Activision’s Kotick could see an unexpected purchase

Bobby Kotik, CEO of Activision Blizzard Inc. It could reach $ 520 million after Microsoft Corporation. Completes your purchase of a video game business.

Activision said in an application filed on Friday that Kotick will receive $ 14.4 million in compensation if he is fired or resigns under different circumstances within a year of the change of control of the company. It also said Kotick owns 4.3 million shares and has the right to acquire another 2.2 million shares – possibly worth more than $ 500 million at a total price of $ 95 per share. Kotick received $ 826,549 in compensation in 2021, according to the application.

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Friday’s announcement in Activision’s agent’s annual report reflects the company’s final accounting for Kotick’s holdings in the company and a possible separation based on existing agreements. It will give investors the best possible window to date on a possible surprise for Kotick after its acquisition, pending regulatory approval. Activision and Microsoft said they hope to close it by spring 2023.

Robert “Bobby” Kotik, CEO of Activision Blizzard Inc. (Via David Paul Morris / Bloomberg Getty Images)

On Thursday, Activision announced that its shareholders had approved the merger.

Mr. Kotick, 59, is one of those who bought the assets of the company, which became Activision Blizzard in 1991. He has served as CEO since then, making him one of the longest-serving CEOs of a listed technology company. The magazine said in January that Kotick is expected to leave Activision after the deal is completed.

A spokesman for Activision Blizzard said Kotick bought $ 50 million worth of Activision shares in 2013 and that they, like all shareholders, benefited from a 500% increase in value due to the company’s “excellent performance” under its leadership over the past eight years. He said all the shares he acquired were performance-based.

ACTIVISION BLIZZARD SHAREHOLDERS AGREE TO SELL $ 68.7 BILLION TO MICROSOFT

Activision also said in its regulatory announcements that Mr. Kotick will not be able to receive additional shares or see his entitlement to share awards as a result of the accelerating acquisition or if he should exit after the transaction.

Robert Kotick, CEO of Activision Blizzard Inc. (Via Daniel Aker / Bloomberg Getty Images / Getty Images)

Activision said it paid Kotick $ 155 million in 2020, primarily in shares, making it the second best-paid CEO in the Wall Street Journal’s annual analysis of S&P 500 CEO fees. At the time, Robert Morgado, an independent director, told Activision’s flagship company, the CEO’s reward came in four years and reflected more than three decades of creating shareholder value.

Known for its Call of Duty, World of Warcraft and Candy Crush franchises, Activision in Santa Monica, California, employs approximately 10,000 people.

Kotick has been controversial after state and federal regulators have accused Activision of abusing employee sexual harassment and the gender pay gap. In October, Kotick said he had asked Activision’s board to reduce his salary to the minimum wage allowed by California law – to $ 62,500 – and that he would give up bonuses and stock awards. According to Kotick, the release is part of a series of changes that aim to make the company more versatile and safer for employees.

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The newspaper reported in November that several women had been accusing Kotick of abuse for years, both inside and outside the workplace, according to people who knew about the events and the documents. Activision said the newspaper article paints “a misleading picture of Activision Blizzard and our CEO” and that it “ignores important changes underway to make this the most attractive and inclusive workplace in the industry.”

Microsoft Activision Blizzard

Bobby Kotik, CEO of Activision Blizzard Inc. and CEO of Microsoft Satya Nadella (Photographer: Patrick T. Fallon / Bloomberg via Getty Images | Microsoft / Getty Images)

In late March, a California judge approved a $ 18 million settlement between Activision and the Equal Employment Opportunity Commission, which has investigated the company for sexual harassment and retaliation.

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ATVI ATIVISION BLIZZARD INC. 75.60 -1.10 -1.43%
MSFT MICROSOFT CORP. 277.52 -12.11 -4.18%

Separately, in July, Activision filed a lawsuit against the California Department of Fair Labor and Housing for ignoring employee complaints of blatant harassment, discrimination and retaliation. The company said the lawsuit contains distorted and often false descriptions of its past and that it seeks to pay fairly to all its employees.

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o The U.S. Securities and Exchange Commission Activision is also investigating allegations of sexual abuse and workplace discrimination by employees. Activision announced that it is working with the agency.

Write to Sarah E. Needleman at sarah.needleman@wsj.com and to Theo Francis at theo.francis@wsj.com

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