SOC Investment Group, the activist shareholder organization dedicated to "organizing workers' capital into an effective voice for corporate accountability" that has previously criticized how much CEO Bobby Kotick is paid (and, more recently, demanded his removal), is urging company shareholders to vote against the re-election of six of the company's ten board of directors.
Kotick, along with Brian Kelly, Robert Morgado, Robert Corti, Barry Meyer, and Peter Nolan, all failed to recognize "that Activision Blizzard for years maintained unsafe workplaces," the organization said in a letter to shareholders, or failed to address those issues once they were brought to light by the 2021 lawsuit filed by California's Department of Fair Employment and Housing.
The first order of business in the upcoming annual shareholders meeting is the election of company directors, ten in total. It's very routine, and generally goes as the current board wants—and in this case, the board unanimously recommends that shareholders vote in favor of the election of each nominated director. And that's super-easy: "Unless shareholders instruct otherwise, proxies solicited by this proxy statement will be voted for the election of the ten nominees," the proposal states, which essentially means that if you're a minority shareholder and don't explicitly vote against the nominees, your vote will be counted in favor.
It requires a little extra effort to vote against nominees, then, but SOC Investment Group is hoping that shareholders will take that step. After the DFEH lawsuit was filed, Activision Blizzard shareholders expected leadership and responsibility from the board, the organization said. What they got was a lengthy silence, followed by a "superficial" statement that "failed to clarify open issues such as when prior to July 20 the Board became aware of the issues at the company."
"This degree of passivity would be disappointing for any board of directors, but given the gravity of the situation at Activision, it has been inexcusable," SOC Investment Group wrote.
"To the extent the Board has taken any action in response to these numerous allegations, it has been to assert in vague terms that the company is taking appropriate steps to address its issues, create a new Board committee comprised of the two women directors on the Board as of November 2021, and to add two new woman directors prior to and at the 2022 general meeting. While these small changes are not unwelcomed, they are clearly far from the thorough housecleaning and serious self-examination that the situation at Activision incontestably demands."
SOC Investment Group urges shareholders of #ActivisionBlizzard to vote against six directors who failed to address the company’s sexual harassment crisis. #CorpGov #EndSexualHarassment #ToneDeafAtTheTop Read our letter here:https://t.co/qiT2zVDPT0 pic.twitter.com/uZivpdOlpAMay 27, 2022
The replacement of Kotick and the rest are seen as a beginning, not an end. The SOC Investment Group said that "under new and more diverse leadership, the Activision Blizzard Board needs to reform its oversight practices and procedures to ensure that a crisis like the one the company is currently enduring does not occur in the future."
Of course, it's vanishingly unlikely that any of these board members won't be re-elected, but the SOC's persistent campaigning has been slowly chipping away at some layers of institutional bedrock. In August 2020, for instance, an SOC complaint (then under the name of CtW Investment Group) helped lead nearly three-quarters of voting shares to reject a proposed pay package for Electronic Arts executives; a year later, the proposed Activision Blizzard executive pay package was approved by just 54% of shareholder votes, compared to 82% in 2019 and 92% in 2018.
The SOC Investment Group also recently urged shareholders to vote against Microsoft's proposed acquisition of Activision Blizzard, although it was overwhelmingly approved by shareholders.
Thanks, GamesIndustry.
