Activision Blizzard (ATVI) has reached a new payment agreement with CEO Bobby Kotick in which Kotick will receive a lower base salary but could get more than $56 million in shares.
Kotick, who has served as CEO of the video-game developer for more than 25 years, will receive a base salary of $1.75 million starting January 1, according to a SEC filing Friday. This is a cut from Kotick's current salary of $2.37 million.
Under terms of the agreement, Kotick will be eligible for up to $56.25 million in stock depending on the company's performance.
The target value of the incentive plan is $22.50 million, according to the filing.
The new employment agreement could make Kotick one of the highest-paid executives in the U.S.
Last year's highest-paid CEO was Expedia's (EXPE) Dara Khosrowshahi with $94.6 million in compensation, according to a Wall Street Journal analysis. Following Khosrowshahi were CBS's (CBS) Leslie Moonves with $56.8 million and former Viacom (VIAB) CEO Philippe Dauman with $54.2 million, according to the Journal.
Activision Blizzard's "Call of Duty" franchise has been the second-most popular video game so far this holiday season (Nov. 1 to Nov. 24), after Nintendo's (NTDOY) "Pokemon Sun and Moon," according to Adobe's (ADBE) Black Friday report on Saturday.
"We continue to see enthusiasm from our global audiences for our key franchises including 'Call of Duty, Destiny,' 'Candy Crush' and 'World of Warcraft,' plus our newest franchise - 'Overwatch,' which after only about four months had already reached over 20 million players and has incredible player engagement," Kotick said in the company's most recent earnings statement.
The company's biggest fall launches were "Call of Duty: Infinite Warfare," "Call of Duty: Modern Warfare" remastered, "Destiny: Rise of Iron" and "World of Warcraft: Legion," BMO Capital analysts Gerrick Johnson and Tristan Thomas-Martin said in a note last week.
In early November, Activision Blizzard said third-quarter revenue grew 58% year-over-year to $1.57 billion while adjusted earnings rose 145% to 49 cents a share.
Shares of the Santa Monica, CA-based company were up 0.67% to $37.47 in Monday morning trading, but are down nearly 3.5% so far this year.