In A Rare Move, EA Shareholders Vote Against Compensation Package For Top Executives
Investors overwhelmingly rejected the proposed pay packages for EA's top executives.
Electronic Arts recently came under fire for how much money the company pays to its top executives. An activist investor group, CtW, called out the gigantic sums that EA's top management is paid, asking for other investors to vote against a proposal regarding compensation.
The EA annual meeting of stockholders took place on August 6, and in a rare move, the investors overwhelmingly voted against the proposed pay packages for EA's executives. Federal documents show that 170.9 million votes were cast against the proposal, with 59.6 million in favor.
While the proposal for EA's executive compensation package was rejected, all of EA's top directors were elected again, as you can see in the chart below.
Business publication Bloomberg mentioned that this vote against EA's "say-on-pay" proposal was rare. Only 2.2 percent of the 3,000 biggest companies in the US had their executive pay proposals rejected in 2020.
One investor group, Institutional Shareholder Services, said it had "significant concerns" about the way in which EA pays executives, specifically surrounding stock bonuses.
Dieter Waizenegger, the director of The CtW Investment Group, said earlier EA has "gone too far in terms of executive pay. Waizenegger said EA CFO Blake Jorgensen and CTO Kenneth Moss are paid too much, and it's an especially poor practice, as EA is laying people off, Waizenegger said.
"While shareholders have benefited from appreciation in the company's stock price over the long term, we believe that that does not permit the company to indiscriminately pay its executives," Waizenegger said.
Investors and investment groups also took issue with how EA's executives are paid multiple rounds of significant bonuses and equity awards on top of their base salaries and normal bonuses structures.
For its part, EA said in a statement to GameSpot that it values the opinions of its shareholders and consider their thoughts going forward as it relates to executive compensation.
"As a company we put a focus on increasing value for all stakeholders, including employees, players, and shareholders," EA said. "We work constantly to make Electronic Arts a great place to be and work for our people, and in highly competitive talent markets, we work aggressively to keep the great people we have. We value the opinion of our shareholders, and the board and compensation committee will take their feedback into account as part of our ongoing evaluation of our compensation programs."
It's not just EA that has come under pressure regarding executive pay. Activision Blizzard is also facing calls to limit the executive pay of its top bosses, including CEO Bobby Kotick. However, in June, Activision Blizzard shareholders approved the company's executive pay proposals.
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