Karl Slatoff
TAKE TWO INTERACTIVE SOFTWAREAbout Karl Slatoff
Karl Slatoff is President of Take-Two Interactive (TTWO), age 55, serving as President since May 2013 after COO (2010–2013) and EVP (2008–2010) roles; he is a partner at ZMC and serves under Take-Two’s 2022 Management Agreement with ZMC through March 31, 2029 . Prior roles include Lehman Brothers (corporate finance/M&A), Walt Disney (strategic planning), and BMG Entertainment (VP, New Media) before joining ZMC in 2001 . TTWO’s compensation framework for the CEO and President ties annual incentive strictly to Adjusted EBITDA and long-term equity to three-year Relative TSR (vs Nasdaq-100) and Recurrent Consumer Spending (RCS), emphasizing multi-year value creation; FY2025 Adjusted EBITDA target was $902.3M with actual $901.0M, yielding slightly-below-target payouts . 2024 Say-on-Pay support was 86% following governance and pay-for-performance enhancements .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Take-Two Interactive | President | May 2013–present | Leads multi-label portfolio, execution of long-term strategy; serves via ZMC Management Agreement . |
| Take-Two Interactive | Chief Operating Officer | Oct 2010–Apr 2013 | Operational leadership across labels; scaled infrastructure . |
| Take-Two Interactive | Executive Vice President | Feb 2008–Oct 2010 | Senior management; foundation for later COO/President roles . |
| ZMC | Partner | 2001–present | Media-focused PE leadership; TTWO senior management services via ZMC . |
| BMG Entertainment | Vice President, New Media | Pre-2001 | Led online/digital strategy; commercial digital initiatives . |
| Walt Disney Company | Strategic Planning | 1994–1996 | Consumer products, studio, broadcast; initiatives in education/publishing/new media . |
| Lehman Brothers | Corporate Finance & M&A | 1992–1994 | Coverage of consumer products and retail/merchandising industries . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cannella Response Television, LLC | Director | Not disclosed | Direct-response media; governance/strategy oversight . |
| CommentSold, Inc. | Director | Not disclosed | E-commerce/live selling; governance/strategy oversight . |
Fixed Compensation
| Component | FY2025 Amount | Terms | Notes |
|---|---|---|---|
| Company Base Salary | $1 | Employment agreement (Feb 14, 2008) | Enables eligibility for certain benefits; no company annual bonus . |
| Company Annual Bonus | Not eligible | — | Employment agreement provides no annual bonus from TTWO . |
| ZMC Annual Management Fee (paid to ZMC) | $3,300,000 | $275,000/month | ZMC provides executive services; allocation to Slatoff capped at 40% but not disclosed by TTWO . |
Maximum Slatoff allocation caps under the Management Agreement: Mr. Slatoff may receive no more than 40% of compensation paid to ZMC (management fee, annual bonus, RSUs); actual allocations are determined solely by ZMC and are not disclosed by TTWO .
Performance Compensation
| Program | Metric | Weighting | Target | Actual/Result | Payout/Opportunity | Vesting |
|---|---|---|---|---|---|---|
| ZMC Annual Incentive (FY2025) | Adjusted EBITDA | 100% | $902.3M | $901.0M (99.9% of target) | ZMC earned $6,567,000 (slightly below target) | Cash for FY2025; schedule ranges from $0 at ≤80% to $13.2M at ≥150% of target . |
| ZMC Performance RSUs (FY2025 grant, planning value) | Relative TSR (Nasdaq-100) | 75% | 50th percentile | Payout schedule: 0%<40th, 50% at 40th, 100% at 50th, 200% at 75th | Target 207,090 RSUs; max 414,180 RSUs | Cliff vest 100% on June 1, 2027; 3-year measurement (Jun 1, 2024–Mar 31, 2027) . |
| ZMC Performance RSUs (FY2025 grant, planning value) | RCS | 25% | Target: 6% absolute growth or 50% relative of 3-yr avg bookings | Payout schedule: 0%<3%/45%; 50% at 3%/45%; 100% at 6%/50%; 200% at 9%+/55%+ | Included in target/max RSUs above | Same cliff vest and measurement period; uses greater of absolute or relative RCS outcomes . |
| ZMC Time-Based RSUs (FY2025 grant, planning value) | Time-based | — | — | — | $15,073,410 planning value | 1/3 vested May 30, 2025; remaining 1/3 on Jun 1, 2026 and 1/3 on Jun 1, 2027, subject to agreement in force . |
Notes:
- Relative TSR peer set changed from Nasdaq Composite to Nasdaq-100; rigorous thresholds maintained (≥40th percentile minimum, 50th target, 75th maximum) .
- In FY2025, non-ZMC NEOs also had performance RSUs with 75% TSR and 25% RCS over three years, evidencing consistent design .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership (Karl Slatoff) | 1,328,797 shares; includes 48,995 directly held and 1,279,802 RSUs held by ZMC (beneficially owned; Slatoff disclaims except to pecuniary interest) . |
| Ownership as % of outstanding | Less than 1% . |
| Vested vs unvested (ZMC awards) | Unvested RSUs held by ZMC (beneficially counted once): sets granted 6/1/2023 (up to 425,045 shares, vesting on Jun 1, 2026), 6/3/2024 (up to 482,180 shares, time-based in 2026/2027 and performance-based on Jun 1, 2027), 6/2/2025 (up to 372,577 shares, time-based in 2026/2027/2028 and performance-based on Jun 1, 2028) . |
| Stock ownership guidelines | CEO/President: retain at least 6x per annum management fee market value; prohibition on selling below this threshold until Mar 31, 2029; all NEOs in compliance as of proxy filing . |
| Anti-hedging/anti-pledging | Prohibits pledging, short sales, derivatives on TTWO securities; no pledges by directors or executive officers . |
Insider selling pressure: The six-times management-fee holding requirement and anti-pledging materially reduce near-term selling pressure; upcoming RSU vest dates in 2026–2028 could introduce supply from ZMC awards depending on performance/vesting .
Employment Terms
- 2022 Management Agreement (ZMC): Term through March 31, 2029; provides executive services of Mr. Slatoff (President) and Mr. Zelnick (CEO); annual management fee $3.3M; annual bonus range $0–$13.2M strictly tied to Adjusted EBITDA; annual equity grants with 67% performance-based weighting at target and three-year performance/vesting periods .
- Severance/Change-of-Control (ZMC): If TTWO terminates without “cause” or ZMC resigns for “good reason,” cash equals earned but unpaid fee, accrued unpaid bonus, plus 3x (per annum management fee + target bonus); double-trigger equity vesting (change in control plus qualifying termination) .
- Clawback policy: Updated Nov 27, 2023 to comply with Nasdaq/SEC clawback rule; applies to NEOs including ZMC affiliates; recovers excess incentive compensation paid within three years prior to an accounting restatement, irrespective of misconduct .
- Karl Slatoff employment agreement (Feb 14, 2008): Continues as President until termination of the 2022 Management Agreement unless earlier terminated; $1 annual salary; not entitled to an annual bonus from TTWO; post-termination non-compete and non-solicit for one year following termination for “cause” or without “good reason”; continuing indemnification and D&O insurance coverage; no additional severance obligations under this agreement .
Compensation Structure Analysis
- Pay mix and risk: For CEO/President via ZMC, at maximum 80% of total opportunity is performance-based (annual bonus + performance RSUs), strengthening pay-for-performance alignment .
- Equity emphasis: 67% of equity is performance-based at target (TSR 75%, RCS 25%); three-year measurement and vesting periods reduce short-termism and favor durable growth in engagement/recurrent monetization .
- ZMC FY2025 compensation summary: Management fee $3.3M; annual incentive $6.567M; performance RSUs planning value $30.6036M (target 207,090 RSUs; max 414,180); time-based RSUs $15.0734M; total $55.544M; Slatoff’s receipt is capped at 40% of aggregate ZMC compensation but exact allocation is not disclosed by TTWO .
- Historical rigor: Annual bonus payouts varied from zero (FY2023) to less-than-maximum (FY2022), and performance equity forfeitures occurred in prior years, evidencing challenging targets .
