EA Investors against Bonuses for Company Executives

Electronic Arts shareholders refused bonuses to the company’s top management and gave a serious reason for reflection. Up to this point, only 2.2% of companies in the Russell 3000 index did not receive bonuses due to investor decisions.

The publisher’s annual shareholders’ meeting was held a few days ago. At it, 171 million investors out of 230 million voted against paying a bonus to EA management, Bloomberg reports. Among those who voted against were: Institutional Shareholder Services, Glass Lewis & Co, CtW Investment Group, ISS.

Basically, the shareholders were dissatisfied with EA’s internal policy.

For example, the consulting agency Institutional Shareholder Services believes that there is simply no need for bonuses. In 2018, the top management of the company has already been awarded a bonus, and the deadline for payments is still not over.

ISS criticized the management’s inflated earnings and drew attention to the salary of EA CEO Andrew Wilson: it is 56% more than the average CEO. According to ISS, this “greatly affects the amount of executive remuneration.”

But CtW Investment Group turned out to be the most notable. A month before the vote, they wrote a letter to EA shareholders urging them to refuse bonuses to management. Among other things, representatives of the group stressed that top management does not perform its duties well enough: the company’s value is decreasing, and the staff is being reduced.

Also, the refusal of bonuses could be affected by a 70% decrease in profits due to the absence of tax relief this year.

In response, EA stated that “pay practices are consistent with financial results.” The company “economically” disposes of bonuses, and the year turned out to be productive. EA probably meant an increase in net revenue (21% compared to last year) and an increase in the value of shares (34%), but there were no separate comments on this.

Salary scandals are no longer a rarity in the gaming industry. One of the most noisy stories of this summer is the problem with the amount of salaries and overwork at Blizzard Entertainment. This week, employees of the company that released World of Warcraft wrote an appeal demanding better working conditions.

Also on the topic:

• Electronic Arts called the last quarter unprecedented for its businessEA shareholders urged to cut executive bonuses
• Blizzard employees are preparing an appeal to the company amid complaints about the salary level
• Is there any news?