EA’s C-suite declines executive bonuses following 2019 financial performance

    
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EA’s C-suite declines executive bonuses following 2019 financial performance

EA hasn’t had the best week, what with sending its representatives before a UK parliament committee to insist that lockboxes are totally fine, healthy, fun, and ethical, to the boos and hisses of gamers around the globe. But the company might make up for that a bit thanks to its recent SEC filing, which as PC Games Insider noted shows that the company’s top brass are passing some cash down to the peons. Apparently, the C-suite at EA has determined that since the company didn’t quite produce the financial performance it should’ve, performance-based payouts for the company’s executives will be pushed into employee bonus pool instead.

“Given the Company’s 2019 financial performance, and in order to maintain alignment with our pay-for-performance executive compensation philosophy, our CEO and his staff (including the NEOs) requested that they receive no performance cash bonus award for fiscal 2019. The Board (in the case of Mr. Wilson) and the Compensation Committee (in the case of the other NEOs) accepted this request. The bonus funding that would have been allocated to our CEO and his staff (including the NEOs) were contributed to the overall Company bonus pool.”

Of course, as PCGI points out, the total of bonuses being skipped and handed down by the board amounts to just over $5.5M, which isn’t really very much considering that CEO Andrew Wilson will make $18.2M for the 2019 fiscal year all by himself, while the median employee will bring home a bit more than $91K. (We presume, given the info under the section “FISCAL 2019 PAY RATIO,” that this means the legal definition of salaried employee, not contractors, which can skew numbers like that.)

Source: SEC filing via PCGI via MMORPG.com
Update June 26
Some context for our last sentence above.

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rafael12104
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rafael12104

Hmm. My bias and experience won’t allow me to view this as anything more a PR campaign in light of the most recent backlash. After all, the C-suite is in control and can get that money right back. Moving around money is a shell game.

BUT even though it may not seem like much, it is a nice gesture and at least acknowledges the top brass screwed up and that the rank and file deserve better.

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Bruno Brito

My bias and experience won’t allow me to view this as anything more a PR campaign in light of the most recent backlash.

It isn’t anything more.

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MrNastyButler

“Hey look! We are a great company! We hear you!”

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Fred Douglas

Their business model seems really risky and dependent on having good games which they haven’t had really. In moments of weakness, I can now pay 15 dollars to see for myself (for a month) how bad or forgettable Anthem and Battlefield 5 are, rather than paying 60 dollars for both.

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Greaterdivinity

That’s a pretty standard bonus model – your bonuses scale based on the performance of the product/company as a whole. If you have a great year, your bonuses are great. If you don’t then RIP your bonus.

On Origin Access though, it’s a bit risky but it’s also very profitable. They can get folks into the system and keep them subscribed in the longterm, generating more revenue than they would via direct sales of the games they play on top of whatever they may spend on MTX. It’s sound, and even provides cover for games like Anthem that struggle as there’s still plenty on-offer for the sub even if a few games are bad/do poorly.

It’s not like either is going for anywhere near $60, they’ve both been getting 50% (or more) discounts for months now, especially at retailers : P

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Greaterdivinity

Thanks for providing context on their regular compensation to put their “generosity” into context. Still nice of them and I don’t want to be too harsh, but this is more a PR move than anything really meaningful for their employees.

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Bruno Brito

but this is more a PR move than anything really meaningful for their employees.

As is per EA tradition.

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Armsman

Well, I guess the C-Suite Execs flipped a coin and it was either this or buy another 60 second commercial spot in the 2020 Superbowl for one of their Sports games. ;)

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Bruno Brito

As is per EA tradition.

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Tobasco da Gama

My questions: Would the Compensation Committee have granted the performance bonuses if the C-levels hadn’t pre-emptively declined them? If so, why, given that EA did not display the kind of performance that would typically merit a bonus?

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Tanek

This was my question.

If performance did not meet goals required for the bonus, they are either giving up something they were not going to get in the first place, or generously offering to not cheat the company out of money they would have figured out a way to take even not having met their goals.

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Connor

They would, they’d just be pulling the bonus money out of the salary pool after laying off a bunch of low-level developers.