Call Of Duty Execs Accused Of Using Microsoft Deal To Line Their Own Pockets

Call Of Duty Execs Accused Of Using Microsoft Deal To Line Their Own Pockets

Two Activision Blizzard shareholders have filed lawsuits against the Call of Duty publisher for making allegedly inadequate disclosures in its recent filings with the SEC about its deal to sell to Microsoft for $US68.7 ($95) billion. The investors further alleged that big payouts for CEO Bobby Kotick and others that would result from the deal have created a massive conflict of interest.

As first reported by Polygon, shareholder Kyle Watson filed a lawsuit in California on February 24 calling Activision Blizzard’s recent several hundred page Proxy Statement to the SEC outlining its proposed deal with Microsoft “materially misleading and incomplete.” Basically, it alleges that the deal is better for Activision Blizzard executives and board members than it is for the average investor. Watson’s lawyers argue the company is trying to obscure that fact by leaving certain information about how the deal came together and who will remain employed after it goes through out of the SEC filings.

A second shareholder lawsuit making similar claims was filed on February 25 by Shiva Stein. As Polygon notes, however, Stein reportedly files complaints like these all the time. According to Reuters, some argue they’re often frivolous, while others say they help keep companies honest about their filings. “We disagree with the allegations made in this complaint and look forward to presenting our arguments to the Court,” a spokesperson for Activision Blizzard told Polygon.

The lawsuits are certainly right about one thing: Kotick and the rest of his C-suite have been golden parachutes coming if the Microsoft deal goes through. As Axios reported last week, Kotick could receive as much as $US22 ($31) million if the company’s Board of Directors, many of whom are his pals, decide he’s done enough to fix the years of workplace abuse that reportedly went on under his watch.

Here are some of the other massive payouts for executives if they stick around for six to eight months after the deal goes through:

  • Chief financial officer Armin Zerza: $US25.3 ($35) million.
  • Chief operating officer Daniel Alegre: $US29.1 ($40) million 
  • Chief administrative officer Brian Bulatao: $US11.3 ($16) million
  • Chief legal officer Grant Dixton: $US14.7 ($20) million.
Image: Activision Blizzard / Kotaku / Yevgenij_D, Shutterstock
Image: Activision Blizzard / Kotaku / Yevgenij_D, Shutterstock

Notably, Bulatao and Dixton haven’t even been at Activision Blizzard for a full year yet. Bulatao joined in March 2021 and Dixton arrived in June 2021 to replace Chris Walther, the previous chief legal officer who conspicuously ended his more than a decade-long tenure the month before the California Department of Fair Employment and Housing filed its lawsuit alleging widespread sexual harassment and discrimination at the company.

Bulatao, meanwhile, is the former Trump Administration lackey who sent an email to Activision Blizzard developers last December begging them not to unionize. Quality assurance testers at Call of Duty Warzone studio Raven Software famously went ahead anyway, and are currently fighting the company to hold an election to become officially recognised by the National Labour Relations Board. Management attempted to stall proceedings, however, and argued that either everyone at the studio must unionize or no one can.

As part of that union-busting offensive, the company has been holding internal meetings to spread negative information about unions. Earlier this month, The Washington Post reported that Raven senior director, David Pellas, told a meeting full of developers that a union would be bad for the studio because it might prevent management from forcing developers to work overtime in the lead up to a new launch and thus lead to worse games.

Call of Duty development has historically run on a notoriously crunch-heavy schedule in order to meet its annualized release calendar. In addition to being bad for workers, it’s also occasionally led to less than stellar games. Bloomberg recently reported that Activision Blizzard has decided to not put out a new mainline Call of Duty in 2023 for the first time in decades, in part because recent entries have underperformed.

Earlier this week, Wisconsin Senator Tammy Baldwin sent a letter addressed directly to Kotick calling on the CEO to, “negotiate in good faith with the workers and suspend any efforts to undermine your employees.” Activision Blizzard’s pending deal with Microsoft would mostly prohibit the company from entering a collective bargaining agreement with its employees unless Microsoft approved it. Shortly after the deal was first announced, Microsoft Gaming CEO Phil Spencer said in an interview that he wasn’t familiar enough with unions to comment on Activision Blizzard workers’ current organising efforts.

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