Electronic Arts 2023. Ratification of Termination Pay is just one of several issues to be voted on before or during the annual meeting on August 10, 2023, at 2:00 pm Pacific Time. Attend the annual meeting online. Vote AGAINST all directors except Kofi Bruce; Against pay, auditor; FOR proposal #5 Require Termination Pay Ratification.
Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. I voted with the Board’s recommendations 17% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Or, look it up on CapEdge, which offers an abundance of free tools.
Read Warnings. Good corporate governance generally results in better profits and a better society. However, I don’t prioritize profits over our natural environment and human needs, especially when companies externalize costs. (see The Shareholder Commons)
Electronic Arts 2023: ISS Rating
Electronic Arts Inc.’s ISS Governance QualityScore as of July 1, 2023 is 3. The pillar scores are Audit: 9; Board: 5; Shareholder Rights: 1; Compensation: 4.
Corporate governance scores courtesy of Institutional Shareholder Services (ISS). Scores indicate decile rank relative to index or region. A decile score of 1 indicates lower governance risk, while a 10 indicates higher governance risk.
Electronic Arts 2023: How I Voted
|1A-1H – Election of Directors||For, except (1B) RACHEL A. GONZALEZ, (1C) JEFFREY T. HUBER, (1D) TALBOTT ROCHE, (1E) RICHARD A. SIMONSON, (1G) HEIDI J. UEBERROTH AND (1H) ANDREW WILSON||Against/Withhold all except Bruce|
|2 – Advisory Vote to Approve Executive Compensation||AGAINST||Against|
|3 – Ratification of the Appointment of Independent Auditors||AGAINST||Against|
|4 – Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation||1 YEAR||1 YEAR|
|5 – Shareholder Proposal on Termination Pay||FOR||For|
Electronic Arts 2023 Votes Explained
CEO compensation of $39M in 2020 is so much that it can’t be made up for by cutting back pay substantially in two subsequent years. The Company underperformed the Nasdq over the most recent 1, 2, and 5-year periods.
E-J recommended against the pay package as too high.”We believe that the Company’s compensation policies and procedures are not effective or strongly aligned with the long-term interest of its shareholders.” They recommend voting against Roche, Ueberroth, and Gonzalez for being on the compensation committee; Huber and Simonson for being over-tenured (I added Ubinas as also over-tenured with 13 years); and Wilson because of cybersecurity weakness at the company. My settings at iconik also led me to vote against Wilson (the chair should be independent). Many of the other settings were similar. EJ also recommends against auditors that have served longer than 7 years. KPMG LLP has served 36 years, so their independence could be compromised.
Of course, I voted for my proposal #5.
I had help with my voting from Egan-Jones, my own proxy voting policy through Iconikapp. and by briefly looking and some funds that announce their votes in advance. Note: you can automate all your proxies to be voted according to human values by signing up for the iconik/AYS app. In about two minutes, you’ll vote all your proxies according to values that balance environment, social, governance, and profitability. More information at Free Proxy Advisor From As You Sow & Iconikapp. I have a more customized version, so your results with the iconik/AYS app may differ. Now, you can also sign-up for automated voting with iconikapp through Third Act.
2023: Proposal #5
Electronic Arts: Ratification of Termination Pay
This proposal is from me, James McRitchie. “Ratification of Termination Pay” seeks greater transparency, accountability, and alignment of executive compensation with company performance. Last year my nearly identical proposal won more than 47% of the vote at Electronic Arts. Consider also that pay was rejected by 8% of shares in 2022, 58% in 2021, 74% in 2020, whereas a 5% rejection is more the norm.
While the Board took steps to reduce the CEO’s pay and opposition to the 2022 package decreased, shareholders should remain vigilant.
The Board has a history of generosity with the CEO.
Added: Large termination pay packages should be subject to shareholder approval or oversight to ensure it is fair and reasonable and that executives are held accountable for their actions and performance. While this proposal is non-binding, a high vote cannot be ignored easily. Remember, last year it won more than 47% of the vote.
Please Vote FOR proposal Number 5.
Electronic Arts 2023: Other Recommendations
You might want to check how a few funds voted. Use our Shareowner Action Handbook.
Electronic Arts 2024: Mark Your Calendar
Proposals to be considered for inclusion in our proxy materials: No later than the close of business (6:00 p.m. Pacific Time) on February 23, 2024. All proposals must comply with Rule 14a-8 under the Exchange Act.