Yesterday, The Wall Street Journal published an extensive report detailing evidence that Activision CEO Bobby Kotick was aware for years of the company’s long history of sexual misconduct. The report also points to Kotick withholding information about these events from the board of directors and surfaces abuse allegations levied at Kotick himself. You can read the full story here, but the revelations sparked an industry-wide outcry that resulted in over 100 Activision Blizzard employees staging an impromptu walkout yesterday demanding Kotick’s resignation. It now appears that a group of shareholders is echoing the same sentiment.
It is important to keep in mind what is going on within Activision Blizzard at this time regarding ongoing allegations about the work culture. The ongoing lawsuit from the California Department of Fair Employment and Housing (DFEH) against the company is over reported toxic workplace culture. The bulk of the suit focuses on "violations of the state's civil rights and equal pay laws," specifically regarding the treatment of women and other marginalized groups. To learn more about the proceedings thus far, including details listed in the lawsuit against Activision Blizzard, please check out our previous coverage here.
The Washington Post published a story revealing that several shareholders, led by the Strategic Organizing Center (SOC) Investment Group, have penned a joint letter to Activision’s board of directors requesting Kotick to step down. The letter also asks for the resignation of two of the board’s longest-tenured members, Brian Kelly and Robert Morgado. Kelly, who joined the company in 1995, serves as chairman of the board. Morgado has been with Activision since 1997 and acts as lead independent director.
These shareholders have requested Kotick, Kelly, and Morgado resign by December 31. If they do not, the group vows not to vote for the reelection of current board members during next June’s annual shareholder’s meeting. The SOC tells the Post that current Activision leadership has repeatedly failed to foster a safe working environment for all employees and that the company needs “a reset button on the board.” Among their replacements, the group wishes to appoint at least one non-executive Activision Blizzard employee and wants a more diverse board overall.
Several investment groups have signed the letter and, as a whole, account for $4.8 million owned shares of Activision's nearly $779 million total outstanding shares. SOC Investment Group is a firm that works with union-sponsored pension funds and, in its own words, "holds corporations and their leadership accountable for irresponsible and unethical corporate behavior and excessive executive pay". The SOC has previously opposed Kotick's substantial income, which is one of the highest among U.S. executives.
It’s worth noting that Activision’s board of directors issued a statement yesterday in response to the WSJ’s report, saying it “remains confident that Bobby Kotick appropriately addressed workplace issues brought to his attention.” Kotick himself sent a transcribed video message to Activision Blizzard employees calling the WSJ's report "inaccurate and misleading."
[Source: The Washington Post]