Andrew Wilson became the CEO of Electronic Arts Inc. (NASDAQ:EA) in 2013. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Andrew Wilson's Compensation Compare With Similar Sized Companies?
According to our data, Electronic Arts Inc. has a market capitalization of US$28b, and pays its CEO total annual compensation worth US$18m. (This figure is for the year to March 2019). That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$1.2m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
It would therefore appear that Electronic Arts Inc. pays Andrew Wilson more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Electronic Arts, below.
Is Electronic Arts Inc. Growing?
Over the last three years Electronic Arts Inc. has grown its earnings per share (EPS) by an average of 8.1% per year (using a line of best fit). It achieved revenue growth of 3.8% over the last year.
I'm not particularly impressed by the revenue growth, but the modest improvement in EPS is good. Considering these factors I'd say performance has been pretty decent, though not amazing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Electronic Arts Inc. Been A Good Investment?
With a total shareholder return of 16% over three years, Electronic Arts Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Electronic Arts Inc., and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. Considering this, we wouldn't want to see any big pay rises, although we'd stop short of calling the CEO compensation unfair. Whatever your view on compensation, you might want to check if insiders are buying or selling Electronic Arts shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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