Activision Blizzard delays vote on execs' eye-popping 2020 pay
"Call of Duty" giant Activision Blizzard has said it will give stockholders an extra week to continue voting on 2020 c-suite payouts that include $155 million for CEO Bobby Kotick.
Why it matters: The shareholder approval vote is non-binding, so Activision Blizzard’s board can do whatever it wants, but a "no" vote would still pressure the company to change things in the future.
Driving the news: The vote was originally scheduled to be completed at Activision Blizzard’s annual meeting on Monday, alongside a vote on the company’s board.
- But Activision announced late on Monday that voting on the compensation issue would be open through June 21, based on "requests from shareholders for additional time."
- The other votes were completed on Monday, successfully.
Between the lines: For the past two weeks, Activision Blizzard has been in a war of statements with investor groups who have urged shareholders to vote “no” on Kotick’s and others’ pay.
- The argument against isn’t just that the payments are too high, but that some adjustments in Kotick’s income announced earlier this spring don’t go far enough.
- Activision had pushed back, issuing two notices to shareholders, including one last Friday, to refute the investor groups.
- In an example of how this has been going, investor group CtW accurately knocked the company for failing to achieve even 70% approval of its annual pay proposals five times since 2014 — while Activision accurately countered by saying it got 92% and 82% in two of the past three years.
By the numbers: Kotick's $155 million in cash and stock for 2020 would make him the second-highest CEO of an S&P 500 company, according to the Wall Street Journal.
- He made $30 million in 2019, but a 90-day streak in Activision Blizzard’s stock price in 2020 triggered the much larger windfall.
- It also triggered investor criticism, which led to Activision Blizzard announcing a 50% pay cut in Kotick’s base salary this year, down to $875,000. A contract extension lowered his potential bonuses in 2022.
- Under that investor pressure, Kotick also agreed to receive an early stock reward for 2021 with a maximum value of $32 million, down from the originally planned $54 million.
What they're saying: Activision Blizzard justified the highly unusual one-week vote delay by saying that "allowing additional time for shareholders to meaningfully participate in the vote better represents their interests."
- Michael Varner, of CtW, one of the groups urging a "no" vote, told Axios that Monday's delay was a "desperate attempt to avoid losing."
- He and Activision both noted that 86% of the shareholders have already voted.
What's next: Results of the extended vote are likely to be revealed on June 21.