Bobby Kotick has been the CEO of Activision Blizzard, Inc. (NASDAQ:ATVI) since 1991, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Activision Blizzard.
How Does Total Compensation For Bobby Kotick Compare With Other Companies In The Industry?
Our data indicates that Activision Blizzard, Inc. has a market capitalization of US$64b, and total annual CEO compensation was reported as US$30m for the year to December 2019. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.8m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$14m. This suggests that Bobby Kotick is paid more than the median for the industry. What's more, Bobby Kotick holds US$199m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 21% of total compensation represents salary, while the remainder of 79% is other remuneration. Activision Blizzard pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Activision Blizzard, Inc.'s Growth Numbers
Activision Blizzard, Inc. has seen its earnings per share (EPS) increase by 16% a year over the past three years. Its revenue is down 1.7% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Activision Blizzard, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Activision Blizzard, Inc. for providing a total return of 33% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As we touched on above, Activision Blizzard, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth and shareholder returns have been top-notch for the past three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. Given the strong history of shareholder returns, the shareholders are probably very happy with Bobby's performance.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Activision Blizzard that investors should think about before committing capital to this stock.
Important note: Activision Blizzard is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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