Strauss Zelnick
TAKE TWO INTERACTIVE SOFTWAREAbout Strauss Zelnick
Strauss Zelnick (age 68) is Executive Chairman and Chief Executive Officer of Take-Two Interactive, serving as Chairman since March 2007, Executive Chairman since February 2008, and CEO since January 2011; he is a founder and partner of ZMC, through which he provides services to TTWO under a management agreement. He holds a BA from Wesleyan University and a JD/MBA from Harvard Law School and Harvard Business School, respectively, and has led TTWO’s transition to a diversified portfolio and multi-year equity- and performance-linked pay structure emphasizing TSR and recurrent consumer spending (RCS) .
| Performance Indicator | FY 2024 | FY 2025 |
|---|---|---|
| Adjusted EBITDA ($ Millions) | 845.2 | 901.0 |
| TSR ($ value of $100 initial investment) | 125.19 | 174.73 |
| Net Revenue ($ Billions) | — | 5.63 |
| Net Bookings ($ Billions, operating metric) | — | 5.65 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ZMC | Founder & Partner | Ongoing | Provides TTWO executive leadership via Management Agreement; access to deal flow, PE discipline |
| BMG Entertainment | CEO (Global) and CEO (North America) | 1994–1998 (NA); then Global | Led $4.7B music company, global ops in 54 countries |
| Crystal Dynamics | President & CEO | Prior to Fox tenure | Built interactive game software capabilities |
| 20th Century Fox | President & COO | 4 years | Managed worldwide film and distribution |
| Vestron Inc. | President & COO | 3 years | Senior executive rise in media distribution |
| Columbia Pictures | VP, International TV Sales | Earlier | International sales expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Starwood Property Trust, Inc. | Director (current) | Current | External public board perspective |
| Entertainment Software Association | Director; Chair (2014–2017) | Past | Industry leadership and policy |
| ViacomCBS (CBS) | Director; Interim Non-Exec Chair; Comp & Nominating Committees | 2018–2019 | Governance experience, turnaround oversight |
Fixed Compensation
TTWO compensates Zelnick via ZMC under the 2022 Management Agreement; he receives $1 in cash from TTWO to access benefits.
| Component (FY 2025) | Terms | Amount |
|---|---|---|
| Annual Management Fee (to ZMC) | Fixed; $275,000/month ($3.3M/year) | $3,300,000 |
| Company Salary to Zelnick | Fixed | $1 |
| Director Fees | None (as CEO) | $0 |
Annual incentive (cash) is formulaic off Adjusted EBITDA with no discretion.
| Adjusted EBITDA Goal (FY 2025) | Actual vs Target | Annual Incentive Paid (to ZMC) |
|---|---|---|
| Target: $902.3M | Actual: $901.0M (99.9% of target) | $6,567,000 (slightly below target) |
Bonus schedule (straight-line proration):
| % of Adjusted EBITDA Target | Bonus Amount (to ZMC) |
|---|---|
| ≤80% | $0 |
| 90% | $3,300,000 |
| 100% (Target) | $6,600,000 |
| 150%+ (Max) | $13,200,000 |
Performance Compensation
Long-term equity is granted to ZMC (not directly to Zelnick) and is majority performance-based with rigorous three-year measurement.
| FY 2025 ZMC Equity Grant (June 1, 2024) | Weighting | Targets/Thresholds | Vesting |
|---|---|---|---|
| Performance RSUs (TSR + RCS) Planning Value | 67% of LTI at target; up to 80% at max | Target RSUs: 207,090; Max RSUs: 414,180 | 3-year cliff; vests June 1, 2027 (performance-based) |
| Time-Based RSUs Planning Value | 33% of LTI | N/A | Ratable over 3 years; 1/3 vested May 30, 2025; then June 1, 2026 and June 1, 2027 |
Performance metrics and payout curves:
| Metric | Weight | Threshold | Target | Max | Notes |
|---|---|---|---|---|---|
| Relative TSR vs Nasdaq-100 | 75% of perf RSUs | 40th percentile → 50% of target | 50th percentile → 100% of target | 75th percentile → 200% of target | No TSR catch-up; multi-year rigor |
| RCS (Absolute Growth OR Relative as % of Net Bookings) | 25% of perf RSUs | Abs: 3% → 50%; Rel: 45% → 50% | Abs: 6% → 100%; Rel: 50% → 100% | Abs: 9% → 200%; Rel: 55% → 200% | Take best of two measures |
Historical vesting evidence:
| Performance Awards (Selected) | Vested | Forfeited |
|---|---|---|
| 2022 2-Year (vested May 31, 2024) | RCS: 37,732; TSR: 45,280 | TSR: 67,920 |
| 2022 3-Year (vested May 30, 2025) | RCS: 41,304; TSR: 123,910 | — |
Compensation governance highlights:
- Clawback policy updated to Nasdaq/SEC standards; applies to ZMC and “Executives” for 3-year restatement lookback .
- Strong anti-hedging and anti-pledging; no holding in margin, no pledging; none of the directors/executives have pledged TTWO stock .
- Double-trigger equity acceleration on change of control; no options repricing; meaningful stock ownership requirements .
Equity Ownership & Alignment
| Holder | Beneficial Ownership (as of July 17, 2025) | % Outstanding | Details |
|---|---|---|---|
| Strauss Zelnick | 1,645,348 shares (incl. trusts and RSUs held by ZMC) | <1% | Includes 326,495 shares via Zelnick/Belzberg Living Trust, 39,051 via Wendy Jay Belzberg 2012 Family Trust, and 1,279,802 RSUs at ZMC; Zelnick disclaims beneficial ownership except to pecuniary interest |
| ZMC Unvested RSUs (aggregate) | Target: 824,790; Max: 1,423,088 | — | Unvested RSUs value: $170,937,728 (target) or $294,934,988 (max) at $207.25 close on Mar 31, 2025 |
Upcoming vesting cadence for ZMC RSUs:
- Grants (with both time-based and performance tranches) scheduled to vest: June 1, 2026; June 1, 2027; June 1, 2028 .
Ownership policies and restrictions:
- Executive ownership guideline: ZMC and “Subject Persons” (includes Zelnick) must maintain TTWO equity market value ≥ 6x annual management fee until March 31, 2029; cannot sell below this threshold .
- Anti-pledging/hedging: No margin accounts, pledging, short sales, or derivatives; minimum 6-month holding for open market purchases .
- Director ownership guideline: 5x annual cash retainer; all directors in compliance as of record date .
- Executive officer guidelines: 6x base salary for CEO/President, 3x for other NEOs; hold at least 50% of net shares until compliant; all NEOs in compliance .
Insider selling pressure indicators:
- The company registered RSUs for ZMC sale and disclosed intent to sell shares promptly after vesting to satisfy tax obligations under a 10b5-1 plan, evidencing sale activity around vest dates (e.g., 9,537 shares planned post-vesting) .
- Upcoming RSU vest dates (2026–2028) and large unvested balances suggest periodic tax-related selling around vest events, bounded by the 6x-fee retention rule .
Employment Terms
| Provision | ZMC (covers Zelnick’s services) | Detail |
|---|---|---|
| Term | Effective May 23, 2022 through Mar 31, 2029 | Superseded 2017 agreement; annual fee and bonus schedules fixed; annual equity grants |
| Severance (no-cause or good reason) | Cash: Earned unpaid fee + earned unpaid bonus + 3x (annual fee + target bonus); Equity: accelerated vesting as specified | Applies pre/post change in control; no enhanced cash on change in control; double-trigger equity vesting on CoC |
| Annual Bonus Metric | Adjusted EBITDA (objective, no discretion) | Rigorously set; FY 2025 target $902.3M; actual $901.0M |
| Fee/Bonus Caps Allocation | Max 60% of ZMC compensation allocable to Zelnick; 40% to Slatoff | Allocation within ZMC at ZMC’s discretion, TTWO not involved |
Contracts and policies:
- Clawback policy aligned to SEC/Nasdaq; 3-year lookback on restatements .
- No tax gross-ups on parachute payments; severance reduced if Section 280G excise would be avoided .
- Strong securities trading policy with 10b5-1 plan requirements and restrictions detailed .
