U.S. Securities and Exchange Commission (SEC) released new documents on Wednesday outlining more details of Microsoft’s $69 billion acquisition of Activision Blizzard. The document outlines the fate of Activision Blizzard’s somewhat controversial CEO, Bobby Kotick. The most interesting clause is that if Kotick is fired by Microsoft without cause, he will be entitled to receive a “Golden Parachute” compensation of $15 million from Microsoft. Additionally, if Activision Blizzard’s board sees an improvement in the company’s culture, Kotick could receive a $22 million stock award later this year.
The documents also indicate that the board may extend Kotick’s contract by 12 months after his term expires in March 2023. Just a few weeks ago, the management of Microsoft and Activision Blizzard allegedly agreed that Kotick would leave the company shortly after closing the deal.
Kotick currently owns (or has the right to acquire) 6.5 million shares of Activision Blizzard, valued at approximately $619 million at Microsoft’s purchase price. Kotick took a pay cut in October in response to the company scandal and said he would forgo bonuses until the board saw improvement.
Gizchina News of the week
Microsoft agreed to buy Activision Blizzard earlier this year. However, the deal came after the company grappled with widespread allegations of wrongdoing. Some of the allegations point directly to Kotick himself. In the wake of the allegations, many of the employees had to call for Kotick to resign.
Microsoft moved to acquire Activision Blizzard after the scandal
Phil Spencer, CEO of Microsoft’s gaming division, approached Kotick just days after the Activision Blizzard scandal broke. His approach is probably to acquire the gaming company. So far, the deal has not officially gone through. However, experts expect the plan to go through careful scrutiny before it gets approval.
Meanwhile, Activision Blizzard has approached four other companies to negotiate acquisitions but has not made much progress. There is also a buyer (no name) who is trying to negotiate a deal to buy out the company. However, the company’s board has been slow in its investigation.
The company expects revenue to grow by nearly $2.5 billion in 2023. This was driven by popular games, including the recently delayed release of Overwatch 2 and Diablo 4.
Activision Blizzard’s mobile gaming division King announced that two executives will be leaving. This includes a co-founder and they will leave before closing a deal with Microsoft. Among them, King founder, Sebastian Knutsson will step down as chief creative officer. The company’s president Humam Sakhnini will also leave. He spent six years at King and 12 years at Activision Blizzard. Tjodolf Sommestad will take over his position as president.