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Shareholders call for removal of Activision Blizzard CEO Bobby Kotick

Had an ongoing lawsuit, departure of executives and a damning report from The Wall Street Journal earlier this week not been enough problems for Activision Blizzard, now shareholders have joined the fray.

The shareholders in question are SOC Investment Group and while it may not have the largest amount of shares, it has made some noteworthy statements that would concern any firm.

Following the publication of the aforementioned report, it called for Activision Blizzard chief executive officer, Bobby Kotick’s resignation.

“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,” SOC Investment Group wrote in a letter to Activision Blizzard.

The group doesn’t stop there though.

“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,” the group added.

Why have the shareholders asked for Kelly and Morgado to step down? The group says that Activision Blizzard needs to reform its oversight practices and procedures to ensure a crisis such as this doesn’t occur in future. In order to do that, the firm needs to start reforming from the top down.

SOC Investments states that part of Activision Blizzard’s problems stem from leadership positions being occupied by directors who have served on the board for a long time. The group says that five of ten current directors were on the board more than 18 years ago.

“Activision Blizzard is at a crossroads, and we call on the independent directors to lead the company’s ongoing response to the sexual harassment crisis. Absent the termination of Mr. Kotick and the thoroughgoing overhaul of the board of directors described above, we would be unable to support the re-election of incumbent directors and would urge our fellow shareholders to do the same. The time for timidity and silence, if there ever was one, has clearly passed, and it is time for the Activision Blizzard board of directors to step forward or step aside,” the group concluded.

Whether Activision Blizzard will heed SOC Investment Group is unclear but it’s unlikely Kotick is sweating.

As Fortune points out, Kotick stands to receive a sizeable payout should he be terminated. If there is cause for his termination – which this current matter could be seen as – he would walk away with $264 524. Should he be terminated without cause, well then Kotick gets a $265 175 849 payout.

With the share price slipping further everyday, since The Wall Street Journal’s report, we wait with baited breath to see what Activision Blizzard’s board of directors does.

 

 

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