Activision-Blizzard CEO Bobby Kotick is facing renewed criticism for his large annual salary. Kotick, who made more than $30 million in 2019, is now being forced to defend his pay after one of the company's investors, The CtW Investment Group, began urging other investors to vote against a measure allowing Activision-Blizzard to pay Kotick such high rates in a new filing with the United States Government.
The filing specifically calls on other investors to vote against the "Say on Pay" proposal at the company's annual meeting, which is scheduled to take place on June 11. "Despite low approval votes from shareholders, Activision Blizzard maintains multiple, overlapping opportunities for its CEO to earn outsize equity awards, even when performance-related vesting thresholds have not been met," the document reads.
The filing alleges that "Activision finds multiple ways to unnecessarily enrich its CEO," and goes on to criticize Kotick's equity options, stating that he has received over $20 million per year, a sum greater than the total salaries of CEOs at other companies. CtW Investment Group specifically pointed out that Kotick has received $96.5 million in cumulative income over the past four years from Activision Blizzard.
The document also mentions Activision Blizzard laying off 800 employees in 2019, which happened after an earnings call where Kotick reported record earnings for the company. "[Employees] typically earn less than 1/3 of 1% of the CEO's earnings," the document states," with some employees, such as Junior Developers, making less than $40,000 a year while living in high-cost areas such as southern California."
The video game industry is infamous for grueling work hours and relatively low pay, with major corporations like Rockstar being criticized for crunch culture regularly. Frequent layoffs after major projects conclude haven't helped the industry's reputation, either, leading to a volatile field despite the size and mainstream appeal of modern, triple-a video games.
Activision Blizzard subsequently released a statement to GameSpot following new of the filing, in which it praises Kotick for raising the Activision Blizzard's market cap from "less than $10 million to over $53 billion dollars." The statement goes on to say that "Over 90% of Mr. Kotick’s proxy reported compensation is performance-based, and he has delivered exceptional value for Activision Blizzard’s stockholders."
Despite the compensation being performance-based, Kotick — and other Activision Blizzard executives — have regularly faced criticism for their large salaries. For instance, Activision Blizzard President and COO Daniel Alegre's salary was revealed earlier this year, with the executive eligible to earn over $4 million a year after bonuses.
It's difficult to say what, specifically, is causing CtW Investment Group to act now, considering its complaints seem to span many years, though it seems fair to say that the coronavirus pandemic is to blame. There's talk of a recession in the immediate future, and additional unnecessary spending in the form of executive bonuses is likely to stir up trouble among investors.
Source: US Government Filing, GameSpot