In This Article:
Andrew Wilson has been the CEO of Electronic Arts Inc. (NASDAQ:EA) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Electronic Arts
Comparing Electronic Arts Inc.'s CEO Compensation With the industry
According to our data, Electronic Arts Inc. has a market capitalization of US$42b, and paid its CEO total annual compensation worth US$21m over the year to March 2020. We note that's an increase of 17% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$14m. Accordingly, our analysis reveals that Electronic Arts Inc. pays Andrew Wilson north of the industry median. What's more, Andrew Wilson holds US$20m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$1.2m | US$1.2m | 6% |
| Other | US$20m | US$17m | 94% |
| Total Compensation | US$21m | US$18m | 100% |
On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. Electronic Arts sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Electronic Arts Inc.'s Growth Numbers
Over the past three years, Electronic Arts Inc. has seen its earnings per share (EPS) grow by 5.5% per year. Its revenue is up 9.9% over the last year.
We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Electronic Arts Inc. Been A Good Investment?
With a total shareholder return of 28% over three years, Electronic Arts Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.