Activision CEO takes pay cut
Bobby Kotick, the longtime CEO of "Call of Duty" and "Candy Crush" game maker Activision Blizzard, will see his base salary reduced by 50% and bonus potential slashed as part of a 15-month contract extension, the company reported Thursday in an SEC filing.
Why it matters: The cut isn't a sign that the company is struggling. Activision, like most big gaming companies, is thriving. But it appears to show a company reacting to criticism of outsized executive compensation.
- Kotick's base salary will be cut in half to $875,000, and his amended contract establishes a reduction of $1.75 million in potential annual bonuses.
- Provisions for lucrative bonuses tied to stock performance have also been removed or rewritten to limit other potential bonus payouts. That follows reports that they triggered payments of as much as $200 million earlier this year.
- In its filing, Activison's board said the compensation changes were made after 12 months of "extensive shareholder outreach."
What they're saying: "The amended and extended agreement maintains our strong pay for performance philosophy," an Activision representative told Axios.
- Michael Varner, who tracks executive compensation for the CtW investment group, had criticized the multi-million-dollar March bonus as the equivalent of rewarding the running of a six-minute mile.
- "The new contract terms are a step in the right direction toward curbing excessive executive pay,” Varner told Axios Thursday.
The big picture: Kotick became CEO of Activision in 1991, when the company was a struggling player in a much smaller industry. Now it is one of gaming's most successful.