One of the highest paid CEO’s in the U.S., Bobby Kotick, requests pay cut after series of company lawsuits

Financial

FILE – This June 13, 2013 file photo shows the Activision Blizzard Booth during the Electronic Entertainment Expo in Los Angeles. Activision Blizzard, the high-profile video game maker facing growing legal problems stemming from allegations of a toxic workplace culture, has settled with U.S. workplace discrimination regulators. The company reached a deal with the U.S. Equal Employment Opportunity Commission to settle claims of sexual harassment, pregnancy discrimination and retaliation against employees who spoke out, according to court documents filed Monday, Sept. 27, 2021. (AP Photo/Jae C. Hong, File)

CLARKSBURG, W.Va. — In a letter from the CEO of the California-based video game company Activision Blizzard, Bobby Kotick, one of the highest paid CEO’s in the U.S., stated that he will accept a pay cut after a series of lawsuits and harassment claims were filed against the company.

On Oct. 28, Kotick released a letter to Activision Blizzard employees addressing past events as well as what the company planned to do moving forward.

This included the adoption of a new, company-wide zero-tolerance harassment policy, a $250 million investment to increase the percentage of women and non-binary employees at the company by 50%, the waiving of required arbitration of sexual harassment and discrimination claims, increasing visibility on pay equity and the promise to provide regular progress updates going forward.

CEO of Activision Blizzard Bobby Kotick (Photo courtesy of Activision Blizzard)

“In the past, when we discovered and substantiated harassment, we terminated some employees and provided verbal or written warnings or different disciplinary actions to others,” Kotick said. “In retrospect, to achieve our goals for workplace excellence, this approach is no longer adequate. We need tougher rules and consistent monitoring across the entire company to make sure reports are being handled correctly and discipline is appropriate and swift.”

According to a 2020 report by cglytics.com, Kotick was ranked as the 40th highest paid CEO in the U.S. At it’s height, his salary was estimated to be around $150 million.

Back in April, Kotick agreed to a 50% pay cut to his salary. In his letter, he expressed a desire to reduce this amount further.

“I want to ensure that every available resource is being used in the service of becoming the industry leader in workplace excellence,” Kotick said. “Accordingly, I have asked our Board of Directors to reduce my total compensation until the Board has determined that we have achieved the transformational gender-related goals and other commitments described above. Specifically, I have asked the Board to reduce my pay to the lowest amount California law will allow for people earning a salary, which this year is $62,500.”

Kotick noted that the reduction would be applied to his overall compensation, not just his salary, until the new goals they have set are met. At the same time, he will not receive any bonuses or be granted any equity.

“I truly wish not a single employee had had an experience at work that resulted in hurt, humiliation, or worse – and to those who were affected, I sincerely apologize. You have my commitment that we will do everything possible to honor our values and create the workplace every member of this team deserves,” Kotick said.

The first of the lawsuits aimed toward Activision Blizzard was filed in July. The suit, filed by the California Department of Fair Employment and Housing (DFEH), alleged that the work culture at Activision Blizzard allowed for gender discrimination and sexual harassment. Some company executives reportedly knew about the behavioral issues and may have also enabled it.

Both the lawsuit and investigation are still ongoing. Activision Blizzard denied many of the claims included in the report.

After CEO Bobby Kotick apologized for the company’s initial public response to the lawsuit, stating that it was “tone-deaf”,  around 3,000 company workers sent an open letter to executives and staged a walk off protest.

In August, another lawsuit, this time filed by the Activision Blizzard shareholders, alleged that the corporate leadership at the company were neglectful, negatively affecting share prices.

Around the same time, the DFEH added to its complaint by accusing Activision Blizzard of suppressing evidence in the investigation, which Activision Blizzard denied.

In September, the latest investigation into Activision Blizzard involved multiple investigations by the U.S. Securities and Exchange Commission and the Equal Employment Opportunity Commission (EEOC). As a result of this, the EEOC received a settlement of $18 million.

“The EEOC’s investigative process, public discussion on discrimination and harassment, and your reports and suggestions helped shine a light on practices we need to improve, policies that need to be strengthened, and resources we are now adding,” Kotick said. “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.”

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