Electronic Arts 2008 Annual Report Download - page 39

talented executives with the skills, experience, integrity and dedication necessary to oversee a dynamic
organization and the vision to anticipate and respond to emerging market developments is equally competitive.
Our success as a global leader in the interactive entertainment industry depends heavily on attracting,
motivating, and rewarding a highly-skilled and experienced management team. At the same time, our leading
position within the interactive entertainment industry makes us a prime target for our competitors (which range
from very small start-up companies with limited resources to very large, diversified corporations with greater
financial and marketing resources than ours) seeking to recruit executives and key creative talent.
Accordingly, it is imperative that our executive compensation program be competitive with the organizations
with which we compete for executive talent, so that we are able to attract, motivate, reward, and retain the
individuals that we believe are capable of leading the Company. At the same time, our program must support
our strategic business objectives and promote the short-term and long-term profitable growth of the Company.
To achieve these dual objectives, our compensation philosophy is predicated on two basic principles:
• A significant portion of each executive officer’s total cash compensation should be performance-based
and “at risk,” with this amount dependent from year to year on the Company’s financial and operational
performance, the operational performance of the executive’s specific business unit, as appropriate, and
his or her individual performance.
• To align each executive officer’s interests with the long-term interests of our stockholders, a significant
portion of his or her compensation should be equity-based.
Further, we believe that an executive officer’s compensation must be appropriate in light of his or her
experience, responsibilities, and performance. Our executive compensation program is designed to be consis-
tent with this philosophy and to maintain parity between the compensation of our executive officers.
Compensation-Setting Process
The Compensation Committee of the Board is responsible for establishing the Company’s compensation
philosophy and making the pay decisions for our executive officers. The Committee’s scope of authority is set
forth in a written charter and includes the oversight and administration of all compensation, equity, and
employee benefit plans and programs, including the annual bonus and equity compensation plans for executive
officers.
The Committee regularly meets on a quarterly basis and holds additional meetings as needed during the year.
The Committee also takes action by written consent, often after informal telephone discussions among the
Committee members. During fiscal 2008, the Committee met 17 times, four of which were regularly-scheduled
quarterly meetings and the remainder of which were in special sessions to consider a variety of items, many of
which emanated from the reorganization discussed above under the heading “Fiscal Year 2008 Overview”.
Among other things, the Committee addressed the Company’s compensation philosophy, the compensatory
aspects of strategic transactions and acquisitions, the adoption of the Key Employee Continuity Plan, the
adoption of new annual cash bonus plans, the adoption of a targeted equity-based retention program, and the
terms and conditions of the compensation arrangements for new, departing, and continuing executives.
For its regular meetings, the Committee maintains a calendar to help guide the meeting agendas and to ensure
fulfillment of the various responsibilities outlined in the Committee’s charter. In fiscal 2008, this calendar
included a comprehensive review of the Company’s total rewards programs, review of the compensation levels
for members of our Board, review and approval of all executive employment offers and promotions, review
and approval of the fiscal 2007 bonus payments, and a review of all actions taken by management using
authority delegated by the Committee.
In fiscal 2008, the Committee reviewed and approved the base salaries (or, as appropriate, the base salary
adjustments), target bonus opportunities, and equity awards of each of our executive officers, including the
Named Executive Officers, other than Mr. Riccitiello, whose base salary, target bonus opportunity, and equity
award were developed and recommended by the Committee and approved by the Board in connection with his
appointment as Chief Executive Officer.
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