In an unusual move for a company of its scale, Activision-Blizzard has delayed changes to their corporate pay structure after a request from shareholders for additional time, according to a report from Bloomberg. A company meeting that took place June 14 will be reconvened in a week to give shareholders extra time to consider the topic, which has been a public point of contention in recent months.
The decision comes in the wake of a public furor over a $154M compensation package paid to CEO Bobby Kotick. This was largely based on stock awards and represented a massive rise in Kotick’s pay package in 2019 worth $30.1M.
The payout was based on contractual agreements from his contract inked in 2016, and Kotick has taken a 15% pay cut on his salary, leaving it at $1.5M. 2020’s say-on-pay vote received just a 57% approval rating, which was a drop from previous years. Reading between the lines, it appears as though the firm may be facing similar doubts in 2021, hence their decision to delay the release of the result.
According to Bloomberg, Activision decreased Kotick’s base salary and cash bonus by 50%, as well as ensuring his compensation package is based on performance — something the franchise has excelled at in recent times. The publisher made a point of drawing attention to those changes in its statement Monday, arguing that criticism leveled at the company has been unfair.
According to the company, it is "capping our CEO’s 2021 and 2022 target equity bonuses below the median of the Company’s peer group [...] putting his [Kotick’s] target cash compensation at the bottom 25th percentile of the CEOs in the Company’s peer group". The statement also claims the company has already "reduced the originally-anticipated value of his 2021 performance-based equity award — reducing the value of its maximum payout opportunity by approximately 40%", suggesting Kotick may have seen at least $50M wiped off his originally slated payout.
In total, 86.54% of the Company’s outstanding shares were represented in person or by proxy at the initial meeting, where the company did not get the result they apparently sought on the pay issue. The only topic discussed at the rescheduled meeting will be the say-on-pay proposal, leaving the company a few short days to convince their members before the final say comes through.
Shareholder views may have been influenced by the waves of layoffs the company has made in recent years, which include large numbers of redundancies in 2021 with the restructuring of some of their esports departments. This follows a 56% increase in share value in 2020 for the company, and good performance in the first half of 2021 for a number of their products, with Call of Duty Warzone very much leading the way.
An earlier version of the article included language, suggesting Bobby Kotick has been with Activision-Blizzard since 2016. The language has since been edited to reflect that it's related to Kotick's contract inked in 2016.