Remember back in June when investment accountability group CtW was agitating against Activision-Blizzard’s corporate finances, arguing that Bobby Kotick is grossly overpaid and urging shareholders to vote down the company management’s Say-on-Pay policy? That vote wasn’t successful by the numbers; 43.2% of shareholders voted against, a surprisingly large number but not quite enough to put Acti-Blizzard execs on notice.
The same investor group made the same overtures to Electronic Arts shareholders a month ago, criticizing EA for its overpaid executives and “payoffs for layoffs” scheming. This time, it won: 68% of EA shareholders voted against the latest Say-on-Pay proposal.
“The vote results – which tallied nearly 171 million votes against ‘say on pay’ – were released in a regulatory filing by the company Friday. Prior to the annual meeting, CtW’s recommendation to vote against awarding unjustified and excessive special equity awards to its top executives was backed by investor advisory firms Institutional Shareholder Services Inc. and Glass, Lewis & Co. Major institutional investors including the California Public Employees’ Retirement System, California State Teachers’ Retirement System, and New York City Retirement Systems announced votes against the proposal.”
CtW Investment Group itself represents pension funds that are heavily invested in these two companies, so they have an interest in seeing these companies do well over the long haul and not be hollowed out by other investors or drained by execs.
“This vote is a clarion call for the board to stop piling awards on top of awards for top executives and make sure that the company develops a pay philosophy that is focused on talent development and retention throughout all levels of the company,” says CtW’s executive director.
As Seeking Alpha (via GI.biz) notes, the vote is advisory, and it’s not clear whether the company will bulldoze onward against the will of its shareholders. If it does, the top three EA execs will draw an additional $23M in total pay for the fiscal year compared to last year.