View Annual Report
Total Page:16
File Type:pdf, Size:1020Kb
Electronic Arts Inc. Fiscal Year 2019 Proxy Statement and Annual Report Proxy Statement Notice of 2019 Annual Meeting and Proxy Statement [THIS PAGE INTENTIONALLY LEFT BLANK] Electronic Arts Inc. Notice of 2019 Annual Meeting of Stockholders DATE: August 8, 2019 TIME: 2:00 p.m. (Pacific) PLACE: ELECTRONIC ARTS’ HEADQUARTERS Building 250* 209 Redwood Shores Parkway Redwood City, CA 94065 * Please note: Building 250 is located on the headquarters’ campus at 250 Shoreline Drive Proxy Statement MATTERS TO BE VOTED UPON: Agenda Item Board of Directors Recommendation 1. The election of nine members of the Board of Directors to hold office FOR ALL for a one-year term. 2. Advisory vote on the compensation of our named executive officers. FOR 3. Ratification of the appointment of KPMG LLP as our independent public registered accounting firm for the fiscal year ending March 31, FOR 2020. 4. Approve our 2019 Equity Incentive Plan. FOR 5. Amend and restate our Certificate of Incorporation to permit stockholders holding 25% or more of our common stock to call special FOR meetings. 6. To consider and vote upon a stockholder proposal, if properly presented at the Annual Meeting, to enable stockholders holding 15% AGAINST or more of our common stock to call special meetings. 7. Any other matters that may properly come before the meeting. Any action on the items of business described above may be considered at the 2019 Annual Meeting of Stockholders (the “Annual Meeting”) at the time and on the date specified above or at any time and date to which the Annual Meeting may be properly adjourned or postponed. Stockholders of record as of the close of business on June 14, 2019 are entitled to notice of the Annual Meeting and to attend and vote at the Annual Meeting. A live audio webcast of the Annual Meeting will also be made available at http://ir.ea.com. Your vote is important. You do not need to attend the Annual Meeting to vote if you have submitted your proxy in advance of the meeting. Whether or not you plan to attend the Annual Meeting, we encourage you to read this Proxy Statement and submit your proxy or voting instructions as soon as possible, so that your shares may be represented at the Annual Meeting. You may vote on the Internet, in person, by telephone, or, if you requested to receive printed proxy materials, by mailing a proxy card or voting instruction card. For specific instructions on how to vote your shares, please refer to the instructions on the Notice of Internet Availability of Proxy Materials (“Notice”) you received in the mail, the section titled “Commonly Asked Questions and Answers” beginning on page 67 of this Proxy Statement or, if you requested to receive printed proxy materials, your enclosed proxy card. Please note that this Proxy Statement, as well as our Annual Report on Form 10-K (the “Annual Report”) for fiscal year ended March 31, 2019, is available at http://ir.ea.com. By Order of the Board of Directors, Jacob J. Schatz Executive Vice President, General Counsel and Corporate Secretary [THIS PAGE INTENTIONALLY LEFT BLANK] TABLE OF CONTENTS Page 2019 PROXY STATEMENT SUMMARY AND HIGHLIGHTS .............................. 1 Fiscal 2019 Summary of EA’s Business ............................................. 1 Executive Compensation Highlights ................................................. 2 Board Nominees ................................................................ 3 Board Diversity and Refreshment .................................................. 4 Corporate Governance Highlights and Report ........................................ 5 Corporate Social Responsibility .................................................... 5 BOARD OF DIRECTORS AND CORPORATE GOVERNANCE ............................ 7 Director Biographies ............................................................. 7 Director Independence ........................................................... 10 Board of Directors, Board Meetings and Committees .................................. 10 Annual Board and Committee Self-Evaluations ....................................... 12 Proxy Statement Compensation Committee Interlocks and Insider Participation ........................... 12 Consideration of Director Nominees ................................................ 12 Global Code of Conduct and Corporate Governance Guidelines ......................... 13 Oversight of Risk Issues .......................................................... 13 Insider Trading, Anti-Hedging and Anti-Pledging Policies ............................... 14 Related Person Transactions Policy ................................................ 14 Certain Relationships and Related Person Transactions ................................ 