Activision Blizzard CEO takes pay cut, announces new workplace changes as lawsuit continues

Activision Blizzard has published a new letter from CEO Bobby Kotick on October 28 outlining changes the company is making in regards to the workplace environment of the company, including reducing his own pay while the initiatives are enacted.

In the letter published, Activision Blizzard CEO Bobby Kotick outlined 5 changes the company is making as they continue to solve the workplace harassment claims, as well as providing an update on what is happening at the executive level.

Bobby Kotick apologized to the employees for the lack of action and for not providing a safe workplace for the team. He also thanked the employees for continuing their dedication to the players and working hard on delivering new content and more to communities.

Kotick outlined 5 changes the company is making to better position the business as “the best place to work” going forward. Months after the initial lawsuit dropped, the company’s executives are finally agreeing to one of the employee group’s demands: removal of forced arbitration.

The changes also include increasing the number of women and non-binary individuals employed at the company by 50% over the next five years.

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Here’s the 5 changes Kotick announced in his email:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.

Even more surprisingly, Kotick also has requested the board of directors of the company reduce his pay to California’s minimum wage of $62,500/yearly until the company meets the standards of fixing its workplace situation.

Kotick says, “I have asked our Board of Directors to reduce my total compensation until the Board has determined that we have achieved the transformational gender-related goals and other commitments described above. Specifically, I have asked the Board to reduce my pay to the lowest amount California law will allow for people earning a salary, which this year is $62,500. To be clear, this is a reduction in my overall compensation, not just my salary. I am asking not to receive any bonuses or be granted any equity during this time.“

Kotick was expected to receive a $200 million bonus at the end of this year thanks to the pay package that was approved in his name. This would be on top of his normal yearly salary. Kotick remains one of the highest-paid CEOs with over $36 million in salary, excluding the additional pay he gets in stock options, with shareholders in the past questioning why he gets paid so much.

He ended his letter apologizing to anyone at the company who was been hurt – or directly experienced harassment – while working for the company and promises to make additional changes.

“I truly wish not a single employee had had an experience at work that resulted in hurt, humiliation, or worse – and to those who were affected, I sincerely apologize. You have my commitment that we will do everything possible to honor our values and create the workplace every member of this team deserves.

I am grateful for how much people care about this company, and I appreciate that many past and present employees have reached out with their thoughts, concerns, complaints, and suggestions. Your experiences, so courageously shared, serve as reason and reminder for why it is so important for us to do better. And we will.”

This announcement comes just a week before the company’s biggest release with Call of Duty: Vanguard on November 5.

The company is also hosting a Q3 Investor Call on November 2, where more information on this situation and the reasoning behind some of the decisions will come to light.

We’ll keep everyone updated as more information is shared.

Source: Activision Blizzard