Electronic Arts 2015 Annual Report Download - page 63

Proxy Statement
The Company’s Statement in Opposition to Proposal No. 4
We recognize that proxy access is an active topic of discussion among stockholders and companies. We have
been engaged in this discussion with our stockholders over the past several months as a part of our ongoing
stockholder outreach efforts, and it is clear to us that there is a variety of views on the matter. As important as
this issue is to investors, it is equally important to our Company. Proxy access would represent a significant
fixture within our Company’s governance framework. It is critical that we strike an appropriate balance between
ensuring this right is actually useable by stockholders while minimizing the potential for abuse and disruption.
Our active dialogue with our stockholders has revealed differing views on proxy access.
Our Board of Directors believes that consideration of implementing proxy access rights should be deliberate and
measured, involving consultation with stockholders, review of marketplace developments, and full consideration
of unintended consequences.
During conversations with our stockholders, we discussed their views on proxy access bylaws, including whether
they support such bylaws and if so, what ownership thresholds, holding periods and aggregation principles they
believe are appropriate. The stockholders we have spoken with thus far, including some of our largest holders,
have expressed differences on these issues.
We believe the process by which companies are being asked to adopt proxy access rights is unsettled and
developing rapidly. While there have been many outspoken voices in this debate, many important stakeholders
have not weighed in, and we expect further action on these issues before the dust settles. Thus, we are
approaching the issue diligently but cautiously.
EA is performing well and it’s critical that we avoid distractions in pursuing our strategic goals.
At this time in our Company’s trajectory, we are particularly sensitive to disrupting the momentum that we have
achieved working together with our Board. Fiscal 2015 was a year of exceptional performance for EA – we
achieved record net revenue, digital net revenue and operating cash flow; our share price increased by 104%
making us the 4th best performing stock in the S&P 500 Index over that time period. Our stockholders benefit
from our clear focus, as evidenced by the new $1 billion share repurchase program we announced in May. We
are committed to delivering stockholder value, and our Board and management take their accountability to
stockholders seriously.
The proponents’ version of proxy access is not the best framework for EA.
Our Board is open to considering an appropriate proxy access provision that is appropriately tailored to EA to
enhance the rights of significant, long-term stockholders without unduly inserting potential for disruptions
associated with unnecessary contests in director elections.
The proposal for proxy access offered by the proponents is not the right structure for EA at this time for the
following reasons:
•Allows unlimited number of stockholders to act as a group: A 3% ownership threshold without
reasonable limits on grouping may provide stockholders with nomination rights that are disproportionate
to their ownership. Allowing an unlimited number of stockholders to act as a group undermines the
principal that proxy access should be available only to those who have a sufficient financial stake to cause
their interests to be aligned with the interests of our stockholders as a whole.
•Permits an excessive number of stockholder-proposed candidates, up to 25% of the Board every
year: This high threshold risks introducing a disruptive and potentially destabilizing dynamic into the
Board election process. A significant number of companies that have enacted proxy access have done so
at a level below 25%.
•Lack of information requirements in order to assess independence and potential conflicts: The
proposal lacks necessary protections relating to the independence of a stockholder nominee or
information to be provided to the Company with respect to a nomination.
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