SOC Investment Group Calls for Bobby Kotick & Board Members to Resign | PlayStation Expresses Concern
2021/11/17 at 4:22 PM
Following a scathing report by the Wall Street Journal which laid all of Activision Blizzard's problems squarely at the feet of CEO Bobby Kotick, the Strategic Organizing Center (SOC) Investment Group has presented a
letter to the Board of Directors
, demanding the resignation of three members of the board: CEO Bobby Kotick, Chairman of the Board Brian Kelly and Lead Independent Director Robert Morgado. For their part, the Board of Directors has defended the CEO and expressed continued confidence in his leadership.
WSJ Report on Bobby KotickKotick Response to EmployeesBoard of Directors Supports CEO
While several media outlets have presented this as
"a group of shareholders representing 4.8 million shares"
to imply a spontaneous organization of well-minded citizens, it is important to recognize that this is coming from a professional organization with a history of criticizing
and CEO Bobby Kotick in particular. Although touted at representing a combined 4.8 million shares of Activision Blizzard stock, that only makes up
about 0.61% of all Activision Blizzard shares
, which gives them very little direct voting power - most recently having failed to convince shareholders to
disprove of Kotick's voluntary 50% pay cut
, although it could be argued that the pressure helped lead to the CEO
pledging to minimize his compensation
further to the California state minimum of $62,500 in October.
SOC Investment Group
As new reporting indicates, and in contrast to past company statements, CEO Bobby Kotick was aware of many incidents of sexual harassment, sexual assault, and gender discrimination at Activision Blizzard, but failed either to ensure that the executives and managers responsible were terminated, or to recognize and address the systemic nature of the company’s hostile workplace culture. Moreover, and despite numerous government investigations, settlements, and top executives’ departures that have negatively affected both the company’s public reputation and its share price, the board has been almost entirely silent.
We, therefore, call on Mr. Kotick to resign as CEO of the company, and on the board of directors to take responsibility for failing to recognize and address what the California Department of Fair Employment and Housing has described as a “frat boy” workplace culture to flourish. In order to ensure that the board has leadership capable of leading this effort, we urge Chairman Brian Kelly and Lead Independent Director Robert J. Morgado to announce their retirement no later than December 31, 2021. The board should start a search for more qualified replacements immediately.
In addition to terminating Mr. Kotick and replacing Messrs. Kelly and Morgado, we urge the board to immediately commit to the following:
• Retain an independent expert in corporate governance with a strong background in uprooting sexist and discriminatory workplace practices to conduct a review of past board practices, structure, and composition to determine how and why the board failed to address the company’s “frat boy” culture before the public announcement of the California lawsuit.
• Independent of this review, commit to a thorough refreshment of the board to increase diversity and inclusion, a key element of which should be the nomination of a non-executive Activision Blizzard employee, selected through a fair and open process by the Activision Blizzard workforce, to serve as an Employee Director subject to election at the next annual meeting.
• If the Board does not terminate CEO Robert Kotick, include the announced voluntary reduction in total CEO pay in his employment contract for at least five years and auto-renew it if the stated workplace goals are not met. In addition, clarify if any other executives will accept similar reductions or if the company will eschew granting bonuses for this year.
Formerly known as the CtW Investment Group, the SOC is a union pension fund advisory organization which has lobbied against Activision repeatedly over the last two years, along with other corporations including
, and several others. It is, in effect, a professional lobbying organization.
PlayStation Expresses Additional Concern
separate piece by Bloomberg
, PlayStation chief Jim Ryan also criticized Activision Blizzard's inadequate response in an email to employees, stating that he and his leadership were “disheartened and frankly stunned to read” that Activision “has not done enough to address a deep-seated culture of discrimination and harassment.” Given PlayStation's close ties with Activision and Blizzard Entertainment in particularly, supporting titles such as Call of Duty and the Diablo series, this could represent additional outside pressure on the company and against the long-time Activision CEO.
Jim Ryan, via Bloomberg
“We outreached to Activision immediately after the article was published to express our deep concern and to ask how they plan to address the claims made in the article,” he wrote. “We do not believe their statements of response properly address the situation.”
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