A significant majority of Electronic Arts shareholders voted last week against the company’s executive compensation plans. The vote follows a pressure campaign by activist investor groups against what they see as excessive bonuses for executives at the company.
So-called “say-against-pay” votes are rarely abused when they are presented to shareholders of large public companies; a recent Harvard Business School study dropped well under 3 percent of such votes in the last decade or so. And while the results of the vote are not binding on the company’s board, they should exaggerate as much as 68 percent of the company’s voting shares that reject the payroll plan.
The rejected payment plan included an estimated $ 21.37 million in total compensation for CEO Andrew Wilson in fiscal year 2020, up from $ 18.3 million in 2019. Other executives were set to see much larger bumps, including CFO Blake Jorgensen ( $ 9.41 million in 2019 to $ 19.5 million in 2020) and Chief Studios Officer Laura Miele ($ 6.95 million to $ 16.1 million), and CTO Kenneth Moss ($ 6.95 million to $ 14, 2 million).
An assortment of investor groups opposed EA’s proposed compensation plan prior to the vote, including influential proxy voting advisers, Institutional Shareholder Services and union-affiliated CtW Investment Group. Public employee pension funds in New York and California followed the lead of those groups in voting against the proposal, and helped lead to its defeat.
“Shareholders have issued a shaky dismissal of ‘deeply flawed electronic arts payment practices’ that do not encourage executives to create long-term value,” CtW CEO Dieter Waizenegger said in a statement. “This vote is a call for clarity for the board to stop attracting top-notch awards for top executives and to ensure that the company develops a pay philosophy that focuses on talent development and retention at all levels of the company.”
Earlier this year, CtW also launched a public campaign against what it says is excessive executive pay at Activision Blizzard, including nearly $ 30 million in compensation for CEO Bobby Kotick. While Activision Blizzard’s compensation plan was released earlier this summer, with the support of less than 60 percent of all shareholders who voted, it set a record low for the company.
The moves against paid executive video games come as employees at Activision Blizzard have pledged to share anonymous salary information, as first reported by Bloomberg News. The results of that survey show large wage differences in, and even within, different roles and demographic groups in the company.
According to public disclosures for 2019, Kotick’s compensation was 319 times the median salary of an Activision employee, while Wilson’s was 200 times the median of the EA employee salary. That compares with an average CEO-to-median employee ratio of 264 to 1 for the S&P 500, according to data collected by the AFL-CIO.
