Bobby Kotick has been the CEO of Activision Blizzard, Inc. (NASDAQ:ATVI) since 1991. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Bobby Kotick's Compensation Compare With Similar Sized Companies?
Our data indicates that Activision Blizzard, Inc. is worth US$38b, and total annual CEO compensation is US$31m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.8m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Thus we can conclude that Bobby Kotick receives more in total compensation than the median of a group of large companies in the same market as Activision Blizzard, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Activision Blizzard has changed over time.
Is Activision Blizzard, Inc. Growing?
On average over the last three years, Activision Blizzard, Inc. has grown earnings per share (EPS) by 12% each year (using a line of best fit). Its revenue is up 1.4% over last year.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Activision Blizzard, Inc. Been A Good Investment?
Activision Blizzard, Inc. has generated a total shareholder return of 23% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We examined the amount Activision Blizzard, Inc. pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Whatever your view on compensation, you might want to check if insiders are buying or selling Activision Blizzard shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.