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Bobby Kotick Nets $20M In Stock Option Sale
Bobby Kotick Nets $20M In Stock Option Sale
November 13, 2009 | By Chris Remo

November 13, 2009 | By Chris Remo
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The same day Activision released Infinity Ward's Call of Duty: Modern Warfare 2, CEO Bobby Kotick celebrated the game's record launch performance by exercising stock options that netted him more than $20 million.

A large quantity of stock vested for the CEO in 2000, when the options were valued at the comparatively meager price of $1.035 per share. Starting on Monday of this week, according to an SEC filing from Activision, Kotick sold 1,931,102 shares of that stock at prices ranging from $11.4304 to $11.5107.

With a stock price well over ten times what it was at the vesting date, Kotick grossed $22,183,738.56 from a stock option purchase of $1,991,931.71 -- netting a grand total of $20,191.806.85.

Activision's stock (NASDAQ: ATVI) has actually risen ever so slightly since that point, having closed at $11.69 the day this article was published.

It is of course not the first time the CEO has netted big money through stock options. This August, when Activision was trading slightly higher, at $12.44, he sold a volume of 2 million shares and brought in nearly $25 million gross.


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Comments


Dr. Squirrel
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Oh, maybe he wants to move house and needs a bit extra, just to be safe.

Stevan Zivadinovic
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I wonder if he works 95-hour work weeks around each and every one of the many crunch times he presides over.

J Boone
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I have no problem with a CEO cashing out his / her options to make a profit. Take into consideration those options were granted to him by a board of directors and CEOs like Kotick were elected to their position. Before we see anyone bashing ANY CEO for the profits they make, consider how they got there, who put those individuals there (and allowed such salaries + options), and what they do for the particular company.



If Kotick makes $20M in options but puts out games MW2 that bolsters the company stock and company in general, then he's worth the profit. Additionally, if he's smart enough to see the industry and can take sufficient risks to warrant the money spent to make a MW2, then he's worth every penny, and we as gamers should be happy that we get good games like MW2.



On the flipside, if a CEO pumps up the stock of a company and then jumps ship, then instead of being completely bitter at the CEO, spread some of that bile for the morons that put such a CEO in that position and didn't incorporate any checks and balances.

Andrew Dobbs
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If you have a problem with how much money some of these guys make while all the people actually doing the work get laid off then stop buying the games they make.



I haven't bought (or pirated or rented) an Activision or EA game all year, and I don't plan on buying any in the future. If you don't believe in the system then stop paying into it. Support indies, stay indie, and preserve your soul.

Z Z
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...

Eric Adams
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J Boone makes great points about this situation. These massive stock payouts happen all the time with CEOs of companies that do very well. I think Steve Jobs recently made 300 million on an exchange. My question is does Bobby, as someone who has worked his way up in the industry (and he has), reward and acknowledge his ATVI staff for their stellar work that helped to realize his fortune?



Granted his staff gets compensated by the company, but as a CEO who is now ultra wealthy he should not overlook the efforts of his line troops in his success.



A reward can be as simple as a self-written thank you company wide email or as generous as a self-funded party event.

Leo Gura
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Capital gains is taxed at 15%.

Timothy Ryan
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Don't grief Bobby. He deserves it. At least these were stock options tied to company performance rather than some obscure executive bonus where execs get rich no matter how well the company does. Case in point - the former Clorox salesman running EA.

Morgan Ramsay
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http://people.forbes.com/profile/robert-a-kotick/1126

[User Banned]
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This user violated Gamasutra’s Comment Guidelines and has been banned.

Richard Cody
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He knows how to make money. I'm have no preference of indie or mainstream. I actively search for new, cool iTouch games and XBL Indie games. But there's no denying the fun and competition that comes with a game like MW2. They even innovated and took chances with games like DJ Hero (which, from what I've played, is pretty great).

I mean no one should be "worth" that much but he has done well. He talks like an idiot sometimes, but the end products are reliably decent. Customers like that.

Benjamin Marchand
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Management by terror shouldn't grant the right to suck so much money out of people's work.



http://www.industrygamers.com/news/bobby-koticks-goal-to-take-all
-the-fun-out-of-making-video-games/

Fiore Iantosca
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This will be petty change when the $ from MW2 are said and done.

Tyler Peters
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Bob Stevens summed it up perfectly.

And for those of you who don't understand how options work, look it up in Google Finance.

Rodney Brett
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Boycotts hurt the lower tier employees in the same way that trade embargoes(like US/Cuba) hurt the Cuban civilians. I never understood it. CEOs still cash out, even for doing a poor performance. I won't pretend to understand the economics of huge stock payouts. All I'll say is that there are over 1000+ laid off employees that could use some of that 30 million right about now.

Patrick R
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Bob: "First, the fact that he made $9-10/share off this transaction is due in part to how he's lead the company"



Do you think this could have something to do with the industry going from nascent to mass cultural media in this time period?



Bob: "Second, I'm not sure if people understand the irony, but when you boycott companies you shouldn't claim to care about the employees of those companies."



Do you think buying more EA games would keep those people working who are being fired to cut $100 million at the same time the EA pays owners (and upper management via options) $300 million for Playfish?



Given your stated knowledge, I will assume that you understand public companies are driven by unachievable year over year growth practices and regardless of how much we consume, this, like our current way of consuming, is unsustainable and when the market corrects, as it always does, the only way to maintain growth is "restructuring" a perfectly viable organization in-order to boost profits. And as a result of this "good" work CEOs like Kotick still get performance bonus even though the real value of the company, its employees and assets has in fact dropped.

Jun Mori
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Sounds like one lucky man.


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