Electronic Arts 2014 Annual Report Download - page 43

Proxy Statement
CEO Compensation
Base Salary and Bonus Target: In September 2013, Mr. Wilson was offered the position of CEO with an
annual base salary of $800,000 and an annual bonus target of 150% of his annual base salary. The Board
approved this compensation after considering market data for both existing and recently appointed CEO hires, as
well as internal equity. While Mr. Wilson’s resulting base salary and total target cash compensation were below
the median for CEOs in our peer group, the Board determined that Mr. Wilson’s aggregate compensation
package (base, target bonus and equity) was appropriate relative to his experience.
Fiscal 2014 Cash Bonus Award: The Board approved a formulaic bonus structure for Mr. Wilson, as CEO, that
included financial and operating objectives for the third and fourth quarters of fiscal 2014 with a weighting and
targeted performance for each objective. To further align Mr. Wilson’s bonus with Company performance, the
Board also added a multiplier based on the company’s TSR relative to companies in the NASDAQ-100 with a
target TSR multiplier of 100% at the 60th percentile of companies and an increase of 3% for each percentile
above the 60th up to a maximum multiplier of 150%, and a decrease of 2% for each percentile below the 60th to a
minimum multiplier of 50%. For fiscal 2014 Mr. Wilson was awarded $570,240 based upon the achievement of
objectives per the bonus formula outlined in the table below.
Fiscal 2014 Q3 and Q4 Non-GAAP Financial Targets
(in millions except earnings per share):
Q3/Q4
Target Actual(1)
Attainment
of Target
Bonus
Weighting
Net Revenue $2,558 $2,486 97% 20%
Gross Profit $1,811 $1,778 98% 20%
Operating Expenses $1,059 $1,043 102% 20%
Operating Income $ 752 $ 735 98% 10%
Diluted Earnings Per Share $ 1.76 $ 1.74 99% 10%
Operating Objectives: FY14 launches (including for Xbox One
and PlayStation 4), Development of New Intellectual Property
and Preparation for FY15, Organizational Health and Digital
Transformation N/A 100% 20%
Total: Financial and Operating Objectives 99% 100%
(1) For a reconciliation of fiscal 2014 third and fourth quarter non-GAAP financial measures to the most directly
comparable GAAP financial measures, refer to the financial tables of the press release contained in the
Current Report on Form 8-K that the Company filed on May 6, 2014. Please also refer to the information
under the heading “About Non-GAAP Financial Measures” in Appendix A of this Proxy Statement for
additional information about our use of Non-GAAP Financial Measures.
From the date Mr. Wilson was appointed as CEO, to the end of the fiscal year, the Company’s TSR was 8.6%,
which was at the 58
th
percentile of the companies in the NASDAQ-100, and resulted in a bonus multiplier of 96%.
Target Bonus:
$600,000 X
Financial & Operating
Objectives:
99%
XTSR Multiplier:
96% =Bonus Payout as CEO: $570,240
Mr. Wilson’s overall fiscal 2014 cash bonus of $780,474 was determined by the Board taking into consideration
both roles he performed during fiscal 2014 and the achievement of the goals and objectives aligned with each of
these positions.
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. In determining the size of the award, the Board 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. The Board granted stock options to Mr. Wilson to introduce an
incentive for absolute long-term stock price growth, and enhance the balance between retention and relative stock
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