This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Electronic Arts Opens Employee Stock Spigot

Electronic Arts (ERTS) has been a crummy investment in recent years, but don't worry, help could be on the way -- if you're an insider.

The video game software company plans to allow employees and executives to exchange their stock options that are currently underwater because of the stock's decline for full shares of stock. Better yet for a select group of "key employees," which include EA's top executives, the company plans to hand out additional shares of stock and options as "retention awards."

EA's "underwater options may not be sufficiently effective as performance and retention incentives," the company said in its proxy statement filed on Friday, in which it outlined its plan. "We believe that to enhance long-term stockholder value we need to maintain competitive employee compensation and incentive programs that will assist us to motivate and retain our employees."

In order to exchange the options, the company will need get shareholders to approve the plan at its upcoming annual meeting, which will be held on July 27. Although the company doesn't need shareholder approval for the retention awards, it is separately asking investors to approve a sizeable increase in its employee stock grant plan that will allow for future grants of restricted shares.

But it's an open question about how accommodating -- and sympathetic -- shareholders will be.

That's in part because, with EA's stock down 18% over the last two years, longtime shareholders have themselves been suffering. The entire sector has been off of late due to a difficult transition to new video-game technology. But EA's shares are off to a greater extent than rivals such as THQ (THQI) and Activision (ATVI - Get Report) as a result of repeated earnings disappointments and slumping sales.

EA closed Friday down 43 cents, or 1%, to $43.04.
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
THQI $0.31 0.00%
ATVI $32.88 0.92%
AAPL $111.79 0.17%
FB $94.12 -0.15%
GOOG $652.30 0.87%


Chart of I:DJI
DOW 17,081.89 -49.97 -0.29%
S&P 500 2,014.89 +15.91 0.80%
NASDAQ 4,796.6090 -42.0340 -0.87%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs