Earlier this week, investors shot down EA’s proposed payment plans for their executives.
It’s not like EA has had a bad year — far from it, in fact. The coronavirus has been good to most listed gaming companies and EA in particular. Their stock is trading at $US143.99 at the time of writing, a sizeable jump from the $US91.77 a share this time last year.
EA’s had a solid string of hits lately too. Apex Legends is motoring along nicely, successes with Jedi: Fallen Order, the excellent Command & Conquer: Remastered Collection and even some goodwill from re-releasing their catalogue on Steam, which has seen classics like Titanfall 2 get a new lease of life.
But despite all that, Bloomberg reports that investors cast nearly 171 million votes against the EA executive pay package versus nearly 60 million votes in favour. It’s a surprise given the corporate backdrop of 2020, with only 2.2 percent of companies in the top 3000 US companies having their executive remuneration shot down.
Part of the issue was EA rewarding their executives with secondary stock awards before the first ones had even vested. “While recognising the need to retain top executives, investors may expect special awards to be relatively infrequent and may question executives receiving multiple special awards in a relatively short period of time,” proxy advisers Institutional Shareholder Services, which backed calls to vote down the EA package, said in late July.
CtW Investment Group went even further, saying EA went “too far in terms of executive pay, piling on exorbitant equity awards” while paying “multimillion dollar bonuses following worker layoffs”. Those layoffs in the financial year included sizeable redundancies at EA’s Melbourne studio, FireMonkeys.
To put the investors’ groups complaints into perspective, EA’s chief technology officer Kenneth Moss and chief financial officer Blake Jorgensen get paid $US691,745 and $US850,000 a year each. However, they also receive annual equity grants which are often much more lucrative. In the 2020 financial year, for instance, Jorgensen and Moss got $US7.5 million and $US5.5 million equity grants. That’s after receiving multi-million dollar equity bonuses in the 2018 financial year.
“The proxy does not discuss the company’s rationale for granting these executives an additional special award on top of the one that is already outstanding. One would think one multimillion dollar retention award at a time would be enough,” CtW argued.
Andrew Wilson, for what it’s worth, received just over $US21 million in annual total compensation for the 2020 financial year, while the “annual total compensation of our median employee was $US97,986”.
In a response following the vote, EA told Bloomberg that “the board and compensation committee will take their feedback into account as part of our ongoing evaluation of our compensation programs”.
This story originally appeared on Kotaku Australia.