Enthusiast Gaming, the publicly traded parent company of Luminosity Gaming, has received a letter from staff requesting the resignation of its CEO Adrian Montgomery.
According to reporting by The Washington Post, the letter was written by four VP-level executives who claimed the publicly traded company’s strategic vision, staffing issues — particularly within human resources — and equity distribution were evidence of Montgomery’s mismanagement.
Current Enthusiast leadership, specifically Chief Corporate Officer Eric Bernofsky, countered these concerns in a statement to The Post. Bernofsky communicated its commitment to employees and pointed to the company’s “dramatically improved” financial performance and standing in the public markets.
This letter echoes a public campaign by Enthusiast Gaming’s largest shareholder, Greywood Investments, to replace Montgomery and the board of directors with its own nominees. The investment group owns 9.3% of Enthusiast, while the board of directors own 5.7% — most of which was gifted, not paid for.
A spokesperson for Greywood told The Post that it had no involvement in the letter from Enthusiast’s staff. However, both the campaign and employees are pointing to misaligned economic interests between themselves and the board.
Greywood believes that the board’s lack of cash investment and overcompensation of the CEO are leading to decisions that are not benefitting the long-term health and prospects of Enthusiast. Similarly, employees questioned the decision to award 80% of restricted stock units (RSUs) to the board and c-suite executives rather than other employees.
Past layoffs are likely contributing to the conflict between employees and management as well. In March, editorial staff were slashed at Upcomer, Enthusiast’s esports and gaming news site. In a report by Digiday, most of the laid-off staff were denied promised annual bonuses and asked to sign NDAs before being able to receive one to three weeks of severance.
The end of Q2 is imminent and financial filings are expected by mid-August. These documents will likely fuel the next conflict in the ongoing proxy war for control of Enthusiast’s board.