EA shareholders overwhelmingly reject excessive executive pay in latest vote

    
32
EA shareholders overwhelmingly reject excessive executive pay in latest vote

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.

Source: Press release. This post was updated after publication to correct an error in the original quote; CtW has corrected its release to note it’s 171M votes against, not 171K.

No posts to display

32
LEAVE A COMMENT

Please Login to comment
  Subscribe  
newest oldest most liked
Subscribe to:
Reader
Robert Mann

Great, now can the customers overwhelmingly reject the excessive shareholder rewards?

Reader
Bruno Brito

pay philosophy that is focused on talent development and retention throughout all levels of the company,

Question: What exactly is talent at the executive level of the companies, and if a executive is literally overpaying his board of directions, isn’t he actually a talented executive?

Reader
dreamer

It kind of seems like their job boils down to throwing darts at the wall and seeing what sticks.

Reader
Hostagecat

They have the talent to lay off employees!!!!! Save money and take that money as a bonus for saving money. Drive up the stock prices cause they had layoff, and so therefore got rid of the dead weight. Giving investors and the market the impression that they are operating efficiently. Then scaring other employees because of heads rolling and causing feelings of job insecurity. This in turn causes lower management to say your lucky you have a job, which terrifies everybody who needs the job, and also forcing everybody to work harder to make up for the folks who went poof.
So yeah its a talent… the talent to make fear drive your workforce… I wonder how well that is gonna work in the long run.

Reader
David Goodman

I imagine your golf game has a lot to do with it. And the size of your nostrils.

Reader
Zero_1_Zerum

I stopped buying EA games long ago. I was upset when they got the Star Wars game license after Disney shut down LucasArts, but no matter how much I want to play Star Wars games, I still won’t buy them if they’re EA games. I think they’re one of the greediest game companies out there, alongside Activision Blizzard. They keep churning out the same crap with new labels every year, and their microtransactions, don’t get me started on those. The fact they even wanted “Say on Pay” proves that. I’m not even sure what that means, but I bet it involves the executives who sit on their butts all day in offices get fat bonuses, while the rank and file devs get paid peanuts. The investors voting against that surprised me… but, I bet it was a PR move.

Reader
Patreon Donor
Loyal Patron
Schlag Sweetleaf

.

ITS IN THE GAME.png
Reader
Danny Smith

Oh no not the poor EA executives, gamings little guy darlings!

Reader
Loyal Patron
Patreon Donor
Dobablo

Actually losing a shareholder rebellion over executive compensation? That almost never happens. They must have erked off some of the major investors.

Reader
Rahayan_Darkleaf

I believe it’s more a thing that they’ll lose money otherwise. EA already doesn’t have the best of reputations, so if an article would release about the execs getting a $50 million bonus, their reputation would even further be tarnished, to the point where people will simply stop buying their games.

Stock price might go down over this, and no investor wants to lose their money.

I may be wrong, or got the technicalities wrong, but I think that’s what’s going on here.

Reader
Schmidt.Capela

I read somewhere else that executive compensation plans across big companies are approved in over 97% of such votes. So yeah, what happened with EA — including the large margin by which it was rejected — is very unusual.

Reader
Kickstarter Donor
Greaterdivinity

If it does, the top three EA execs will draw an additional $23M in total pay for the fiscal year compared to last year.

Also known as,

“Three men give themselves a raise large enough to fund a full development studio including non-development staff for a year.”

At least they only laid off 350 people in their last round of layoffs last year.

Reader
Schmidt.Capela

Two men and a woman, actually.

Reader
Kickstarter Donor
Java Jawa

That’s equivalent to 383.33 employees assuming a 60,000 dollar salary to put things into perspective.

Reader
bobfish

Or quarter of a AAA game.

Reader
Kickstarter Donor
Greaterdivinity
Reader
Kickstarter Donor
Java Jawa

Exactly , a few Sr. Level employees and that amount takes it down to the article you linked.

Crazy – so many mouths they could feed, but nope greed wins again.

I can think of an mmo I play – swtor , if that had some more folks working on it, we could maybe see more than 5 hours of new content a year!

. . . :(

Reader
Kickstarter Donor
JoeCreoterra

Mind you as long as people keep playing it and giving them money they really don’t have any incentive to invest more into an aging title.

Reader
Hostagecat

Your absolutely right that is enough employees and money to maybe help the game last a little longer.. But they wont cause its more important the money goes up to the top …. and spent on rebuilding Anthem a game that has already failed once.