EA Introduces Caps on Executive Cash Severance Packages

Electronic Arts has implemented a policy capping the cash component of executive severance packages at 2.99 times the executive's base salary and annual bonus targets. This move follows a shareholder proposal earlier in the year aimed at addressing the company's history of generous executive payouts. Although the policy does not limit stock-based severance packages, it marks a step towards greater fiscal responsibility. According to recent filings, the cap will apply to all new employment, severance, or separation agreements with executive officers. Notably, while the policy reduces cash payouts, stock-based compensation can still result in substantial severance deals. For instance, CEO Andrew Wilson's potential severance package includes $7.8 million in cash, which is below the 2.99x threshold, but also $27 million in stock, significantly exceeding that limit. The introduction of this policy reflects EA's efforts to address shareholder concerns over executive compensation, which have been ongoing for several years.