Activision Blizzard’s CEO, Bobby Kotick, is cashing in big time. He is reportedly set to receive a staggering $200 million “bonus.”
Update: According to multiple reports, the bonus is not a direct $200 million payout, but a substantial amount in the form of company stock shares.
Original report: Just yesterday, we reported that around 50 employees were laid off at Activision Blizzard, who were responsible for event planning. However, it seems that slightly less than 190 people were actually terminated. Almost simultaneously, another report emerged: Activision Blizzard’s CEO, Bobby Kotick, is supposedly cashing in on a hefty bonus of around $200 million. This has raised concerns among some, even investors.
What is it about? The CtW Investment Group reports that Activision Blizzard CEO, Robert “Bobby” Kotick is receiving a large bonus payout of a whopping $200 million (via Gamespot).
The CtW Investment Group states:
The increase in Activision’s stock value is remarkable […], but this achievement alone does not justify such a large payout for the CEO. There are many factors that can contribute to an increase in stock value that may not be directly related to Robert Kotick’s leadership. The use of video games was one of the few entertainment options available during the COVID-19 pandemic. This was a great blessing for many companies in the gaming industry, regardless of leadership talent or strategic decisions.
The payout comes at an unfortunate time, as it was just revealed that numerous employees at Activision Blizzard were laid off yesterday.
Are the two incidents related? No – at least not directly, even though the timing overlaps. Essentially, the layoffs are likely a response to the ongoing COVID-19 pandemic. However, the large payment to Kotick is based on the rising stock price. After all, Activision Blizzard has seen a 66% increase over the past two years.
Why is there a bonus? The reason seems to be a clause in Kotick’s contract. It provides for special bonus payments when the company reaches certain milestones – such as an increase in stock value. Since the stock has risen by 66% in recent years, there is now a retroactive bonus payment dating back to 2017 that amounts to the whopping sum of $200 million.
Criticism is coming from all sides: Not only the CtW Investment Group but also many players of Blizzard games are voicing criticism regarding this bonus payment. Many find it irresponsible to lay off employees during the pandemic while achieving record revenues and stock values, yet simultaneously making huge bonus payments to the executives. Some cynically state: “The laid-off employees receive $200 gift vouchers for the shop of the company that just fired them, while the CEO receives a bonus worth millions. GG, well played.”
What do you think? Is such a payment justified when the stock price is massively rising? Or is it unacceptable when such events coincide with layoffs?
