Gaming giant Electronic Arts has been put on blast by one of its investors for the lucrative pay packages that the publisher gives to some of its highest-ranking executives.

　　Dieter Waizenegger, the director of The CtW Investment Group, said in a notice that EA has "gone too far in terms of executive pay," and is calling on shareholders to vote against the "Say-On-Pay" proposal for EA's upcoming shareholder meeting on August 6. Waizenegger has also called out Activision Blizzard CEO Bobby Kotick for his huge pay and sought changes within the Call of Duty company.

　　Specifically, Waizenegger says EA CFO Blake Jorgensen and CTO Kenneth Moss are paid too much, and it's an especially poor practice, as EA is laying people off, Waizenegger said. EA is said to have laid off 4 percent of its total workforce in 2019.

　　"While shareholders have benefited from appreciation in the company's stock price over the long term, we believe that that does not permit the company to indiscriminately pay its executives," Waizenegger said.

　　Waizenegger said EA investors should know that EA has an "excessive" problem as it relates to the equity grants and other forms of compensation for its top executives. In short, EA has multiple bonus awards programs, and they are able to overlap, which is what Waizenegger takes issue with.

　　"In June 2017 (EA's fiscal year 2018), EA executives Blake Jorgensen and Kenneth Moss, among others, received substantial equity awards on top of their already above-median (the company benchmarks equity compensation at the 75th percentile of its peer group) compensation levels that year: Jorgensen received an additional $10 million special equity grant on top his $6.5 million annual grant, and Moss received an additional $7 million on top of his $5.5 million dollar annual award," Waizenegger said.

　　Waizenegger took issue with these payments in part because they were greater than the executive's annual equity awards. "The awards were based on net revenue and free cash flow targets that the company did not disclose, citing 'competitive concerns,'" Waizenegger said.

　　In November 2019 (EA's fiscal year 2020), EA also paid Jorgensen a special award of $7.5 million on top of his annual $7.5 million grant, while Moss got $5.5 million on top of his $5.5 million annual award, Waizenegger said.

　　"It is extremely rare that a company grants a special performance award while another special award performance period is still ongoing. These two executives now have two special awards outstanding at the same time, in addition to annual equity grant tranches," Waizenegger said. "Shareholders have increasingly expressed dissatisfaction with large awards granted in addition to the company's ordinary course executive pay program."

　　Waizenegger also took issue with how EA defines and defends these awards. EA says these bonus payments are made in part to help retain key executives, but Waizenegger said the company has gone too far by offering double awards on an overlapping basis.

　　"On the matter of retention, let us point out once again that these two executives already have one retention award outstanding from fiscal 2018 … why do they need two?" Waizenegger said. "The proxy does not discuss the company's rationale for granting these executives an additional special award on top of the one that is already outstanding. One would think one multimillion dollar retention award at a time would be enough."

　　Waizenegger went on to say that while he understands that attracting and retaining executives is an important part of any business, EA has gone too far in this case and is offering bonuses beyond the traditional "pay-for-performance" guidelines.

　　"On the matter of 'incentivizing' executives, we have repeatedly stated and continue to vehemently argue that the notion that executives need to be incentivized with pay above-and-beyond the ordinary course program is a complete fallacy in almost all cases," Waizenegger said. "In reality, executives are already well incentivized through a company's ordinary course executive pay program alone because they receive significant amounts of annual equity grants in the first place that appreciate in value when the company performs well."

　　Waizenegger pointed out that EA's stock value has climbed by almost 70 percent since December 2018, and executives are set for big paydays in their regular payment schemes. The extra pay program is excessive, Waizenegger said.

　　Also in the notice, Waizenegger said it's a particularly bad look for EA that, not long after the company announced layoffs at the end of its 2019 fiscal year, EA executives received their bonuses for fiscal 2020, including EA CEO Andrew Wilson who got a reported $4 million.

　　Waizenegger said it is "commendable" that Wilson and other executives gave up their bonuses during fiscal year 2019, but he also raised some concerns about how charitable this really was given EA's softer earnings results that year (which are tied to bonus payouts).

　　"In fiscal 2019, executives voluntarily forfeited their bonuses, which, while commendable, was mostly or entirely due to company's financial performance," he said. "It is very telling that the proxy does not even disclose what executives would have received on a formulaic basis if they had not forfeited their bonuses that year--shareholders are left to wonder how much, if any, bonus amounts executives would have ultimately earned."

　　Waizenegger went on to say that it is common for companies whose executives give up their bonuses to provide information about how much money this amounted to. However, EA apparently did not do this, and Waizenegger contends that Wilson and others didn't end up missing out on major payments.

　　"The absence of that disclosure in this case, coupled with EA's financial underperformance for that fiscal year, leads shareholders to conclude that the forfeited amount was most likely small to begin with, diminishing any altruistic motives surrounding the forfeiture," he said.

　　The long and short of Waizenegger's argument is that EA's executives are already paid well under their normal payment structures including bonuses and equity awards. EA has failed to explain why the second bonus payment is needed, Waizenegger said.

　　"Further, we believe executives should not receive multimillion dollar cash bonuses after laying off workers the prior fiscal year," Waizenegger said in his notice.