Board Governance
Zelnick serves as combined Chairman/CEO; TTWO mitigates dual-role risks with a Lead Independent Director and fully independent Audit, Compensation, and Corporate Governance committees.
| Role/Committee | Status | Notes |
|---|---|---|
| Board Leadership | Combined Chairman/CEO; Lead Independent Director (LaVerne Srinivasan) | Lead Independent Director presides over sessions, sets agendas, liaises with management and shareholders |
| Executive Committee | Member (with Srinivasan (Chair) and Dornemann) | Committee met 4 times in FY 2025 |
| Independence | Zelnick is not independent under Nasdaq rules | Nine of ten nominees independent; independent-only core committees |
| Attendance | Board met 9 times; all directors ≥75% attendance; all attended 2024 annual meeting | Practices include off-site strategy sessions and annual evaluations |
| Say-on-Pay | 86% support in 2024 | Extensive shareholder engagement reported |
| Compensation Peer Group | 16 companies incl. EA, Roblox, eBay, DraftKings, Fox, Hasbro, Mattel, Paramount, Warner Music; FY 2026 adds Live Nation, TKO, WBD | Periodic refresh with FW Cook; size- and industry-relevant peers |
Director compensation and ownership:
- Zelnick receives no director compensation as CEO .
- Non-employee director retainer and committee fees are provided; directors may elect stock; director ownership guideline 5x cash retainer, all in compliance .
Compensation Structure Analysis
- Increased “at-risk” equity (performance-based RSUs 67% at target, 80% at max) and lengthened performance periods to 3 years—aligning compensation with longer-term TSR and RCS outcomes .
- Annual cash bonus solely tied to Adjusted EBITDA; FY 2025 payout slightly below target, demonstrating rigor and lack of discretion .
- Elimination of option repricing; strong anti-hedging/anti-pledging; meaningful ownership requirements—reducing misalignment risk .
- Enhanced disclosure of fee caps and vesting curves; no automatic fee increases under the agreement .
Related Party Transactions
- Management Agreement with ZMC governs Zelnick’s and Slatoff’s service; TTWO pays fees/bonuses/equity to ZMC; expense reimbursement allowed; compensation limits and sale restrictions embedded .
- S-3ASR registered RSUs for ZMC and disclosed Rule 10b5-1 plan sales, including tax-related selling post vesting .
Risk Indicators & Red Flags
- Dual Chairman/CEO structure offset by Lead Independent Director and independent committees; still a governance watchpoint for some investors .
- Significant unvested RSU balances at ZMC create periodic selling pressure around vest dates; retention rule (6x fee) limits net disposals .
- Related party management agreement demands continued oversight; however, performance alignment (TSR/RCS) and rigorous targets mitigate concerns .
Say-on-Pay & Shareholder Feedback
- 86% approval at 2024 meeting following outreach; investors supported increased goal rigor, longer performance periods, and higher performance-based equity weighting .
Expertise & Qualifications
- Education: BA (Wesleyan), JD/MBA (Harvard) .
- Deep media/entertainment leadership; prior CEO roles across BMG, Crystal Dynamics; governance tenure at ESA and ViacomCBS .
Work History & Career Trajectory
- Progression from Columbia Pictures international sales to senior operating roles (Vestron, Fox), then CEO roles (Crystal Dynamics, BMG), to founding ZMC and leading TTWO since 2007 .
Compensation Committee Analysis
- Committee composition: Sheresky (Chair), Dornemann, Hernandez, Moses—independent; retained FW Cook; conducted 360° interviews and annual reviews of ZMC structure .
- Program emphasizes pay-for-performance using Adjusted EBITDA, Relative TSR, and RCS; annual risk assessment found no material adverse risk from compensation programs .
Investment Implications
- Compensation alignment: High share of multi-year performance equity tied to TSR (vs Nasdaq-100) and RCS should incentivize durable growth and share price outperformance; FY 2025 EBITDA near-target payout confirms rigor .
- Trading signals: Large unvested RSU blocks with scheduled vest dates (2026–2028) and a history of tax-related 10b5-1 plan sales imply potential episodic supply around vesting; mitigated by 6x-fee ownership retention .
- Governance: Dual-role Chairman/CEO is balanced by strong independent oversight (Lead Independent Director; independent committees) and robust policies (clawback, anti-pledging), but remains a governance flag for some investors .
- Performance momentum: TSR improved materially from FY 2024 to FY 2025; pipeline commentary (e.g., GTA VI fiscal 2027) suggests potential uplift to bookings and profitability, which would favor equity-award vesting outcomes and long-term incentive payouts .