updated 3/29/2007 9:34:04 PM ET 2007-03-30T01:34:04

Investors at video game publisher Take-Two Interactive Software Inc. ousted five of six board members up for re-election Thursday, including the chief executive, who was booted from the boardroom and the executive suite.

After years of management gaffes and embarrassing marketing stunts, frustrated shareholders said a boardroom shake-up was the only way to correct the accounting and ethical lapses of Take-Two, publisher of the popular, murder-your-way-to-victory video game “Grand Theft Auto.”

The investor group, including Oppenheimer Funds and DE Shaw Valence Portfolios LLC, announced in early March they would nominate and vote for new directors at the Take-Two’s annual meeting in New York. The group’s nominees were considered shoo-ins because the two funds control nearly half of the company’s shares.

Take-Two reported the official vote tally Thursday night, and the vote came in as expected, with Strauss Zelnick, former CEO of BMG Entertainment, which became part of Sony Corp. in 2004, being named nonexecutive chairman.

Zelnick praised the company’s “exceptional brands and creative resources” and vowed that the game maker’s new leadership would focus on maximizing its value to shareholders, gamers and employees.

“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,” Zelnick said in a statement.

The upheaval claimed several jobs from Paul Eibeler, who lost his bid for re-election to the board and was immediately removed by the new slate of directors as Take-Two’s president and CEO.

Eibeler was replaced by Ben Feder, formerly a senior executive at News Corp., the global media conglomerate controlled by Rupert Murdoch. Feder was named acting CEO, and Take-Two said the new directors plan to work closely with Eibeler to ensure an orderly executive transition.

As expected, John Levy was the only Take-Two board member to survive the purge. Backed by shareholders, Levy is CEO of Board Advisory Services, a consulting firm that advises public companies in the areas of corporate governance, corporate compliance, financial reporting and financial strategies.

However, when the board met for the first time after the shareholder meeting, the new directors voted to give another chance to Grover C. Brown, a former Delaware judge who lost re-election by shareholder vote but was elected by the board as a seventh director.

In addition to Zelnick and Feder, the others newcomers who won seats on the board were: Michael Dornemann, an entertainment and marketing executive; Jon Moses, the chief executive of a company that oversees a network of online game sites; and Michael James Sheresky, a senior vice president at the William Morris Agency.

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