Activision Blizzard CEO requests pay cut amid company's workplace culture transformation

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Activision Blizzard CEO Bobby Kotick has requested a pay cut as the video game publishing giant makes improvements to its corporate culture in the wake of allegations of sexual harassment and discrimination. 

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According to a letter to employees, Kotick has asked the board to reduce his overall compensation to $62,500, the lowest amount permitted by California law for individuals earning a salary, until the company's new gender-related hiring goals and other commitments have been met. During this time, Kotick will not receive any bonuses or be granted any equity. 

The company's new goals and commitments include:

  • Increasing its global workforce of women or non-binary employees by approximately 50% within the next five years. Approximately 23% of its total global employee population currently identifies as women or non-binary.
  • Investing $250 million to accelerate opportunities for diverse talent
  • Investing an additional $250 million over the next decade in initiatives that foster expanded opportunities in gaming and technology for under-represented communities. These initiatives include the ABK Academy, which partners with colleges and technical schools serving under-represented communities, mentorships for participants, and a rotating apprenticeship program that leads to game development jobs. Activision Blizzard will also provide learning, development, and advanced degree opportunities for current employees to boost the number of women and under-represented groups in its workforce.

Bobby Kotick, chief executive officer of Activision Blizzard, attends the annual Allen & Company Sun Valley Conference, July 10, 2019 in Sun Valley, Idaho.  (Drew Angerer/Getty Images / Getty Images)

Kotick's pay reduction request marks a steep drop from his $155 million compensation package approved by shareholders in June.

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In addition to its hiring and investment commitments, Activision Blizzard has also launched a zero-tolerance harassment policy. As part of this policy, any employee found to retaliate against anyone for making a compliance complaint will be terminated immediately. The company will also no longer rely on written warnings in other instances of workplace misconduct. Terminations for these reasons will result in immediate forfeiture of future compensation. 

Activision will also investigate all harassment and retaliation claims, as well as whether the personnel who received the reports took the appropriate steps involved in its compliance process. More than 20 employees have been fired since the company's harassment claims first surfaced, according to Reuters.

"The guardrails weren’t in place everywhere to ensure that our values were being upheld. In some cases, people didn’t consistently feel comfortable reporting concerns, or their concerns weren’t always addressed promptly or properly. People were deeply let down and, for that, I am truly sorry," Kotick said. "Being welcoming and inclusive, in the context of our workplace, is crystal clear. We will still passionately debate ideas, employ healthy skepticism when appropriate, and demand excellence and rigor in all of our pursuits – but we will always treat each other with dignity and respect. And regardless of differences, voices will be heard, perspectives welcomed, and contributions valued."

In addition, Activision will waive required arbitration of sexual harassment and discrimination claims and will increase transparency related to pay equity. The company emphasized that its recent U.S. analysis showed women at the company earned slightly more than men for comparable work in 2020.

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Activision says it will actively monitor the progress of its business units, franchise teams, and functional leaders with respect to workplace initiatives and provide quarterly status updates. It will also provide information on gender hiring, diversity hiring and workplace progress in its annual report to shareholders and annual environmental social governance (ESG) report. 

TickerSecurityLastChangeChange %
ATVIACTIVISION BLIZZARD, INC.77.92-0.96-1.22%

The allegations against the company stem from a lawsuit filed by the California's Department of Fair Employment and Housing in July. Activision initially issued a lengthy response, calling the claims "distorted, and in many cases false, descriptions of Blizzard’s past," which lead to a petition signed by a group of over 2,000 former and current employees. Kotick later apologized for the company's "tone deaf" response, but that didn't stop a walkout from employees. 

ABetterABK, the group of workers that organized the walkout, have since filed a complaint with the National Labor Relations Board alleging working intimidation and union busting and shareholders have filed a class action lawsuit alleging the company "artificially inflated" the value of the its stock and made "false and misleading statements" by withholding the complaints of harassment, discrimination and retaliation. ABetterABK called the new changes a "huge win" but noted it will "remain vigilant and continue to push for other industry practices that need to change."

Activision also has been working with regulators at the Securities and Exchange Commission and the Equal Employment Opportunity Commission after the agencies launched their own investigations into the matter. Activision has since reached an $18 million settlement with the EEOC.

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