EA Shareholders Reject Executive Compensation Plan | Game Rant
While many video game companies have been doing well financially during the coronavirus pandemic, many people are worried about making ends meet. During these unprecedented times, there is a considerable number of workers who are concerned about their jobs. Even though Electronic Arts has been doing well, shareholders overwhelmingly shot down paying top executives special equity awards in light of their payment of regular employees.
With EA topping the charts for Steam sales in June, the company has shown itself to be doing very well, despite all of the external factors that have been affecting the world's economy. However, the average employee of the game studio weren't seeing the benefit of their hard work at a comparable level to the higher-ups in Electronic Arts, so a large majority of the company's shareholders decided to keep the wage gap between them from growing any further.
EA shareholders met on August 6 to discuss and vote on a 'say on pay' plan that the company was planning to instate during their annual meeting. However, 68% of shareholders, which is around 171,000 votes, stood against this idea, which would have given top executives larger equity awards.
With such high numbers, there has never been as large opposition from shareholders to the company over its employee pay than this. Electronic Arts has given two multimillion-dollar awards to its executives Blake Jorgensen, EA's chief financial officer, and Kenneth Moss, the company's chief technology officer, and these actions have caused investors in the company to be concerned.
Many factors were brought to the shareholders' attention before the vote. Many of the EA executives are generously compensated for their work with their well-paying salaries. In 2019's fiscal year, around 4% of the company's employees were let go, while the top executives were offered the same expensive bonuses and large equity awards.
Even though they didn't accept their bonuses that fiscal year, that decision seemed to be based more on the low profits that year than the employees that had been laid off. These are some of the factors that led Electronic Arts to be one of the few companies that shareholders have does something to stand against increasing top executives' monetary gains.
While video game companies' second-quarter earnings have been doing very well, it is important for companies to recognize the work that employees have done to produce those profits. Executives may direct the company, but regular employees are the ones who do the legwork to get the games out there for fans to enjoy.
Source: SEC Filing Details
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