In a surprising move, EA shareholders have shut down the motion for EA executives to get more money by way of a new compensation plan for those at the highest level positions. Previous to this denial, both Electronic Arts and Activision have been in the hot seat regarding unfair pay practices and disproportionate payoffs, especially following layoffs.
The “Say-on-Pay” package was first proposed back in June regarding Activision’s standings and now the same denial has been granted to Electronic Arts. Back in July, the CtW Investment Group, a group that works with union-sponsored pension funds with the goal of retaining stockholder value, raised concerns over a bid regarding CTO Kenneth Moss and CFO Blake Jorgensen saying that both positions were awarded far too much money when comparing to under-performing numerous goals and repetitious layoffs. In a surprising move, not only was the motion for more money by execs denied, it was denied by a whopping 74% of shareholders.
Given the history of rejections based on this type of proposal, seeing such a high number of “no’s” is outstanding. A recent report stated that the denial was rooted to a change over the past several years in how the investment group votes on matters such as this, taking a more “critical approach” to these types of propositions for compensation.
Earlier this year, the earnings of higher-ups was released and compared to the rest of the company on a broader scale. The gap between the wages was immense with CEO Andrew Wilson ranking in $21.4 million this year with an earning of $18.3 million last year.
“Shareholders issued a resounding rebuke of Electronic Arts’ deeply flawed executive pay practices that do not incentivize executives to create long-term value,” CtW Investment Group executive director Dieter Waizenegger outlined in a recent statement, via PC Gamer. “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.”
Don’t take the underperformance reasoning as a sign of failure, however. Despite a few shortcomings, delays, and missed marks, EA’s latest earnings report was still impressive with an increase in revenue up by 17% when comparing it to last year. It’s also important to note that the compensation plan isn’t completely shelved; the board of directors for EA has final say.
What do you think about the resounding no regarding the proposed compensation plan for EA? Sound off with your thoughts over on Twitter @PrimaGames.