IN A NUTSHELL:
- Bobby Kotick's regular salary will be cut by 50% and his annual bonus will not exceed $1.75 million;
- Kotick will remain Activision Blizzard's CEO until at least March 31, 2023;
- The management of Activision Blizzard is trying to portray Kotick in a good light and mention how much the holding has grown under his leadership.
CEO of Activision Blizzard, Bobby Kotick, has cut his salary and annual bonus by 50 percent with the approval of the Compensation Committee. A report filed yesterday with the U.S. Securities and Exchange Commission (SEC) shows that two financial bonuses were also eliminated - the reward for creating shareholder value was worth a total of $200 million.
What's more, Activision Blizzard's board extended Kotick's term as CEO at least until March 31, 2023, . The program of reductions is an interesting PR move, given the fact that the the company's took some damage recently. The mass layoffs in the ranks of Activision Blizzard or opposition to the incentive bonus for Kotick became quite a hot topic. Currently, the board is trying to regain community's trust and claims that cutting the CEO's salary is a response to shareholder reactions, as well as the incorporation of best market practices.
Kotick's annual salary so far was 1.75 million dollars. After the cuts, the CEO will earn only 875 thousand. Added to this is the annual bonus, reduced by 50%. It is determined based on various performance factors, but it can not exceed 200% of base salary - so after the changes will not be more than 1.75 million dollars. The report also states that Kotick's new salary is expected to be in the bottom 25% of average CEO salaries at similar companies, and the maximum value of his potential bonus is expected to be equal to the median of their earnings.
After yesterday's report, it is clear that Activision Blizzard is trying conquer recent problems without losing its face. On the one hand, Kotick agrees to reduce his salary, on the other hand, he remains the CEO. In addition, in a letter submitted to the SEC, the management cites a plethora of statistics to show how much Activision Blizzard has grown under the leadership of its CEO. The question is, is this enough...?
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