Before I get into flour, I make sure to clarify that I am talking about pension plans, not retirees and pensioners, although there is clearly an important bidirectional relationship. I clarify this because we are not going to talk about the implementation of technology among our elders and people who, for whatever reason, have already left their working period behind. This is also, without a doubt, a really interesting topic, and we already addressed it a few months ago when we talked about the digital divide.
It is not that, today we are talking about pension plans, whether private, public or semi-public, that are totally or partially supported by investments in the private sector. Because are aimed at trying to guarantee the economic stability of their investors When the time comes, pension plan managers usually prioritize security, even if this means giving up potentially very profitable operations, but which carry a high level of risk.
This does not mean, of course, that private pension plans are something 100% safe.. From unexpected turns of events that dramatically impact investment performance, to scams that promise to be very profitable until the perpetrator either suddenly disappears with the money or ends up behind bars, mutual fund-based pension plans they can escape from the dynamics of the markets.
A) Yes, it is understood that the managers of said pension plans are particularly reluctant to the potential repercussions of certain operations, such as mergers or acquisitions, and that on certain occasions and circumstances do not skimp on measures to try to prevent them from coming to fruition. And not always, but sometimes, when there are gray points in them, the judicial route can be included among their plans.
Pension plans and Microsoft-Activision Blizzard
Before Microsoft’s purchase of Activision Blizzard made headlines, we told you that several US state treasurers had joined the call for radical measures to mitigate the effects of the company’s toxic policies on the price of its shares. And it is that some of them are responsible for pension planswho were being affected by the terrible management of the CEO of the company in relation to the toxic work culture that had prevailed in the company for years.
Well, this week we learned that the New York City Employees Retirement System (a pension plan fund for the city’s firefighters, policemen and teachers) has decided to take the purchase operation to court. The lawsuit alleges that the CEO and the board of directors rushed the sale to try to avoid their responsibilities in the internal management of the company, which resulted in its shares plummeting, thus affecting its pension plans.
«Given Kotick’s personal responsibility and responsibility for Activision’s “broken” work environment, it should have been clear to the board that he was not fit to negotiate a sale of the company.“says the lawsuit. «The merger not only offered Kotick and his fellow directors a means to escape liability for their egregious breaches of fiduciary duty, it also offered Kotick the opportunity to make significant unprofitable profits.»
Pension plans and Twitter
On the other hand, today we have also learned of another action in this regard, but which points to the purchase of Twitter by Elon Musk. In this case the lawsuit stems from the Orlando Police Pension Fund, responsible for the pension plans of said body. In their case, yes, they are not opposed to the purchase operation itself, but to the terms with which both parties intend to carry it out.
And it is that, as we told you, Musk’s plans go through eating the nougat next Christmas being already the owner, and probably also CEO, of the social network. The fund responsible for the Orlando police pension plans, however, rejects that it can be carried out in less than a yeara period that they consider insufficient for it to be possible to determine all the implications of the operation, and that can mean that their investment in Twitter is not as profitable as it could have been.
In this case, the lawsuit from the manager of the pension plans is directed at Parag Agrawal, CEO of the social network since the departure of Jack Dorsey from the company, has been filed in the state of Delaware, as well as that of New York against the purchase of Activision Blizzard, and is based on the fact that the legal regulations of that state prevent a quick merger, since Musk had agreements with other large Twitter shareholders to support the purchase, including Morgan Stanley, his financial advisor and the founder of Twitter, Jack Dorsey. Its objective is that the operation is not completed until the year 2025.
With information from Digital Trends and Business Insider
