Investment Group Calls Out 'Excessive' EA Executive Pay
CtW Investment Group has called out EA for the "excessive" bonuses that the company has paid out to its executives. CtW is the same group that criticized Activision Blizzard for paying CEO Bobby Kotick a huge salary, despite the mass layoffs that have hit the company.
In a letter filed to the United States Securities and Exchange Commission yesterday, CtW Investment Group criticized EA over its "excessive equity granting problem" and giving "some of its executives a new special award before the performance period for a previous special award has even finished."
In November 2019, EA gave CFO Blake Jorgensen $7.5 million on top of his $7.5 million annual equity award and CTO Kenneth Moss $5.5 million on top of his $5.5 million annual equity award, which CtW feels "undermines the spirit of pay-for-performance," said the letter. This came two years after Jorgensen was given a $10 million bonus and Moss given a $7 million bonus.
The group also takes issue with the fact that these bonuses were handed out after EA was hit by mass layoffs earlier that year. In March 2019, EA laid off 350 employees, or 4% of its total workforce, as CEO Andrew Wilson said that these "important steps" were made to "address challenges and prepare for the opportunities ahead." The move affected employees in several departments, such as marketing and publishing, and reportedly came after EA put a hiring and travel "freeze" on its marketing department earlier in the year.
The decision to fire so many employees while executives got huge bonuses has been criticized on social media. It's also a criticism that faced Activision Blizzard after it laid off hundreds of employees. At the time of layoffs, CEO Bobby Kotick had also talked about the company's "record" earnings year. On social media, many were quick to label it as another case of corporate greed.
Activision Blizzard also came under fire when Blizzard Entertainment posted a new job listing for the Hearthstone community manager, a position that had been affected by the layoffs. EA has not been criticized for doing this sort of thing, but it shows that there is a larger conversation about how gaming giants compensate their executives.
CtW's letter has asked for shareholders to vote against the Say On Pay proposal at EA's annual meeting in August.
Source: US SEC
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