activision blizzardceo cut pay ends mandatory arbitration

Activision Blizzard CEO Bobby Kotick Temporarily Cuts His Salary to Minimum Wage, Ends Mandatory Arbitration Amid Efforts to Improve the Company

Activision Blizzard has been under fire since a California lawsuit earlier this year alleged a toxic culture of discrimination and harassment at the company. In a new email set out to all Activision Blizzard employees, CEO Bobby Kotick outlined some major initiatives intended to improve the equality and workplace culture at the company. These include ending forced arbitration, increasing diversity with additional female and non-binary employees, and increased visibility into pay equity throughout the company. Amid these initiatives, Kotick is also reducing his own salary to California minimum wage until the Board has determined that the goals and commitments have been met.

Kotick’s email targets five areas that Activision Blizzard will be focusing on. The first is a zero-tolerance harassment policy, which will implement “tougher rules and consistent monitoring” to make sure “reports are being handled correctly.”

“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,” Kotick’s email says. Additionally, employees found to have retaliated against other employees for making complaints will be terminated immediately.

Harassment based on any legally protected category will no longer result in written warnings; “termination will be the outcome.” Termination for these reasons will also forfeit future compensation, meaning that high paid executives and managers can’t coast by.

The second initiative is increasing the percentage of women and non-binary people in the company by 50%, investing $250 million to “accelerate opportunities for diverse talent.” Kotick says that the current Activision Blizzard workforce has around 23% women and non-binary people. The goal is to see this number rise by 50%, to over one-third, in the next five years, “and hopefully faster.”

Over the next 10 years, the company will invest $250 million in “initiatives that foster expanded opportunities in gaming and technology for underrepresented communities.” More details on this investment and initiative will be coming in the next few months.

Third is the ending of mandatory arbitration at Activision Blizzard. Mandatory arbitration clauses have forced employees to arbitrate conflicts via a third-party, rather than pursuing lawsuits. These clauses have received a massive backlash in recent years as designed to protect companies and not the employees. A number of developers have recently ended mandatory arbitration, including Bungie removing it from all of its employment contracts last month.

Increased visibility on pay equity is the fourth initiative. Activision Blizzard recently reported on its 2020 pay equity analysis, which found that in 2020, women and men who performed comparable work earned effectively the same amount of money. Kotick promises that they will continue to report these results annually.

Finally, Kotick promises that Activision Blizzard will provide regular progress updates, monitoring progress and providing a status report quarterly. The focus on diversity, equity, and a safe workplace will also be added to the annual shareholders reports. More specifics on overall implementation and tracking will be coming in the future.

After outlining these five areas of focus, Kotick says that he has asked the Board to cut his total compensation to the California minimum wage for salaried individuals of $62, 500 per year, until such time that the Board deems they “have achieved the transformational gender-related goals and other commitments described above.” This includes bonuses and equity, effectively any compensation Kotick would receive from the company. Kotick specifically mentions that this is a request to the Board, and it’s unknown at this time what the Board’s decision on the matter will be.

Kotick concludes the email celebrating the work that the employees at Activision Blizzard do:

There’s a tendency when companies face challenging moments to lose sight of what makes them special, what makes them great. You are a truly special group of people who – through passion, conviction, drive, and determination – keep accomplishing extraordinary things. While the critical work ahead won’t be easy, I am confident our collective commitment to workplace excellence will be achieved.

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.

Notably, this initiatives finally meet some of the requests that the A Better ABK employee coalition had made to the company in light of the lawsuits and allegations from earlier this year. Kotick’s email does not address employee criticisms of the audit being done by the law firm of WilmerHale, which they say is not an “unbiased third-party,” and has a reputation of protecting companies and executives over employees. However, ending mandatory arbitration, as well as efforts by Activision Blizzard to increase the number of women and non-binary people in the workforce are counted as a big win.

The email from Kotick comes just ahead of Activision Blizzard’s upcoming earnings call, as well as just a week shy of the release of Call of Duty: Vanguard, which analysts expect to yet again be a best-selling title for the year.

[Source: Activision Blizzard]