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CEO Bobby Kotick has been around the headlines for his leadership practices and inflated salary, especially back in 2019. During that time, Activision Blizzard laid off more than 800 employees despite a profitable year, only to have it revealed that Kotick's salary came in at $30 million. Since that time, more layoffs have occurred and big names at Blizzard have been shifting to pursue other ventures. Hawaii of Blizzard after its absorption in to the Activision Blizzard umbrella is a constant source of scrutiny in the gaming community, especially in regards to Kotick and his extravagant salary. Now, bobby kotick has agreed to a 50 percent bonus reduction and a salary cut moving forward, as well as several other key changes that could be a positive step for the people at Blizzard.

The move found light when a portion of the extension agreement filed with the SEC went public (via WoWhead). In the documentation, it had been revealed that Kotick both agreed to slashing his salary and cutting his bonus by 50 percent. In addition to the pay changes, he also decided to terminate the Transformation Transaction Award and the Shareholder Value Creation incentives.

Based on the SEC filing, "Under the Extension Amendment, effective January 1, 2021, the Compensation Committee and CEO decided to reduce his contractually agreed-upon base salary by 50 percent to align with targets established in the bottom 25th percentile of the business's peer group, despite the Company's strong relative performance."

The base salary for the executive has been slashed from $1,750,000 to $875,000 on an annual basis. The 50 percent bonus reduction also has a ceiling of $1,750,000 for every fiscal year, both for 2021 and for 2022. The moves made with the CEO's reductions derive from feedback from shareholders following a steady incline of concerns from the games industry, both on the consumer and the business side.
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ACTIVISION BLIZZARD
CEO Bobby Kotick has been around the news for his leadership practices and inflated salary, especially back 2019. Throughout that time, Activision Blizzard let go more than 800 employees despite a profitable year, only to own it revealed that Kotick's salary came in at $30 million. Since then, more layoffs have occurred and big names at Blizzard have been shifting to pursue other ventures. The state of Blizzard following its absorption into the Activision Blizzard umbrella has been a constant source of scrutiny in the gaming community, especially when it comes to Kotick and his extravagant salary. Now, the CEO has decided to a 50 percent bonus reduction and an income cut moving forward, as well as several other key changes that could be a positive step for the people at Blizzard.

The move came to light when a portion of the extension agreement filed with the SEC went public (via WoWhead). In the documentation, it was revealed that Kotick both decided to slashing his salary and cutting his bonus by 50 percent. As well as the pay changes, he also agreed to terminate the Transformation Transaction Award and the Shareholder Value Creation incentives.

In line with the SEC filing, "Beneath the Extension Amendment, effective January 1, 2021, the Compensation Committee and CEO decided to reduce his contractually agreed-upon base salary by 50 percent to align with targets established in the bottom 25th percentile of the Company's peer group, regardless of the Company's strong relative performance."

The bottom salary for the executive has been slashed from $1,750,000 to $875,000 on an annual basis. The 50 percent bonus reduction also has a ceiling of $1,750,000 for every fiscal year, both for 2021 and for 2022. The moves made with the CEO's reductions derive from feedback from shareholders after a steady incline of concerns from the games industry, both on the consumer and the business side.

The CEO?s potential maximum Annual Bonus through the Employment Period, as defined in the Extension Amendment, was based on the median multiplier for target annual bonuses of chief executive officers within the Company?s peer group. Therefore, the CEO?s target Annual Bonus is less than the median target annual bonus of the Company?s peer group because the CEO?s base salary is in the bottom quartile of the average base salary earned by ceos of peer companies while his maximum bonus payout as a percentage of his salary reaches the median. The Annual Bonus will be based eighty percent (80%) on the attainment of Company non-GAAP financial objectives (the ?Financial Metrics?) and twenty percent (20%) on the achievement of objective and measurable Environmental, Social, and Governance (?ESG?) initiatives for the fiscal year regarding which the Annual Bonus accrues, in each case, as established by the Compensation Committee.
Back 2017, Kotick netted $28,698,375 even with a pay cut, that is around 300 times more than the average employee. While an enormous pay increase is nothing normal for a person in a CEO position, eliminating 800 employees and then immediately change and say, "Just kidding, we are in need of 2,000 more to fill those spots" is not normal. At least, it shouldn't be. Seeing this new agreement is a positive first step, but one of many that must be designed to ensure the integrity of Blizzard and to start the long road before reparative actions following a declining public perception round the work culture.

You will have another earnings call with stakeholders on May 4 to discuss the next steps for the brand and what's coming for Activision Blizzard and every one of the properties under that name.