Bobby Kotick, CEO of Activision Blizzard, could walk away with more than $500 million after Microsoft deal

In a securities filing on Friday, Activision said Kotick will receive $14.4 million in severance pay if he is fired or resigns in various circumstances within a year of the company’s change of control. It also said that Kotick owns 4.3 million shares and has the right to acquire another 2.2 million — potentially worth just over $500 million combined at the settlement price of $95 per share. Kotick received $826,549 in compensation in 2021, according to the filing.

Friday’s disclosure in Activision’s annual proxy statement reflects the company’s definitive accounting for Mr. Kotick in the company and the possible termination of existing agreements. It offers investors their best window yet into the potential windfall Kotick could receive following the acquisition, which is pending regulatory approval. Activision and Microsoft said they expect it to close in spring 2023.

Activision said on Thursday that its shareholders had approved the merger.

Mr. Kotick, 59, is part of a group of people who in 1991 acquired the assets of the company that became Activision Blizzard. He has been its CEO ever since, making him one of the longest-serving heads of a publicly traded tech company. Kotick is expected to leave Activision when the deal closes, the Journal reported in January.

An Activision Blizzard spokeswoman said Kotick purchased $50 million worth of Activision stock in 2013 and that he, along with all shareholders, had the benefit of a 500% increase in value due to the company’s “extraordinary performance”. under his leadership for the past eight years. All the equity he’s earned is performance-based, she said.

In its regulatory filings, Activision also said that Kotick cannot receive any additional capital, or see his rights to any capital awards accelerated, as a result of the acquisition, or if he is expected to leave after the deal. .

Activision said it paid Kotick $155 million in 2020, mostly in stocks, making him the second highest-paid CEO in The Wall Street Journal’s annual S&P 500 CEO compensation analysis. At the time, Robert Morgado, Activision’s chief independent director, said the CEO’s pay was earned over four years and reflected more than three decades of shareholder value creation.

Santa Monica, California-based Activision, known for its Call of Duty, World of Warcraft and Candy Crush franchises, has about 10,000 employees.

Kotick has been embroiled in controversy, as state and federal regulators have accused Activision of mishandling cases of employee sexual harassment and the gender pay gap. In October, Kotick said he asked Activision’s board to reduce his salary to the minimum allowed under California law for salaried workers — $62,500 — and that he would forgo bonuses and stock awards. The announcement is part of a series of changes that Kotick said aim to make the company more diverse and safer for employees.

Kotick himself has been accused over the years by several women of mistreatment inside and outside the workplace, according to people familiar with the incidents and documents, the paper reported in November. Activision said the Journal article paints “a misleading view of Activision Blizzard and our CEO” and that it “ignores important changes underway to make this the most welcoming and inclusive workplace in the industry.”

In late March, a California judge approved an $18 million settlement between Activision and the Equal Employment Opportunity Commission, which has been investigating the company over allegations of sexual harassment and retaliation.

Separately, Activision was sued in July by the California Department of Fair Employment and Housing for allegedly ignoring employee complaints of blatant harassment, discrimination and retaliation. The company said the lawsuit includes distorted and, in many cases, false descriptions of its past, and that it strives to pay all employees fairly.

The US Securities and Exchange Commission is also investigating Activision over allegations of sexual misconduct and workplace discrimination. Activision said it is cooperating with the agency.

write to Sarah E. Needleman at sarah.needleman@wsj.com and Theo Francis at theo.francis@wsj.com

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