Almost a year ago, Activision Blizzard CEO Bobby Kotick, along with partner Brian Kelly and Chinese company Tencent, formed an investment group and purchased majority shares of Activision Blizzard from French parent company Vivendi. That purchase has put Kotick and pals in the driving seat of Activision, however the way his investment team got there has ruffled shareholder feathers.
Activision investor Anthony Pacchia, along with another unnamed investor, filed court documents against Kotick and his group in June of this year – they’re claiming that Activision’s board of directors allowed Kotick and Kelly to purchase the majority shares at a discounted price that was below market value. They’re also claiming that directors allowed Kotick and Kelly to gain a massive financial windfall as insiders. Vivendi officials are also being sued for failing to protect minority shareholders’ interests. A court has allowed the documentation to pass, which means that Kotick and company will need to face the charges.
While that in itself is interesting, what’s even more interesting is how close Kotick came to being fired in May last year.
According to internal emails, which were obtained for Pacchia’s legal case, long-time CEO Bobby Kotick was nearly fired by Vivendi and Activision board members. The reason for this potential firing stemmed from the fact that Kotick was deliberately uncooperative when it came to signing off on any Vivendi share purchases that didn’t involve his investment group as the main buyers. Basically, Bobby Kotick knew how valuable he was as a CEO to Activision, and so he used that power to move the Vivendi shares buyout in his favour. In the end, Vivendi and Activision’s board relented and the Kotick-Kelly-Tencent investment group gained control.
An internal email sent by Vivendi’s CEO at the time Jean-Francois Dubos said: “I really wonder who’s going to fire him,” referring to Kotick. Philippe Capron, who was Activision’s chairman at the time responded, “Myself, happily. Tomorrow if you want.” One of Activision’s independent directors, Richard Sarnoff, expressed that he would help if Vivendi and Activision decided to terminate Kotick’s employment.
In the end, however, it looks like Kotick’s worth to Activision saved him. The current board of directors certainly knows Kotick’s worth and has since gone on record to say that they support Kotick and Kelly’s “ongoing leadership of the company”.
Say what you will about Bobby Kotick, but the man knows how to run a publisher.