Electronic Arts 2014 Annual Report Download - page 39

Proxy Statement
form of stock options. Stock options were added to the Annual Award mix because the Committee views stock
options as performance-based equity that focuses recipients on the Company’s long-term stock price growth,
which complements the retentive value of time-based RSU awards and the relative stock price performance
rewards of our PRSUs.
Retention Equity Awards
From time to time, we grant supplemental equity awards to encourage retention of key executives, especially
during periods of transition for the Company or when faced with significant recruiting pressure from other
companies with which we compete for talent. In February 2014, the Committee granted 225,000 time-based
RSUs to Mr. Jorgensen in recognition of his key role in driving a reduction in our operating expenses and
improving operating margins and cash provided by operations for the Company; this award was also intended to
support the longer term retention of Mr. Jorgensen during a time of leadership and console transition for the
Company. These RSUs will vest as to 100% of the shares on the third anniversary of the grant date. The size and
vesting schedule of this award is consistent with awards we have previously granted to other key leaders.
CEO Stock Option Award
On October 31, 2013, in connection with his appointment as CEO, Mr. Wilson was granted a non-qualified
option to purchase 1,000,000 shares of common stock. The Board granted stock options to Mr. Wilson to provide
an equity incentive focused on absolute long-term stock price growth and to enhance the balance between
retention and relative stock price performance goals of our time- and performance-based RSU programs. In
determining the size of the award, the Board, in consultation with Compensia, the independent consulting firm
retained by the Committee, considered market data for existing CEOs, new CEOs who were promoted from
within a company, and Mr. Wilson’s current unvested equity holdings from prior PRSU and RSU grants.
Executive Chairman Equity Award
On May 30, 2014, upon the recommendation of the Committee and in recognition for his service to the Company
as Executive Chairman during fiscal 2014, the Board (with Mr. Probst abstaining) awarded Mr. Probst a one-time
equity award with a maximum aggregate grant date value of $1,532,447 (“Award Value”) in accordance with our
2000 Equity Incentive Plan. The award shall be granted on June 16, 2014 and will consist of two components:
(a) RSUs with a maximum grant date fair value equal to 50% of the Award Value; and (b) non-qualified stock
options to purchase shares of common stock with a maximum grant date fair value equal to 50% of the Award
Value. The RSUs will vest, and the options will vest and first become exercisable, on the 12-month anniversary
of the grant date.
In determining the Award Value, the Board considered: (i) Mr. Probst’s performance as Executive Chairman
during fiscal 2014, including his role in the Company’s executive leadership transition, (ii) 150% of Mr. Probst’s
fiscal 2014 salary, and (iii) the funding approved by the Committee for the fiscal 2014 Company-wide employee
bonus pool based on the Company’s financial performance.
Principle 3 — Target Total Direct Compensation: We awarded total direct compensation to our NEOs for
fiscal 2014 consistent with market practices, based on each NEO’s role at the time the decision was made, his
experience and performance. Total direct compensation has three components: base salary, annual cash bonus,
and equity awards. When setting the fiscal 2014 base salaries and target bonus opportunities for our NEOs, the
Committee references the 50th to 75th percentiles of the market range of comparable companies, and for our
annual equity awards, we reference the 75th percentile. While we consider each component with respect to this
data, the actual base salary, bonus, and equity compensation awarded to an NEO may be above or below these
levels and is determined based on the Company’s financial performance, the financial and operating performance
of each NEO’s business unit (if applicable), individual performance, market trends, and other factors unique to
each individual.
The Committee also considers the aggregate value of all three total direct compensation components, and
references the 50th to 75th percentiles of the market for total direct compensation. When necessary for retention,
succession planning, or recognition of outstanding performance, the Committee may approve exceptional
compensation programs for select key executives that could result in target total direct compensation above our
referenced range.
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