Bobby Kotick is set to earn somewhere in the region of £375 million if Microsoft’s acquisition of Activision Blizzard gets over the line.
The US Federal Trade Commission’s attempt to seek an injunction against Microsoft’s takeover of Activision Blizzard was quoshed yesterday, with the court ruling in favour of Microsoft. The deal isn’t quite sealed yet: the FTC has said it will continue to fight the acquisition, and Microsoft still has to persuade the UK’s Competition and Markets Authority to let the deal pass, after the regulator blocked the acquisition back in April.
But with yesterday’s court decision, there is now a reasonable chance that the takeover of Activision Blizzard could well go through by the 18th July deadline. So how much does Activision Blizzard head Bobby Kotick stand to make if the deal goes go ahead?
The answer is: a lot. Microsoft’s $68.7 billion takeover of the company puts a value of around $95 on each share. According to Fortune, Bobby Kotick owns just shy of four million shares in Activision Blizzard, which means he stands to receive around $375 million once the deal is signed.
However, Kotick has the right to acquire up to 6.5 million shares, which could push his payout considerably higher. In addition, according to the SEC filing, the Microsoft takeover agreement includes a ‘Golden Parachute’ clause which would potentially give Bobby Kotick a severance payout of nearly $15 million. The Wall Street Journal reported in January 2022 that Kotick was expected to leave if the takeover deal went through, but in April 2022, Activision Blizzard denied that any such arrangement had been made.
Kotick is already one of the most well-paid CEOs in the games industry. Back in 2021, after shareholders complained about Bobby Kotick’s high pay, Kotick voluntarily reduced his salary by 50%. But that still left him with a salary of $875,000. For comparison, the median salary at Activision is around $91,579, according to Salary.com.
Later in 2021, Kotick cut his salary again to $62,500, the “lowest amount California law will allow”, after Activision was rocked by allegations of harassment. He also said he was “asking not to receive any bonuses or be granted any equity during this time”.
Speaking of bonuses, it’s worth noting that Bobby Kotick’s salary is only a small part of his earnings. Even after his 50% pay cut in April 2021, Kotick was still entitled to annual bonuses up to a maximum of 200% of his base salary. In addition, he has received huge rewards based on share performance.
In June 2021, Activision Blizzard shareholders narrowly approved a compensation package worth $155 million for Bobby Kotick, linked to increases in the company’s share price since 2016. The approval vote only just squeaked over the line, with 54% of shareholders voting in favour. Then in February 2022, it was revealed that Kotick would be eligible to receive up to $22 million in stock bonuses later in the year if “Activision Blizzard has made appropriate progress” towards improving the company’s culture in the wake of the harassment allegations.
In short, Bobby Kotick has consistently been one of the highest earning CEOs in the games industry over the past couple of decades, thanks to generous stock options and bonus packages, and he will potentially receive hundreds of millions of dollars more if Microsoft buys Activision Blizzard.
