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Wednesday, May 25, 2022

Activision CEO expects $375M from Microsoft sale

Devon Pendleton and Scott Carpenter | bloomberg

Last year, the CEO of Activision Blizzard Inc. Bobby Kotick received a 50% pay cut. It made a $375.3 million windfall this year.

This is the pre-tax amount a video game executive will receive when Microsoft Corp. completes a $68.7 billion acquisition of Activision. This is a wonderful accolade for a leader whose recent tenure was marked by employee complaints of sexism, a hostile work culture, and poor handling of allegations of violence.

Back in November, Kotick, 58, was the target of employee strikes and petitions demanding he be fired over reports that he failed to report allegations of rape and other serious misconduct to the company’s board of directors.

CEO since 2017, Kotick owns nearly 4 million Activision shares — more than any other official or director, documents show. The second largest holder, chairman Brian Kelly, owns $1.4 million through trusts and a fund, which is valued at $137.1 million based on the terms of the deal.

With a 45 percent premium to Activision’s closing price on Friday, Microsoft’s $95-per-share offer nearly undoes the blow dealt to Kotick’s stock last year when revelations of years of allegations of harassment and a cover-up hit the stock. Shares of the Santa Monica, California-based company rose 26% on Tuesday to close at $82.31 in New York.

Kotick’s compensation was controversial even before the California Department of Fair Employment and Housing sued the video game publisher in July, detailing the local “fraternity boys” culture. The company previously announced that it was cutting Kotick’s salary and bonus in half in 2021 in response to criticism that his pay package was overly generous compared to peers.

In 2020, Kotick received a total settlement of $155 million. Most of this came in the form of incentive shares that were granted by the board of directors in 2016.

The “overwhelming majority” of Kotick’s total compensation for 2020 was “the result of successfully generating substantial shareholder returns over a four-year period,” an Activision spokesperson said in an email.

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