Activision CEO to Take Pay Cut, Waive Arbitration in Harassment Claims

Bobby Kotick, left, has asked Activision Blizzard's board of directors to significantly reduce his salary temporarily.
Bobby Kotick, left, has asked Activision Blizzard's board of directors to significantly reduce his salary temporarily. / Kevin Dietsch/GettyImages

Activision Blizzard CEO Bobby Kotick has announced he will take a steep pay cut and waive forced arbitration on sexual harassment, unlawful discrimination, or related retaliation.

Kotick has been the company's steward since 2008. A pair of court cases and investigations, led by the Equal Employment Opportunity Commission and the California Department of Fair Employment and Housing, have accused Activision Blizzard of a culture rife with sexual harassment and gender-based discrimination. Activision Blizzard and the EEOC agreed to an $18 million settlement of that lawsuit, to which the DFEH objected.

A judge has yet to accept the settlement agreement, but in the meantime the EEOC has accused the DFEH of ethics violations, and Activision Blizzard used the dust up as cover to request to pause the DFEH case. The judge in the case denied that request earlier this week.

As all this news swirls, Kotick has announced five changes the company plans to make to combat these cultural problems in a letter to staff.

First up, leadership is launching a zero-tolerance harassment policy company-wide. Activision Blizzard employees found through an internal investigation to have retaliated against anyone for making a compliance complaint or committed other misconduct will be terminated. Their future compensation will also be forfeited.

"Our goal is to have the strictest harassment and non-retaliation policies of any employer, and we will continue to examine and tighten our standards to achieve this goal everywhere we do business," Kotick wrote.

Next, Kotick wants to improve the ratio of women and non-binary people in Activision Blizzard's workforce by 50% over the next five years. The company will invest $250 million to accelerate opportunities for diverse talent.

Another $250 million will be invested over the next 10 years including an ABK Academy that partners with colleges and technical schools serving under-represented communities, mentorships, and an apprenticeship program. Kotick says further details on this initiative will be shared in the coming months.

Third, employees who file sexual harassment and discrimination claims will no longer be forced to arbitrate. Arbitration prevents victims from going to court over their experiences or speaking publicly about what happened to them, protecting the company at the expense of the employee. Forced arbitration has been a hot button issue in the games industry of late, with organizers at Riot Games and Activision Blizzard pushing for its end.

Fourth, Activision Blizzard will publish annual reports on pay equity at the company.

Fifth, Kotick says Activision Blizzard will provide quarterly status reports on the progress its many teams have made on these fronts. It will also add a dedicated portion of its annual report to shareholders in annual ESG reports to focus on gender hiring, diversity hiring and workplace progress.

Finally, Kotick says he has asked the board to reduce his compensation a second time. Previously, Kotick's salary was taken down from $1,750,000 to $875,000, leaving his other forms of compensation untouched. Now Kotick has requested his salary be cut down to the base salary under California law: $62,500.

"To be clear, this is a reduction in my overall compensation, not just my salary," Kotick wrote. "I am asking not to receive any bonuses or be granted any equity during this time."

Even with the significant pay cut, Kotick remains an outrageously wealthy man, having benefitted from several years of high salary and generous bonuses over the years during which harassment and discrimination problems grew and festered at Activision Blizzard.