In a recent letter to shareholders, the CtW Investment Group wrote against the bonuses that EA has paid CFO Blake Jorgensen and CTO Kenneth Moss.
“The company has gone too far in terms of executive pay, piling on exorbitant equity awards… and paying multimillion dollar bonuses following worker layoffs,” the letter reads.
Last month, the same investment group told Activision Blizzard shareholders to vote against a “Management Say On Pay” proposal that could give CEO Bobby Kotick a bonus. CtW claimed that Kotick is paid disproportionately to other employees and fellow CEOs from other companies.
This time, the investment group argues that EA “has an excessive equity granting problem,” which is the distribution of stock shares as bonuses. It says that executives earn the bonus “before the performance period for a previous special award has even finished.”
Executives received above-median bonuses following layoffs of roughly four percent of EA’s total workforce in 2019, according to the letter. Jorgensen reportedly received a $10 million special equity grant on top of his $6.5 million annual grant in January 2017, whereas Moss received $7 million on top of his $5.5 million annual award.
“Electronic Arts appears to be developing a special award grant addiction,” the letter reads. “The company has seen fit to grant some executives yet another retention award in fiscal 2020 after already granting them one in fiscal 2018, even when the performance period for the first special award has yet to conclude.”
In March 2019, EA laid off 350 people in marketing, publishing, and other areas. At the time, the company had a total of 9,000 employees. Last year, the company also closed offices in Russia and Japan.
CtW is asking shareholders to vote against the Say On Pay proposal. “The notion that executives need to be incentivized with pay above-and-beyond the ordinary course program is a complete fallacy in almost all cases,” the letter reads.
EA will discuss this subject in its next annual meeting in August.