Take-Two Interactive's chairman, Strauss Zelnick, and president, Karl Slatoff, are set to collect $43 million for their management fund, ZMC, even after cutting 5% of the company’s workforce.
In a recent letter to shareholders, Zelnick boasted about the "tremendous growth" expected in the coming years, largely thanks to the anticipated release of Grand Theft Auto VI. However, this optimism comes after laying off 550 employees and spending $460 million to acquire Gearbox. Despite these costs, Zelnick and Slatoff also secured a $25 million 'performance-based bonus' for ZMC.
This information was disclosed in the same report where Zelnick’s letter appeared. It outlined that for fiscal 2024, ZMC received a $3.3 million annual management fee, along with a chance for an additional $2.8 million performance-based incentive, tied exclusively to company performance metrics. Moreover, ZMC was granted $25 million in performance-based restricted stock units (RSUs) and $12.4 million in time-vested RSUs. While these RSUs will take several years to fully vest, it's notable that had Take-Two’s performance been even stronger, ZMC could have earned up to $79.2 million.
Earlier this year, Zelnick told IGN that Take-Two had "no current plans" for mass layoffs and that no firm decisions had been made. Yet, just a month later, the company bought Borderlands studio Gearbox for $460 million, followed by layoffs affecting 550 employees, with the corporation projecting savings of up to $165 million as a result.
These layoffs occurred just 10 days after the end of the fiscal year, the same year in which ZMC received $25 million in ‘performance-based’ RSUs—a plan that had been discussed as early as February.
Zelnick also noted that Take-Two's largest expense is marketing, which the company aims to "optimize." Shortly after this, the potential closure of Roll7 was hinted at, a move some have described as an “insulting rug pull.”
According to the 2022 Management Agreement, Zelnick may not receive more than 60% of the total compensation paid to ZMC, while Slatoff’s share is capped at 40%. Both executives also earn an annual salary of just $1 from Take-Two Interactive, giving them access to “certain and other plan benefits.”
ZMC is described as a "leading investor in and operator of media, entertainment, communications, and technology businesses" and is largely responsible for overseeing Take-Two’s executive management.
The irony isn't lost on me that some of the best parts of Grand Theft Auto are its satirical jabs at corporate figures like Zelnick and Slatoff.
That is so god damn fucked up!! Unfortunately...I know damn well I will be still buying their games but shit like this should seriously have some sort of repercussion of some sort. 550 people get their lives totally up-ended and the leadership get a bonus on top of an already high salary. 25M could set those 550 people up with an annual salary each of $45,000. Depending on where you live, that is a very livable salary even...
Can't wait to hear how the corporate bootlickers defend this.