A new round in Electronic Arts' executive pay fight
An investor group that has for over a year been critical of how Electronic Arts' top people are paid says it is only partially satisfied by the company's latest pledges.
Why it matters: EA shareholders issued a rare "no" vote on the company's executive pay last summer, and EA has laid out measures to address that.
- The pay vote is non-binding, but a flurry of filings last month showed that EA wants to avoid another loss this month.
- Investment group SOC (former CtW) is urging shareholders to vote "no" on this year's payment plan.
Between the lines: At issue is whether EA's bonus payments are too frequent, too large and too quickly given as a means of retention, a justification given for CEO Andrew Wilson's unusually large $30 million stock award for the current year.
- In late June, EA said it was forgoing special stock awards to its top executives through 2022 and, under pressure, extended that to 2026 last week.
- SOC says that "unprecedented" move helps, but is two years too short for it to support the payment plan.
- It also criticizes EA's continued justification for special bonuses as a means to keep executives, stating in a letter today that "it is time to encourage a climate where executives are content with ordinary course equity award levels most of the time[.]"
What's next: The EA pay votes are due on Aug. 12.