EA is making "substantial changes" to executive pay after negative shareholder feedback.
In a regulatory filing ahead of a say-on-pay vote set for August, EA said it had "considered stockholder feedback" and made "substantial changes" to executive pay for the 2022 financial year.
Last year's say-on-pay vote saw 170.89m votes against the company's plan versus just 59.6m votes for.
While the vote was merely advisory, it signalled discontent among shareholders about the amount and frequency of compensation awarded to CEO Andrew Wilson and EA's other executives.
Last year, two months before the say-on-pay vote, EA's board of directors approved a $30m equity award to Wilson for the 2021 fiscal year. That was up from $15m for the 2020 fiscal year.
"The Board of Directors believed that making this larger than normal grant on a one-time basis was in the best interests of stockholders given the heightened competition for top executive talent and the need to continue to retain and motivate Mr. Wilson," EA said.
CtW Investment Group, which has also applied pressure to Activision Blizzard over its executive pay packages, said last year that EA "is becoming a serial granter of special awards". "EA appears to be developing a special award grant addiction," CtW said ahead of the 2020 vote.
EA pointed out its stock price rose from $27.60 when Wilson became CEO in 2013 to $117.12 the day the award was approved last year.
Despite this, EA's shareholders weren't happy with the compensation - and voted accordingly. And so, with this year's say-on-pay vote looming, the company has announced changes. In May this year, EA's board approved a fiscal 2022 annual equity award for Wilson targeted at $18m, at least 60 percent of which is performance-based. This was granted on 16th June, EA said.
According to GamesIndustry.biz, the proposals for the 2021 financial year put Wilson on course to earn $39.2m, which is still an 83 percent increase on the $21.4m he received the previous financial year.
"We traditionally have received strong support for our say-on-pay proposals including 94 percent, 86 percent, and 96 percent of the votes cast in our favor at the 2019, 2018 and 2017 annual meetings, respectively," EA said in its proposal.
"We were disappointed that the 2020 advisory say-on-pay proposal did not receive majority support. In response to the 2020 say-on-pay vote, EA's management and the Compensation Committee took decisive steps to respond to the vote outcome and stockholder feedback."
To that end, no special equity awards were granted in fiscal 2021, and no special equity awards outside of EA's regular compensation program will be granted in fiscal 2022 to any of EA's named executive officers. More broadly, EA is now employing a "pay-for-performance" approach that's "designed to reward the achievement of company-wide financial and business objectives, individual performance, and the creation of long-term value for stockholders, while also recognising the dynamic and highly competitive nature of our business and the market for top executive talent".
Essentially, EA is making a pitch here to shareholders ahead of the upcoming say-on-pay vote, and while it's advisory only, the company will not want to go ahead with its compensation package without the blessing of its stakeholders.
"Although the vote is advisory and non-binding, our Board of Directors and Compensation Committee value the opinions of our stockholders and will consider the outcome of the vote, along with other relevant factors, in evaluating the future compensation of our named executive officers," EA said.
The change in pay at EA comes at a time of increased scrutiny on executive compensation at big video game companies. This week, Activision Blizzard boss Bobby Kotick's $155m pay package was approved by shareholders - by just 54 percent.
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