Electronic Arts 2008 Annual Report Download - page 44

In the case of Mr. Moore, the Committee approved a cash bonus of $330,000 based on the Company’s and the
EA SPORTS label’s fiscal 2008 operating performance, his achievement of individual performance objectives
for fiscal 2008, and his target bonus opportunity of 75% of his base salary.
In the case of Mr. Gibeau, the Committee approved a cash bonus of $299,542 based on the Company’s and
the EA Games label’s fiscal 2008 operating performance, his achievement of individual performance objectives
for fiscal 2008, and his target bonus opportunity of 75% of his base salary.
Equity Awards
We believe that alignment of the interests of our executive officers and our stockholders is significantly
advanced through the issuance of equity awards as a portion of their total direct compensation. In this way, we
reinforce the link between our stockholders and our executive officers’ focus on personal responsibility,
creativity, and stockholder returns. We also believe that delivering a portion of their total direct compensation
in the form of long-term equity awards helps encourage a long-term view in an industry that is subject to
lengthy business cycles. Equity incentives such as stock options and restricted stock units (“RSUs”) also play
an important role in our recruitment and retention strategies, as the competition for creative and technical
talent and leadership in our industry is intense.
Executive officers are eligible to receive equity awards when they first join the Company, in connection with a
significant change in responsibilities, annually to provide incentives for continued performance and retention
of employment and, occasionally, to achieve internal parity between different executive positions. The target
value granted to each executive is determined by the Committee in its judgment, after considering a number of
factors, including the executive’s position and level of responsibility, an assessment of his or her performance,
the value of equity awards for similar positions in the external market (as referenced by the 75th percentile in
the survey data and Peer Group information), and internal parity among similarly-situated executives.
In February 2006, the Committee began granting target equity awards to our executive officers as a mix of
stock options and RSU awards. This mix delivered 70% of the target equity award value in stock options and
30% of the target equity award value in RSUs. This compensation mix reflects the Committee’s belief that
stock options are an important vehicle for encouraging equity ownership by executive officers and aligning
their interests with the interests of our stockholders, whereas RSUs strengthen the retention of key employees.
The Committee also reviews the estimated total pool of stock options and RSU awards to be granted to
executive officers and other employees to ensure that share use remains in line with internal targets.
During its May 2007 compensation review, the Committee decided to grant equity awards to our executive
officers, including the Named Executive Officers (except for Mr. Riccitiello and Mr. Moore) in view of their
positions, responsibility, and an assessment of their performance. In August 2007, in connection with the
reorganization of the Company, the Committee approved an equity-based retention program pursuant to which
RSUs were granted to our executive officers, including the Named Executive Officers (other than
Mr. Riccitiello and Mr. Moore). These RSUs first vest as to 50% of the shares on September 16, 2008 and as
to the remaining 50% of the shares on October 16, 2009. Also in August 2007, the Committee approved stock
option grants to certain executive officers, including certain of the Named Executive Officers, which vest as to
24% of the shares on the first day of the calendar month that includes the one-year anniversary of the option
grant date, and as to an additional 2% of the shares on the first calendar day of each month thereafter for
38 months.
In the case of Mr. Jenson, the Committee approved: (i) in May 2007, (a) a stock option to purchase
35,000 shares of the Company’s common stock, vesting as to 24% of the shares on the first day of the
calendar month that includes the one-year anniversary of the option grant date, and as to an additional 2% of
the shares on the first calendar day of each month thereafter for 38 months, and (b) an RSU award of
5,000 shares, vesting as to 25% of the shares on each of the first four anniversaries of the grant date; and
(ii) in August 2007, (a) a stock option to purchase 60,000 shares of the Company’s common stock, vesting as
described above, and (b) 20,000 RSUs, vesting as noted above.
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