A major activist investor group is putting public pressure on Activision Blizzard, saying that recent statements from the company regarding allegations of widespread harassment and discrimination “do not go nearly far enough to address the deep and widespread issues with equity, inclusion, and human capital management at the company.”
That message comes from the SOC investment group, which works with union-sponsored pension funds representing millions of union members to speak out against “irresponsible and unethical corporate behavior and excessive executive pay.” The group sent a letter to Activision Blizzard Lead Independent Director Robert Morgado last week (before publishing it Tuesday) asking the company “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.”
The letter takes particular issue with the naming of Wilmer Hale as the law firm that will handle ongoing employee complaints and investigate harassment at the company. SOC says Wilmer Hale and its named lead investigator Stephanie Avakian are “defender[s] of the wealthy and connected” and do not have an established track record in this kind of wrongdoing investigation.
SOC’s criticism of Wilmer Hale comes on top of similar thoughts from the ABK Workers Alliance, a group of Activision Blizzard employees that formed earlier this month. That group took issue with what it called Wilmer Hale’s pre-existing conflicts of interest with Activision Blizzard and its “history of discouraging workers’ rights and collective action,” among other identified problems.
SOC also wants Activision Blizzard to implement a method for “clawing back compensation from executives who are found to have engaged in or enabled abusive practices” and to withhold executive bonuses “unless independently verified diversity and equity milestones have been achieved.” Those demands are in line with the group’s long-standing complaints against excessive executive compensation in the industry, including a failed attempt to limit CEO Bobby Kotick’s pay last June and a successful effort to limit raises for EA executives last August (both efforts came under SOC’s former name, CtW).
SOC is also urging changes in the way senior management and board members are hired. The changes include better gender and racial balance on the board of directors—including gender parity by 2025—and the naming of an “employee representative” board member designated by the workforce.
SOC’s letter comes as Activision Blizzard faces a proposed class-action lawsuit from other investors who say they were “economically damaged” by the company’s handling of and secrecy surrounding a California Department of Fair Employment and Housing (DFEH) discrimination and harassment lawsuit.