Electronic Arts 2009 Annual Report Download - page 53

Proxy Statement
Section 162(m) of the Internal Revenue Code, due to the subsequent modification to the terms of these awards to
extend the performance period by an additional two years.
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 2009, the
compensation paid to Mr. Moore and Mr. Pleasants, which included for each of them a signing bonus and
relocation-related financial assistance, exceeded the Section 162(m) deductibility threshold by approximately
$410,000 for Mr. Moore and $780,000 for Mr. Pleasants. Mr. Brown, our Chief Financial Officer, was not
considered a covered employee for purposes of Section 162(m) during fiscal 2009.
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 recommended 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
Geraldine B. Laybourne
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