After Microsoft’s $68.7 billion acquisition, Activision Blizzard CEO may leave next year with a $520 million “severance package”

On May 3, video game company Activision Blizzard’s regulatory filing with the U.S. Securities and Exchange Commission (SEC) showed that after Microsoft completed its acquisition of the company, its CEO Bobby Kotick (Bobby Kotick) May leave with a “severance package” of $520 million.

The file shows,If Kotick is fired or leaves under various circumstances within 1 year of Activision Blizzard’s change of control, he will receive a “severance package” of $14.4 million. Meanwhile, Kotick owns 4.3 million shares of the company and is entitled to an additional 2.2 million shares. At $95 a share, the shares could be worth more than $500 million in total. Kotick will be paid $826,549 in 2021, documents show.

Activision Blizzard disclosed the information in its annual proxy statement on Friday, indicating that the company has made a clear accounting of Kotick’s stake in the company and possible severance payments under the existing agreement. This provides investors with the best data yet on how much “windfall” Kotick could get after Activision Blizzard was acquired by Microsoft.

The deal is pending regulatory approval. Both Activision Blizzard and Microsoft said they expect the deal to close in spring 2023. Activision Blizzard said on Thursday that its shareholders had approved the merger.

Kotick, 59, has been Activision’s CEO since 1991. After Activision and Vivendi Games announced their merger in 2008 to form Activision Blizzard, he has remained CEO of the company, making him one of the longest-serving heads of a U.S.-listed tech company. However, reports say Kotick is expected to resign from Activision Blizzard after the deal closes.

An Activision Blizzard spokesman confirmed that Kotick purchased $50 million worth of company stock in 2013. Under Kotick’s leadership, Activision Blizzard has grown 500% over the past eight years, benefiting him and all shareholders. At the same time, all of the equity that Kotick receives is a performance-based award.

In the regulatory filing, Activision Blizzard also said that Kotick will not receive any additional equity as a result of the Microsoft acquisition, nor will he see any increase in his authority to receive any equity awards, or whether he should Resigned after the transaction was completed.

Activision Blizzard reported that the company paid Kotick $155 million in 2020, most of which were equity awards, making him part of The Wall Street Journal’s annual analysis of S&P 500 CEO compensation The second highest paid company executive. At the time, Activision Blizzard’s lead independent director, Robert Morgado, said the compensation, earned over four years, reflected more than three decades of Activision Blizzard’s efforts to create shareholder value.

Headquartered in Santa Monica, California, Activision Blizzard is best known for developing and publishing franchises such as Call of Duty, World of Warcraft and Candy Crush Saga, and employs about 10,000 people.

Kotick’s leadership has been questioned as California and federal regulators accuse Activision Blizzard of mishandling employee sexual harassment and gender pay discrimination. In October, Kotick said he asked Activision Blizzard’s board to reduce his salary to the minimum wage allowed by California law, which is $62,500, while forgoing bonuses and stock awards. Kotick said the statement was a Part of a series of reforms aimed at making the company more diverse and safer for employees.

The Wall Street Journal, citing people familiar with the matter, said Kotick himself has been accused by multiple women over the years of abuse in and out of the workplace. Activision Blizzard said the WSJ article “misleadingly portrayed Activision Blizzard and our CEO, ignoring the important changes taking place that have made Activision Blizzard the industry’s most popular and the most inclusive workplace.”

In late March, a California judge approved an $18 million settlement between Activision Blizzard and the U.S. Equal Employment Opportunity Commission, which has been investigating allegations of sexual harassment and retaliation.

Separately, Activision Blizzard was sued last July by the California Department of Fair Employment and Housing for ignoring complaints from female employees of blatant harassment, discrimination and retaliation. The company said the lawsuit misrepresented the facts. In many cases, depictions of Activision Blizzard’s past have been false, and the company has always worked hard to pay all employees fairly.

The SEC is also investigating allegations of sexual misconduct and workplace discrimination by Activision Blizzard employees, which it said is actively cooperating with the investigation.