Why is the Activision Financial Director's award in reality less than $15 million
Yesterday it was reported that Dennis Durkin, rehired by Activision Blizzard as CFO, will receive a fabulous bonus of $ 15 million. The company also promised him a cash bonus in addition to an annual salary of $900 thousand. But if you look closely at Durkin’s employment contract, it becomes clear: Activision’s generosity has its limits and a number of conditions.
Salary and bonuses
Everything is simple here: as the financial director of Activision Blizzard, Durkin will earn $ 900 thousand a year. This is without taxes. He can also count on an annual cash bonus of 150% of his salary — this is $ 1.35 million.
Prize
The bonus is really surprising, if we recall that Activision has recently been set up to cut costs in every possible way. Durkin’s bonus will be $15 million, but he will receive $11.25 million of them in shares. And there are nuances here.
- The shares that Durkin will receive are PSU (performance share units). These shares are tied to the efficiency of the business, or, in the case of Durkin, the efficiency of his work.
- Durkin has not yet been granted the rights to own these shares. This could happen in March 2020 or March 2021.
- The granting of rights will take place only after certain financial indicators have been achieved — that is, a specific amount of operating profit and earnings per share.
- Of course, by the time the agreed indicators are reached, Durkin should still be the financial director of Activision.
Durkin can spend the remaining bonus $3.75 million right now. But Activision issued this money with the possibility of a refund. Under the terms of the employment contract, Durkin is obliged to return the $3.75 million to the company if he is fired (or lured to another organization) by January 2020.
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