EA resists call to shrink golden parachutes for top executives
Electronic Arts is not giving up the chance to offer its top executives massive severance payouts, despite recent pressure from some perennially provocative shareholders. Driving the news: Late last week, the publisher of Madden and The Sims tweaked its executive pay policy, placing a partial cap on termination pay. But the limit falls far short of a proposal that in early August nearly won majority support from stockholders. According to EA''s new policy, future employment agreements with top executives will limit the cash part of any severance plan to no more than 2.99 times the total of the execs’ salary and target annual bonus. The proposal that shareholders voted on, pitched to rein in EA’s “tendency to overpay management” or offer the “wrong” incentives, would have applied that 2.99x cap, but for cash and stock-based severance payouts. With either plan, severance offers beyond the cap would be subject to shareholder approval. What they’re saying: “It is a Trojan horse, which looked like a gift to those who don’t pay attention," activist investor James McRitchie tells Axios of EA’s new policy.
EA resists call to shrink golden parachutes for top executives
Electronic Arts is not giving up the chance to offer its top executives massive severance payouts, despite recent pressure from some perennially provocative shareholders. Driving the news: Late last week, the publisher of Madden and The Sims tweaked its executive pay policy, placing a partial cap on termination pay. But the limit falls far short of a proposal that in early August nearly won majority support from stockholders. According to EA''s new policy, future employment agreements with top executives will limit the cash part of any severance plan to no more than 2.99 times the total of the execs’ salary and target annual bonus. The proposal that shareholders voted on, pitched to rein in EA’s “tendency to overpay management” or offer the “wrong” incentives, would have applied that 2.99x cap, but for cash and stock-based severance payouts. With either plan, severance offers beyond the cap would be subject to shareholder approval. What they’re saying: “It is a Trojan horse, which looked like a gift to those who don’t pay attention," activist investor James McRitchie tells Axios of EA’s new policy.