Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Appointment of Chief Financial Officer
On January 31, 2022, Electronic Arts Inc. ("EA") issued a press release
announcing that Chris Suh has been appointed Executive Vice President, Chief
Financial Officer of EA, effective March 1, 2022 (the "Effective Date"). Mr. Suh
will serve as EA's principal financial officer beginning on the Effective Date.
Mr. Suh, age 51, will join EA from Microsoft Corporation, where he has served in
various roles since 1996. Most recently, Mr. Suh has served as Corporate Vice
President and Chief Financial Officer of Microsoft's Cloud + AI group, a role he
assumed in January 2018. His previous roles at Microsoft include serving as
General Manager, Investor Relations, from January 2013 to January 2018; and
General Manager, Finance, Worldwide SMB and Channel, from August 2008 to January
2013. Mr. Suh also serves on the Board of Directors and Audit Committee of
Cardlytics.
Mr. Suh's deep experience in a rapidly growing and in-demand technology sector,
particularly in the areas of cloud services, AI and advanced technology
development, his extensive investor relations background, together with his
leadership in all core financial aspects of a large public company made him the
best candidate to help EA deliver its long-term strategy.
In connection with his appointment as Executive Vice President and Chief
Financial Officer, EA entered into an offer letter with Mr. Suh setting forth
the terms of his employment and compensation. Under the terms of the offer
letter, Mr. Suh's annual base salary will be $700,000, and beginning with EA's
fiscal year ending March 31, 2023 ("fiscal year 2023"), he will be eligible for
an annual cash bonus with a target bonus opportunity equal to 100% of his base
salary. Funding for Mr. Suh's annual cash bonus will be based 60% on company
financial performance and 40% on company business performance, in each case,
based on pre-established goals approved by the Compensation Committee (the
"Compensation Committee") of EA's Board of Directors. The actual bonus award, if
earned, will also be based on achievement against individual performance
objectives.
EA also will provide Mr. Suh with certain new hire compensation to make him
whole for the estimated value of compensation that he will forfeit upon his
departure from his prior employer, induce him to accept employment with EA,
incentivize long-term performance, and retain him. The new hire compensation
consists of a one-time cash sign-on bonus and a one-time new hire equity award,
as described below.
New Hire Sign-On Bonus: EA will pay Mr. Suh a one-time cash sign-on bonus of
$4,000,000 within thirty days following the Effective Date. The amount of the
sign-on bonus is intended to make Mr. Suh whole for:
• the estimated value of unvested equity awards that were due to vest over
the next 12 months that he will forfeit upon his departure from his prior
employer; and
• the lost opportunity to receive his annual cash bonus from his prior
employer given the timing of Mr. Suh's departure.
Mr. Suh will not be eligible to participate in EA's annual cash bonus program
for fiscal year 2022 and payment for EA's fiscal year 2023 annual cash bonus, if
earned, will not be made until June 2023. The sign-on bonus will be subject to
full repayment if Mr. Suh voluntarily resigns from EA prior to the first
anniversary of the Effective Date, and pro-rata repayment if he voluntarily
resigns on or after the first anniversary and prior to the second anniversary of
the Effective Date.
New Hire Equity Award: Mr. Suh will be granted a one-time new hire equity award
consisting of restricted stock units ("RSUs") with a grant date value of
$3,000,000, and performance-based restricted stock units ("PRSUs") with a target
grant date value of $3,000,000. It is expected that the new hire equity award
will be granted on EA's first regularly scheduled grant date after the Effective
Date. The structure of the new hire equity award was intended to put a
significant portion of Mr. Suh's compensation at risk, in order to align with
the interests of our stockholders and to promote long-term retention in our
highly competitive industry and geographic area.
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The grant date value of the award was determined in consideration of the
following factors:
• the estimated value of the unvested equity awards that would have vested
in years after 2022 that Mr. Suh will forfeit when he joins EA;
• the market compensation paid to chief financial officers among the peer
group of companies that the Compensation Committee references for
determining executive compensation; and
• the competitive landscape in order to induce Mr. Suh to join EA in light
of alternative opportunities that he was considering prior to accepting
EA's offer.
Subject to Mr. Suh's continued employment with EA on the applicable vesting
dates, the RSUs will vest over three years, with one-third of the RSUs vesting
on the first anniversary of the grant date and one-sixth of the RSUs vesting
every six months thereafter until the RSUs are fully vested. The PRSUs will be
subject to vesting terms, which are expected to be substantially similar to the
structure of the performance-based restricted stock unit awards granted in June
2021 to EA's named executive officers, beginning with the fiscal year 2023
performance period. The new hire equity award will be granted under EA's 2019
Equity Incentive Plan (the "Equity Plan") and will be subject to the terms of
the Equity Plan and the applicable RSU and PRSU award agreements. Mr. Suh is
expected to participate in EA's standard annual equity program for executive
officers beginning with the fiscal year 2023 performance period, on the same
schedule and cadence as EA's other named executive officers. It is expected that
going forward, Mr. Suh's annual equity award will consist of 60%
performance-based restricted stock units and 40% time-based restricted stock
units.
Mr. Suh will be eligible to participate in employee benefit plans and
arrangements generally available to EA's U.S. employees and similarly-situated
senior executives of EA from time to time. In addition, EA will provide Mr. Suh
with relocation benefits to assist Mr. Suh and his family with relocation to the
San Francisco Bay Area.
The foregoing description of Mr. Suh's compensation arrangements under the offer
letter is qualified in its entirety by reference to the offer letter, which is
filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by
reference herein.
There are no arrangements or understandings between Mr. Suh and any other
persons, pursuant to which he was appointed as Chief Financial Officer. There
are no family relationships between Mr. Suh and any director or executive
officer of EA. Mr. Suh has not engaged in any related person transaction (as
defined in Item 404(a) of Regulation S-K) with EA.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description of Exhibit
10.1 Offer Letter for Employment at Electronic Arts Inc. to Chris Suh,
dated January 14, 2022*
99.1 Press Release dated January 31, 2022 announcing Chris Suh's
appointment as Executive Vice President and Chief Financial Officer of
Electronic Arts Inc.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
* Management Contract or compensatory plan or arrangement
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