Bobby Kotick could be set to receive a massive payout if his loyal friends on the Activision Blizzard board of directors deem that he's fixed workplace issues sufficiently. The beleaguered CEO could also be in for a huge $15 million "golden parachute" payment if he's fired without cause.
Why does Bobby Kotick stand to receive these massive payouts?
Despite shareholders calling for Bobby Kotick's resignation, it now looks like he might be set to receive a huge bonus. In January, Microsoft revealed it had acquired Activision Blizzard for an unprecedented $69 billion sum, and furthermore, Bobby Kotick would remain as the studio's CEO, at least for the moment. Now, it has emerged that he could be set to receive a huge $22 million stock bonus if the Activision Blizzard board deems that he has sufficiently addressed widespread issues of sexual harassment and toxicity within the company. In addition, Kotick could be due a $15 million "golden parachute" handout should he be fired without cause by Microsoft, which simply means letting him go without an immediate reason.
In addition to these potential bonuses, Kotick could also be in for a restoration of his salary. The filing states that if Kotick's efforts are found to be satisfactory, he will be provided with "cash compensation...without regard to any waiver of compensation", indicating that his salary will be restored to its former amount. Kotick had previously taken a salary cut, lowering his annual salary to the California minimum for a company of Activision Blizzard's size, although given the amount he receives in bonuses and the amount he holds in stock, this was unlikely to have any real practical impact on his wealth. The SEC filing also states that Kotick's contract could be extended for an extra 12 months beyond March 2023, when it's currently set to expire.
According to Axios' Stephen Totilo, an SEC filing regarding Microsoft's acquisition of Activision Blizzard shows that Kotick could be due up to $22 million in stock this July or later. This will be paid out if the Activision Blizzard board deems Kotick to have sufficiently addressed workplace toxicity and sexual harassment allegations. The problem here is that the Activision Blizzard board has already given its stamp of approval to Kotick despite the many allegations that have emerged against his company. This means that Kotick's payout is all but assured; given that the people deciding whether he's done enough good work are already on his side, there are questions around exactly how much he will need to have "improved" things in order to receive these eye-watering bonuses. The filing gives a zero-tolerance harassment policy and increased hiring of women and non-binary people as conditions, but it doesn't state exactly what Kotick would need to do in order to fulfill those remits.
What else does the filing reveal?
As well as Kotick's potential payouts, the SEC filing reveals some other interesting tidbits. Per Axios and Totilo, Xbox's Phil Spencer began talks with Activision Blizzard shortly after allegations emerged that Kotick not only knew about the sexual harassment issue at the company, but hushed it up and even potentially threatened to have a female employee killed. Naturally, this tanked share prices in the company, but Axios says Kotick still owns, or can acquire, around $619 million in shares of his company. These are truly staggering amounts of money.
After these allegations emerged, many began calling for Kotick's resignation with renewed vigor. Rumors began to swirl that Kotick would eventually be let go as part of an attempt to improve Activision Blizzard's PR on Microsoft's part. Earlier today, King.com, an Activision Blizzard subsidiary, announced that it will be changing its leadership at the end of March. New president Tjodolf Sommestad will take over from Humam Sakhnini, who has presided over King for six years. While the allegations naturally aren't mentioned by name, this could be part of a potential restructuring that could eventually result in Kotick being replaced as Activision Blizzard CEO. Microsoft has already said it's watching Activision Blizzard to make sure that "the right people" are in positions of power after the acquisition.
Kotick's potential "golden parachute" and huge bonus come after months and months of sexual harassment allegations against Activision Blizzard. These allegations culminated in a lawsuit against the company on behalf of the State of California, which recently stepped up its investigations into Kotick's studio, subpoenaing several police departments and company directors in an effort to gather more intelligence. It remains to be seen what will become of Bobby Kotick in the coming months, but one thing's pretty much for sure: he stands to gain quite a lot, whether or not he remains in his position.
