Summary
This 8-K filing from Electronic Arts Inc. (EA) on May 20, 2019, primarily details the approval of executive compensation arrangements for the upcoming fiscal year. Key updates include the approval of performance-based restricted stock unit (PRSU) awards for senior vice presidents and above, expected to be granted in June 2019. Additionally, the company adopted a Bonus Plan Addendum for Fiscal Year 2020, outlining bonus structures for the CEO and other eligible employees.
Key Highlights
- 1Electronic Arts Inc. (EA) approved performance-based restricted stock unit (PRSU) awards for employees at the senior vice president level and above, expected to be granted on June 17, 2019.
- 2The terms of the PRSU agreements for fiscal year 2020 grants remain unchanged from the prior fiscal year.
- 3The Board of Directors approved the Bonus Plan Addendum for Fiscal Year 2020, which sets guidelines for bonus payouts.
- 4For fiscal year 2020, the bonus pool for eligible employees (excluding the CEO) will be funded 50% by company financial performance (25% non-GAAP EPS, 25% non-GAAP net revenue) and 50% by business performance and achievement of measurable objectives.
- 5The CEO's bonus award for fiscal year 2020 will be determined by the Board based on a 60% financial performance (non-GAAP net revenue, gross profit, operating expenses, non-GAAP EPS, operating cash flow) and 40% strategic/operational objectives assessment.
- 6The CEO's bonus payout is capped at the lesser of 300% of his target bonus or $5 million, with no bonus payable if the company's net income falls below a certain threshold.
- 7All approved bonus and PRSU agreements are filed as exhibits to the 8-K filing.
Frequently Asked Questions
The filing announces the approval of performance-based restricted stock unit (PRSU) awards for senior executives and the adoption of the Fiscal Year 2020 Bonus Plan Addendum, which outlines the structure for executive and employee bonuses.
For most eligible employees, 50% of the bonus pool funding for fiscal year 2020 will be based on company financial performance, specifically 25% on non-GAAP earnings per share and 25% on non-GAAP net revenue. The other 50% will be based on business performance.
Yes, the CEO's bonus payout is capped at the lesser of 300% of his target bonus or $5 million. Furthermore, no bonus will be payable if the company's net income falls below a predetermined threshold.
The performance-based restricted stock unit awards are expected to be granted on June 17, 2019.