Following a contentious set of shareholder votes in 2014, Activision-Blizzard has extended a vote regarding the compensation of its executives to April 11, 2015. The vote will be nonbinding for all shareholders, but it could have major ramifications for the company’s future compensation plans.
Last week, Spencer Neumann, the CEO of Activision Blizzard, had to rally shareholders to approve his own $42m pay package. The vote was a contentious one, with many shareholders questioning if the CEO is worth his salary. The vote, which was 11 percent lower than the originally proposed amount, was approved by the shareholders but not without the anger of many.MMO readers will recall that the industry exploded earlier this year due to a PR fiasco that Activision-Blizzard failed to adequately respond to: In the midst of another round of layoffs at the company, CEO Bobby Kotick, already one of the highest paid executives in the country, was poised to take advantage of a questionable clause in his contract that could have made him up to $200 million more. Activision’s board of directors subsequently announced that Kotick’s base salary and annual bonus would be cut in half, but not before the original message disappeared from the internet and a wave of identical new articles appeared in searches claiming that the $200 million figure was incorrect. (We touched on this strange situation at the end of the original article; it seemed to us that Activision was very interested in discrediting the $200 million figure without actually refuting it. Bloomberg estimates Kotik’s bonus total for 2021 at $155 million). Anyway, we’ll continue this week: Activision-Blizzard’s annual shareholder meeting was held yesterday, and apparently the company was able to vote on most of the agenda items, but the board of directors extended the vote on executive compensation by a week, arguing that shareholders need more time. The news was announced in a press release from Activision-Blizzard, and the company is obviously recommending that shareholders vote in favor of the board’s proposal, reiterating its position that it has already done enough to limit excessive executive pay. The company’s compensation committee, following discussions with our CEO, has taken the important step of reducing the initial expected value of its 2021 performance-based equity incentive, reducing the value of the maximum payout opportunity by approximately 40%, AB said in a statement. But AB also uses the press release to label industry reports on executive pay as misleading, suggesting that shareholders have traditionally supported executive pay by pointing to large majorities in 2018 and 2019, but not referring to 2020, when that was not the case. The shadow seems to be cast on CtW Investment Group, undoubtedly the investor group that has been at the forefront of the fight against corporate pay abuse in recent years. The group, which ostensibly represents the interests of Activision-Blizzard’s long-term investors, scored an intellectual victory last year in its efforts to curb executive compensation abuses when it convinced more than 43% of AB shareholders to vote against AB’s say-on-pay rule. (She also managed to convince the majority of EA’s shareholders of this). The group issued its own press release last night, claiming that 86% of the vote has already been cast and that AB is simply trying to rig the vote. The decision made today by Activision Blizzard’s board of directors is a desperate attempt to avoid defeat in the shareholder vote on executive pay, CtW said. Activision’s board of directors needs to put an end to this charade. View