Activision pres Kathy Vrabeck resigns post

Kathy Vrabeck, a six-year veteran of the executive ranks at Activision, most recently the president of its publishing division, and one of the highest-ranking women in the publishing industry, tendered her resignation earlier this month, according to documents filed with the Securities and Exchange Commission (SEC) today.

While the resignation from her executive post was effective September 2, 2005, Vrabeck remains on the staff roster of the company until April of next year.

"Kathy Vrabeck has resigned her position as an officer of Activision but will remain an employee of Activision through April 1, 2006," a company spokesperson told GameSpot today.

Some industry insiders have speculated that Vrabeck had been passed over for a promotion in June when the company announced it had hired former Proctor & Gamble executive Michael Griffith to replace Activision Publishing CEO Ron Doornink, although it's not clear if Vrabeck's resignation was the direct result of that hire. At that time, Doornink was promoted to chairman of the publishing division.

An Activision spokesperson had previously denied that Vrabeck had been passed over by the Griffith hire.

According to documents, Vrabeck will draw her full salary through April 1, 2006. She will qualify for a portion of her bonus through that date as well. Reportedly, Vrabeck earned a base salary of $500,000, and during fiscal year 2005 she garnered a $423,750 bonus. That would make Vrabeck the second-highest-paid executive at Activision, according to TheStreet.com.

Griffith was hired at an annual base salary of $600,000, with incremental increases, and options to purchase 1,000,000 shares of company stock at a price of $17.12 per share. The SEC filing that outlined his hire stated: "In the event that on May 15, 2010, Mr. Griffith's total compensation plus any severance payments received by him has not exceeded $20 million, Activision Publishing will pay Mr. Griffith the shortfall."

When the Griffith hire was announced, one analyst told GameSpot, "To be honest, I really think that the guarantee is excessive. They are paying the guy $600K plus bonus plus options. I can see guaranteeing a 50 percent bonus and the entire salary package, so you'd be looking at a $5 million guarantee with escalators, but to guarantee $20 million is really making a big bet."

In a memo to investors today, Wedbush Morgan senior analyst Michael Pachter reacted to the news, saying he was "slightly surprised and disappointed."

"We believe that [Vrabeck] was a key member of management and a capable executive, and we credit her with contributing to the company's success over the last two years."

Pachter added that Vrabeck's departure "adds some uncertainty regarding the strength of the management team going forward," but concluded that "we are not concerned with the management team's ability, and believe that Activision has sufficient bench strength to match its leading stable of marquee games and development talent."

Vrabeck joined Activision in 1999 from a post at ConAgra Foods. She was promoted to president of the publishing division in November 2003.