Electronic Arts 2014 Annual Report Download - page 46

development teams from studio locations around the globe and oversees the relationships with EA Partners
development studios, including Respawn Entertainment.
Mr. Söderlund is located in Sweden and is paid in Swedish kronor. All values reported for his cash compensation
throughout this Compensation Discussion and Analysis were converted to U.S. dollars based on the exchange
rate for the Swedish kronor as of the end of fiscal 2014.
Base Salary and Bonus Target: In the first quarter of fiscal 2014, the Committee increased Mr. Söderlund’s
base salary by 4% and maintained his target bonus percentage at 75% of his annual base salary. In the third
quarter of fiscal 2014, the Committee increased Mr. Söderlund’s target bonus percentage from 75% to 100%
(adjusted on a pro rata basis) to recognize his increased responsibilities, which now include development of
products and services for both the sports and games genres as Executive Vice President, EA Studios, and to
better align his target cash compensation with internal peers.
Cash Bonus Awards: Mr. Söderlund’s fiscal 2014 cash bonus award was $725,000 which corresponds to 134%
of his target bonus. To determine Mr. Söderlund’s cash bonus award, the Committee took into account that the
Company achieved its non-GAAP net revenue target and exceeded its non-GAAP earnings per share target, as
well as an overall evaluation of his performance in both roles he performed during the fiscal year.
In evaluating his performance as Executive Vice President, EA Games Label, the Committee considered strategic
and operational results, such as: launching games on-time for next generation and legacy generation gaming
consoles; the success of products released (including Need for Speed: Rivals and Battlefield 4 and the challenges
at the launch of Battlefield 4); digital revenue; talent and organizational objectives.
In evaluating his performance as Executive Vice President, EA Studios, the Committee considered the expanded
scope of his role and strategic and operational results in the role such as: managing the operations of our high
definition games during the next generation console launches; the success of other products released in the
second half of the year (including Titanfall and Plants vs. Zombies: Garden Warfare); digital revenue; and
reorganizing the former EA Games and EA SPORTS labels into the newly formed EA Studios organization.
Equity Awards: In June 2013, Mr. Söderlund was granted an Annual Award consisting of PRSUs with a target
vesting of 75,000 shares and 75,000 time-based RSUs. Overall, 73% of the value of Mr. Söderlund’s total
compensation was in the form of long-term equity.
COMPENSATION PROGRAMS AND PLANS
Non-GAAP Financial Measures
The Company uses certain adjusted non-GAAP financial measures when establishing performance-based bonus
and equity award targets, such as non-GAAP net revenue, non-GAAP gross profit, non-GAAP operating
expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP diluted earnings per share.
These non-GAAP financial measures exclude the following items (as applicable, in a given reporting period):
acquisition-related expenses, changes in deferred net revenue (online-enabled games), college football settlement
expenses, amortization of debt discount, restructuring charges, stock-based compensation, and income tax
adjustments, among others. In addition, for these purposes, we make further adjustments to our publicly
disclosed non-GAAP measures to add back bonus expense.
Base Salary
A competitive base salary is a crucial component in providing an attractive total compensation package for our
NEOs. The Committee initially sets each NEO’s base salary at a level which reflects the NEO’s position,
responsibilities and experience, as compared to similar executives at comparable companies. On an annual basis, the
Committee reviews and approves any base salary adjustments, considering such factors as individual performance,
pay relative to market, level of responsibilities, complexity of role, and internal compensation alignment.
As part of its May 2014 compensation review, the Committee (and Board for Mr. Wilson) increased the base
salaries of certain NEOs for fiscal 2015. Effective June 1, 2014, the base salaries of our NEO’s will be:
Mr. Wilson, $900,000; Mr. Jorgensen, $700,000; Mr. Gibeau $725,000; Mr. Moore $670,000; Mr. Söderlund
$725,000; and Mr. Probst, $515,000. These increases were consistent with the compensation-setting process
described above.
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