Activision Blizzard CEO Bobby Kotick recently made headlines for taking a 50% pay cut to his salary, something extremely unusual for the CEO of a Fortune 500 company (or any CEO, for that matter). This dropped his base pay from $1.75 million to a mere $875,000, although he still had several potential performance awards that could boost pay in stock to be millions higher.
CtW Investment Group, a union-affiliated pension fund management group seeking to bring back accountability on Wall Street, essentially called the move a publicity stunt, pointing out that the pay cut only lasts until 2023 at which point Kotick would be free to renegotiate his salary back to where it was before. CtW also pointed out that the awards were really where Kotick made his bank and stripping away base salary really didn’t do much to reign in his overall pay.
The investment group issued an open letter to shareholders urging them to vote “no” on Kotick’s pay proposal and also sack the head of the board’s compensation committee. Activision Blizzard responded to CtW’s letter with two rebuttals before delaying the vote to provide “shareholders adequate time to review and consider our responses,” according to an Activision spokesperson."
“Based on requests from shareholders for additional time, the independent members of the Activision Blizzard Board believe it is in the best interest of its shareholders to extend the opportunity for shareholders to vote on this important matter,” the company wrote in a statement, “and therefore recommended an adjournment to allow additional time for shareholders to submit proxies with respect to the [CEO pay package].”
Activision pointed out that it’s “made significant changes to address shareholder feedback” with regards to CEO pay, noting the 50% salary reduction and that 95% of Kotick’s total compensation is performance-based and fully at risk." Potential CEO bonus awards were also reduced by 40%, while equity bonuses were also capped “below the median of [Activision]’s peer group.”
Michael Varner, head of CtW’s executive compensation research division, called the delay a “desperate attempt to avoid losing.” Roughly 86% of shareholders have already voted, with the final tally coming on June 21.
