Electronic Arts 2008 Annual Report Download - page 38

COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis describes our executive compensation program for fiscal 2008.
We use this program to attract, motivate, reward, and retain the key individuals that lead our business.
This discussion describes our executive compensation program and addresses how we made compensation
decisions in fiscal 2008 for our:
• Chief Executive Officer, John S. Riccitiello,
• Former Executive Vice President, Chief Financial and Administrative Officer, Warren C. Jenson,
• Executive Vice President, Publishing (formerly Executive Vice President, Publishing, Americas and
Europe), Gerhard Florin,
• President, EA SPORTS, Peter Moore, and
• President, EA Games, Frank Gibeau.
Collectively, these individuals are referred to in this discussion as the “Named Executive Officers.” The
compensation of the Named Executive Officers is set forth in the compensation tables that follow this
Compensation Discussion and Analysis.
Fiscal Year 2008 Overview
In February 2007, we entered into an agreement with Mr. Riccitiello, under which he was appointed as our
Chief Executive Officer effective April 2, 2007, the beginning of fiscal 2008. During the year we launched
several new initiatives that resulted in a comprehensive review and re-evaluation of our executive compensa-
tion program and had a significant impact on individual compensation decisions. In addition, during fiscal
2008, we made several other changes to our senior management team, hiring four new executive officers
(some of whom did not join the Company until fiscal 2009) and promoting others into a number of newly-
created leadership positions within our reorganized operating structure. Most notably, we initiated the
reorganization of the Company into four operating “labels” — EA Games, EA SPORTS, The Sims and
EA Casual Entertainment — and an additional group, Global Publishing, that works closely with the labels and
which operates in North America, Europe and Asia.
To support the objectives of the reorganization, we reoriented our use of cash and equity compensation to
better reflect our new operating structure and to ensure that our incentive pay arrangements are properly
aligned to help us achieve our financial and operating objectives. Accordingly, beginning in fiscal 2009, the
annual incentive plans for our employees, including our executives, have been revised to provide for cash
bonus payments that are directly tied to the Company’s financial performance as a whole (as well as, in certain
cases, the financial performance of an employee’s label, studio, or other relevant business unit) and the
employee’s individual performance. In addition, to strengthen the relationship between the Company’s
operating performance and our employees’ long-term incentives, in May 2008, we granted performance-based
restricted stock units to a group of our senior executive officers, including our Named Executive Officers
(other than Mr. Jenson), in lieu of annual stock option grants.
The impact of these changes on the compensation we offer our executive officers, including the Named
Executive Officers, is described in a separate section of this Compensation Discussion and Analysis.
Compensation Philosophy
We operate in an intensely competitive business environment, which is characterized by ongoing technological
advances, constantly changing and difficult-to-predict consumer tastes and preferences, and the emergence of
new competitors and technologies. The market for technical, creative, marketing, and other personnel essential
to the development, marketing, and sales of our products is extremely competitive. Similarly, the market for
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