Activision-Blizzard Shareholders Condemn CEO's "Skewed Approach To Human Capital Management"

Plenty of gamers think Activision-Blizzard CEO Bobby Kotick makes too much money -- and now, some people with the actual power to do something about that agree. GamesIndustry.biz is reporting that the CtW Investment Group, which represents "a 'substantial' portion of Activision Blizzard's shareholders," believes that Kotick's compensation for his role is outsized when taking into account the company's recent performance.

CtW director Dieter Waiznegger has urged Activision-Blizzard shareholders to vote against the Management Say on Pay proposal, which will be voted on on June 11. According to Waizneggar, "performance-related vesting thresholds have not been met"; despite that, Kotick's compensation, which is nearly $100 million per year, remains "consistently larger than the total pay... of CEO peers at similar companies."

Waizneggar specifically called out that Activision-Blizzard's "skewed approach to human capital management - lavishing multi-million dollar rewards on the CEO as employees face layoffs - needs to be addressed before it manifests in deeper operational problems."

Activision-Blizzard countered by stating that the company's market capitalization has increased from less than $10 million to over $53 billion since Kotick took over as CEO in 1990, and that its share price has "outperformed the S&P 500 by over 11,000%" over the past 20 years. It also pointed out that "Over 90% of Mr. Kotick's proxy reported compensation is performance-based."

The dispute, it would seem, revolves around the classic question, "What have you done for us lately?" It's indisputable that Activision-Blizzard has become a juggernaut in the entertainment industry over the past several decades, but if Kotick's management over the past few years is leading the company in the wrong direction, then things might change.

I'm not going to try and make sense of the numbers and counter-numbers and everything that goes into CEO compensation, except to say that it's unlikely that anyone, in any position, is worth $100 million. If the shareholders of Activision-Blizzard agree and think that they could find someone just as useful as Kotick for, say, a mere $20 million or so -- and I'm sure they could -- then we might see some changes, either to Kotick's compensation or to his employment status.