Kotick persuaded casino magnate Steve Wynn to invest, and the employees of their company, called Arktronics, included members of the university’s computer science faculty. Kotick and his partners asked their employees to forgo part or all of their pay in return for shares in the company, court records show, with Kotick thanking one hire for “the confidence and dedication you have demonstrated by your deferral of salary for stock, it is appreciated and should prove rewarding.”
But Apple’s next model made Jane obsolete, and the employees claimed their thousands of shares — said to be worth $1 each — were in fact worthless. “We felt that we had been lied to and perhaps cheated,” said former employee John Wiersba.
Five employees sued Arktronics and its principals in 1985, records show. Arktronics and the employees reached a settlement — but then the company claimed the agreement should not be enforced due to a “mistaken assumption” about expected revenue. In 1989, a Michigan judge ordered Arktronics to honor the settlement: $17,000.
But by then, Kotick and his partners had moved to Los Angeles, where he was in the midst of taking over a salvaged gaming company known as Activision.
The dispute would drag on for six more years, with interest accruing. Kotick’s spokesman, Mark Herr, said the judgment was “paid and satisfied,” though he did not specify when. Wiersba said he was never paid, and a second employee said he couldn’t comment because he signed a nondisclosure agreement. Available court records don’t indicate whether the debt was ultimately paid.
“Our intention was not to hurt people. Our intention was to start another company and become successful,” said Kotick’s partner Marks, who added that he didn’t recall specifics of the dispute. “And it turns out it was unfortunate for the original people.”
The early enterprise — with Kotick blazing toward profits while leaving behind a trail of aggrieved employees — was a case study in his approach to business, which would become well known over the decades that followed.
That approach was on full display last month when Microsoft, in an industry-shifting megadeal, agreed to purchase Activision Blizzard for $68.7 billion, with Kotick reportedly expected to leave his role as CEO after the sale closes, probably sometime next year. The purchase price, nearly as much as the $71.3 billion Disney recently paid for 21st Century Fox, showed the remarkable extent of Activision’s overhaul since Kotick revived it from bankruptcy three decades ago. And it demonstrated why Kotick is revered by some as having one of the most prescient minds in business, recognizing and situating himself to capitalize on incoming industry booms in computing, video games and, most recently, esports.
That reputation has helped make Kotick one of America’s highest-paid executives, earning $154 million in 2020. And it won him the loyalty of a corporate board that has stood by him through periods of tumult — including when he fired two of
