On Thursday, Activision Blizzard CEO Bobby Kotick announced that he's reducing his salary to $62,500, the lowest amount allowed under California law. The company is so mired in scandal, lawsuits and investigations that even the CEO announcing he's taking a massive pay cut probably will not calm the storm. Protocol spoke to employees who say the move is just an effort to assuage investors ahead of the company's Tuesday earnings call and it doesn't go far enough.
The gaming company has been in turmoil since the state of California revealed widespread, systemic allegations that women had been assaulted, harassed and discriminated against inside the workplace for years, and that the company's toxic culture had allowed those allegations to go ignored. After the announcement that the California Department of Fair Employment and Housing would be suing the company, Activision Blizzard at first challenged the suit and the people who came forward, calling the claims "distorted" and also suggesting that lawsuits like this one contribute to companies' decisions to relocate outside of California.
While company leadership has since apologized for some of its remarks and conducted an investigation that led to the firing of 20 employees accused of inappropriate behavior, the initial reaction so angered workers that many remain skeptical of the changes that have since occurred. Activision Blizzard also agreed to pay $18 million to settle a parallel investigation from federal investigators at the Equal Employment Opportunity Commission in late September, a move that some employees involved in the "A Better ABK" worker movement told Protocol was "disgustingly low."
Activision Blizzard did not respond to requests for comment.
"A Better ABK" became a powerful force inside the company when the group organized a walkout after the company's initial dismissal of the lawsuit. The group made explicit demands, including an end to forced arbitration clauses, new hiring and promotion to improve diversity and inclusion, a clear pay transparency report with publications of salaries and a diversity task force empowered to hire a third party to audit the company.
Kotick's Oct. 28 announcement that he will be taking a pay cut partially meets some of those asks. Kotick will be reducing his salary until the company meets a number of new commitments to improve representation of women and non-binary people inside the company and to create transparency around pay equity. He also wrote in his note to staff that mandatory arbitration clauses for claims of sexual harassment, discrimination or related issues would be waived.
While many workers inside the company welcomed Kotick's announcement as a step in the right direction, some also questioned his motives. "It just seems like he's trying to save face before the Activision Blizzard earnings call on Nov. 2. Shareholders are now paying attention to the lawsuit and to employees and the 'A Better ABK' movement. It just seems like he's trying to appease shareholders," Jessica Gonzalez, a senior test analyst at Blizzard Entertainment, told Protocol.
She is concerned that the concessions announced in Thursday's letter might not be as clear of a win for workers as they first appeared; she is especially worried that people might not take advantage of the change to forced arbitration in their contracts if they don't know to advocate for it, for example. "It seems like smoke and mirrors to appease shareholders. And if he really wanted to work with employees and our concerns, he would address the ABK Workers alliance," she said.
"Today's step seems less like a concession and more like Bobby realizing that legally he's going to lose this battle as time goes forward," said another worker involved in "A Better ABK" who asked to remain anonymous for fear of retaliation from the company. "This has heartened us though, this has made us understand that when our workers do come together to speak up and form collective action groups, that we can make change. While we're happy about everything that has happened today, it has not yet met our four demands," they said.
Both this worker and Gonzalez also expressed their frustration with Activision Blizzard's decision to hire WilmerHale attorneys to conduct an audit of the company. They and the rest of ABK workers say that WilmerHale has a conflict of interest because attorneys at the company have crossed paths with EVP Fran Townsend — one of the executives who initially criticized the investigation — and that ABK should instead pick an auditor in partnership with employees.
The mistrust of Kotick's intentions also stems from the EEOC settlement itself, and from the fact that the company has since sued the DFEH to try to stop its investigation. The two agencies have been warring publicly over their suits against the company, with the DFEH accusing the EEOC of jeopardizing the state investigation with the settlement, while the EEOC claimed that two California attorneys have violated ethical rules. Activision Blizzard itself waded into the turmoil to ask a California judge to end the DFEH investigation because of the ethical issues, but a judge ruled last week that the work can continue.
"We really hoped that Activision Blizzard would lean into it. Instead, they blamed the state of California. I think we collectively wanted the company to settle with the DFEH, and we don't think that's going to happen, we think that they want to fight it. And we think the EEOC settlement was part of a way to fight it," Gonzalez said.