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Report: Take-Two approves new management payout

Game publisher says new compensation packages for its management firm, ZelnickMedia, are not related to Electronic Arts' acquisition bid.

The New York Times reported on Wednesday that the board of directors for video game publisher Take-Two Interactive Software, facing a buyout offer from Electronic Arts, approved new compensation packages for its management firm that would take effect with a merger or acquisition.

The new measures, approved within days of EA's initial offer, concern Take-Two's agreement with management firm ZelnickMedia. Under the revised terms, in the event of a takeover, ZelnickMedia would be awarded two restricted stock grants of 780,000 shares.

At EA's $26-per-share offer, that would be worth $20 million. Additionally, Take-Two's monthly management fees to the firm would rise from $62,500 to $208,333; the annual bonus to ZelnickMedia would rise from $750,000 to $2.5 million.

Take-Two representatives say the move has nothing to do with EA's proposed acquisition. "The board discussions surrounding the ZelnickMedia management agreement began well before the company received a formal offer from EA on Feb. 6, 2008," Take-Two spokesman Steve Lipin told the Times, "and were not initiated as a result of conversations with any potential acquirer."

He added that Take-Two's shareholders have not yet approved the new compensation packages.