In June 2020, CtW Investment Group, which "works with union-sponsored pension funds to increase long-term shareholder value," called on Activision shareholders to vote against CEO Bobby Kotick's proposed compensation. Managing Director Dieter Weisenegger said at the time that CEO Kotick received nearly $100 million in stock and option compensation alone, an amount that is "consistently higher than the total compensation (base salary, annual bonus, and equity compensation combined) of CEOs at comparable companies in the industry."

(Not that CtW was particularly attracted to Activision's competitors: a month later, CtW filed a similar complaint against Electronic Arts. Activision's bid failed, and shareholders actually rejected a proposed salary package for EA executives)

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In April of this year, Kotick signed a new employment extension agreement with Activision, agreeing to cut his base salary and bonus in half. He will not suffer greatly as a result: after the reduction, his base salary will still be $875,000, and his bonus could be increased by an additional $1.75 million. He will also have some money saved from past bonuses.

Still, a significant reduction is not enough for CtW Group, which said in a statement that the two-year employment extension period is "too short to have a significant impact on total payroll over the long term." As a result, the company is again calling on shareholders to vote against the "Say On Pay" proposal and the re-election of Activision's compensation committee chairman.

"The Compensation Committee failed to address longstanding shareholder concerns about Activision's executive compensation practices by extending CEO Kotick's contract for less than two years, and given the CEO's longstanding and repeated opposition to his pay, shareholders should expect more long-term compensation reform, not just a one-year They should expect more," the statement said." Because the CEO's 2021 equity compensation will be accelerated at the maximum payment level, most of the compensation reductions will apply only to one year in 2022, and therefore may only apply to next year's equity compensation."

Kotick's extended employment period means that his salary could be renegotiated, possibly up as early as April 2023, less than two years from now. Furthermore, this period overlaps with Activision's "Shareholder Value Creation" incentive program, the terms of which already meet the maximum payout potential; CtW Investment Group notes that "Mr. Kotick's equity compensation will only be reduced for the full year of 2022. In other words, this extension is not long enough to demonstrate a serious effort by the Compensation Committee to sustainably reduce the CEO's high equity compensation."

I have no intention of arguing that Cortic's pay is justified, but even if it were, I would not bet heavily on the possibility that shareholders would react to it. Activision's stock price has been moving in the right direction for several years now, and its recent quarterly results "far exceeded expectations."