EA hits out at Riccitiello pay reports

Electronic Arts has responded to what it claims is an erroneous article by the Associated Press regarding the compensation package for its CEO, John Riccitiello.

The AP report claimed earlier this week that Riccitiello had scooped USD 11.1 million in the year ending March 31, 2009, an apparent decline of 36 per cent over the previous year.

However, EA has told GamesIndustry.biz that the calculations - particularly those pertaining to shares awards - are "factually incorrect" and that Riccitiello wasn't in fact awarded "any options or restricted stock at all".

"Their calculation is inaccurate," a spokesperson for the company explained. "It includes value of performance-based shares that will vest over several years - and only if high performance hurdles are met.

"As reported, it appears as though those shares are compensation for this year, which they are not. Accurately, they are an opportunity to earn shares over the coming years if company objectives are met."

A recent financial release, on which the AP report was based, noted that Riccitiello's basic salary rose by 6.7 per cent to USD 800,000 - a rise which the company board's Compensation Committee decided upon in order to "position his base salary closer to a competitive level relative to similar positions in the Peer Group and an evaluation of his individual performance."

That Peer Group of companies, which includes the likes of Activision, eBay and Yahoo, is designed to act as a broad comparison and ensure that EA remains able to attract key talent.

"The spirit of those shares is to link executive compensation to the achievement of long term financial objectives," the spokesperson continued. "That programme, which is in place for all of EA's top executives, is designed to align interests of shareholders and management."

The financial statement also revealed that Riccitiello received an annual cash bonus of USD 400,000, which was half of his possible total, and based - the Committee said - on personal performance rather than company performance.

It was also noted that all of the named executive officers, which also includes EA Games president Frank Gibeau and EA Sports president Peter Moore, will see their pay frozen for the next financial year.

The company's stock closed up 3 per cent today at USD 22.99.