EA chief's 2009 compensation valued at $11.1M
May 29, 2009
John Riccitiello, the chief executive of Electronic Arts Inc., saw the value of his compensation package decline 36 percent in fiscal 2009 - to $11.1 million, according to an Associated Press calculation of figures disclosed in a regulatory filing - in a challenging year for the video game publisher.
According to a proxy statement EA filed with the Securities and Exchange Commission Wednesday, Riccitiello received a base salary of $793,749 in the fiscal year that ended in March. This was a roughly 6 percent increase from his fiscal 2008 salary.
Riccitiello, 49, became CEO of Redwood City, Calif.-based EA in April 2007. Since then, he's been focused on slashing spending and improving the quality of the company's games. EA said earlier this month that the company is ahead of schedule on its cost-cutting measures that include eliminating 1,100 jobs.
Tough financial times for the software giant
Riccitiello's performance-based cash bonus declined 36 percent last year, to $400,000 from $625,350. His perks totaled $1,308, for insurance premiums and physical fees, down 67 percent from $3,958 last year. The CEO was also awarded restricted stock and options valued by the company at $9.9 million on the date they were granted. This was a 38 percent drop from fiscal 2008.
The Associated Press compensation formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.
EA, like most video game publishers, makes the bulk of its money during the holiday season. But its games failed to live up to expectations, and the company had a weak holiday quarter even as consumers continued to spend money on video games while cutting back elsewhere. In February, Riccitiello acknowledged that a a significant portion of EA's holiday quarter shortfall, as well as the company's sharply reduced outlook for the remainder of the year, had to do with EA's own performance.
In the end, EA reported a net loss of more than $1 billion for fiscal 2009, though much of this was due to special items. On an adjusted basis, the year's loss was 30 cents per share. Revenue, meanwhile, climbed 15 percent to $4.21 billion.
Revenue shortfalls and high operating costs plagued the company's results last year. And EA was late jumping on the Wii bandwagon even as the $250 console from Nintendo continued to outsell its rivals, the Xbox 360 and the PlayStation 3.
Fiscal 2009 also saw EA's plan to buy "Grand Theft Auto" publisher Take-Two Interactive Software Inc. fizzle, after the two companies couldn't agree on a price.
Analysts say that EA's sizable cost cuts and a streamlined focus on hit games should put the company in a better position this year.
EA's shares lost nearly 64 percent of their value during the fiscal year, to close at $18.19 at the end of March. The stock has gained more than 22 percent since, closing Wednesday at $22.14.
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