Compensation Peer Group & Say-on-Pay
- Peer group (FY2025): Electronic Arts, Playtika, Roblox, Booking, eBay, Expedia, Match, Peloton, Roku, Sirius XM, DraftKings (added), Fox, Hasbro, Mattel, Paramount, Warner Music; FY2026 planned changes include removing Peloton and adding Live Nation, TKO Group, Warner Bros. Discovery to improve size/industry balance .
- Say-on-Pay: 86% approval at 2024 annual meeting; shareholders noted increased goal rigor, longer performance periods, higher share of performance-based equity .
Performance & Track Record
TTWO multi-year fundamentals:
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Revenues ($) | $5,349,900,000* | $5,349,600,000* | $5,633,600,000* |
| EBITDA ($) | $555,500,000* | $520,400,000* | $448,900,000* |
Values retrieved from S&P Global.*
TTWO performance context disclosed in proxy: FY2025 net revenue $5.63B and net bookings $5.65B; major franchises (GTA V >210M sold-in; RDR2 >70M) and NBA 2K franchise strength underpin results; FY2025 Adjusted EBITDA was $901.0M vs $902.3M target . TSR ranking: Top quartile (>75th percentile) for three-year period ended Mar 31, 2025; earlier periods show top-half/top-quartile results vs relevant indices .
Equity Ownership & Vesting Schedules (Detail)
| Holder | Unvested RSUs | Key Dates |
|---|---|---|
| ZMC (beneficially counted for Zelnick/Slatoff) | 1,279,802 RSUs total across grants | 6/1/2023 grant: remaining time-based & performance RSUs vest 6/1/2026; 6/3/2024 grant: time-based vest equal installments 6/1/2026 & 6/1/2027; performance RSUs vest 6/1/2027; 6/2/2025 grant: time-based vest equal installments 6/1/2026, 6/1/2027, 6/1/2028; performance RSUs vest 6/1/2028 . |
Policy constraints: ZMC and “Subject Persons” (includes Slatoff) cannot sell TTWO stock if aggregate Market Value would fall below 6x per annum management fee prior to Mar 31, 2029; formal anti-pledging policy prohibits pledging/margin accounts; no pledges by directors/executives .
Risk Indicators & Red Flags
- Strong anti-hedging/anti-pledging policy; no pledging by insiders; limits insider-leverage risk .
- Double-trigger equity vesting in change-of-control; no excise tax gross-ups in the 2017 Plan; re-pricing of options prohibited; minimum vesting periods; no dividends on unvested awards—sound practices .
- Clawback policy updated per SEC/Nasdaq standards; three-year recovery window irrespective of misconduct .
- ZMC cash severance could be sizable (3x fee + target bonus), which is shareholder-sensitive but governed by rigorous performance structures .
Investment Implications
- Alignment: High proportion of performance-based equity (TSR/RCS) and EBITDA-only annual bonus indicate strong pay-for-performance alignment; three-year measurement horizons mitigate short-term risk .
- Retention & supply: Management Agreement through 2029 plus multi-year RSU schedules support retention; vest dates in 2026–2028 could introduce share supply from ZMC awards depending on performance outcomes, though selling is constrained by 6x-fee ownership requirements .
- Governance quality: Anti-pledging/hedging, double-trigger vesting, clawbacks, and no option repricing reduce governance risk; historical say-on-pay support (86%) reflects investor acceptance of structure .
- Economics in change-of-control: The 3x fee + target bonus cash under termination scenarios and continued vesting mechanics should be considered in M&A modeling; equity remains performance/double-trigger aligned .
- Execution backdrop: TSR outperformance in latest 3-year window and durable franchise performance (GTA, NBA 2K, RDR) support compensation outcomes; monitor RCS trajectory and EBITDA conversion given FY2025 below-target bonus payout .
Note: For CEO/President compensation via ZMC, Mr. Slatoff’s individual receipt is capped at 40% of ZMC’s aggregate compensation; specific allocation amounts are determined solely by ZMC and are not disclosed by TTWO .