SiliconBeat

The compensation committee at Electronic Arts is evidently not as confident about the companies near-term prospects as they were last year, judging by their decision March 18 to extend the performance period for some restricted stock awards it doled out to executives at the senior vice president level and above last May.

According to the original agreement, the awards were to vest Read the rest of this entry »

Computer game-maker Electronic Arts said it expects sales and profits for its 2009 fiscal year ending next March to be below its previous guidance given on Oct. 30, when the company said it expected sales to come in “between $4.9 and $5.15 billion”, or 33 to 41 percent higher than the year before. Profit was forecast to range between a loss of 21 cents to a gain of 7 cents per diluted shares.

The downturn was primarily the result of Read the rest of this entry »

Electronic Arts and Take-Two Interactive, the maker of the popular Grand Theft Auto video games that EA tried unsuccessfully to buy prior to removing its bid for the company last week, signed a “confidentiality agreement” that prohibits both companies from “publicly disclosing the status or terms of any discussions or negotiations between EA and Take-Two unless EA or Take-Two notifies the other that it is terminating discussions.”

Last week, EA said it would now need to Read the rest of this entry »

Take-Two Interactive Software says it reached agreement with the Federal Trade Commission to “appropriately limit the scope of its production of information and witnesses” in connection with the FTC’s review of San Mateo-based Electronic Arts’ bid to buy the New York developer of entertainment software, including the blockbuster hit Grand Theft Auto IV, according to a
filing the company made with the SEC today. Read the rest of this entry »

Earlier this month, the board of directors for entertainment software developer Electronic Arts adopted what it called a “Key Employee Continuity Plan,” which seems to guarantee the continuity of compensation for key employees prior to and after some “change in control” event, say a take-over, hostile or otherwise.

No surprise, of course, that it names only executive-level employees who might lose their job “without cause” within two months before such an event, or for up to a year after such an event, even if the executive quits for “good cause.”

The executives are classified into four “tiers:” tier 1 is really just numero uno, the
chief executive; tier 2 includes presidents, executive vice presidents and the chief financial officer; tier 3 is made up of senior vice presidents; and tier 4 includes vice presidents.

As usual, them that gots the most gets the most. The tiers kick-in when lump sum severance payments are calculated by taking a year’s worth of salary and bonus and multiplying it by a pre-ordained factor: with tier 1 and 2 executives getting 1.5 times salary and bonus, tier 3 executives getting 1 times salary and bonus, and tier 4 executives getting half a year’s salary and bonus.

The compensation caste system even works its way down to any medical payments paid in the wake of terminations, with tier 1 and 2 employees getting eighteen months of health care benefits paid for, while tier 3 employees would get 12 months and tier 4 employees six months worth.

This is compensation designed by executives for executives. What sense does this make, business or otherwise? Surely, the highest paid executives at the company are the employees who would be most able to afford paying their health care premiums after losing their jobs, right?