The report noted that a letter sent on 23rd November by US Treasurers from California, Massachusetts, Illinois, Oregon, Delaware, and Nevada requested a meeting with Activision Blizzard board members to discuss their response to "the challenges and investment risk exposures" plaguing the company.
Axios further noted that US State Treasurers would "weigh" a "call to vote against the re-election of incumbent directors" and were not afraid to "utilize billions of dollars [...] as a way to trigger corporate change." The company has until 20th December to respond.
US Treasurers threaten to hit Activision Blizzard where it hurts, their pockets
This response came after calls by employees and investors for CEO Bobby Kotick to resign, which seemingly fell on deaf ears after the Activision Blizzard board of directors expressed confidence in Kotick's "leadership, commitment and ability" to lead the company.
Illinois State Treasurer Michael Frerichs told Axios that they think "there need to be sweeping changes made in the company," referencing the bombshell article by the Wall Street Journal "that said Kotick downplayed sexual misconduct allegations at the company."
Frerichs continued to express their concern, saying that Kotick and the current board of 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."
Axios noted that Frerichs confirmed that the state of Illinois has investments in Activision Blizzard, which explains why US Treasurers are pressuring Activision Blizzard to get a grip since plummeting stock prices affect state pension funds, and thus, the state as a whole and its citizens.
Since the US Treasurers own Activision Blizzard stock, they also have some voting power; however, it is not known how much influence they possess.
Axios further noted that "the company's board could point to its proposed settlement with the Equal Employment Opportunity Commission as a sign it is serious," which Axios reports "includes an $18 million victims fund and a commitment to EEOC oversight for the next three years."
Frerichs told Axios that they "look at that as a penalty [and] perhaps an admission of wrongs in the past" but went on to say that they are investors and "want to see those risks that caused that penalty addressed, so they don't happen again."
Likewise, Fredrichs conceded that "it's not all just about the number of dollars and number of shares" that the state has, noting that "one thing the Treasurers bring is also a bit of spotlight [...] and public pressure."
We will endeavour to continue to update you regarding all matters pertaining to this developing story.
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Featured image courtesy of Activision Blizzard.