Electronic Arts 2009 Annual Report Download - page 44

(b) companies that compete with us for executive talent in the media and entertainment and technology
industries.
The fiscal 2009 group of peer companies (the “Peer Group”) consisted of:
• Activision • Lions Gate Entertainment
• Adobe Systems • Mattel
• Amazon • Symantec
• eBay • Take-Two Interactive Software
• Hasbro • THQ
• IAC / Interactive • Viacom
• Intuit • Warner Music Group
• Liberty Media Capital • Yahoo!
This peer group was re-evaluated in December 2009. Liberty Media Capital was no longer considered to be an
appropriate peer company in light of our business and was removed from the Peer Group. This update made to
the Peer Group did not impact the compensation decisions for our Named Executive Officers. Compensia
compared each of our executive-level positions to similar positions as reflected in the survey data and the Peer
Group information to establish base salary, target cash and equity incentive awards, and target total cash
compensation ranges. This analysis was reviewed by Ms. Toledano and our Human Resources Department with
Mr. Riccitiello for each executive-level position and with the Committee for our Chief Executive Officer and
other positions at or above the level of Senior Vice President.
The Committee used the survey data and the Peer Group information to validate the range of competitive pay for
the business sectors in which we compete for executive talent. Based on its assessment of the competitive
marketplace, the Company’s long-term strategic objectives, our need for a strong management team to help us
achieve our operating objectives, and our desire to minimize retention risk, the Committee referenced the 50th to
75th percentile of the combined survey data and Peer Group information as the relevant range for base salaries,
target bonus opportunities, and total cash compensation on average, and the 75th percentile for equity awards for
our executive officers. The Committee believes that paying above average compensation is necessary to remain
competitive in our industry.
During fiscal 2009, these base salary, target bonus opportunity, and target total cash compensation ranges were
considered by management in formulating individual compensation recommendations for the Committee to
consider. These ranges, together with management’s recommendations, served as a reference point for the
Committee in making compensation determinations for most of the executive officers and recommendations to
the Board for Mr. Riccitiello. Because these decisions were influenced by the Company’s actual financial and
operational results, as well as each executive officer’s individual performance, his or her total cash
compensation, and any individual compensation component, may be within, below, or above the market range for
his or her position.
The market ranges established by Compensia also helped the Committee in assessing the competitive placement
of our executive officers’ total direct compensation for fiscal 2009. The Committee’s assessment of an individual
executive officer’s compensation relative to market range took into consideration the scope, complexity, and
responsibility of the executive’s position in relation to positions in the data sources. In setting actual
compensation, the Committee considered each executive officer’s experience,responsibility level, individual
performance, and the Company’s actual financial and operational results for the year (measured against
pre-established objectives and potential performance targets for the subsequent year). In addition, the Committee
also compared the compensation of the executive officers with each other, as well as the highest-paid employees
at the Company, to monitor internal pay equity. While the Committee does not use fixed ratios when conducting
this analysis, typically it tries to ensure that the total compensation paid to each of our executive officers is
reasonable when compared to our employees generally.
Compensation Elements
Our executive compensation program is comprised of three principal components: base salary, an annual cash
bonus and equity awards.
36