Activision Blizzard reduces annual base salary of CEO Robert Kotick to $1.8M
Activision Blizzard said in a regulatory filing that on November 22, the company entered into an employment agreement with CEO Robert A. Kotick, who has served in this position for over 25 years. The Employment Agreement is effective as of October 1, 2016 and will expire on December 31, 2021, unless terminated earlier pursuant to the terms and conditions of the Employment Agreement. Kotick will continue to receive his current base salary for the remainder of 2016 at the annual rate of $2,366,757. Beginning January 1, 2017 Kotick's base salary will be reduced to the annual rate of $1,750,000. The Employment Agreement also provides for an annual bonus based upon achievement of certain financial and business objectives determined by the Compensation Committee. For the remainder of 2016, Kotick will continue to have a target annual bonus equal to 200% of his 2016 base salary specified above. Beginning with the 2017 fiscal year, the target annual bonus for each fiscal year shall be equal to 200% of Kotick's reduced base salary. The bonus will be paid in the form determined by the Compensation Committee of the company's Board of Directors in its discretion, including cash, shares of Company common stock, stock options or equity-based awards. The Employment Agreement includes significant changes from Kotick's prior employment agreement that expired on June 30, 2016. Among other changes, the Employment Agreement eliminates any "gross up" payments for Internal Revenue Code Section 280G "golden parachute" excise taxes and all change in control payments to which Kotick may be entitled under the Employment Agreement are "double-trigger." The Employment Agreement does not provide for any guaranteed annual base salary increases. In addition, the Employment Agreement provides for annual equity grants, instead of an up-front grant structure, and includes additional performance conditions and Compensation Committee discretion as to the form and total value of the annual awards, as described below. The Employment Agreement also provides for additional awards and payments in the event of a "Transformative Transaction" and in the event that certain "Shareholder Value Creation" metrics are satisfied prior to December 31, 2021.