Shareholders have been advised to vote against the reappointment of the chairman of computer games maker Electronic Arts Inc., the company behind international hits such as The Sims and the FIFA football simulation game.
Advisors PIRC (Pensions & Investment Research Consultants Ltd) told shareholders in a note that non-executive chairman, Lawrence F. Probst III, fails to meet independence criteria having served as chief executive and then executive chairman at the company.
PIRC said: “Non-executive chairman, Lawrence F. Probst III, is not considered independent as he was previously chief executive officer of the company from 1991 to April 2007 and executive chairman from March 2013 to December 2014. There is insufficient independent representation on the board.”
PIRC also advised against the reappointment of non-executives Vivek Paul, Jay Hoag, Leonard Coleman and Richard Simonson for each serving on the board for more than nine years.
The investor body has also taken a stance against executive pay, advising shareholders to oppose an advisory vote. The advisers say the bonus for Electronic Arts chief executive Andrew Wilson was too high, and there is also concern at the vesting period for performance-related stock units (PRSUs).
“Rewarded executive compensation is below peer group averages,” said PIRC. “However, annual cash awards were considered excessive; the CEO’s actual bonus was $2.69m, representing 248% of his base salary (200% maximum is considered as acceptable practice).”
There are concerns that PRSUs vest upon the first, second and third anniversaries of the date of grant. A five-year vesting period is considered best practice.
Electronic Arts’ annual general meeting takes place on August 3.