Some Activision Blizzard wholesalers and investors believe Bobby Kotick, the company’s CEO, would make too much money. According to a detailed report at GamesIndustry.biz the boss “obviously did not achieve certain goals”. At the same time, it would be a bad picture that 800 employees were fired despite a record year (we reported) and the boss continues to collect millions of dollars in bonuses. These allegations come from two consulting firms that represent the interests of many Activision Blizzard shareholders. They recommend the other shareholders to vote against the proposal to pay Kotick as in previous years. In addition, possible problems with the “human capital management” (employee as a resource) of the publisher are indicated.
The Application was supported by the CtW Investment Group, which is committed to making management on accountable for “irresponsible and unethical corporate behavior and high-profile managers”. The CtW works with unionized pension funds that make up a “substantial” part of Activision Blizzard’s shareholders. In a motion to the U.S. Securities and Exchange Commission, CtW Director Dieter Waiznegger asked Activision Blizzard shareholders to vote against management’s proposal for a manager (say on pay) that is scheduled for the June 11 Annual General Meeting was.
“Despite repeated low approval ratings from the shareholders, Activision Blizzard maintains several overlapping opportunities for its CEO to receive oversized stock awards even if performance (…) thresholds have not been met,” the letter said. The CtW Investment Group criticized that the compensation proposal for Kotick would not carry out some performance targets in detail, while other targets would be below the results of the previous year. Nevertheless, the proposed CEO compensation should not have been shortened accordingly.
According to the report, Kotick has received nearly $ 100 million as a combination of stock options and capital since 2016. This amount is described as “consistently higher than the total remuneration (…) of CEOs of comparable companies”. Activision Blizzard’s “normal employees” typically earn less than a third of one percent of the boss’s earnings.
Waiznegger (CtW Investment Group) writes that the remuneration of Kotick this time is of “special importance”, given the unsafe situation of the employees, since (beginning of 2019) 800 employees were fired despite a record year. The disclosure of strategic business goals is also described as “very poor” and “superficial”.
abstract: “We find that three of these goals are clearly related to human capital management, and that Kotick’s apparent failure to achieve more than half of the targeted performance goals strongly suggests that the imbalance in human capital management approach – the waste of bonuses $ several million to the CEO while employees face layoffs – must be addressed before they manifest themselves in deeper operational problems. ”
Activision Blizzard made a statement regarding this report GameSpot and put the immense success of the company in the foreground since 1990. Under Bobby Kotick’s leadership, market capitalization has grown from $ 10 million to $ 53 billion. “Over 90 percent of the compensation stated by Mr. Kotick is performance-related and he created exceptional value for Activision Blizzard shareholders,” it continues.
Bobby Kotick is number 45 on the list of “overpaid bosses” (source). In 2019, he is said to have received $ 28.7 million. The CEO: Worker salary is given as 306, i.e. Kotick earns 306 times as much as an average employee. The list also includes Andrew Wilson, head of Electronic Arts at number 98. He earned $ 35.73 million (CEO: Worker: 371).
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