CEO Bobby Kotick has asked the Activision Board board of directors to reduce his total compensation down to $62,500, to “ensure that every available resource is being used in the service of becoming the industry leader in workplace excellence”. This comes amid the ongoing lawsuit against Activision Blizzard by the state of California’s Department of Fair Employment and Housing. Blizzard is also facing a separate class-action lawsuit filed by investors who claim that the company failed to disclose its problems with discrimination and harassment.
It’s no surprise that Bobby Kotick can pledge to take such a hit to his wallet. He’s been called one of America’s most overpaid CEOs for a reason: In 2020, his total compensation was over 154 million, comprising a base salary of 1.4 million, over 3 million in bonuses, and a whopping $149 million in stock. Under his now pledge, the CEO will no longer receive any pay from bonuses or stock until the company’s gender equity goals are met. $62,500 is the lowest Kotick can be paid under California law.
In a letter to his staff, Bobby Kotick also outlined five new changes to Activision policies:
- “We are launching a new zero-tolerance harassment policy company-wide – In the past, when we discovered and substantiated harassment, we terminated some employees and provided verbal or written warnings or different disciplinary actions to others. In retrospect, to achieve our goals for workplace excellence, this approach is no longer adequate. We need tougher rules and consistent monitoring across the entire company to make sure reports are being handled correctly and discipline is appropriate and swift.
As a result, we are implementing a zero-tolerance policy across Activision Blizzard that will be applied consistently. 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.
Any Activision Blizzard employee found through our new investigative processes and resources to have retaliated against anyone for making a compliance complaint will be terminated immediately.
In many other instances of workplace misconduct, we will no longer rely on written warnings: termination will be the outcome, including in most cases of harassment based on any legally protected category.
Future employment contracts and equity awards will be clear: termination for these reasons will result in the immediate forfeiture of future compensation.
We also want to ensure that employees who file reports are encouraged, protected, and heard. For all reports of harassment and retaliation, we will investigate the allegation and whether the Activision Blizzard personnel who received the report of such behavior took the appropriate steps to protect the integrity of our compliance processes.
There may be some places around the world where local law may restrict some of these measures. In those cases, we will apply the highest permissible standards and the strongest possible discipline.
- We will increase the percentage of women and non-binary people in our workforce by 50% and will invest $250 million to accelerate opportunities for diverse talent –Today, approximately 23% of our global employee population identifies as women or non-binary. Building on the success that King and other business units have achieved, we will seek to increase our percentage of women and non-binary professionals by approximately 50% – to more than one-third across the entire company – within the next five years and hopefully faster. Each franchise team, business unit, and functional area will be expected to have plans to help fulfill this ambition.
With respect to diversity, while we perform better than our peers with 30% of our U.S. workforce from diverse or under-represented communities, broadening this progress will continue to be a significant focus of mine as well as company, business unit, and franchise leadership.
To further this commitment, we’ll be investing an additional $250 million over the next 10 years in initiatives that foster expanded opportunities in gaming and technology for under-represented communities. This commitment includes inspiring diverse talent to pursue career opportunities in gaming through an ABK Academy that includes partnerships with colleges and technical schools serving under-represented communities, mentorships for participants, and a rotating apprenticeship program that leads to game development jobs, similar to the programs we began with the United Negro College Fund and Management Leadership for Tomorrow. We will also provide learning, development, and advanced degree opportunities for current employees to increase the number of women and those from under-represented communities in leadership positions across the company and in our industry.
In the coming months, Brian Bulatao, Julie Hodges, and I will share details about how we are operationalizing these goals and implementing and measuring this expanded investment.
- Based on feedback from employees, we are waiving required arbitration of sexual harassment and discrimination claims – For any Activision Blizzard employee who chooses not to arbitrate an individual claim of sexual harassment, unlawful discrimination, or related retaliation arising in the future, the company will waive any obligation to do so.
- We will continue to increase visibility on pay equity – As described in the recent note from our President, Daniel Alegre, and our Chief Administrative Officer, Brian Bulatao, the company continues to focus on pay equity for employees. In fact, our U.S. analysis showed that women at the company on average earned slightly more than men for comparable work in 2020. To ensure transparency on our continuing commitment to pay equity, we will report these results annually.
- We will provide regular progress updates – We will be monitoring the progress of our business units, franchise teams, and functional leaders with respect to workplace initiatives and we will provide a status report quarterly. We also will be adding a dedicated focus on this vital work in our annual report to shareholders and in our annual ESG report with information on gender hiring, diversity hiring, and workplace progress.”
The Activision Blizzard worker group ABetterABK has called the announcement a “huge win”. And it’s certainly a glimpse at what’s possible when a company feels the pressure. But Blizzard has else were shown some signs that it’s less than sincere when it comes to taking real action against its toxic culture. Kotaku has helpfully compiled a list of the lawsuit timeline, which includes reports that Activision hired a union-busting firm, and even accusations that Blizzard has destroyed evidence crucial to California’s lawsuit against the company (although this has been denied by a spokesperson.)
Bobby Kotick’s salary cut pledge is good to hear, but it’s hard not to see it as a PR move more than anything. His salary has been a matter of contention separate from the discrimination proceedings, so to lower in now when the company is being accused of far worse things seems it could be a misdirection. It could also be an attempt to save his position – in situations like these, it’s not too uncommon to see the CEO position changing hands. Whatever the case, it remains the correct decision so long as his promise to redirect the money into implementing the changes the troubled company so desperately needs.