Electronic Arts 2008 Annual Report Download - page 51

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With respect to non-equity compensation arrangements, the Committee has reviewed the terms of those
arrangements most likely to be subject to the $1 million limitation of Section 162(m). In fiscal 2008, the
compensation paid to Peter Moore, which included a signing bonus and relocation-related financial assistance,
exceeded the Section 162(m) deductibility threshold by approximately $926,000. Pursuant to guidance from
the Internal Revenue Service, Mr. Jenson, our former Chief Financial Officer, was not considered a covered
employee for purposes of Section 162(m) during fiscal 2008.
While the Committee will continue to consider deductibility under Section 162(m) with respect to future
compensation arrangements with our executive officers, deductibility will not be the only, or necessarily the
primary, factor in determining appropriate levels or modes of compensation. Since corporate objectives may
not always be consistent with the requirements for full deductibility, it is possible that we may, if consistent
with our compensation philosophy, enter into compensation arrangements in the future under which payments
are not fully deductible under Section 162(m).
Accounting for Stock-Based Compensation
In fiscal 2007, we began accounting for stock-based compensation awards in accordance with the requirements
of SFAS No. 123(R), “Share-Based Payment”. The comparable compensation expense of RSUs and stock
options under SFAS No. 123(R) has removed a financial reporting disincentive to use RSUs that existed before
we began expensing stock options under that accounting standard. As such, in anticipation of the adoption of
SFAS No. 123(R), we began granting RSUs to certain overtime-eligible employees during calendar year 2005.
In calendar year 2006, we expanded the use of RSUs to all employee groups, including our executive officers.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following Compensation Committee Report on Executive Compensation shall not be deemed to be
“soliciting material” or to be “filed” with the Securities and Exchange Commission nor shall this information
be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that EA specifically incorporates it by
reference into a filing.
The Compensation Committee has reviewed and discussed with management the Compensation Discussion
and Analysis. Based on its review and discussions with management, the Compensation Committee recom-
mended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy
statement.
COMPENSATION COMMITTEE
Linda J. Srere (Chair)
Leonard S. Coleman, Jr.
Richard Simonson
37