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Activision Delays Say-on-Pay Vote, Citing ‘Misleading’ Claims

After drawing criticism over its chief executive officer’s $154.6 million compensation package, Activision Blizzard Inc.delayed releasing results of a say-on-pay vote, citing “misleading” information that may have swayed shareholders.

The video-game maker, which held its annual meeting on Monday, said most matters on its agenda were approved by investors. But in an unusual move, Activision said it wants to give shareholders more time to mull executive pay and will reconvene its meeting on June 21 to solely focus on that issue.

Activision has taken flak from critics such as CtW Investment Group, a pro-labor investment firm, over its executive pay — particularly that of CEO Bobby Kotick. The group recommended against the compensation proposal in 2020 and 2021, and institutional investors such as Calstrs also said they voted no.

Though such measures are nonbinding, low approval rates generate bad publicity for companies and reflect shareholder ire. 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 four-year 2016 employment contract. His salary, meanwhile, declined 15% to $1.5 million.

The delay is “in the best interest of its shareholders,” Activision said in Monday’s statement. It wants to give investors “adequate time to review and consider the company’s recent responses to statements that were published and recirculated about the company’s executive compensation practices that the company believed to be misleading.”

The 2020 say-on-pay vote received 57% support from shareholders, down from previous years. That spurred the company to hold over 70 meetings with shareholders owning a total of about two-thirds of the company’s shares.

Activision decreased Kotick’s base salary and cash bonus by 50%, and made sure his compensation is almost all based on performance. The Call of Duty maker highlighted those changes in its statement Monday, arguing that criticism leveled at the company has been unfair.

Activision shares rose 56% last year, outpacing the S&P 500, and 28% in 2019. This year, they’re up 6.8%

“Despite exceptional shareholder returns, the company has made significant changes to address shareholder feedback,” Activision said. “The company has more closely aligned CEO and shareholder interests.”

Source: Bloomberg