Is Bobby Kotick Not Going To Get Another Payday?

While it’s fashionable to bash on game publisher CEOs, mainly when their companies do incredibly stupid things seemingly at their behest, there are few as recognizable as Bobby Kotick, CEO of Activision Blizzard. Yet today’s news, as reported on, suggests that Kotick’s mention in the news cycle at this moment is surprising for an entirely different reason. Reportedly, a pair of proxy advisory service firms are recommending against a proposal to pay him similarly as he has in the past.

The recommendation against paying Kotick another massive installment of stock options and equity comes from CtW Investment Group, a firm that works with union-sponsored pension funds. Such pension funds represent a “substantial” portion of Activision Blizzard’s current shareholders. CtW’s director, Dieter Waiznegger, filed his firm’s objections with the Securities and Exchange Commission as well as the recommendation Activision Blizzard’s shareholders vote against the scheduled Management Say on Pay proposal which is to be voted on at Activision Blizzard’s annual shareholder’s meeting on June 11.

The SEC filing contains allegations of corporate wrongdoing, which, while not particularly shocking, are nonetheless damning for their simplicity. Waiznegger indicated specific concern over the pay differential between the rank-and-file and Kotick, as well the slash-and-burn personnel management methods Activision Blizzard seems to employ, mainly calling attention to the publisher’s layoff of 800 staff in 2019 despite reporting a record year.

Disclosure surrounding the strategic objectives portion is severely lacking and merely cites ‘attracting, retaining and motivating top talent; cultivating new business opportunities and expanding existing ones; delivering production and development milestones; and increasing productivity.  We note that three of these objectives are clearly related to human capital management, and that Kotick’s apparent failure to achieve more than half of the targeted performance strongly suggests that Activision Blizzard’s skewed approach to human capital management – lavishing multi-million dollar rewards on the CEO as employees face layoffs – needs to be addressed before it manifests in deeper operational problems.

Activision Blizzard responded to the filing in a statement to GameSpot. “During Mr. Kotick’s tenure — which is the longest of any CEO of a public technology company — Activision Blizzard’s market capitalization has increased from less than $10 million to over $53 billion,” they said.

“In the last five years, Activision Blizzard’s share price has outperformed the S&P 500 by more than 120%, and over the past 20 years, under Mr. Kotick’s leadership, Activision Blizzard’s share price has outperformed the S&P 500 by over 11,000%. Over 90% of Mr. Kotick’s proxy reported compensation is performance-based, and he has delivered exceptional value for Activision Blizzard’s stockholders. Our equity dilution rates remain among the lowest of our peer group.”

Given that exceedingly narrow defense, it seems likely Bobby Kotick is headed for a pay cut.

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