Electronic Arts 2010 Annual Report Download - page 38

Base Salary
We believe that a competitive base salary is the foundation to providing an attractive total compensation package
for our executive officers. The Committee reviews and approves the base salaries for our executive officers,
including the NEOs, as part of its annual compensation review and upon a change in an executive officer’s role.
Typically, base salaries are initially set to reflect an executive officer’s position, responsibilities and experience.
Subsequent adjustments are based largely on individual performance and other factors as determined by the
Committee, including the position’s complexity, level of responsibility and importance in relation to our other
executive officer positions. As previously described, Mr. Riccitiello, assisted by Ms. Toledano, annually
performs an individual performance review for each executive officer, which is then provided to the Committee.
During the May 2009 compensation review cycle, the Committee decided not to increase the base salaries of our
NEOs for fiscal 2010 and none of our NEOs received a base salary adjustment during fiscal 2010. This was
consistent with the Company’s decision not to increase the base salaries of all employees as part of the May 2009
compensation review cycle.
As part of its May 2010 compensation review, the Committee decided to increase the base salaries of certain
NEOs for fiscal 2011. These increases were consistent with the compensation-setting process described above
and in line with our target position within the Peer Group.
Annual Cash Bonus
Our executive officers are eligible for annual cash bonuses that are linked to the achievement of the Company’s
annual financial objectives and individual performance objectives and, for those executive officers with direct
responsibility for the development or publishing of products, business unit performance. These bonus
opportunities allow us to make a significant portion of each executive officer’s total cash compensation
performance-based and “at risk,” consistent with our compensation philosophy. As with base salaries, the
Committee seeks to target total cash compensation with reference to the third quartile of the survey data and Peer
Group information in order to attract, motivate, reward, and retain highly-qualified executive officers, while also
allowing flexibility to recognize executive officers with additional responsibilities or skills that are critical to the
Company’s success.
During fiscal 2010, the Committee reviewed and approved target bonus opportunities (expressed as a percentage
of base salary) for each executive officer, including the NEOs, with reference to the total cash compensation
(base salary plus target bonus opportunity) in the third quartile of annual incentive compensation, as reflected in
the survey data and Peer Group information.
Mr. Riccitiello’s target total cash compensation was found to be significantly below the desired third quartile of
the Peer Group. Effective October 1, 2009, his target bonus opportunity was changed from 100% to 150% of his
base salary and was prorated for fiscal 2010 in order to position his target total cash compensation more
competitively with the Peer Group.
In August 2009, the target total cash compensation for the NEOs was reviewed relative to our philosophy and the
target comparison of the third quartile of the survey data and Peer Group information. As a result, the target
bonus opportunities for Mr. Gibeau and Mr. Moore were adjusted from 75% to 100% of base salary effective
August 2009 and November 2009 respectively, and were prorated for fiscal 2010. Effective June 1, 2010,
Mr. Brown’s target bonus opportunity was increased from 75% to 90% of base salary and Mr. Schappert’s target
bonus opportunity from 75% to 100% of base salary. These increases in target bonus opportunity were intended
to provide a more competitive pay opportunity for these executive officers relative to the Peer Group.
The annual cash bonus awards for our executive officers for fiscal 2010 were determined by evaluating actual
Company and individual performance relative to certain performance measures under two separate annual
incentive plans, the Executive Bonus Plan and the Electronic Arts Discretionary Bonus Plan (the “Discretionary
Bonus Plan”).
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