Over the past few weeks, Activision Blizzard has been dealing with the ramifications of their previous CFO, Spencer Neumann, being fired after breaching his contract by searching for a new job. With Neumann now working for Netflix under the same job title, Activision’s Dennis Durkin will be reprising his CFO role he held just a couple years ago, and has received a hefty payday for doing so.
As reported by Bloomberg, Durkin will be receiving $15 million as part of his appointment as the company’s new Chief Financial Officer. Durkin already had a previous stint as Activision Blizzard’s CFO for five years until May 2017, when Spencer Neumann had taken over the position. Out of Durkin’s awarding of $15 million, $3.75 million of it is considered his sign-on bonus. The remaining amount, which is roughly $11.3 million, is under restriction as company stock tied to earnings targets and operating income. To put these number into perspective, Durkin’s base salary is a reported $900,000.
While incentives and bonuses are not an uncommon practice in business, Durkin’s bonus opposes the recent history of Activision Blizzard in the past few months. Following the negative response from BlizzCon in November with Diablo Immortal’s announcement and a push to bring more games to mobile platforms, Activision saw a noticeable drop in stock prices.
Another huge announcement which caused stock prices to drop was the splitting between Activision and Bungie, who were then in the middle of a multi-year deal for Destiny, which hadn’t met the former’s expectations despite reports of improved sales numbers from quarter-to-quarter. On top of the steep losses, the company is also currently under investigation for fraud and unlawful practices.
In response to failing to meet expectations, Activision has also begun cutting costs internally. The company’s European customer service offices based out of Cork, Ireland reported last month that employees were being incentivized with up to a year’s worth of salary to “voluntarily” leave their jobs. Plus, with live service games such as Diablo and Overwatch continuing to see a steady decline in monthly users, Activision is now pushing for more new game releases on the regular basis as a means to keep players invested in its titles, and that’s before mentioning any form of microtransactions the company may implement in the future.
As a result, it seems odd that Activision’s businesses are being asked to find ways to cut costs, while its executives are making more money. But this isn’t the first or the last time, bonuses have been handed out to executives while a company is struggling. Just look at Toys R Us near the end.
Source: Bloomberg
