Activision CEO set for $15M “golden parachute” in Microsoft deal
Why it matters: Kotick has faced scrutiny and calls for his resignation over widespread sexual misconduct allegations at Activision Blizzard but appears set to profit.
Details: Microsoft and Activision propose that Kotick could receive as much as $22 million in stock in July or later, if Activision’s board sees improvement in company culture.
- Measured improvements would include the implementation of a zero-tolerance harassment plan and an increase in hiring women and non-binary people.
- Kotick took a pay cut in October in response to the company’s scandals and said he was forgoing bonuses until the board saw improvement.
- The filing also indicates that the board may extend Kotick’s contract by 12 months beyond its current March 2023 expiration. Kotick has not been expected to remain at the company long after the merger, a source told Axios’ Ina Fried earlier this year.
- Should Kotick be fired without cause by Microsoft, he’ll get a $15 million “golden parachute,” according to the filing's compensation proposal.
Between the lines: The filing reveals that Microsoft gaming executive Phil Spencer began talks with Kotick about a potential acquisition on Nov. 19, three days after a Wall Street Journal expose that said Kotick knew of sexual misconduct at the company for years.
- The investigation walloped Activision Blizzard’s stock price well below even Microsoft’s opening bid of $80 per share.
- Over the course of a month of negotiation, Activision got Microsoft to $95/share.
- Kotick owns (or has the right to acquire) 6.5 million shares, which will be worth $619 million at Microsoft’s price.
Other intrigues from the filing:
- Four other companies approached or were approached by Activision about an acquisition but little came of it.
- An unnamed individual also made a play to solely acquire Blizzard, an inquiry that Activision Blizzard’s board slow-walked in part because “prior dealings” with that person raised concern about possible leaks.
- Among the deal’s parameters, Activision Blizzard is generally prohibited from entering a collective bargaining agreement with employees but could do so with Microsoft’s approval. Some of the company’s workers have been attempting to unionize.
- A long-term revenue estimate prepared in November indicates Activision Blizzard expects a dramatic, nearly $2.5 billion revenue increase in 2023. It’s a potential sign of major releases that year, possibly including the recently delayed Overwatch 2 and Diablo IV.
Sign up for the new Axios Gaming newsletter here.