Axios reports on a letter sent last month by the state treasurers of California, Massachusetts, Illinois, Oregon, Delaware, and Nevada to Activision Blizzard, asking to meet with the company's board of directors regarding their "response to the challenges and investment risk exposures that face Activision." The group also writes that it is considering a "call to vote against the re-election of incumbent directors," echoing similar calls from activist investors in recent weeks.
"We think there needs to be sweeping changes made in the company," Illinois State Treasurer Michael Frerichs told Axios. "We're concerned that the current CEO and board directors don't have the skill set nor the conviction to institute these sweeping changes needed to transform their culture, to restore trust with employees and shareholders and their partners."
Illinois is among the states that invests in Activision through its employee pension fund and other public investments, which makes the company's sinking stock price of direct concern for the state government. As of this writing, Activision's stock is down almost 40 percent from six months ago and nearly 35 percent for the 2021 calendar year so far.
In September, Activision Blizzard reached a proposed settlement in a federal discrimination lawsuit for $18 million, a small fraction of its annual revenue. Frerichs told Axios he sees that settlement "as a penalty, as perhaps an admission of wrongs in the past," but also as far from sufficient.“We're long-term investors, and we want to see those risks that caused that penalty addressed so they don't happen again," he said. "You can point to ‘Hey, we paid the victims, we're making them whole.’ But if you're continuing a culture that creates new victims in the future, you are creating more risk for your company."
The newly reported pressure from state treasurers comes as Jessica Gonzalez, a major employee organizer at Activision Blizzard, announced her departure from the company. Gonzalez was instrumental in helping organize the A Better ABK Workers Alliance and in putting together multiple employee walkouts to protest management's handling of the allegations.
"To [CEO Bobby Kotick]: Your inaction and refusal to take accountability is driving out great talent, and the products will suffer until you are removed from your position as CEO," Gonzalez wrote in a public departure message. "This may seem harsh, but you had years to fix the culture, and look at where the company currently stands."
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