EA is making “substantial changes” to executive compensation after negative feedback from shareholders.
In one regulatory filing ahead of a pay vote slated for August, EA said it had “taken into account shareholder feedback” and made “substantial changes” to executive pay for fiscal 2022.
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Last year’s compensation vote saw 170.89 million votes against the company’s plan compared to just 59.6 million votes in favor.
Although the vote was only advisory, he signaled shareholder dissatisfaction with the amount and frequency of compensation awarded to CEO Andrew Wilson and other EA executives.
Last year, two months before the compensation vote, EA’s board of directors approved a $ 30 million stock award to Wilson for fiscal 2021. This represented an increase of $ 15 million. dollars for fiscal 2020.
“The Board of Directors felt that this larger than normal award on a one-time basis was in the best interests of shareholders given the increased competition for senior executives and the need to continue to retain and motivate Mr. Wilson.” , said EA. .
CtW Investment Group, which has also lobbied Activision Blizzard over its executive pay, said last year that EA “is becoming a serial recipient of special awards.” “EA appears to be developing a dependency on special grants,” CtW said ahead of the 2020 vote.
EA pointed out that its stock price fell from $ 27.60 when Wilson became CEO in 2013 to $ 117.12 on the day the price was approved last year.
EA boss Andrew Wilson.
Despite this, EA’s shareholders weren’t happy with the compensation – and voted accordingly. And so, with this year’s pay vote looming, the company has announced some changes. In May of this year, EA’s board of directors approved an annual stock award for fiscal 2022 for Wilson in the amount of $ 18 million, of which at least 60% is performance-based. . This was granted on June 16, EA said.
According to JeuxIndustrie.biz, Fiscal 2021 Proposals Put Wilson On Track To Earn $ 39.2 Million, Still An 83% Increase From The $ 21.4 Million He Received The Previous Fiscal Year .
“We have traditionally received strong support for our compensation voting proposals, including 94%, 86% and 96% of the votes cast in our favor at the 2019, 2018 and 2017 annual meetings, respectively,” EA said. in his proposal. .
“We were disappointed that the 2020 compensation advisory proposal did not receive majority support. In response to the 2020 compensation vote, EA management and the compensation committee took decisive action to respond to the vote result and shareholder feedback. . “
To this end, no special share grants were granted during fiscal year 2021, and no special share grants outside of EA’s ordinary compensation program will be granted during fiscal year 2022 to the ” one of EA’s named executive officers. More broadly, EA now uses a ‘pay for performance’ approach that is’ designed to reward the achievement of company-wide financial and business goals, individual performance and long-term value creation for shareholders, while also recognizing the dynamic and highly competitive nature of our business and the senior management market ”.
Essentially, EA is making a speech here to shareholders ahead of the next compensation vote, and while this is only an advisory opinion, the company won’t want to move forward with its compensation package without the blessing of its stakeholders.
“Although the vote is advisory and non-binding, our board of directors and compensation committee value the opinions of our shareholders and will take the outcome of the vote, as well as other relevant factors, into account in assessing compensation. future of our NEOs, ”said EA.
The salary change at EA comes at a time when executive compensation at major video game companies is increasingly under scrutiny. This week, Activision Blizzard boss Bobby Kotick’s $ 155 million salary approved by shareholders – by only 54 percent.
Article source https://www.eurogamer.net/articles/2021-06-23-ea-makes-substantial-changes-to-executive-pay-after-negative-shareholder-feedback