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Activision's Kotick was paid $64.9 million last year

Activision's Kotick was paid $64.9 million last year

Sat 27 Apr 2013 11:36pm GMT / 7:36pm EDT / 4:36pm PDT
PeopleFinancial

Kotick is now one of the highest paid CEOs in the US

Activision Blizzard

Headquartered in Santa Monica, California, Activision Blizzard, Inc. is a worldwide pure-play online...

activisionblizzard.c...

Activision Blizzard chief executive officer Robert Kotick was paid $64.9 million last year, according to documentation obtained by Bloomberg. The increase in compensation is due to Kotick's new employment agreement signed on March 2012, which gives the CEO stock awards of valued at $55.9 million over the course of his five-year contract. Though Kotick has not received the entirety of that $55.9 million yet, the compensation is on the books in 2012.

Kotick's total compensation, not including the stock awards, came to $8.33 million last year, which included base pay of $2.01 million and a bonus of $2.5 million. Kotick's total compensation in 2011 was also the same $8.3 million.

The new contract is retroactive from July 1, 2011 until June 30, 2016. Kotick received $1.9 million in stock awards in 2010, no stock awards in 2011, and no stock options in the past three years.

The new employment agreement and compensation puts Kotick as the second-highest paid CEO in the United States for 2012. The number one spot was taken by Oracle Corp founder Larry Ellison, who made $96.2 million last year. The compensation could be seen as skewed; in the last fiscal year Oracle posted a net income of $9.98 billion on $37.1 billion in total revenue, while Activision Blizzard recorded $1.15 billion in net income on $4.86 billion in revenue.

GMI Ratings corporate-governance consultant Nell Minow has misgivings about Kotick's compensation. He told Bloomberg that Kotick's salary and incentives are too high, and there's no clarity about how pay was determined.

"We don't like any element of this pay package," said Minow. "In the past we have expressed concern about this company and its compensation practices. The lack of information provided by the compensation committee is a red flag. It's very difficult to discern how they determined this compensation package from the information that's been provided."

19 Comments

Paul Johnson Managing Director / Lead code monkey, Rubicon Development

896 1,339 1.5
Why is someone's salary agreement being reported as news?

Good luck to him I say, hope to earn that much myself one day.

Posted:A year ago

#1

Bruce Everiss Marketing Consultant

1,692 594 0.4
Deliver value to shareholders, get rewarded.
The opposite of EA.

Posted:A year ago

#2

Ruben Monteiro Engineer

80 194 2.4
And on other news, 6 million people without a job in Spain.
Capitalism and the downfall of humanity: on schedule and rockin'!

Posted:A year ago

#3

Paul Johnson Managing Director / Lead code monkey, Rubicon Development

896 1,339 1.5
You think he should give them all 10 dollars?

Don't make the usual mistake of pointing to the "injustices" of the tiny group of people on the planet who earn above the norm. You could kill them all and give their estates to the poor and it wouldn't make a single drop of real difference to anyone else. If my maths is correct, he could forego his salaray and instead run Spain for about 5 seconds. Given Spain isn't special, how about europe for what, a tenth of a second?

Edited 1 times. Last edit by Paul Johnson on 28th April 2013 11:36pm

Posted:A year ago

#4

Ruben Monteiro Engineer

80 194 2.4
No, I think people should be compensated according to what they produce.

Since a programmer/artist earns 50k/year, this gentleman must produce the equivalent of 1280 programmers/artists. I guess he does a lot of overnights...

Edited 1 times. Last edit by Ruben Monteiro on 29th April 2013 1:13am

Posted:A year ago

#5

Steve Peterson West Coast Editor, GamesIndustry.biz

109 73 0.7
Really, the important part is in the details we don't know -- exactly what performance Kotick needs to deliver in order to get those shares. If, for instance, Kotkick delivers $1 billion in profit over five years beyond what is anticipated in the normal course of business, that would seem like a worthwhile return on a $56 million investment. Or if the stock price and market cap of Activision increased by a significant amount, that might be worthy of a large reward.

The suspicion is that that the stock awards may not require such heroic achievements, though, which is all too likely in today's corporate environment.

Posted:A year ago

#6

Paul Johnson Managing Director / Lead code monkey, Rubicon Development

896 1,339 1.5
Ruben? 50K a year huh. I think you need to take a pay cut as most of our cpuntry earn far less than that.

This guys salary does seem a bit ridiculous, but most of it sounds based on a small percentage of how well the company is doing. Which is how all business owners and top execs get paid. If it wasn't like that, they wouldn't do it. It's how I get paid too, though I wish the numbers were in a similar vein. If my firm gets the success of Activision, maybe it will be.

Edited 1 times. Last edit by Paul Johnson on 29th April 2013 9:09am

Posted:A year ago

#7

Dave Herod Senior Programmer, Codemasters

528 788 1.5
Popular Comment

Posted:A year ago

#8

Jakub Mikyska CEO, Grip Digital

202 1,108 5.5
this gentleman must produce the equivalent of 1280 programmers/artists
Kotick is keeping Activision on top, while their competition sinks. He really is one-in-a-million guy, so, if he is only getting the salary of 1280 programmers, he seems ridiculously underpaid ;-)

Posted:A year ago

#9

Paul Johnson Managing Director / Lead code monkey, Rubicon Development

896 1,339 1.5
I looked at Dave Herods link and couldn't see an issue, just an observation.

