Activision Blizzard Shareholder Group Calls for Kotick's Resignation

A group of Activision Blizzard shareholders with 4.8 million shares is calling for CEO Bobby Kotick to resign following a Wall Street Journal report (paywall) that Kotick was aware of sexual misconduct allegations at the company and misled the board of directors about them.

"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 systematic nature of the company's hostile workplace culture," reads a letter the shareholders sent to the company's board of directors and shared with the Washington Post (paywall).

The group of shareholders, led by the Strategic Organizing Center Investment Group, also called for Brian Kelly and Robert Morgado, the two longest-serving directors on the board, to retire by Dec. 31. Kelly serves as chairman of the board, and Morgado as a lead independent director. Kelly joined in 1995, Morgado in 1997.

If Kotick, Kelly and Morgado don't step down, the shareholders said they would not vote for the reelection of the current directors on the board in the next annual shareholder meeting, scheduled for June.

Activision Blizzard has yet to comment on the letter, but its board of directors threw support behind Kotick just hours after the Wall Street Journal exposé.

SOC Investment Group has frequently criticized Activision Blizzard leadership, particularly regarding what it describes as exorbitant pay packages for top executives. Its 4.8 million shares represent a 0.6% stake in Activision Blizzard. The group also invests in other major gaming companies, including EA, where it has successfully roused non-binding votes against executive pay packages despite its relatively modest size.

Over 110 employees walked out of Blizzard Entertainment's Irvine, Calif. campus Tuesday to protest Kotick's response to the Wall Street Journal story, which detailed several incidents in which Kotick learned of misconduct at Activision Blizzard, protected the accused, and kept the information from shareholders. It was the second employee walkout at that campus, the first taking place after California's Department of Fair Employment and Housing sued Activision Blizzard in July over a reportedly sexist and toxic workplace.

That lawsuit is still ongoing. A separate investigation by the Equal Employment Opportunity Commission has led Activision Blizzard to accept an $18 million settlement. The US Securities and Exchange Commission is running yet another investigation into the company, and shareholders filed a class-action lawsuit against Activision Blizzard in August alleging violation of securities laws. SOC Investment Group is not involved in that suit. Finally, workers have filed an unfair labor practice complaint against the company in conjunction with the Communications Workers of America.