Activision Blizzard defends CEO Bobby Kotick as workers call for his resignation, plan walkout

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Activision Blizzard is pushing back against reporting by the Wall Street Journal that its chief executive officer Bobby Kotick has known about sexual misconduct allegations at the video game publishing giant for years.

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ATVIACTIVISION BLIZZARD, INC.66.14-4.29-6.09%

Shares fell over 5% on Tuesday as the WSJ cited internal documents, including memos, emails and regulatory requests and interviews with former employees and others familiar with the company, which reportedly show that Kotick did not inform the company's board about everything he knew even after regulators began investigating claims in 2018. 

In addition, the outlet reports that Kotick himself has been accused by several women of inappropriate behavior both outside and inside the company over the years and, in some instances, has worked quickly and quietly to settle complaints, citing people familiar with the incidents and internal documents.

SUN VALLEY, ID – JULY 10: Bobby Kotick, chief executive officer of Activision Blizzard, attends the annual Allen & Company Sun Valley Conference, July 10, 2019 in Sun Valley, Idaho. (Photo by Drew Angerer/Getty Images) (Drew Angerer/Getty Images / Getty Images)

An Activision Blizzard spokesperson told FOX Business that the WSJ report "presents a misleading view of Activision Blizzard and our CEO." 

"Instances of sexual misconduct that were brought to his attention were acted upon. The WSJ ignores important changes underway to make this the industry’s most welcoming and inclusive workplace and it fails to account for the efforts of thousands of employees who work hard every day to live up to their – and our – values," the spokesperson explained. "The constant desire to be better has always set this company apart." 

ACTIVISION BLIZZARD CEO REQUESTS PAY CUT AMID COMPANY'S WORKPLACE CULTURE TRANSFORMATION

The recent turmoil within the company that produces the best selling ‘Call of Duty’ was sparked by a lawsuit by the California's Department of Fair Employment and Housing in July which claimed the company paid its female employees less than their male counterparts, provided them with fewer opportunities to advance, fostered a "frat boy workplace culture" and ignored complaints by female employees of blatant harassment, discrimination and retaliation. The company was also accused in September of union busting and worker intimidation.

The company originally called the allegations "distorted, and in many cases false, descriptions of Blizzard’s past," prompting a petition by over 2,000 current and former workers who proceeded to stage a walkout over the issue. Following the backlash, Kotick issued a lengthy apology over the company's "tone deaf" response and promised changes would be made to improve its workplace culture. 

Since then, Activision Blizzard has been caught in the crosshairs of regulators and a group of employees, known as ABetterABK, who have been pushing for a series of changes. The Securities and Exchange Commission has subpoenaed Kotick and other company executives over their disclosures regarding employment matters and related issues. Meanwhile, the Equal Employment Opportunity Commission reached an $18 million settlement to end a probe launched in 2018 to look into the allegations. The settlement agreement will be enforced by an outside monitor. 

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Last month, Activision Blizzard instituted a zero-tolerance harassment policy and outlined a series of new goals and commitments to improve its workplace culture, including increasing its global workforce of women or non-binary employees by approximately 50% within the next five years and investing approximately $500 million towards accelerating opportunities for diverse talent and expanding workplace initiatives for under-represented communities. Activision also said it will waive required arbitration of sexual harassment and discrimination claims and will increase transparency related to pay equity.

In addition, Kotick, who dated Facebook's Sheryl Sandberg who is now married to someone else, 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 new goals and other commitments have been met. He noted that he would not receive bonuses or be granted any equity during this time. 

"We are moving forward with unwavering focus, speed, and resources to continue increasing diversity across our company and industry and to ensure that every employee comes to work feeling valued, safe, respected, and inspired, the spokesperson added. "We will not stop until we have the best workplace for our team."

Activision Blizzard's board of directors added that it remains "committed to the goal of making Activision Blizzard the most welcoming and inclusive company in the industry" and expressed confidence that Kotick "appropriately addressed workplace issues brought to his attention" and will be able to achieve the company's new goals.  

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More than 20 employees have exited the company, including Blizzard president J. Allen Brack, and another 20 employees have faced other types of disciplinary action since the harassment claims first surfaced. 

One of Brack's successors, Jen Oneal, also recently said she would step away from her new co-lead role at Blizzard and leave the company at the end of the year. According to the Journal, Oneal sent an email to leadership last month expressing a lack of faith in turning the company's problems around, adding, "It was clear that the company would never prioritize our people the right way." Oneal added that she herself has been "tokenized, marginalized, and discriminated against" during her Activision career and that she was paid less than her male counterpart leading Blizzard, Mike Ybarra. 

ABetterABK tweeted that they will stage a walkout on Tuesday in response to the allegations in the Journal's report and have called for Kotick's resignation. 

"We will not be silenced until Bobby Kotick has been replaced as CEO, and continue to hold our original demand for Third-Party review by an employee-chosen source," the employees said. "We welcome you to join us."

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