It's true that people in the red bar are doing disproportionately well for themselves, but I have a question to take away. Does that say more about the red bar people or the non red bar people?

Posted:A year ago

#10

Ruben Monteiro Engineer

80 194 2.4
Paul, If you don't see an issue in Dave Herod's link, is because you've become absorbed in the egoistic dellusion that all is fine and dandy with a system that increasingly promotes misery for most and wealth for a few, as long as you're in the few.
Oh and you're right, my numbers were off, it's more like he gets 2200 times a normal salary. My bad.

Jakub, I'm all in favor of compensation for higher skills, but these values are simply ridiculous and can only happen in a dysfunctional system were money, instead of being a measure of the value of product/service, has become a value in and of itself.

Posted:A year ago

#11

Paul Jace Merchandiser

942 1,428 1.5
I'm just trying to picture Kotick standing on the balcony of one of his multi-million dollar homes, fist-pumping while yelling down to all the people below in his best Dave Chappell voice: "I'm Rich Bitch!!!!!"

Posted:A year ago

#12

Paul Johnson Managing Director / Lead code monkey, Rubicon Development

896 1,339 1.5
"Paul, If you don't see an issue in Dave Herod's link, is because you've become absorbed in the egoistic dellusion that all is fine and dandy with a system that increasingly promotes misery for most and wealth for a few, as long as you're in the few."

Wow, you got all that from a couple of posts on a forum? I'm impressed.

FYI, I'm earning way less than that 50K you mentioned, despite having gambled my house on making a success of my business and still working about 60 hours a week at a minimum. Currently typing this on Tuesday morning at 3.31am for example. And I'm still nowhere near that red band. Who am I pissed at about all this? Nobody.

Stop whining and being jealous of the rich kids and address your own problems. When those at the bottom start doing more of that, those band widths will start to shrink, of that I have no doubt.

Posted:A year ago

#13

Sandy Lobban Founder and Creative Director, Noise Me Up

315 208 0.7
For anyone complaining, why not start your own business, or strategically plan to get that job one day? There's simply no point in bitching about it. That's like expecting to win the Olympics without doing the training.

Good luck to him. They've had some successful games in recent years and the share price is holding up, so he is obviously continuing to make good decisions and consequently keeping everyone in a job.

Posted:A year ago

#14

Jeremy Glazman Programmer

29 4 0.1
For anyone complaining, why not start your own business, or strategically plan to get that job one day? There's simply no point in bitching about it. That's like expecting to win the Olympics without doing the training.
So many things wrong with this statement... if Kotick is like a gold medal olympic athlete, then what does that make the people who actually produce Activision's products, couch potatoes? A businessman schemes his way to the top of the food chain, gets grossly disproportionately rewarded for no apparent reason, and that somehow makes him someone to be idolized? Clearly there is something wrong with the structure of our society if Bobby Kotick is our role model.
he is obviously continuing to make good decisions and consequently keeping everyone in a job.
The man is practically a super hero! Obviously he's worth more than the combined salaries of a thousand other employees!

Posted:A year ago

#15

Paul Johnson Managing Director / Lead code monkey, Rubicon Development

896 1,339 1.5
Yes, obviously. Else he wouldn't bet getting that salary.

I really don't see how some find this so hard to get. Probably down to all these assumptions about "skiving", "trickery", "old boy networks", "schemes" and "silver spoons". I guess hard work, focus, good skills and a track record only mean something to those earning peanuts.

There's a good test for an employee to see if he's worth $64,000,000. He says "give it me or I leave" and observes the result.

Edited 2 times. Last edit by Paul Johnson on 1st May 2013 3:37pm

Posted:A year ago

#16

Jeremy Glazman Programmer

29 4 0.1
I guess hard work, focus, good skills and a track record only mean something to those earning peanuts.
So only CEOs work hard, focus, have good skills and a track record? You can't be serious.

A CEO is just another employee with their own domain of expertise, I don't see how they are valued so disproportionately (in this case, exponentially) higher than almost everybody else in an organization. If they were valued maybe 2x, 3x, 5x as much as the average employee that would be one thing, but 1000x? Seems far more likely that "old boy networks" and "schemes" are to blame here than good ol' hard work and elbow grease.

Bloomberg reported Monday that the ratio of CEO-to-worker pay has increased 1,000% since 1950.

Pay no attention to the man behind the curtain.

Posted:A year ago

#17

Paul Johnson Managing Director / Lead code monkey, Rubicon Development

896 1,339 1.5
>> So only CEOs work hard, focus, have good skills and a track record? You can't be serious.
Hint: Base a response on what I write, not what you read. I never said any such thing.

You know what, I'm done arguing. If you think their job is easy money and just a scheme away, why not get a plan and do it yourself. You can then give your massive salary back to the workforce on the QT. No, seriously. Start now, you'll be there in a couple of years - that must be long enough just to think up one easy scheme.

I am going to wrap up with this:
A good CEO is indeed worth 1000x the wages of one programmer. Because one right decision over a wrong one will generate massively far more wealth for both the company and the employees as that one programmer. Put those 1000 people on the wrong track and pretty soon nobody's earning anything at all.

Edited 1 times. Last edit by Paul Johnson on 1st May 2013 11:01pm

Posted:A year ago

#18

Justin Trautmann Studying Digital Media & Multimedia Technology, Hillsborough Community College

24 35 1.5
A company cannot do well without a good executive in charge. A good executive cannot have a successful company without good employees making product.

Posted:A year ago

#19

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