In mid-November, we reported on a group of shareholders joining the calls for change at Activision-Blizzard leadership, led by the Strategic Organizing Center Investment Group, the activist shareholder group that has been leaning on the company to improve executive pay decisions and stop labor abuses for a number of years. We recall this story because another series of voices has joined that rebuke: No less than six different state treasurers from across the US, representing states with investments in ActiBlizz amounting to significant sums of money.
The treasurers in question are from California, Delaware, Illinois, Massachusetts, Nevada, and Oregon, who joined together to issue a letter last week stating that they share “many concerns” that investors associated with SOC Investment Group have. The letter further warned that these treasurers are “eager to know the actions that the board will take in response to these concerns as we weigh the letter’s call to vote against the re-election of incumbent directors,” which readers will recall is a reference to ActiBlizz’s board standing behind Bobby Kotick. The treasurers further issued their own individual statements denouncing the goings-on within the company.
According to statements made by Illinois state treasurer Michael Frerichs, the plummeting stock price of ATVI shares has impacted the state’s investments, but he declined to detail how much. That said, he maintains that this isn’t “all just about the number of dollars and number of shares that [Illinois has],” arguing that the investment capital of these treasurers can be used to affect change.
“One thing the Treasurers bring is also a bit of a spotlight here and a little public pressure as well. […] We’re concerned that the current CEO and board directors don’t have the skillset, nor the conviction to institute these sweeping changes needed to transform their culture, to restore trust with employees and shareholders and their partners.”
State treasurers using their investment strength to shake up company behavior is not without precedent: Axios points to instances like New York state divesting funds from fossile fuel companies last year and Massachusetts using company investments to pressure companies into making better climate policies.
Ultimately, the treasurers want a meeting with ActiBlizz by December 20th, and an SOC rep said the company replied to the letter to figure out next steps. ActiBlizz’s board could very likely point to its EEOC settlement as a signal of the company’s attempts to fix the problem, but statements from Frerichs seem to suggest that throwing money at the matter won’t be enough of an appeasement. “I look at that as a penalty, as perhaps an admission of wrongs in the past. But we’re long-term investors and we want to see those risks that caused that penalty addressed, so they don’t happen again. […] If you’re continuing a culture that creates new victims in the future, you are creating more risk for your company.”
The whole saga to date: