The Activision boss, who has drawn criticism for his high earnings at a time when the company is laying off staff in some departments, on April 28 agreed to extend his existing executive employment agreement, according to an 8-K form filed on Thursday.
The previous agreement was due to expire at the end of 2021 but Kotick, who has served as Activision‘s CEO for over 30 years, will now remain in charge of the Call of Duty and World of Warcraft firm until March 31, 2023.
Effective as of January 1, 2021, Kotick has agreed to reduce his base annual salary by 50%, from $1.75 million to $875,000. Kotick’s maximum annual bonus has also been reduced as part of the contract extension.
While his base salary and annual bonus have been cut, it doesn’t mean Kotick—who reportedly earned $30 million in 2020—will make less than he’s accustomed to over the next few years.
The extension states that Kotick will be eligible to earn an annual bonus for each of fiscal years 2021 and 2022 of up to a maximum of 200% of his reduced base salary.
The 8-K form, in which Kotick is praised for transforming Activision’s fortunes during his tenure, also confirms the CEO will be granted long-term equity incentive awards in the form of stock units, with the amount set to be received based on the company hitting various financial performance milestones.
It was claimed in March that Kotick was in line for a payout of nearly $200 million based on the company’s strong stock performance throughout the pandemic, although this figure has been disputed, with Tweak Town reporting he received roughly $41 million worth of shares instead.
While it is unclear exactly how much these will be worth in the long-term, Activision Blizzard’s willingness to retain Kotick suggests he will continue to be rewarded handsomely should the company maintain its current trajectory.
Under Kotick’s leadership, the company’s market capitalisation has increased from less than $10 million to over $70 billion, and total shareholder return has grown by over 8,100% between 2000 and 2020, Activision Blizzard said.