With Microsoft Deal, Activision CEO Bobby Kotick’s Tumultuous Reign Nears a Lucrative End

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

With Microsoft Deal, Activision CEO Bobby Kotick’s Tumultuous Reign Nears a Lucrative End

As the dust continues to settle from Microsoft’s massive $69 billion deal to acquire video game publisher Activision Blizzard, speculation is rife about what the agreement will mean for Bobby Kotick, the controversial chief executive who has led Activision for 30-plus years.

The man who built the Santa Monica firm into one of the gaming industry’s giants is very well-paid, but these days not nearly as well-thought-of. His botched handling of sexual harassment and assault complaints by Activision workers placed the company at the center of a firestorm last year, spurring lawsuits and investigations and prompting investors, employees and even gamers to call for his resignation.

Activision Blizzard CEO Bobby Kotick.Photo: Jordan Matter/Flickr

But all that has now taken a backseat to the Microsoft deal, which would be the largest acquisition in the history of the video game industry and, at a price of $95 per share, prove an enormous windfall for Activision shareholders (including Kotick himself, who holds nearly 4 million shares in the company). And while Kotick helped engineer the transaction—with the furor around Activision reportedly setting a merger into motion last fall—there have been conflicting signals and reports about whether he himself will have a future with the combined companies.

In the span of several months, Microsoft Gaming CEO Phil Spencer went from telling Xbox staff that he was “disturbed and deeply troubled by the horrific events and actions” at Activision, to being described as having “a great relationship” with Kotick by none other than the Activision CEO himself. Microsoft CEO Satya Nadella also spoke highly of Kotick on a conference call Tuesday, praising “his leadership and commitment to real culture change.”

Still, both the Wall Street Journal and Axios reported that Kotick is expected to step down as Activision CEO once the transaction closes—with Kotick said to be drawn to the idea of a “graceful exit.” If Kotick leaves, he will likely do so with an extremely lucrative payout of up to $293 million, per terms described in Activision’s most recent annual report.

But at this point, neither Microsoft nor Activision have revealed what the future will hold for Kotick.

Should He Stay or Should He Go?

Much could depend on what the combined entities will look like. If Microsoft decides to allow Activision to continue operating as a standalone subsidiary following the merger, it’s possible that Kotick could stay put and continue running the business while reporting to Spencer.

A more integrated relationship between the two companies—with Activision folded into Xbox Game Studios—would increase the likelihood that Kotick’s time is up. That is exactly what many workers at the “Call of Duty” publisher have clamored for; nearly 2,000 Activision employees have signed a petition demanding Kotick be removed as CEO in the wake of the controversies under his watch.

While Kotick has thus far survived those controversies, other high-ranking executives have not. Last summer, Activision president J. Allen Brack stepped down days after the California Department of Fair Employment and Housing sued the company for running a “frat boy” workplace culture where women employees were subject to sexual harassment and retaliated against for complaining.

It all culminated in a bombshell Wall Street Journal report in November, which revealed that Kotick himself had known of such allegations for years, yet had ignored and failed to report them to Activision’s board of directors.

Activision workers’ alliance ABetterABK said on Twitter this week that the Microsoft acquisition was “surprising, but does not change the goals” of the group, which include removing Kotick as CEO and improving conditions for women employees at Activision. “We remain committed to fighting for workplace improvements and the rights of our employees regardless of who is financially in control of the company,” it said.

Kotick’s Big Payday

In 2020, Kotick was one of the highest-paid CEOs of any publicly traded company in the U.S., with a total compensation package worth nearly $155 million. And though the scandals at Activision saw Kotick attempt to save face by drastically reducing his salary, the “graceful exit” that he is said to desire would almost certainly include a hefty payday.

Per Activision’s public disclosures, Kotick would be due as much as $293 million in compensation in the event that he is terminated following a change in the company’s ownership. That sum includes up to $4.4 million in severance pay, $17.4 million in severance bonuses and $271 million in equity awards.

