Electronic Arts hires former president to become the new CEO.
Game developer and publisher Electronic Arts announced that ex-President John Riccitiello will return to the company as the new Chief Executive Officer on April 2, replacing Larry Probst, who will continue his post as Chairman. Riccitiello departed in 2004 to co-found Elevation Partners, a private equity fund that partnered Bioware and Pandemic Studios in 2005. As CEO, Riccitiello will earn $750,000 annually and have the option to purchase 850,000 shares of Electronic Arts (ERTS).
The news came as a surprise to stock analysts, who have remained positive on company since Riccitiello left. Evan Wilson of Pacific Crest Securities said, "Electronic Arts has stumbled over the last two and one half years since he left. ... The stock has underperformed the rest of the publishers." Mike Hickey, an analyst at Janco Partners, has a "buy" rating on the stock and defends Probst's management. "Larry's done a good job over the last cycle and is well-respected. At some level there could be dissatisfaction the stock hasn't move higher." The general consensus appears to be that Riccitiello's return will have a positive effect on both the company and its lagging stock.