WSJ Says Activision Blizzard CEO Feigned Ignorance About Employee Sexual Misconduct For Several Years

Activision Blizzard Inc ATVI documents proved that CEO Bobby Kotick was well aware of the employee misconduct allegations and feigned ignorance, the Wall Street Journal reports.

What Happened: The documents included memos, emails, and regulatory requests, and interviews with former employees and others familiar with the company.

The SEC subpoenaed Kotick into how the company handled reports of misconduct and disclosed them to the public. A former employee lawyer alleged that her client was raped in 2016 and 2017 by her male supervisor after pressuring her to consume too much alcohol in the office and at work events.

The female employee accused Dan Bunting, a co-head of Activision's Treyarch studio, of sexually harassing her in 2017. Bunting reportedly quit after WSJ questioned the incident.

Activision reached an out-of-court settlement with the woman, who also had reported one of the incidents to the police. Kotick did not inform the issue to company's board.

In July, the California Department of Fair Employment and Housing prosecuted Activision for allegedly ignoring complaints by multiple female employees of harassment, discrimination, and retaliation. Kotick refuted the allegations and did not inform the board either.

When the board questioned Kotick's discretion, he defended that any cultural issues were centered at the Blizzard Entertainment unit, which he said he had resolved years earlier.

Another supervisor Javier Panameno was also fired following harassment allegations. Since the California lawsuit, Activision has received more than 500 reports from current and former employees alleging harassment, sexual assault, bullying, pay disparities, and other issues.

Why It Matters: In October, after the WSJ questioned Activision, Kotick assured that he would take a compensation cut and that the company was implementing a zero-tolerance harassment policy and ending mandatory arbitration for harassment and discrimination claims.

In August, Activision named a longtime employee, Jennifer Oneal, Blizzard's co-head, who shared her harassment experiences and decided to resign. Kotick denied her allegations.

Former employees at several studios admitted behavior like workplace drinking, comments about women's appearances, sharing explicit content, and staff-organized trips to strip clubs were common. They did not feel comfortable complaining to human resources.

Activision had settled a sexual harassment case by Equal Employment Opportunity Commission by paying $18 million.

Activision did not disclose the more than two-year-long EEOC probe until the lawsuit became public in 2021 and disclosed the SEC probe in September after questions from the WSJ.

Several women accused Kotick himself of mistreatment both inside and outside the workplace, and in some instances, have worked to settle the complaints quickly and quietly.

Former Blizzard technology chief Ben Kilgore faced multiple allegations of sexually harassing female staffers over several years before being terminated in 2018.

The company issued a statement on the WSJ article - "We are disappointed in the Wall StreetJournal's report, which presents a misleading view of Activision Blizzard and our CEO. Instances of sexual misconduct that were brought to his attention were acted upon. The WSJ ignores important changes underway to make this the industry's most welcoming and inclusive workplace..." (Read full statement here)

Price Action: ATVI shares traded lower by 6.08% at $66.15 on the last check Tuesday.

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