Activision shareholders demand Kotick's head after CEO 'failed' to take claims of staff sex assault seriously

A group of Activision Blizzard investors called for CEO Bobby Kotick to resign on Wednesday, claiming he knew about sexual harassment and assault claims made against his staff for years and failed to adequately address them.

The shareholders, who together own a fraction of the gaming giant, also urged chairman Brian Kelly and lead independent director Robert Morgado to step down by the end of the year. In addition they urged the board to conduct an independent review of the "frat boy" culture at the company and to commit to "structural reform" of the corporation's governance system.

"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," the investors wrote in an open letter [PDF], "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.

"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."

In addition they suggested adding a new board member, selected from the non-management workforce by "an open and fair process." The candidate would be nominated for possible election to the board at next year's annual general meeting by shareholders.

The Register has asked Activision Blizzard for a response.

The gathering avalanche

The letter comes after the Wall Street Journal reported Kotick knew of alleged cases of sexual assault and harassment within his company, and inappropriate behavior at drunk work parties, for years and didn’t inform the board – not even telling directors of an out-of-court settlement with a woman who said she was raped by her male supervisor.

Not only that, the chief exec told senior colleagues he wasn’t aware of many of the allegations and played down others, the newspaper reported, citing sources. The SEC is, by the way, investigating whether Kotick and other managers withheld word of these claims from shareholders.

It was also reported that Jen Oneal, who just quit three months after she was made co-lead of Blizzard Entertainment, said she was sexually harassed during her earlier years at Activision.

• Blizzard co-leader Jen Oneal leaps into escape pod after just three months in the role
• Multimillionaire Activision Blizzard CEO cuts annual pay to $62,000 amid sexual harassment probes
• Activision Blizzard to pay out three days of annual profit to settle sex discrimination case
• Activision Blizzard accused of union busting, intimidating staff in complaint to watchdog

The Californian games publisher, best known for titles like Call of Duty and World of Warcraft, has fallen from grace hard this year. In July, its home state’s Department of Fair Employment and Housing accused the company of supporting a frat boy culture, and another case is pending with the National Labor Relations Board.

Activision Blizzard this week denied its chief exec ignored, overlooked, or hushed up claims of misconduct and serious sexual assault.

“We are disappointed in the Wall Street Journal’s report, which presents a misleading view of Activision Blizzard and our CEO,” the biz said in a statement.

“Instances of sexual misconduct that were brought to his attention were acted upon. The WSJ ignores important changes underway to make this the industry’s most welcoming and inclusive workplace and it fails to account for the efforts of thousands of employees who work hard every day to live up to their – and our - values. We will not stop until we have the best workplace for our team.”

Sony's PlayStation boss Jim Ryan said he was "disheartened and frankly stunned" by the internal state of Activision in an email sent to employees and obtained by Bloomberg.

“We outreached to Activision immediately after the article was published to express our deep concern and to ask how they plan to address the claims made in the article,” he said. “We do not believe their statements of response properly address the situation.”

Trouble at the top

Kotick has held the position of chairman and CEO of Activision for 30 years, making him a multimillionaire. Last month, he announced he cut his salary to $62,500 and is turning down bonuses and stock options until the company cleans up its act. He promised to implement a zero-tolerance approach to sexual harassment, make it easier for victims of sexual harassment and discrimination to come forward, and increase the number of women and non-binary staff by 50 per cent.

That isn't enough for him to keep his job, however, the aforementioned shareholders believe. They asked the company to commit to hiring an external investigator to root out "sexist and discriminatory workplace practices" and to probe past board practices to see where it failed to deal with sexual harassment claims.

If Kotick isn't terminated, they asked that his salary remains low for the next five years of his contract, and beyond if it's renewed, until his workplace goals are met. Other execs should also have pay cuts and not be given any bonus pay or shares until these goals are met, according to their letter.

Polygon reported hundreds of employees staged a walkout this week outside Activision Blizzard offices in California and Minnesota calling for Kotick to resign. ®