A majority of EA’s shareholders have voted against EA’s proposed compensation package for its top executives.
Early in July, the CtW Investment Group, one of EA’s pro-labour shareholders, urged investors to vote against the Say on Pay proposal. Had it passed, the proposal would have given EA complete control over how well it compensates its top executives outside of their salaries.
The annual shareholder meeting in question took place last Thursday, August 6, and CtW’s argument has seemingly worked, convincing 68% of shareholders to reject the executive pay proposal. Over 171 million votes were cast against it, compared to 59.6 million in favour according to regulatory SEC financial filing made the same week.
Although the idea to vote against was proposed by CtW, other investor groups such as Institutional Shareholder Services Inc., Glass Lewis & Co., the California Public Employees’ Retirement System and several others agreed, hence the overwhelming result.
“Shareholders issued a resounding rebuke of Electronic Arts’ deeply flawed executive pay practices that does not incentivize executives to create long-term value,” said CtW executive director Dieter Waizenegger.
“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.”
CtW’s July letter called out the “excessive” equity grants EA tends to award its top brass, with CFO Blake Jorgensen and CTO Kenneth Moss specifically mentioned. Prior to that, CtW also demanded Activision investors do the same as it believes CEO Bobby Kotick is paid too much.