General Electric said Chief Executive Larry Kolb has agreed to cut his potential compensation by about $10 million this year, responding to shareholder concerns about changes to
The Board of Directors to plan CEO salaries in 2020.
In August 2020, the GE board reviewed Mr. Kolb’s contract, extending it to 2024 and awarding him a private equity grant during the year he was It is valued at more than $100 million By the end of 2020. Asset managers described awards as poorly correlated with company performance, which they described as lagging behind GE’s peers.
Approximately 58% of the shares of General Electric were Vote Against Board Compensation Practices At last year’s annual meeting. It is rare for shareholders to refrain from supporting such votes in large corporations.
For 2022, Mr. Culp is expected to receive a $5 million stock award, instead of the $15 million stipulated in his revised contract, if he and the company meet performance targets. Exceeding these goals or falling short will increase or decrease the prize, respectively.
General Electric said in its annual agent statement that GE reduced Mr. Kolb’s potential 2022 salaries after discussions with most of its major shareholders last year.
“There has been shareholder concern about the timing, size and structure of the 2020 retention grant that was offered as part of the extension,” GE said in its filing, along with shareholder support for Mr. Kolb’s leadership. The company also said that it does not plan to make similar changes to its CEO’s salaries in the coming years.
On Thursday, GE reported a $22.7 million payment to Mr. Kolb for 2021, including a $4.2 million cash bonus and $2.5 million salary plus $15 million bonus cash. GE said in the filing that the stock award was presented prior to the 2021 annual meeting.
His 2021 salary is down from the $73.2 million GE reported paying him in 2020, but it’s roughly matching the $24.6 million paid in 2019, the first full year for Mr. Culp to head the company, stock filings show.
GE said in its proxy that the board will also limit its use of discretion when setting executive bonuses, after shareholders expressed concerns that GE used discretion in 2020 to award bonuses rather than tying them to performance measures.
Culp’s 2021 bonus was paid out 112% of the target, the company said, reflecting better-than-target free cash flow numbers and margin expansion, worse-than-target revenue growth, as well as a fine based on company-wide safety metrics.
A GE spokeswoman said the company spoke with investors who own about half of the company’s shares, and three-quarters of those held by institutional investors, after the vote on the principle of payment failed.
write to Theo Francis at [email protected]
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It appeared in the March 18, 2022, print edition as “GE Cuts CEO Pay after shareholder protest”.