EA is so pleased with progress, boss sees 19% rise in compensation
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EA is so pleased with progress, boss sees 19% rise in compensation

Andrew Wilson, Electronic Arts Inc.’s 42-year old CEO, had a great year last year. His total compensation rose by 19% from the previous year, comprised of a $1.08 million salary, $16.20 million in equity, and an annual cash bonus of $2.69 million. How can the company justify this 19% rise? On the basis of his performance leading the company into the future of video gaming. As it stands now, Electronic Arts is one of a handful of companies pioneering new technology and business models worldwide – and it’s being rewarded for it in the market.

Electronic Arts share price has risen 40% year-to-date

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SOURCE: Yahoo Finance

Electronic Arts – along with rivals Activision Blizzard and Take Two Interactive, also held in Dominion’s Global Trends Ecommerce Fund – recognized early that the future of video game deliveries were digital. High speed internet and increasingly powerful computers mean that it is possible to download games online, cutting out the need for a physical disk completely. There were added benefits to this digitization for both the game developers and the customer: games can be delivered much quicker online, costs kept down (for both parties), and the added convenience that is common to Ecommerce removed a critical barrier for video game sales: laziness. You can order games from your sofa now.

Take Two and Activision are also outperforming the market easily

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SOURCE: Yahoo Finance

Over the past 12 months, Electronic Arts has seen the benefit of the trend towards digitization, keeping a bigger portion of the revenue these sales generate as middlemen are squeezed out. Given the success it’s had with titles like FIFA 17 and Battlefield 1, that’s no small victory. It’s also aggressively pursued early gains in areas like esports, which many commentators think will be the industry’s next major growth driver.

Disclosure

Dominion holds Electronic Arts, Activision Blizzard, and Take Two Interactive in its Global Trends Ecommerce Fund.


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