Electronic Arts proposes new stock compensation plan

Iria · Jul 6, 2006, 12:38 AM

Source: Ars Technica
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Electronic Arts has come a long way since its founding in 1982 by game pioneer Trip Hawkins. As of 2005, it had grown into the largest third-party game publisher, with revenues of over US$3 billion. The company grew rapidly through dominating the sports game market (including acquiring exclusive contracts with leagues such as the NFL), acquiring smaller studios, and obtaining licenses to popular IP such as the Harry Potter series.

While the company's growth has been impressive, its recent stock performance has not. From a high of nearly US$70 in March 2005, the stock has dropped to its current value of US$42.81. To address the problem of underwater stock options, the company has proposed a new plan that will offer top executives additional shares and options. According to a proxy statement issued by the company, "underwater options may not be sufficiently effective as performance and retention incentives" and the company needs to "maintain competitive employee compensation and incentive programs that will assist us to motivate and retain our employees."

Jul 6, 2006, 12:38 AM	#1
Iria DriverHeaven Extreme Member Join Date: Apr 2004 Posts: 7,275 Rep Power: 89	Electronic Arts proposes new stock compensation plan Source: Ars Technica _________ Electronic Arts has come a long way since its founding in 1982 by game pioneer Trip Hawkins. As of 2005, it had grown into the largest third-party game publisher, with revenues of over US$3 billion. The company grew rapidly through dominating the sports game market (including acquiring exclusive contracts with leagues such as the NFL), acquiring smaller studios, and obtaining licenses to popular IP such as the Harry Potter series. While the company's growth has been impressive, its recent stock performance has not. From a high of nearly US$70 in March 2005, the stock has dropped to its current value of US$42.81. To address the problem of underwater stock options, the company has proposed a new plan that will offer top executives additional shares and options. According to a proxy statement issued by the company, "underwater options may not be sufficiently effective as performance and retention incentives" and the company needs to "maintain competitive employee compensation and incentive programs that will assist us to motivate and retain our employees."