Electronic Arts 2009 Annual Report Download - page 47

Proxy Statement
business units of their fiscal 2009 financial plan goals, (4) the implementation of the Company’s cost reduction
program and the resulting cost savings in the Company’s operating expenses, (5) significant developments in the
Company’s online, direct-to-consumer and wireless businesses, and (6) individual performance achievements in
a difficult business environment. The Committee then determined the actual bonus payment of each Named
Executive Officer, considering their achievement of individual objectives for which bonus targets have been
established, and their personal performance during fiscal 2009.
In the case of Mr. Riccitiello, the Board, based on the Committee’s recommendation, awarded a cash bonus of
$400,000, which reflects 50.0% of his base salary. This payment was based on Mr. Riccitiello’s achievement of
his individual performance objectives for fiscal 2009, and his target bonus opportunity of 100% of his base
salary.
For each of the other Named Executive Officers, the Committee approved a cash bonus of $200,000, which
reflects between 33.3% and 36.7% of their base salaries. This payment was based on the achievement by each of
these Named Executive Officers of his individual performance objectives for fiscal 2009, and the target bonus
opportunity of 75% of his base salary. In the case of Mr. Pleasants, pursuant to the terms of Mr. Pleasant’s offer
letter dated February 19, 2008, he was guaranteed a minimum bonus of $200,000 (minus applicable deductions).
In May 2009, the Committee approved amendments to our Annual Bonus Plan, which is now known as the
Discretionary Bonus Plan, to provide for greater flexibility in order to motivate our employees further and drive
the Company’s financial performance in fiscal 2010. Bonuses will be based on performance during the period
covering the second through fourth quarters of the fiscal year ending March 31, 2010, with actual bonus payouts
determined based on (i) the Company’s financial performance (based on revenue and an adjusted measure of
non-GAAP earnings) measured against pre-determined performance targets for this three-quarter period, (ii) for
some groups, the participant’s business unit’s performance measured against pre-determined targets for the three-
quarter period, and (iii) the participant’s individual performance during the three-quarter period.
For the performance period covering the first quarter of the fiscal year ending March 31, 2010, the Company has
adopted a bonus program based on certain targets for the quarter. All regular status employees, including
executive officers, of the Company (and its subsidiaries and affiliates), are eligible to participate in the program.
Payments made pursuant to the program will be shared equally by all plan participants if the targets for the
quarter are achieved. If the Company distributed the maximum amounts payable under the program, each
participant would receive a nominal payment. If the targets are not achieved, no amounts would be paid under the
plan.
Equity Awards
As discussed above in “Compensation Philosophy”, 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 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
occasionally, to achieve internal parity between different executive positions or to meet retention objectives. The
target value granted to each executive officer is determined by the Committee, 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.
The Committee grants target equity awards to our executive officers as a mix of stock options and RSU awards.
This mix delivers 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
39