15 Director Attendance at Annual Meeting .............................................. 15 Stockholder Communications with the Board of Directors ............................... 15 Other Business ................................................................. 15 Report of the Audit Committee of the Board of Directors ................................ 16 DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES ................... 18 Fiscal 2019 Director Compensation Table ........................................... 19 COMPENSATION DISCUSSION AND ANALYSIS ...................................... 21 Compensation Committee Report on Executive Compensation .......................... 34 EXECUTIVE COMPENSATION ...................................................... 35 Fiscal 2019 Summary Compensation Table .......................................... 35 Fiscal 2019 Grants of Plan-Based Awards Table ...................................... 38 Outstanding Equity Awards at Fiscal 2019 Year-End ................................... 39 Fiscal 2019 Option Exercises and Stock Vested Table ................................. 41 Potential Payments Upon Termination or Change in Control ............................ 41 Fiscal 2019 Pay Ratio ............................................................ 44 Equity Compensation Plan Information .............................................. 45 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ....... 46 PROPOSALS TO BE VOTED ON .................................................... 48 Proposal One: Election of Directors ................................................. 48 Proposal Two: Advisory Vote on the Compensation of the Company’s Named Executive Officers ...................................................................... 49 Proposal Three: Ratification of the Appointment of KPMG LLP, Independent Registered Public Accounting Firm ............................................................... 50 Proposal Four: Approval of Our 2019 Equity Incentive Plan ............................. 52 Proposal Five: Amend and Restate Our Certificate of Incorporation to Permit Stockholders Holding 25% or More of Our Common Stock to Call Special Meetings ................... 62 Proposal Six: Stockholder Proposal to Allow Stockholders Holding 15% or More of Our Common Stock to Call Special Meetings ........................................... 64 COMMONLY ASKED QUESTIONS AND ANSWERS .................................... 67 i [THIS PAGE INTENTIONALLY LEFT BLANK] In this Proxy Statement, we may make forward-looking statements regarding future events or the future financial performance of the Company. We use words such as “anticipate,” “believe,” “expect,” “intend,” “estimate,” “plan,” “predict,” “seek,” “goal,” “will,” “may,” “likely,” “should,” “could” (and the negative of any of these terms), “future” and similar expressions to identify forward-looking statements. In addition, any statements that refer to projections of our future financial performance, trends in our business, projections of markets relevant to our business, uncertain events and assumptions and other characterizations of future events or circumstances are forward-looking statements. These forward- looking statements are not guarantees of future performance and reflect management’s current expectations. Our actual results could differ materially from those discussed in the forward-looking statements. Please refer to the Annual Report for a discussion of important factors that could cause actual events or actual results to differ materially from those discussed in this Proxy Statement. These forward-looking statements speak only as of the date of this Proxy Statement; we assume no obligation to revise or update any forward-looking statement for any reason, except as required by law. 2019 PROXY STATEMENT SUMMARY AND Proxy Statement HIGHLIGHTS This summary highlights information contained in this Proxy Statement, and it is qualified in its entirety by the remainder of this Proxy Statement which was distributed and/or made available via the Internet to stockholders on or about June 21, 2019 along with the Electronic Arts Inc. Notice of 2019 Annual Meeting of Stockholders, Annual Report and form of proxy. You are encouraged to read the entire Proxy Statement carefully before voting. In this Proxy Statement, the terms “EA,” “we,” “our” and “the Company” refer to Electronic Arts Inc. FISCAL 2019 SUMMARY OF EA’S BUSINESS Fiscal 2019 was a year of intense competition in the video game industry. While there were many achievements this year that we are proud of, after generating strong financial results and robust stockholder returns from fiscal 2014 through fiscal 2018, we did not perform to our expectations during fiscal 2019. Given the Company’s fiscal 2019 financial performance, and