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State Treasurers Express Lack of Faith in Activision Blizzard CEO & Board of Directors
01/12/2021 à 21:32
Six states treasurers have joined the fight for corporate change, expressing concern over CEO Bobby Kotick and the Board of Directors ability to institute the cultural change needed to restore trust with employees and shareholders. Originally
reported by Axios
, the state treasures of California, Delaware, Illinois, Massachusetts, Nevada, and Oregon have all requested a meeting with Activision by December 20th in order to discuss the company's response to the challenges and investment risk exposures that face Activision, indicating that they were considering the
SOC investment group's call
to oust CEO Bobby Kotick and other long-standing members of the board.
“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 skillset, nor the conviction to institute these sweeping changes needed to transform their culture, to restore trust with employees and shareholders and their partners,” Frerichs said.
“This particular case has been waiting for the board to step in and do an investigation,” Massachusetts treasurer Deborah Goldberg told Axios. “A true investigation, an outside investigator. And, I mean, what was it, two weeks ago that they said they stand by the CEO?”
Though it goes to show how even a minor shareholder like the SOC investment group can rouse others to join in their movement, it's unclear exactly how impactful this is outside of general optics. These types of investment funds are hold shares in thousands of different companies, from Apple to Amazon, PayPal, JP Morgan, Coca-Cola, Papa Johns, and many more - not heavily invested in any one company or industry.
Oregon Public Employees Retirement Fund
holds 65,838 shares.
Illinois Municipal Retirement Fund
holds 68,146 shares (recently increasing their holdings by 21,637 shares, or a 46% increase in their investment).
California State Teachers Retirement System
holds 1,340,293 shares.
California Public Employees Retirement System
holds 6,009,140 shares.
These are just a part of the state's investments, and we didn't find information on Massachusetts, Delaware, or Nevada, though the total of these state funds still only amount to
less than 1% of Activision Blizzard stock
. Although there are almost certainly other state-level deals, grants, or investments that could mount additional pressure, their actual voting power would appear to render the threat of backing the SOC's call to vote against the re-election of incumbent directors rather toothless - their main weapon is visibility.
Illinois state treasurer Michael Frerichs, via Axios
“One thing the Treasurers bring is also a bit of a spotlight here and a little public pressure as well,” he said. “So it's not all just about the number of dollars and number of shares that we have.“
Though regardless of their individual impact, it's clear that more investors are targeting Activision in the wake of wide-spread media coverage of the lawsuits and controversies, and that alone could snowball into an avalanche. If bigger investors such as the Vanguard Group, BlackRock, or the
Saudi Arabian Public Investment Fund
were to join this motion, they could begin to exert serious pressure.
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