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Dissident Take-Two Shareholders Elect New Board
by Brandon Boyer
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March 30, 2007
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As widely expected, after failing to come to mutual alternative agreements including a sale of the company, a group of disgruntled investors has presented their own selection of directors to replace current Take-Two execs at the Grand Theft Auto publisher's annual shareholders' meeting - results of voting due imminently.
On the table at this year's meeting, which Gamasutra listened in on via webcast, were four proposals, including the election of six directors to hold office for the following year, a vote to increase the number of available stocks by 2 million, and ratification of Ernst & Young, LLP to audit the company's fiscal 2007 financial statements.
As part of the proposals, a representative from OppenheimerFunds, Take-Two's largest institutional shareholder, amended the proposal to include an alternative set of directors for the company: Strauss Zelnick, Benjamin Feder, Jon Moses, Michael Dornemann, Michael James Sheresky, and John Levy.
The move follows earlier reported news that existing directors and a group of investors, including OppenheimerFunds, D.E. Shaw Valence Portfolios, S.A.C. Capital Management and Tudor Investment, who together hold 46 percent of the company, failed to find any 'alternative courses of actions' that could alleviate their differences, including a possible sale of the publisher.
At the center of the controversy is the shareholders' disapproval of the board's actions on a seemingly endless string of court battles and financial issues including the recent stock-option backdating scandal, as well as its role in the recall of Grand Theft Auto following the infamous 'hot coffee' discovery.
Oddly, also on the agenda was a proposal announced earlier in the year by faith-based institutional investors Sisters of St. Joseph that called for consideration of 'social responsibility and environmental performance, as well as the financial performance, of the company' in setting executive compensation.
The final tally of each vote, including the crucial directors replacement element, is expected to be delivered to executive Seth Krauss imminently, and Gamasutra will update with the results as they are released.
[UPDATE: The results of the voting are now in, and the dissident shareholders have elected a new slate of directors to the Take-Two Board, as well as a new CEO.
At the direction of the new Take-Two Board, Strauss Zelnick, founding partner of ZelnickMedia and previous president and chief executive officer of Crystal Dynamics became the new chairman of Take-Two.
In addition, Ben Feder, an aassociate of my Zelnick at ZelnickMedia, has been named acting CEO, reporting to Mr. Zelnick. According to the statement: "The Board is working with Paul Eibeler, former CEO and President of Take-Two, to ensure an orderly and effective transition."
The Take-Two Board of Directors now consists of Strauss Zelnick, Ben Feder, Jon J. Moses, Michael Dornemann, Michael James Sheresky and John Levy, who is an incumbent, independent director of Take-Two. Grover C. Brown, an incumbent, independent director, was also elected as a director at a meeting of the new Board of Directors held following the stockholders meeting.
Strauss Zelnick, founding partner of ZelnickMedia, commented, "Take-Two has exceptional brands and creative resources, and we are thrilled to be able to work with the many talented people within the company. The new Board plans to put in place strategies designed to revitalize Take-Two, focus on supporting and enhancing its creative output, improve its margins and ensure that the 2007 release pipeline meets expectations. We are here to maximize the value of Take-Two for shareholders, for game consumers, and for the Company's employees."]
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