The woes for Activision Blizzard continue this week, after an eventual few days that have seen some shakeups at the massive publisher.
Last week, it was announced that Activision will be parting ways with Bungie, the development team behind the Destiny franchise, along with the news that Blizzard Co-founder Mike Morhaime will be leaving the company later this year. This all on the heels of the firing of CFO Spencer Neumann on January 1st, after he was found to be discussing with Netflix for a position he then took at the streaming giant.
This week has added to the drama, most of it today surrounding new CFO Dennis Durkin, who is reportedly receiving a $15 million reward package as part of his appointment to the CFO office.
Per a quick post on Bloomberg, Durkin will we be getting $11.3 million in restricted stocks tied to the operating income and earnings-per-share targets of the entire company, along with a $3.75 million sign-on bonus. In the position, Durkin would be receiving a $900,000 yearly salary, with a $1.35 million target bonus on top.
It should be noted that Durkin is not receiving a full cash bonus to return to the position, but rather shares and equity making up the majority of the package, as is the case for many executives. This is in line with many executives at a similar level. Durkin was previously the Chief Financial Officer, before vacating it back in May of 2017 to become the companies Chief Corporate Officer.
Quick Take
I honestly think putting Durkin in as CFO is likely a temporary move to try and reassure investors. After the stock drop over Bungie, Activision needed to move fast and the deal they made with Durkin was probably after a few days of negotiation, and the news of Morhaime and the possible Pomerantz investigation are only compounding problems.A lot of folks are likely going to criticize Activision Blizzard for making that deal, but in the corporate world offering CFO's stock options and money is not out of the ordinary. Most of his package is basically tied to the stock of the company, and therefore the companies performance, so it behooves Durkin to help 'right the ship' so to speak.
The bigger question is what can Activision do to stop the bleeding. They make a ton of money thanks to Call of Duty and Blizzard alone, but after the loss of Bungie, the lack of tie-in franchises and the lower presence of the likes of Skylanders, Guitar Hero and other franchises under their belt, they don't have much else to show for it.
I guess time will tell with whatever happens next. What do you think though? Leave your comments below.
