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Microsoft deal to deliver $390 million payday for Activision's embattled CEO

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By Krystal Hu

(Reuters) - Activision Blizzard Inc's Chief Executive Officer Bobby Kotick has gone from defending his handling of sexual harassment and discrimination claims at the video game maker to preparing to walk away with a windfall of at least $390 million.

The 58-year-old executive stands to receive the payday after clinching a deal on Tuesday to sell Activision to Microsoft Corp for $68.7 billion, but the vast majority will come from the 3.95 million Activision shares he owns, regulatory filings show.

He will miss out on a change of control payment because he doesn't own any unvested equities, which is uncommon for public company CEOs.

Kotick plans to step down once the deal with Microsoft closes, which is expected in June 2023, a person familiar with the matter said. Had he stayed as Activision's CEO, he would have reported to Microsoft's gaming chief Phil Spencer, a far cry from running a standalone company.

Kotick, who has led Activision since 1991 and turned it into one of the world's biggest videogame giants, said in an interview on CNBC on Tuesday that the company had "worked through" allegations of sexual harassment and discrimination that led to more than 20 employees being fired and 20 more individuals facing other forms of disciplinary action last year.

A spokesperson for Kotick and Activision declined to comment.

Activision shareholders only narrowly approved Kotick's $155 million pay package last year, after investors criticized the company for awarding him one of the highest compensation packages in the corporate world.

In response, Activision decreased Kotick's base salary and cash bonus by 50% and made 95% of his total compensation subject to performance.

Activision also did away with a "transformation transaction award" that would have given Kotick a special payout, whose value would be determined in the future, should the company have been sold.

In October, in light of the sexual harassment and discrimination charges at the company, Kotick dropped his salary to $62,500, the minimum allowed under California law and stopped receiving any bonuses or equities, vowing to improve the company culture.

(Reporting by Krystal Hu in New York; additional reporting by Ross Kerber in Boston; editing by Richard Pullin)