Electronic Arts 2008 Annual Report Download - page 42

addition, as noted above, the Committee considers the third quartile of base salaries as reflected in the survey
data and Peer Group information.
During its May 2007 compensation review, the Committee decided to adjust the base salaries of our executive
officers, including the Named Executive Officers (other than Mr. Riccitiello and Mr. Moore), for fiscal 2008.
These base salary increases were pro-rated to account for the additional time between the last annual review
on February 15, 2006 and the new annual review effective date of June 1, 2007. The increases were, at 4.6%
in the aggregate, approximately the same on a percentage basis as the annual base salary increases received by
our non-executive employees for the year.
In addition, from time to time, the Committee may review and adjust the base salaries of certain executive
officers at its discretion, including upon a change in an executive’s role or responsibilities and to ensure
internal pay equity with other executive officers at a comparable level in the Company. During fiscal 2008, in
connection with the Company’s reorganization, the Committee approved base salary increases for certain
executive officers so that their compensation levels would be consistent with their peers in other areas of our
business, taking into consideration various factors such as differences in experience.
Accordingly, during fiscal 2008 the Committee increased Mr. Jenson’s base salary by 4.5% to $595,204;
Dr. Florin’s base salary by 3.1% to 752,281 Swiss francs; and Mr. Gibeau’s base salary to $500,000 which
reflected an annual merit increase of 3.2% and a mid-year adjustment of 7.6% after he moved into the position
of President of EA Games label. Mr. Riccitiello’s base salary was set at $750,000 when he was appointed
Chief Executive Officer, effective April 2, 2007.
As part of its May 2008 compensation review, the Committee decided to adjust the base salaries of our
executive officers, including the Named Executive Officers, effective June 1, 2008, for fiscal 2009. These
adjustments, which were approximately 4% in the aggregate and were approximately the same on a percentage
basis as other executives and employees, will be reflected as part of our fiscal 2009 compensation disclosure.
Annual Cash Bonus
We use cash incentives to deliver competitive total cash compensation to our executive officers that is linked
to the achievement of both the Company’s annual financial objectives and individual performance objectives.
For fiscal 2008, the Committee reviewed and approved target bonus opportunities for each executive officer,
including the Named Executive Officers (expressed as a percentage of that executive’s base salary), intended
to deliver target total cash compensation (base salary plus target bonus opportunity) in the third quartile of
annual incentive compensation as reflected in the survey and Peer Group data. Mr. Riccitiello’s target bonus
opportunity for fiscal 2008, which was 100% of his base salary, was established as part of the terms of his
initial employment when he was appointed Chief Executive Officer effective April 2, 2007.
As with base salaries, the Committee seeks to deliver total cash compensation at levels within the third
quartile to reflect target cash compensation opportunities that it believes are necessary to attract, motivate,
reward, and retain highly-qualified executives while also allowing flexibility to recognize executives such as
those who have additional responsibilities or skills which are critical to the Company’s success.
During fiscal 2008, the annual bonuses for our executive officers were determined in accordance with two
separate annual incentive plans, the Electronic Arts Executive Bonus Plan (the “Executive Bonus Plan”) and a
discretionary bonus plan in which both executive and non-executive employees were eligible to participate (the
“Discretionary Bonus Program”). The Executive Bonus Plan was a cash bonus plan pursuant to which bonuses
awarded to participating executive officers are intended to qualify as deductible “performance-based compen-
sation” within the meaning of Section 162(m) of the Internal Revenue Code.
The Executive Bonus Plan required that the Company achieve at least 75% of a pre-established corporate
financial performance metric in order to fund a pool from which participating executive officers were eligible
to receive a bonus payment. Upon funding of the bonus pool, the Committee then determined the actual bonus
payment of each participating executive officer, considering his or her individual target bonus opportunity and
the factors set out in the Discretionary Bonus Program. Under the Executive Bonus Plan, the Committee could
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