News
Take-Two CFO Out After Shareholder Coup
The chief financial officer of beleaguered video game publisher Take-Two Interactive
Software Inc. announced his resignation Monday, less than two weeks after a
shareholder
revolt that ousted the CEO and several board members.
CFO Karl Winters' resignation took effect immediately. Take-Two named Lainie
Goldstein, currently senior vice president of finance, as interim CFO while
the company searches for a permanent replacement.
"Karl oversaw finance at Take-Two during challenging times for the company,"
CEO Ben Feder said in a statement. "I look forward to working closely with
Lainie as we continue to address Take-Two's challenges aggressively and swiftly
so that employees can focus on building the company's bright future."
Financial analysts have been anticipating the CFO's departure since a coup
led by major stockholders Oppenheimer Funds and DE Shaw Valence Portfolios LLC,
which together control nearly half of the company's shares.
The shareholder revolt followed poor results as well as accounting troubles
and controversy surrounding the violent and sexual content of Take-Two's most
popular line of games, "Grand Theft Auto."
At the company's annual shareholder meeting March 29 in New York, the investment
firms elected new directors and stripped Paul Eibeler of his titles as CEO and
president. He was replaced by Feder, formerly a senior executive at News Corp.
Earlier, Take-Two's former chairman and CEO, Ryan A. Brant, became the first
chief executive to be convicted of backdating stock options, a practice that
involves pegging stock options to favorable grant dates in the past to boost
the recipients' award. In February, he pleaded guilty in a New York state court
to first-degree falsification of business records in a deal that lets him avoid
prison.
Take-Two disclosed last week it is under a formal investigation by the Securities
and Exchange Commission over its stock-options practices.
Critics have blasted Take-Two's old management and board for ethical lapses
and a lack of creativity, saying the company relies heavily on relatively uncreative
sequels, sports games and bloodthirsty "first-person shooters."
Although so-called hardcore games remain popular with teens and young men,
new online genres -- trivia quizzes, word games and multiplayer role-playing
games -- are catching on with women, older players and millions of mobile phone
users.
Child advocacy groups and legislators have also complained that the company
produces the industry's most violent, mean-spirited games. One version of "Grand
Theft Auto" included a hidden, lewd scene that sparked a 2005 congressional
uproar.