Activision Blizzard CEO Bobby Kotick has received a new contract with the gaming giant, and as part of it, his salary and bonuses are being cut in half. Kotick’s new deal with Activision Blizzard was due to end on December 31 this year, but it’s now been extended to March 31, 2023 with some new terms.
Under his new deal announced in a regulatory filing this week, Kotick’s salary as Activision Blizzard CEO is being cut in half. This follows on from a reduction in base salary in 2020 by 15%. Additionally, Kotick’s target annual bonus is being slashed by 50%, which represents a potential reduction of $1.75 million, the company said.
Kotick still stands to make a lot of money as Activision Blizzard’s CEO, as his new deal makes him eligible for an annual bonuses in 2021 and 2022 for up to 200% of his base salary.
With his new base salary and bonus structure, Kotick’s pay is now in the bottom quartile of the average base salary for a CEO in his peer group for salary, and his bonus range is at the median among peer companies.
To earn his annual bonus, Activision Blizzard must meet certain financial milestones. The bonus is based on 80% financial performance and 20% for environmental, social, and governance initiatives.
Kotick is also getting long-term equity awards as part of his new deal in the form of stock units. The value of these stock options will depend on how Activision Blizzard’s stock performs. Finally, Activision Blizzard said Kotick is losing his Transformation Transaction Award and the Shareholder Value Creation Incentive as part of his new contract.
We won’t know exactly how much Kotick will make as Activision Blizzard’s CEO under his new contract until the end of the fiscal year when that information is shared.
Kotick has been Activision Blizzard’s CEO for 30 years, making him one of the longest-serving gaming executives ever. Under his leadership, Activision Blizzard’s market capitalization rose from $10 million to $70 billion, the company said in its filing announcing the contract. Between 2000 and 2020, Activision Blizzard’s shareholder return rose by 8,100%, which compares to the average annual increase for the S&P 500 of 322%.
Activision Blizzard has come under fire before regarding Kotick’s executive pay, and the company has defended him.
Kotick was recently interviewed by GamesBeat, and he touched on a Pitfall remake, why the Metaverse might be here before you know it, and the recent layoffs at Activision Blizzard’s live operations division.