The CtW Investment Group (which we will shorten to CtW onwards) has previously fought against Activision Blizzard’s (and Electronic Arts’) CEO’s payout.
A year ago, CtW, which „works with union-sponsored pension funds to enhance long-term stockholder value,” called on Activision Blizzard‘s shareholders to vote against a proposed compensation package for CEO Bobby Kotick, who had received nearly 100 million dollars in combined stock and options rewards alone. According to CtW’s executive director Dieter Waizenegger, this amount has „consistently been larger than the total pay (the sum of base salary, annual bonus, and equity pay) of CEO peers at similar companies.” However, their plan failed. But with Electronic Arts, they managed to get the shareholders to reject the proposed pay packages.
In April, Kotick signed a new employment extension agreement, in which he agreed to cut his base salary and bonuses in half. According to Activision Blizzard, this is a move that „reflects shareholder feedback, incorporates market best practices, and continues to directly connect pay to performance.” (Don’t cry a river for him, though: his base salary will still be 875K USD, and with bonuses, it can effectively be tripled…) And yet, CtW thinks it’s not enough, and more needs to be done.
In a statement, they claim that this two-year term „is too short to significantly impact his total pay for an extended time,” and because of it, CtW is calling on shareholders to vote against the Say On Pay proposal, and the re-election of Activision’s Compensation Committee chair.
„The Compensation Committee did not address longstanding shareholder concerns about executive pay practices at Activision by extending CEO Kotick’s contract by less than two years. Given the repeated opposition to CEO Kotick’s pay over the years, shareholders should expect to see a long-term reform of his compensation over a greater period than merely one year. The CEO’s 2021 equity award will accelerate at maximum payout level leaving most of the compensation reductions to apply to only one full year, 2022, and as such may only cover the equity award for next year. […] The only full year for which Mr Kotick will see a meaningful equity pay reduction is 2022. In other words, the extension is not long enough to represent an earnest effort by the Compensation Committee to reduce the CEO’s outsized equity pay over a sustained period,” CtW wrote.
They aren’t wrong: the leadership earns a ton of cash, while developers might be netting just enough to scrape by each month. And newcomers to the industry will get even less, while Activision Blizzard, a company that doesn’t have any financial problems, is laying off more and more people around the world (to replace them with less experienced, and thus, cheaper workforce…).