Investor Call Acti-Blizz Management Response “Inadequate”

Over the past three weeks, Activision-Blizzard has given several responses following the allegations of sustained sexual harassment, gender inequalities, and a repeated display of company culture that is not what is portrayed outside of the workplace. The initial response was later called by Activision-Blizzard CEO, Bobby Kotick, “tone-deaf,” and went on to call for the company to lead the industry in better conduct. Meanwhile, further allegations came out, repercussions were being dished out, and executives were taking their personal swipes (according to some). Kotick’s letter to workers came after employees stated the intention to stage a walk-out; Which prompted Ubisoft employees to state solidarity and call for industry-wide change.

In the weeks following this, further news has broken of sponsors of the Overwatch and Call of Duty esports leagues dropping deals. T-Mobile, State Farm, and Kellogg all pulled out of the leagues that they sponsored. Coca-Cola continues to be named on the Overwatch League site despite re-evaluations of what the company will do following these reports. Presently, rumors circle despite being refuted by the Overwatch League VP Jon Spector, about a year-long hiatus ahead of season 5. Furthermore, former Blizzard President J. Allen Brack stepped down last week, and Fran Townsend deleted a social account and publicly stepped down from her sponsor of the ABK Women’s Network. Townsend is still employed as a company executive according to The Washington Post.

Following this, Activision-Blizzard investor SOC Investment Group, which works with pension funds sponsored by unions, sent a letter to Robert J Morgado, Activision-Blizzard’s Lead Independent Director. In the letter, the group calls the response, including Kotick’s letter declaring change, lackluster. Not in too few words, but the intent is there. “The Changes Mr. Kotick has announced do not go nearly far enough to address the deep and widespread issues with equity, inclusion, and human capital management at the company,” the letter said, which was later published on Tuesday.

In the letter, the SOC Investment Group points to several causes for their message. In order: A lack of action or discussion to “alter the current process for filling vacancies” of directors or senior management, a lack of announcements on “clawing back compensation from executives” known of abusive practices or aligning executives with equity goals, and the appointment of WilmerHale, despite their reputation as, “a defender of the wealthy and connected,” with no record of practices requested of them by Kotick. Moreover, an employee network known as “A Better ABK,” published a letter via IGN describing WilmerHale’s: “history of discouraging workers’ rights.”

SOC Investment Group goes on to make a list of suggestions, ones they believe to do more for the workers and improve the overall workplace culture. Once again, the suggestions here are listed in order. An increase in diversity of the board members, by adding a woman to the board by the end of the year and committing to further diversity by 2025, “Claw back” the bonuses from those found to have done wrong and award no bonuses for 2021, with further bonuses dependent on a third-party independent review of milestone achievements for diversity and equity, and conduct a company-wide review on equity, listing several examples of such, to fully stick to the broad goals set out by Kotick. This is not the first time the SOC has called upon Activision-Blizzard and (at large) investors to make a change.

The group, formally known as CtW Investment Group is attempting to block Kotick’s bonuses, while also pushing to reject EA executives getting bonuses too. In the closing statements from the group’s executive director Dieter Waizeneggar, Waizeneggar states, “[W]e urge you and the board to push beyond the inadequate response from management and take the steps necessary to protect our investment from the financial, operational, and reputational risks that have come to the fore over the past week.”