8-KLeadership ChangesExhibits & Filings

ELECTRONIC ARTS INC. 8-K Report, Executive Changes (Apr 29, 2008)

Filed April 29, 2008For Securities:EA

Summary

Electronic Arts Inc. (EA) filed an 8-K on April 29, 2008, detailing the adoption of the Electronic Arts Annual Bonus Plan (the "Plan"). This new plan, effective for the fiscal year ending March 31, 2009, replaces the previous Discretionary Bonus Program. The primary objective of the Plan is to attract, motivate, and retain talent by offering incentive compensation tied to the achievement of specific performance goals. Under the Plan, eligible employees, including executive officers (excluding those in product development), can receive cash bonuses. Bonus amounts are discretionary and contingent upon continued employment at the time of payout. The Compensation Committee administers the Plan, with the ability to amend or terminate it. Bonus determinations will be based on a combination of individual performance, company financial performance (measured by non-GAAP net income and revenue against pre-determined targets), and, for some groups, business unit performance. The structure includes defined thresholds for bonus payouts, with specific caps and adjustments for exceeding performance targets.

Key Highlights

  • 1Adoption of the new Electronic Arts Annual Bonus Plan (the "Plan"), effective for FY2009.
  • 2The Plan aims to attract, motivate, and retain employees through performance-based incentives.
  • 3Eligible participants include regular employees and executive officers, excluding product development staff.
  • 4Bonus payouts are discretionary and dependent on continued employment.
  • 5The Compensation Committee has broad administrative and interpretive authority over the Plan.
  • 6Bonus calculations will consider individual performance, company financial performance (adjusted non-GAAP net income and revenue), and business unit performance.
  • 7Specific performance achievement thresholds are defined, including a 0% payout below 85% achievement and varying calculation methods up to 120% and above.

Frequently Asked Questions

The main purpose of the new Plan is to attract, motivate, and retain eligible employees, including executive officers, by providing incentive compensation linked to the achievement of specific performance goals.

Generally, regular status employees of EA and its subsidiaries, including executive officers, are eligible, provided they do not perform product-development functions and are selected at the Company's discretion. Participation and any bonus payment are entirely discretionary.

Bonus amounts will be determined after the fiscal year-end and will be based on a participant's assigned target bonus (as a percentage of base salary), adjusted by performance. This includes the participant's individual performance, the Company's fiscal year financial performance (based on adjusted non-GAAP net income and revenue targets), and potentially the participant's business unit's performance.

Yes, for company or business unit performance, if achievement falls below 85%, no bonus payout is awarded for that measure, unless separately approved by the Compensation Committee. Between 85% and 120% achievement, the payout is based on the actual level. Above 120%, payouts are calculated at the actual level up to 120%, then at a two-to-one basis for percentages above 120%, with a cap of 200% for these measures.