Activision Blizzard CEO Bobby Kotick’s huge perk amidst the recently announced lay-off of 190 employees has received criticism from both gamers and the CtW Investment Group.
CtW is not only one of Activision-Blizzard’s investors, it is also a corporate watchdog. They have the mission of holding “directors accountable for irresponsible and unethical corporate behavior”. Kotick’s bonus is part of the “Shareholder Value Creation Incentive” provision in his employment contract. The company holds that the bonus is justified by the rise in the company’s stock price. Activision’s share price has increased by 66 percent since December 2019. That is the highest point that the stock reached since 1984.
Michael Verner, the Director of Executive Compensation Research, claimed that the rise in Activision’s stock price was not due to any of Kotick’s strategies. He stated, “The use of video games as one of the few entertainment options available amid the COVID-19 pandemic has been a boon to many companies in the gaming industry irrespective of executive talent or strategic decisions.”
The “Shareholder Value Creation Incentive” in Kotick’s contract states that the CEO could receive the full amount of an equity payout from past years. This is whether or not certain goals or milestones were achieved. This qualifies Kotick to receive cash rewards from as far back as 2017.
Past and present criticisms
This is not the first time that CtW is criticizing Kotick. They have previously called him out for his massive pay. Between 2016 and 2020, Kotick has been reported to have received more than $96.5 million in cumulative income.
But what ticked off fans was that Kotick was receiving the bonus as the company was laying off 190 employees across all departments. All of this was due to losses incurred from the coronavirus pandemic. The virus scare caused the cancellation of last year’s major events. The number included 50 employees from esports.
Activision was bashed even as it offered 90-days severance pay, one year of continued health benefits and $200 worth of Battle.net gift cards to laid-off employees. Gamers were calling out Activision-Blizzard for the mass layoffs during a time of economic turbulence. Even as the company was reporting huge profits. 2019 had seen the company closing its French office and laying off a total of 800 employees.