Activision Blizzard CEO Bobby Kotick receiving a huge bonus despite the recent announcement of 190 employee layoffs, has received major criticism from both gamers and investors, including the CtW Investment Group.
CtW is a corporate watchdog as well as a significant investor in Activision Blizzard. The company aims to hold “directors accountable for irresponsible and unethical corporate behavior.” The bonus is one of the “Shareholder Value Creation Incentive” provisions outlined in Kotick’s contract as the company CEO. The company justifies the bonus by pointing to the increased stock value. The share price for Activision stock increased by 66% since December 2019, marking the highest point the stock has reached since 1984.
Michael Verner, the Director of Executive Compensation Research, claims that this stock increase had little, if anything, to do with Kotick. Verner argues that video games being one of the few entertainment options open to people during the pandemic, has been beneficial to many companies in the gaming industry, regardless of executive decisions and talent.
The “Shareholder value Creation Incentive” in the CEO’s contract states that Kotick receives the total amount of an equity payout from past years. Kotick is due this bonus whether or not the company achieves certain milestones. As such, he can claim cash rewards from as far back as 2017.
CtW Strikes Again
This isn’t the first time CtW has criticized Bobby Kotick. The company previously called out the CEO for his earnings between 2016 and 2020. Kotick reportedly received over $96.5m in cumulative income during that period.
What made this move so controversial for fans was Kotick receiving this bonus as the company laid off 190 employees across several departments. Those layoffs were allegedly due to the company losing money during the pandemic. Several events were canceled last year due to the pandemic. The list of 190 employees included 50 esports-related employees.
The company was criticized even as it offered those employees 90-days severance pay, an extra year of health benefits, and $200 of Battle.net gift cards. Gamers called out the company for laying off so many people during a period of economic turbulence. The company has been closing offices and laying off employees even while recording significant profits, including closing its French office and letting go of 800 employees in 2019.