He would also likely be paid out for the roughly 3.9 million Activision shares he owns, which would net him more than $370 million given Microsoft’s $95-per-share acquisition offer.

Some investors are already taking exception to such a sizable payout for Kotick—particularly given the revelations about his role in fostering a toxic, misogynistic culture at Activision, and the subsequent damage to the company’s reputation.

“Now that I think it's highly likely that he will retire once the deal is through, what are the accountability mechanisms for his years of leadership of the company?” Dieter Waizenegger, executive director of activist shareholder group SOC, told Axios this week. The shareholder group has called for any “golden parachute” payment to Kotick to be linked to a “civil rights audit” of his leadership at Activision.

SOC, however, owns less than 1% of Activision Blizzard. And in arranging a deal that will reward Activision shareholders handsomely, it appears that Kotick is set to depart the company on his own terms as a very wealthy man—regardless of the damaging, undignified nature of the latter years of his reign.


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Genies Wants To Help Creators Build ‘Avatar Ecosystems’

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”

The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.

Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.

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Here's What To Expect At LA Tech Week

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Here's What To Expect At LA Tech Week

LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.

The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.

From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.

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PCH Driven: Director Jason Wise Talks Wine, Documentaries, and His New Indie Streaming Service SOMMTV

Jamie Williams
­Jamie Williams is the host of the “PCH Driven” podcast, a show about Southern California entrepreneurs, innovators and its driven leaders on their road to success. The series celebrates and reveals the wonders of the human spirit and explores the motivations behind what drives us.
Jason Wise holding wine glass
Image courtesy of Jason Wise

Jason Wise may still consider himself a little kid, but the 33-year-old filmmaker is building an IMDB page that rivals colleagues twice his age.

As the director behind SOMM, SOMM2, SOMM3, and the upcoming SOMM4, Wise has made a career producing award-winning documentary films that peer deep into the wine industry in Southern California and around the world.

On this episode of the PCH Driven podcast, he talks about life growing up in Cleveland as a horrible student, filmmaking, Los Angeles and his latest entrepreneurial endeavor: A streaming service called SOMMTV that features–what else?–documentaries about wine.

The conversation covers some serious ground, but the themes of wine and film work to anchor the discussion, and Wise dispenses bits of sage filmmaking advice.

“With a documentary you can just start filming right now,” he says. “That’s how SOMM came about. I got tossed into that world during the frustration of trying to make a different film, and I just started filming it, because no one could stop me because I was paying for it myself. That’s the thing with docs,” or “The good thing about SOMM is that you can explain it in one sentence: ‘The hardest test in the world is about wine, and you’ve never heard about it.’”

…Or at least maybe you hadn’t before he made his first film. Now with three SOMM documentaries under his belt, Wise is nearing completion of “SOMM4: Cup of Salvation,” which examines the history of wine’s relationship with religion. Wise says it’s “a wild film,” that spans multiple countries, the Vatican and even an active warzone. As he puts it, the idea is to show that “wine is about every subject,” rather than “every subject is about wine.”

For Wise, the transition to launching his own streaming service came out of his frustration with existing platforms holding too much power over the value of the content he produces.

“Do we want Netflix to tell us what our projects are worth or do we want the audience to do that?” he asks.

But unlike giants in the space, SOMMTV has adopted a gradual approach of just adding small bits of content as they develop. Without the need to license 500 or 1,000 hours of programming, Wise has been able to basically bootstrap SOMMTV and provide short form content and other more experimental offerings that typically get passed over by the Hulus and Disneys of the world.

So far, he says, the experiment is working, and now Wise is looking to raise some serious capital to keep up with the voracious appetites of his subscribers.

“Send those VCs my way,” Wise jokes.

Subscribe to PCH Driven on Apple, Stitcher, Spotify, iHeart, Google or wherever you get your podcasts.

dot.LA reporter David Shultz contributed to this report.