A large investment group with substantial holdings in Activision shares speaks out against the high compensation for Bobby Kotick, CEO of Activision Blizzard, this week. The move will take place before a shareholder vote on executive compensation is scheduled for June 11.
"For the past four years, Robert Kotick, CEO of Activision Blizzard, has received combined share / option capital of over $ 20 million a year," the CtW investment group wrote in a letter filed with the SEC this week . "These equity grants were consistently higher than the total compensation (the sum of base salary, annual bonus, and equity compensation) of CEO colleagues from similar companies."
CtW, working with unionized pension funds to speak out against "irresponsible and unethical corporate behavior and excessive executive compensation," said Kotick's excessive compensation is particularly important given the wave of nearly 800 layoffs that the company introduced in 2019 as part of the announcement of "Record Results in 2018" for Activision and reportedly focused on "non-development teams" that will no longer be needed in the future thanks to an easier list of company publications.
In a statement to GameSpot, Activision defended Koticks high pay and found that over 90 percent of this compensation is based on the performance of the company's stock. Activision's market cap "has grown from less than $ 10 million to over $ 53 billion" since Kotick began as a CEO in 1991.
"In the past five years, Activision Blizzard's share price has outperformed the S&P 500 by more than 120%, and in the past 20 years, Activision Blizzard's share price, led by Mr. Kotick, has surpassed the S&P 500 by over 11,000 % exceeded, "said the company GameSpot.
What is "excessive payment" anyway?
Kotick's high pay is not a new topic for investment groups. The Institutional Shareholder Services (ISS) proxy advisory group has recommended similar votes against Activision's executive compensation systems since 2012, when Kotick's $ 64.9 million compensation made him the second-best paid CEO in the country. Consulting firm Glass Lewis also recommended that Kotick's compensation package not be approved from 2012 to 2018 before supporting the vote in recent years.
Enlarge /. Bobby Kotick, CEO of Activision Blizzard. In a SEC filing in April, Activision said that the ISS recommendation against the executive compensation package (which CtW strongly cited in its letter) was based on an "incorrect analysis" with a number of technical errors. "We also believe that the ISS analysis does not adequately take into account the company's historically strong financial and operational results, which have continued to this day even in these historically difficult times," the company wrote.
In 2019, the As You Sow Kotick shareholder representative ranked 45th on its list of "most overpaid CEOs", arguing that nearly $ 13 million of its $ 28.7 million this year was inflated based on total returns of shareholders. Andrew Wilson, CEO of Electronic Arts, appeared at number 98 on this list.
A full 92 percent of Activision shareholders voted in June 2018 to approve Kotick's compensation. According to public figures for 2018, Kotick's remuneration is 319 times the average salary of an Activision employee, compared to a 142 times average multiplier for the entire S&P 500.