Activision Blizzard CEO Kotick Details New Company Policies On Harassment And Other Important Issues

Activision Blizzard King CEO Bobby Kotick has issued a statement to workers and the public addressing at length the harassment allegations at Blizzard and what his company plans to do about the situation going forward. Following the usual multi-paragraph letter containing stock terms such as "a tremendously challenging time," "the guardrails weren't in place," and a necessary apology ("I am truly sorry"), he detailed five changes that his company was going to make:

1. "We are launching a new zero-tolerance harassment policy company-wide." Kotick said that warnings were sometimes issued in the past for harassment complaints. Going forward, such claims, if found to be substantiated by an investigative process, will result in termination of the offender. As previously reported, 20 employees have been let go from the company over the past few months, but 20 were also "reprimanded" after investigations, which seems to contradict this new policy.

2. "We will increase the percentage of women and non-binary people in our workforce by 50% and will invest $250 million to accelerate opportunities for diverse talent." Kotick said that approximately 23% of its global workforce identifies as female or non-binary. The quarter of a billion dollars will be invested over the next 10 years and will include programs already in place, such as ABK Academy, and new initiatives.

3. "Based on feedback from employees, we are waiving required arbitration of sexual harassment and discrimination claims." A key point in workers' demands for "A Better ABK," forced arbitration will no longer be required in such cases.

4. "We will continue to increase visibility on pay equity." According to Kotick, women at ABK actually earned slightly more than men in comparable positions, and ABK will report such numbers annually.

5. "We will provide regular progress updates." This will include quarterly status updates, as well as "a dedicated focus on this vital work in our annual report to shareholders."

As a final measure, Kotick said that he would be reducing his compensation from the company -- valued in the tens of millions of dollars -- to $62,500 for the coming year, which he described as "the lowest amount California law will allow for people earning a salary." He clarified that this figure represented his total compensation from the company, including salary and all benefits, and that he would not receive any bonuses or equity.

Kotick's missives would seem to somewhat address three of the four key points laid out by a group of employees who labeled themselves as "A Better ABK" -- those being an end to mandatory arbitration, better hiring practices to foster diversity, and publication of data on relative compensation. The fourth point, regarding "a company-wide Diversity, Equity, & Inclusion task force to hire a third party to audit ABK’s reporting structure, HR department, and executive staff" was not addressed by Kotick. The Twitter account of the group celebrated the announcement as "a huge win."

The timing of Kotick's statement is more than a little suspect. The conference call for third-quarter financial results will occur next Tuesday, November 2, which means that Kotick now has in his possession figures that demonstrate how badly his company was impacted by the situation that first made itself known on July 22. That was over three months ago, and it's taken until now -- when he saw the financial impact of his lack of leadership -- that he decided to make changes.

Or, more accurately, now he's decided to announce that changes will be made. How those are implemented and whether they'll be done in a manner that suits employees is still an open question. Notably, there's no mention of a third party to handle investigations, which means that serious harassment cases that involve Blizzard employees might be handled by other Blizzard employees, leading to a potential conflict of interest.

As for Kotick's personal finances, while his salary might be relatively low, he still has enough current stock as to turn a tidy profit for the year that will greatly exceed that $62,500 figure. And if that doesn't turn out to be the case, he'll somehow have to scrape by on the $150 million or so he made last year.

In closing, while Kotick's statement is a step in the right direction, it's only a beginning -- and, like nearly everything the CEO does, it appears to be largely driven by a profit motive. It took multiple investigations by government entities, a near-mutiny by employees, and a likely poor financial report for Kotick to take this action, and even these simple steps were delayed longer than they should have been -- and, initially, blocked or diminished by high-ranking executives. When a new case presents itself, will there be swift and decisive action or will the company again deny everything and drag its feet in the hopes that the problem goes away before it impacts the bottom line? Right now, I don't see any reason to give Activision Blizzard King the benefit of the doubt.