EA will make ‘substantial changes’ to executive pay following largely negative feedback from shareholders.
A regulatory filing ahead of a ‘say-on-pay’ vote in August reveals that EA has proposed a substantial cut to executive pay.
It’s proposed that CEO Andrew Wilson will be awarded $18 million (£12.8 million) for the 2022 financial year – 60% of which is performance-based.
That’s a staggering 40% pay cut compared to his $30 million (£21.4 million) equity award for 2021.
This all comes after last year’s ‘say-on-pay’ vote unearthed dissent amongst shareholders.
The vote saw 170.89m votes against the company’s pay plan versus just 59.6m votes in support.
Although the vote was only advisory, this clearly struck a chord with the EA board.
“We traditionally have received strong support for our say-on-pay proposals including 94 per cent, 86 per cent, and 96 per cent of the votes cast in our favour at 2019, 2018 and 2017 annual meetings, respectively,” said EA in its proposal.
“We were disappointed that the 2020 advisory say-on-pay proposal did not receive majority support. In response to the 2020 say-on-pay vote, EA’s management and the Compensation Committee took decisive steps to respond to the vote outcome and stockholder feedback.”
Now, the board has proposed a much smaller award for CEO Andrew Wilson.
But it’s worth noting that this is still higher than his 2020 award of $15 million (£10.7 million), which saw him take home $21.4 million (£15.3 million) by the end of the financial year.
But EA states that this new award includes a more performance-based approach.
“[It’s] designed to reward the achievement of company-wide financial and business objectives, individual performance, and the creation of long-term value for stockholders, while also recognising the dynamic and highly competitive nature of our business and the market for top executive talent.”