Summary
This 8-K filing from Electronic Arts Inc. (EA) on July 11, 2017, details the adoption of the Bonus Formula Addendum for the fiscal year ending March 31, 2018 (Fiscal Year 2018 Addendum). This addendum outlines the bonus structure for eligible employees, including the Chief Executive Officer (CEO). While generally similar to the prior year's addendum, a key change is the introduction of a cap for the CEO's bonus payout, which may not exceed the lesser of 300% of his target bonus or $5 million. This adjustment to the CEO's potential bonus payout is a significant point for investors, as it introduces a defined upper limit to a portion of executive compensation. The Compensation Committee and the Board will use this addendum as a guideline for determining bonus awards and potential discretionary payments to named executive officers, emphasizing a structured approach to incentive compensation.
Key Highlights
- 1Electronic Arts Inc. (EA) adopted a Bonus Formula Addendum for Fiscal Year 2018, effective July 9, 2017.
- 2The addendum applies to eligible employees of EA and its subsidiaries.
- 3A new provision caps the CEO's bonus award payout at the lesser of 300% of his target bonus or $5 million.
- 4The terms of the Fiscal Year 2018 Addendum are substantially similar to the previous fiscal year's addendum.
- 5The Compensation Committee and Board will use this addendum as a guideline for determining bonus awards for named executive officers.
- 6The filing includes Exhibit 10.1, which is the EA Bonus Plan Fiscal Year 2018 Addendum, classified as a management contract or compensatory plan.