Activision Holders Affirm Pay Plan After Controversial Delay

Bookmark

Activision Blizzard Inc. shareholders approved the video-game giant’s executive pay proposal, handing the company a victory after it delayed the vote to give investors more time to consider it.

Fifty-four percent of shareholders backed the measure, the company said on Monday. Activision’s board members also were re-elected, by an average of 96%.

Activision took the unusual step of prolonging the say-on-pay referendum after its annual meeting last week. The company complained of “misleading” information that may have swayed shareholders against its executive compensation plan. Chief Executive Officer Bobby Kotick received $154.6 million last year, mostly in the form of stock awards.

A number of investor groups had come out against the proposal -- and the delay added fuel to the criticism. Labor-backed investment firm CtW Investment Group called the postponement a “desperate attempt” to avoid losing the vote.

Though say-on-pay measures aren’t binding, losing such votes represents a painful rebuke for companies. Activision had spent months meeting with investors on the topic, but major shareholder advisory firms had sided with CtW in advising a no vote.

“It appears Activision did just enough arm-twisting for its say-on-pay measure to pass, nearly failing to receive majority support with only 54% of votes cast in favor,” Michael Varner, director of executive compensation research at CtW, said in a statement. “Such marginal support for say-on-pay votes is extremely rare: Fewer than 4% of companies in the broader Russell 3000 index receive support around 50%, with average support in the S&P 500 at 88.6%.”

Kotick’s pay package ballooned in 2020, largely due to stock awards of nearly $150 million. It climbed more than 400% from $30.1 million in 2019.

The stock awards included grants made as part of Kotick’s 2016 employment contract, so they represent four years of performance, Activision said.

His salary, meanwhile, declined 15% to $1.5 million. And the company lowered his cash incentives, arguing that its executive compensation is now better aligned with performance.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.