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
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

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) as a result of repeated earnings disappointments and slumping sales.

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

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,485.69 -15.96 -0.10%
S&P 500 1,877.33 +1.94 0.10%
NASDAQ 4,142.3760 +15.4090 0.37%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs