Activision's Hires Greeted With $40 Million Welcome Package
(Bloomberg) -- Activision Blizzard Inc. agreed to pay $40 million in signing bonuses and one-time equity awards to four senior executives, including one who left the video-game company and returned after a year.
Coddy Johnson, a former Republican political operative who worked for Activision from 2008 to 2016 before leaving to help lead a private-school company, is returning as president and chief operating officer. He was granted $15 million in stock options and performance-linked restricted shares that vest over four years, as well as a $2.2 million “contract inducement” to come back, according to a regulatory filing Thursday.
The company also handed $14 million in one-time equity grants, tied to goals, and a $2 million bonus to Spencer Neumann, who’ll become chief financial officer at the end of the month. Neumann presently holds that title at Walt Disney Co.’s theme-parks division.
The equity awards will vest over several years, in most cases depending on company performance. The shares are linked to goals including operating income and earnings, as set forth in the company’s annual operating plans. If targets are exceeded, the executives could receive more shares.
“Activision Blizzard’s compensation practices are designed to tie executive compensation to high levels of performance,” Ross Zimmerman, a senior partner at compensation consulting firm Exequity who advises Activision’s board, said in an statement. “Unlike companies that award time-based RSUs, these equity grants are tied to challenging performance criteria or stock price appreciation, both of which directly align interests of the executives with those of shareholders.”
Johnson’s and Neumann’s cash bonuses will be fully paid out by May 2018. The awards were granted in part to replace compensation they forfeited when leaving their prior jobs, according to Activision.
Activision, the world’s largest video game publisher, has been expanding in recent years, acquiring mobile gaming giant King Digital for $5.9 billion and launching new divisions that make TV shows and license the company’s characters for consumer products. Based in Santa Monica, California, Activision plans to start an esports league this year based on its hit Overwatch game.
Shares of Activision were little changed Friday at $55.79, shy of Wednesday’s record close of $55.99. The company reported earnings this week that topped its own forecast for the 15th quarter in a row.
Neumann is replacing Dennis Durkin, who was granted $3.5 million in equity as he transitions to chief corporate officer. Thomas Tippl, who’ll leave his role as chief operating officer to become vice chairman, also received $3 million in equity as part of his move. The bulk of those vest if certain financial targets are met.
The job contracts of the four executives also entitle them to company-paid supplemental life insurance policies with face amounts ranging from $3 million to $9.4 million, the filing shows. The awards come in addition to regular salaries, bonuses and annual stock awards tied to performance.
Johnson joined Activision in 2008 after serving as associate director of political affairs in the White House under President George W. Bush. He also held regional and national field director roles in the president’s election campaigns. He was chief operating officer of the Activision game publishing unit when he left for AltSchool in 2016.