Bobby Kotick, the longtime chief executive of videogame empire Activision Blizzard Inc., told employees Thursday he will take a pay cut and end mandatory arbitration for internal harassment and discrimination claims amid regulatory probes into the company’s culture.

Mr. Kotick, 58, was the second-highest paid chief executive nationwide, earning $154 million in 2020, according to The Wall Street Journal’s annual ranking of pay and performance for leaders of S&P 500 companies.