Electronic Arts Inc. · NASDAQ:EA
Electronic Arts — Proxy Contest (July 2021)
20 slides from Electronic Arts's proxy contest presentation, Jul 8, 2021
Slide 1: Stockholder Outreach
Stockholder Outreach June 2021 1
Slide 2: Contents
Contents ● Business Overview ● Compensation Program Highlights ● Corporate Governance ● Corporate Responsibility / Response to COVID-19 Pandemic 2
Slide 3: Business Overview
Business Overview Electronic Arts
Slide 4: Business Strategy
Business Strategy 1. Deliver amazing games and content ● Global presence with key franchises that include: FIFA; Battlefield; Madden NFL; Apex Legends; The Sims; Dragon Age; Mass Effect; Need for Speed 2. Offer live services that extend and enhance the experience ● FIFA Ultimate Team pioneered live
Slide 5: Growth: Topline to Cash
Growth: Topline to Cash (in $ millions) 6,190 5,372 5,132 1,598 5,537 5,629 Full Game 4,950 1,780 1,613 1,840 1,887 Full Game 1,793 1,797 1,934 4,592 Live Services & Other 1,547 4,016 3,292 3,592 3,650 Live Services 3,157 & Other FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 Net Revenue Net Bookings
Slide 6: Financial and Operational Highlights
Financial and Operational Highlights • FY21 Financial Highlights ○ Fiscal 2021 resulted in record net revenue, net bookings and annual operating cash flow ○ Returned over $800 million to shareholders through our two-year, $2.6 billion stock repurchase program and quarterly dividend • Strong executio
Slide 7: Compensation Program Highlights
Compensation Program Highlights 7
Slide 8: Our Compensation Program Promotes Pay-For-Performance
Our Compensation Program Promotes Pay-For-Performance ● Pay-for-Performance ○ Our compensation programs are designed to attract and retain high-performing executives ○ FY21, 96% of our CEO pay and 91% of our NEO pay is at-risk compensation ○ Regularly benchmark against market practice and peers ● Lo
Slide 9: Compensation Best Practices
Compensation Best Practices What We Do What We Don’t Do ✔ Structure executive compensation to link pay and performance ✘ No “single-trigger” change in control arrangements ✔ Provide a high percentage of variable, at-risk pay; approximately 94% of NEO compensation is variable and at- ✘ No excise tax
Slide 10: Key Actions in Response to Stockholder Feedback (1/3)
Key Actions in Response to Stockholder Feedback (1/3) Governance changes – New Compensation Committee Chair appointed in December 2020 and new independent consultant to the Compensation Committee engaged. What We Heard Our Actions and Perspective Special Equity Awards Action: ● Concerns with the use
Slide 11: Key Actions in Response to Stockholder Feedback (2/3)
Key Actions in Response to Stockholder Feedback (2/3) What We Heard Our Actions and Perspective PRSU Program Features Action: ● Program should incorporate ● Added two additional performance metrics—net bookings and operating income—to our financial and operating metrics FY 2022 PRSU program in addit
Slide 12: Key Actions in Response to Stockholder Feedback (3/3)
Key Actions in Response to Stockholder Feedback (3/3) What We Heard Our Actions and Perspective Annual Bonus Program ● Enhanced disclosure of our annual bonus program structure, non- ● Would like to better understand our financial financial goals, and how payouts are determined, in our FY2021 proxy
Slide 13: New Entrants Have Increased Competition for Experienced Executive Games Industry Talent
New Entrants to the Interactive Entertainment Space Have Increased the Competition for Experienced Executive Games Industry Talent *Note: King was acquired by Activision Blizzard in 2016; Bethesda (ZeniMax) was acquired by Microsoft in 2020. Competitors are based on a Western view only. 13
Slide 14: Board Approved an Enhanced Fiscal 2021 Annual Equity Award for Mr. Wilson
The Board Approved an Enhanced Fiscal 2021 Annual Equity Award for Mr. Wilson in May 2020 for the Following Key Reasons ● To drive transformational growth and long-term success ○ Mr. Wilson has the strategic vision necessary to transform EA into a digital interactive platform ○ The Board is committe
Slide 15: Corporate Governance
Corporate Governance Electronic Arts
Slide 16: Corporate Governance Highlights
Corporate Governance Highlights ● 25% Special Meeting Right ● Proxy Access. 3% / 3 years / greater of 2 directors or 20% of the Board ● Highly Engaged Lead Independent Director. Robust and well-defined duties ● Seven of Eight Board Nomineees are Independent ● Luis Ubinas elected Chair of Compensatio
Slide 17: Board Nominees Reflect and Support Oversight of Long-term Strategy
Board Nomineees Reflect and Support Oversight of Long-term Strategy and Evolving Needs Range of Tenure Diversity of Skills 0-5 Board reflects diversity in experience, 5 directors (62%) skills, race, ethnicity, age and gender: 6-10 female and/or from underrepresented 62% > 10 communities ● Executive
Slide 18: Corporate Responsibility
Corporate Responsibility 18
Slide 19: Corporate Responsibility
Corporate Responsibility Actions and Highlights ● Published inaugural Impact Report in November 2020. Aligned with SASB standards ● Publicly disclosed race/ethnicity/gender representation ● Leveraged Inclusion Framework to help studios develop more inclusive characters and stories across our games a
Slide 20: Thank You!
Thank You! 20