Activision Blizzard CEO takes pay cut amidst California lawsuits

Activision Blizzard CEO Bobby Kotick has asked for his salary to be slashed until the company has addressed its issues with gender discrimination and harassment, he revealed in a letter to employees on Thursday (28/10)

Kotick said he will accept California’s legal minimum salary of $62,500 and has asked to not receive any other bonuses or compensation in the meantime. Subject to the board’s approval, this will be a substantial decline from the $155 million pay packet he was narrowly afforded earlier this year. This bonus was given for achievements tied to the 2016 goal of doubling the company’s market capitalisation and the soaring shares amidst last year’s lockdowns.

Kotick had previously cut his salary back in April, where he took a 50% cut to $875k, yet he still collected an annual bonus up 200% of his base salary.

Activision Blizzard CEO, Bobby Kotick (Bobby Kotick via Flickr with license

This announcement comes as part of a larger outline of changes set out by Kotick, who has been Activision’s CEO since 1991 and Activision Blizzard’s CEO since Blizzard’s merger with Activision in 2008. Of the changes announced, the most notable is the agreement to drop forced arbitration of future sexual harassment cases – a demand which employees have expressed numerous times.

Other changes include a new “zero-tolerance harassment policy company-wide” which will ensure “tougher rules and consistent monitoring” across the entire company and “the strictest harassment and non-retaliation policies of any employer”.

“Any Activision Blizzard employee found through our new investigative processes and resources to have retaliated against anyone for making a compliance complaint will be terminated immediately.” He wrote.

He goes on to pledge support for increasing the percentage of women and non-binary people in the company by 50% over the next five years, with an investment of $250 million to accelerate opportunities for diverse talent. This will be supported by spending $250 million over the next ten years to initiatives that “foster expanded opportunities in gaming and technology for under-represented communities”, particularly those in leadership positions.

Blizzard Entertainment is responsible for multiple best selling games such as Diablo, Hearthstones and World of Warcraft. But behind the scenes, the company faces serious issues concerning gender and sexual harrassment (Tea Tater via Flickr with license)

Kotick’s announcement comes at a time when Activision Blizzard has already experienced several months worth of internal trouble and grievances. 

In July, California’s Department of Fair Employment and Housing alleged a “frat boy” work culture in which women were subjected to targeted and constant discrimination and harassment.

The lawsuit and managerial response caused a wave of dissent from the company’s workforce which led to a walkout back in August at the company’s office in Irvine, California. Kotick was later forced to acknowledge that the initial response from management was “tone deaf.”

At the time, a spokesperson for the company dismissed the state’s filing and investigation as “inaccurate” and “distorted”.

Since then, current and former employees continue to speak out on social media, detailing their experiences and desire for change and accountability.

Activision Blizzard faces numerous investigations from federal agencies and these show no sign of going away anytime soon (Joe Crawford via Flickr with license)

However, the trouble is not over as the company is facing multiple complaints from various agencies, including the National Labor Relations Board, who earlier this month filed a complaint which accuses the company of unfair labour practices. Activision Blizzard has said it continues to “productively engage” with regulators which includes an investigation by the Securities and Exchange Commission.

In September, Activision Blizzard paid $18 million to settle a separate lawsuit by the Equal Employment Opportunity Commission (EEOC) that accused the gaming giant of subjecting female employees to sexual harassment and then retaliating against them when they spoke out about their treatment. This is on top of the accusation of paying female employees less than their male counterparts.

“The EEOC’s review was a catalyst to sharpen our focus on the ways we can become a company others emulate as a model for workplace excellence and one with an unwavering commitment to its values.” Kotick explained in his letter.

Activision Blizzard has declared their commitment to diversifying their talent pool and being a company the industry can be proud of, but they still have a lot of work to do to make this goal a reality.

Kotick’s words may reassure some, and the dropping of forced arbitration and increase pay transparency is a huge win for current employees who continue to push for better treatment. However, the CEO’s words and actions run in the face of the company’s efforts to have the case dismissed in court. LA County Court judge Timothy Patrick Dillon has denied Activision’s application to pause California’s ongoing lawsuit in October, less than a week after its submission. Kotick insists that the company will be better moving forward, stating “We have a lot more to do”, but its reassurances ring hollow when at every opportunity they attempt to escape accountability.

Bobby Kotick has seen Activision Blizzard’s rise over the last twenty years and the man who remains in charge despite the behaviour employees engaged with in his employment. How much the company can change under his leadership remains unknown, when on the one hand his presence has seen the company’s market capitalisation increase from less than $10 million to over $70 billion, with a more than 8100% increase in shareholder returns between 2000 and 2020. But on the other hand, rampant culture and workplace practices still present a potentially dangerous work environment to many current and former employees.

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