Activision recently announced changes to CEO Bobby Kotick’s pay package that would see his salary cut in half and also removes many of the equity bonus awards that were pushing him into the category of what some groups call “the most overpaid CEO in America.” And now it looks like EA is trying to follow suit.
EA’s recent SEC filing on its notice for an annual shareholder meeting contains a say-on-pay proposal which will be voted on by shareholders in August for the 2022 financial year. This comes after last year’s say-on-pay proposal was rejected with only 26% support, according to GamesIndustry.biz, which noted that previous years’ support for pay proposals often reached as high as 90%.
Last year’s pay proposal was rejected in large part due to CtW Investment Group’s campaign to reduce CEO pay. The investment group sent a letter to shareholders urging them to vote against the pay proposal, writing EA had a “special award granting addiction” that often pushed executive pay into the tens of millions of dollars, consistently putting EA in the top 25% for executive pay in the US.
After that failed vote, EA’s board did an executive compensation review in collaboration with shareholders and came back with “substantive changes” for the 2022 financial year.
Those changes included no special equity awards for the 2021 financial year as well as changes to future equity awards that would expand their window to a three-year period. Awards would also have two additional metrics to make it harder to earn and ensure higher performance from executives.
For 2022 and beyond, 60% of executive compensation would be based on performance, with bonuses capped at twice their target bonus percentage.
EA CEO Andrew Wilson is still set to make close to $40 million this year (83% more than 2019), but will see a big drop in pay for 2022. The same can be said for EA CFO Blake Jorgensen, who will see a drop in pay of 39%, and CTO Kenneth Moss who will see a drop of 32%.
We should note that this say-on-pay vote is advisory and non-binding, so these changes are likely to go through regardless of whether shareholders vote for or against it.
