The Chief Executive Officer at Activision Blizzard, Bobby Kotick, is reportedly set to receive a massive bonus from the company, expected to be worth around $200 million, despite the fact that the company announced moves to lay off around 190 workers yesterday.
You may recall we announced that Activision Blizzard were set to lose 50 workers from their esports department as part of a refocusing of their efforts on online tournaments, away from live events.
However, further research has revealed that the reported figures may be lower than the actual number of people losing their job in the latest spate of Blizzard’s recent lay-offs.
Estimates are that around 2% of the workforce (around 190 people) may have been made redundant by the company.
Strong Performance On The Stock Markets
The claims about Mr. Kotick’s bonus payment were made by the corporate accountability and union pension fund advocacy firm CtW Investment Group.
They explained that due to the strong performance by Activision Blizzard shares on the stock exchange throughout 2020, that Mr. Kotick would be in line to receive a bonus just shy of $200 million on the back of that.
This comes after Mr. Kotick had received over $20 million worth of bonuses in the form of stocks and option equity per year, over the last four years.
Despite the COVID-19 pandemic, Activision Blizzard enjoyed sustained growth and strong performances throughout 2020 and its share price has risen to a high of over $102 per share over the past couple of months.
It is part of a growing trend for traders to consider investing in esports stocks over the past couple of years.
Currently, its share price is $92.26, which is considerably more than the $56 each share was valued at 12 months ago.
Mr. Kotick has a ‘shareholder value creation incentive’ clause in his contract with the company, which means that when the company performs well on the stock market, he is in line for incentivised bonus payments.
However, other shareholders are believed to be unhappy at the size of the bonuses being awarded to Mr. Kotick. Last June, a significant number of shareholders campaigned to block a different set of bonuses set to be paid to Mr. Kotick.
They argued that the Activision Blizzard CEO was “paid disproportionately [compared] to other employees and fellow CEOs from other companies.”
Similarly, Michael Varner, a researcher with the CtW Investment Group commented that
“While the increase in Activision’s stock price is somewhat commendable, as we stated last year and continue to assert, this achievement alone does not justify such a substantial pay outcome for the CEO.”
The timing of the announcement also does not reflect well on Activision Blizzard coming just 24-hours following the job-loss announcement.
Bloomberg has reported that most employees made redundant were given a year of health benefits, 90-days severance pay, and $200 worth of Battle.bet gift cards.
Since 2019, around 800 people have been made redundant by the company globally, despite an increasing improvement in performance on the stock exchange.
For a company that relies on the support of the game-playing public to play its games, it is certainly not positive news for the company and one that will, once again, reflect very badly on how it treats its employees, compared to its chief executive officer.