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Photo: Patrick T. Fallon/Bloomberg via Getty Images

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.

  • That success hasn't meant labor happiness for all. Activision has laid off waves of employees each of the last three years.
  • Kotick told Gamesbeat Wednesday that Activision needs to hire some 2,500 workers.

Go deeper

Blizzard president J. Allen Brack stepping down amid scandal

Photo: Blizzard

Blizzard president J. Allen Brack is out at Blizzard, two weeks after being named in an explosive lawsuit by the state of California involving misconduct at the company.

Why it matters: This is the most concrete reaction Activision Blizzard management has taken since the scandal broke and one taken in advance of executives taking live calls from analysts later today.

Industry leader calls for unionization

"State of Decay 2." Screenshot: Undead Labs/Microsoft

The call for game developers to unionize is now coming from a voice close to the top. On Friday, former Blizzard senior programmer and three-time studio founder Jeff Strain released a letter encouraging his own developers to unionize.

Why it matters: Unionization is often mentioned by industry pundits and workers themselves as a crucial maneuver to empower the people who make games, but it’s been a non-starter at most studios.

Updated 18 mins ago - Economy & Business

Tax season nightmare ahead for understaffed IRS

Illustration: Shoshana Gordon/Axios

The IRS will start accepting 2021 tax returns in less than a week, and the filing delays and administrative headaches to come might eclipse last year — which was “one of the worst filing seasons," according to an independent advocacy agency within the IRS.

Why it matters: For taxpayers, especially with complex or paper filings, this means headaches, delayed refunds, and mistakes.

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