Investors concerned about golden parachute if Activision boss leaves
An activist investor group that previously called on Activision Blizzard CEO Bobby Kotick to resign is now raising concerns about the executive’s golden parachute, should he exit the company.
Why it matters: Microsoft’s plans to buy Activision Blizzard for $70 billion may alter the consequences coming to Kotick, who has led the company for three decades.
- Kotick has been facing calls for his resignation from many of his company’s workers and investors since news broke last summer of lawsuits against Activision Blizzard over widespread sexual harassment and discrimination at the company.
- Kotick is expected to leave after Microsoft buys the company, Axios’ Ina Fried and others have reported.
- SOC investment group now says it will press for any exit payments for Kotick to be tied to a “civil rights audit” of the company.
What they’re saying: “Now that I think it's highly likely that he will retire once the deal is through, what are the accountability mechanisms for his years of leadership of the company?” Dieter Waizenegger, executive director of shareholder group SOC tells Axios.
- “I think that that needs to be linked to any golden parachute.”
The numbers: Activision’s most recent annual filing indicates that Kotick could receive as much as $293 million in cash and stock, if he departs after a change in control of the company.
Between the lines: SOC only owns a small percentage of stock of Activision and other gaming giants, but it has still managed to apply pressure on pay issues and win some concessions, reducing some large bonus payouts.
- Shareholders can vote against executives’ pay during a publicly-traded company’s annual meeting, though those votes are advisory and not binding.
- Pay is usually approved without issue, but Activision’s barely passed this past year, as even pre-scandal scrutiny increased.
After the summer’s lawsuits, SOC called for an independent investigation at Activision Blizzard and, eventually, Kotick’s ouster.
- The company's board has stood by Kotick.
- Last September, the Equal Employment Opportunity Commission agreed to settle its sexual harassment and workplace misconduct lawsuit against Activision. The agreement, pending judicial approval, calls for three years of oversight and an $18 million victims fund.
- Waizenegger conceded that its hope to overhaul Activision Blizzard’s board of directors through shareholder votes this June will be “a bit more tricky” due to the Microsoft move.
The bottom line: Any Kotick departure tied to the deal won’t be soon. The deal isn’t expected to close until Microsoft’s next fiscal year, which ends in mid-2023.