A small group of Activision Blizzard shareholders is calling for the resignation of CEO Bobby Kotick and two long-serving members of the company's board of directors, and says that it will not vote for the re-election of any of the current board members at the company's annual shareholders meetings next year if they refuse to step down.
The SOC Investment Group, formerly known as the CtW Investment Group, has for years criticized Kotick and other industry CEOs for being wildly overpaid. The group made the demand in the wake of yesterday's bombshell report that Kotick was aware of ongoing incidents of sexual abuse and harassment at the company going as far back as 2006.
In a letter sent to the board of directors, the investors group said Activision Blizzard now faces "an unprecedented workplace crisis of its own making," largely because of Kotick's failure to take action against offenders.
"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," the SOC Investment Group's letter says. "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 investment group also called on Activision Blizzard to retain "an independent expert in corporate governance with a strong background in uprooting sexist and discriminatory workplace practices" in order to conduct a full review of the board's failure to address the problems, and to improve diversity and inclusion on the board of directors, including the addition of a non-executive employee to serve as an Employee Director. If Kotick is not terminated, the group says his recent voluntary pay reduction should be extended for at least five years, presumably to give him incentive to jump ship.
The SOC Investment Group was joined by other shareholder organizations including Future Super, NEI Investments, Shareholder Association for Research & Education (SHARE) and Verve Super, according to the Washington Post; SHARE doesn't actually hold any interest in the company but elected to sign the letter in order to help "prod reform."
(3/5) As a result, we call on Mr. Kotick to resign as CEO of @ATVI_AB and urge Chairman Brian Kelly and Lead Independent Director Robert J. Morgado to announce their retirements no later than 12/31/2021. @ATVI_AB needs new leadership to address its "frat boy" culture.November 17, 2021
Collectively, the investor groups hold roughly 4.8 million shares in Activision Blizzard, which isn't nearly as significant a number as it sounds, representing just 0.6% of the company's total outstanding shares. Despite that, the SOC Investment Group has influence: In August 2020, following complaints about overpaid executives at Electronic Arts, 74 percent of voting shares rejected the company's proposed pay package in a non-binding vote, and in June 2021 it came close to doing the same at Activision.
The group's efforts to remove Kotick will also no doubt be buoyed by public opinion. Kotick has previously positioned himself as a deeply committed agent of change, but reports that he has for years been aware and dismissive of abuses at the company—and actually threatened to have an assistant killed—have scuttled that image. Activision Blizzard's board of directors issued a statement yesterday expressing confidence in his leadership, but the ABK Workers Alliance is now demanding that Kotick step down: More than 150 employees took part in a walkout calling for his removal, and the group said that it "will not be silenced" until Kotick has been replaced.
I've reached out to Activision Blizzard for comment and will update if I receive a reply.