Activision Blizzard CEO Bobby Kotick routinely gets millions in stock bonuses every year based on how the company is doing. Now he’s set to get even more, for a total payout of nearly $200 million according to CtW Investment Group, a union pension fund advocacy organization. And it’s all thanks to a clause in his contract that was recently triggered by the company’s strong stock performance throughout the pandemic.
As the Call of Duty maker’s CEO, Kotick gets bonuses based on helping the company hit profit targets and other milestones. And because 2020 saw Activision Blizzard’s stock price jump dramatically as millions turned to games to distract themselves during the pandemic, he’s on track to collect all of the incentive bonuses he missed in recent years, in addition to the tens of millions he already earns annually, due to a “shareholder value creation incentive” clause in his contract.
In March of 2016, the company’s stock price was around $32 a share. By last March it had climbed to $56, and in the year since the pandemic began, it only climbed higher, peaking at over $100 at one point last month before settling back down at just under $92. Because the stock has remained over double what it was when Kotick’s 2016 employment agreement went into effect for over 90 days, the “shareholder value creation incentive” provision was triggered earlier this month. “On March 1, 2021, the performance conditions for the four-year performance period from 1/1/17 through 12/31/20 underlying these performance stock unit awards were achieved at the maximum level,” reads Activision Blizzard’s most recent SEC filing.
“While the increase in Activision’s stock price is somewhat commendable, as we stated last year and continue to assert, this achievement alone does not justify such a substantial pay outcome for the CEO,” CtW Investment Group researcher Michael Varner said in a statement. In a phone call with Kotaku, Varner called a “maximum level” payout the c-suite equivalent of running a six minute mile, and said Activision Blizzard is basically retroactively awarding Kotick gold medals for his past performance based on the latest stock price.
CtW Investment Group has been criticizing CEO pay at a lot of companies, including one of gaming’s biggest. It called out pay inequity and Kotick’s significant bonuses at last year’s annual meeting of Activision Blizzard shareholders, and has been pushing the company’s board of directors to dial back just how rich it makes the company’s decade-long boss. As Activision Blizzard was boasting record sales last summer, Bloomberg reported that some of its employees started sharing their personal pay information with one another internally to protest a lack of raises in proportion to the company’s ongoing success.
While the pandemic has made Kotick even richer, it hasn’t put an end to layoffs at Activision Blizzard. The company laid off roughly 800 people in early 2019, followed by hundreds more in the subsequent months, the closing of its French office, and just yesterday it confirmed that somewhere between 50 and 190 more people would be let go, including in its esports division, which has struggled over the last year during the ban on in-person gaming events.
Bloomberg reported that the most recently laid off employees would receive healthcare benefits throughout the year as part of their severance package. They would also get $200 gift cards to Battle.net, I guess so that they can still buy the latest Overwatch skins even while being out of a job, and even while their former boss is about to rake in millions in additional bonuses.
Activision Blizzard did not respond to a request for comment.