As Microsoft begins to dot its I's and cross its T's for its $68B Activision acquisition, SEC filings are surfacing with details on multiple payouts plans for the company's current CEO, starting with a $15M "golden parachute."
According to the PREM14A merger proposal from Activision Blizzard Inc, CEO Bobby Kotick could receive up to $15M if Microsoft decides to let him go "without cause" if and when the two companies close their respective deal.
There are other financial bonuses tucked away in the filing that all positively benefit Kotick that don't end with a pink slip from Microsoft such as a possible $22M stock endowment by July of 22' if the board sees improvement in company culture. With Microsoft planning to pay upwards of $95 a share as part of the acquisition deal, Kotick could easily ride into the sunset with over $400M in addition to the $15M he's made Microsoft agree to for his "untimely" departure from the company.
If pushed, Kotick could force Microsoft to pay out $619M or the equivalent of the full 6.5M shares that he's allowed to own at $95 per share.
As it stands now, Microsoft could opt to keep Kotick onboard until the end of his contract in March of 2023 and save itself $15M but mitigating lawsuits from the state of California against Activision Blizzard, a rapid unionization effort by employees and personal harassment suits against Kotick himself may prompt executives to cut its losses as soon as possible.
With this amount of money on the table, the SEC filing servers as a paper trail for both companies and a timeline for the negotiated results. Acitvision's filing confirms some previously rumored dates about when Microsoft approached the publishing firm back on Nov 19, 2021, just days after the Wall Street Journal dropped its report on Kotick knowledge of rampant sexual misconduct in the company.
Other notes pulled from the Activision filing also show Microsoft overpaying for the company despite the Wall Street Journal report knocking the stock price to below $80 a share.
However, it's the long-term revenue estimates Microsoft seemed to be paying for as Acitvision is expected to tack on an additional $2B revenue increase in 2023 due to some of its slated game releases for the year.
As of now, Kotick is sitting tight at Activision with his current salary that's been reduced presumably as a show of accountability for the company-wide harassment turmoil he's allowed under his watch, and Microsoft still needs to clear some major FTC hurdles before either party start discussing million-dollar parachutes.