Exclusive: Activision Blizzard shareholder calls company response "inadequate"

SOC Investment Group says that Activision Blizzard's recent promises to improve its culture do not go "nearly far enough to address the deep and widespread issues with equity, inclusion, and human capital management" that the company is facing.

Why it matters: In addition to being an Activision Blizzard shareholder, SOC advocates for ethical business practices and is outspoken on topics like pay gaps between executives and workers.

A letter from SOC executive director Dieter Waizenegger, shared exclusively with Axios, reads:

• "No changes have been announced or proposed that would in any way alter the current process for filling vacancies either to the board of directors or to senior management."
• "No changes have been announced with respect to executive pay, either with respect to clawing back compensation from executives who are found to have engaged in or enabled abusive practices, or to align executives with the equity goals [CEO Bobby] Kotick articulated."
• "The announced review by Wilmer Hale is deficient in a number of ways: this firm has a sterling reputation as a defender of the wealthy and connected, but it has no track record of uncovering wrongdoing, the lead investigator does not have in-depth experience investigating workplace harassment and abuse, and the scope of the investigation fails to address the full range of equity issues Mr. Kotick acknowledges."

SOC is calling on Activision Blizzard to make the following changes:

• "Increase board diversity and equity by adding a woman director — preferably one with a history of advocacy for marginalized people and communities — by the end of 2021, committing to gender-balance on the board by 2025, and reserving at least one board seat for a nominee selected by current employees as their representative."
• "Claw back bonuses from executives found to have engaged in or enabled abusive behavior, award no bonuses for 2021, and make future bonus awards contingent on the company as a whole achieving clearly articulated and independently verified milestones for diversity and equity."

• "Undertake a company-wide Equity Review, similar to the Racial Equity Reviews that Facebook, Air B&B, Starbucks, and BlackRock have completed or promised, but that will encompass the full range of concerns (including inequities rooted in gender, gender-identity, sexuality, and race) articulated by Mr. Kotick, Activision Blizzard employees, and customers: equity and representation issues in game design, the development process, and in user forums and similar settings."

What's next: Although Kotick has promised that Activision Blizzard "will be the company that sets the example for this in our industry," employees and industry observers remain skeptical.

• "At this critical juncture in Activision Blizzard’s history, we urge you and the board 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," Waizenegger says.