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AT&T investor General Electric rejects CEO pay plan



Shareholders at General Electric Co., Ltd.

give -2.45%

And AT&T Inc.

T 1.65%

It rejected the company’s executives’ compensation plans in a recent non-binding vote of blue chip companies that investors blamed on how they paid their leaders during the pandemic.

Nearly 58% of GE GE -2.45%

Shares were voted against the board’s remuneration practices, according to the first announcement at GE’s annual meeting on Tuesday. Less than half of the shares at AT & T’s meeting last week supported the telecom and media giant’s compensation plan, the company said on Friday.

The two widely held stocks add to the list of big, growing U.S. companies that failed to gain shareholder support for executive compensation plans this year. Such advisory voting was non-binding and seldom overwhelmed by shareholder support. But some institutional investors have used them this year to express their dissatisfaction with Starbucks. Corp

And Walgreens Boots Alliance Inc.,

Among others

GE and AT&T executives received a special stock award in 2020 that made them one of the top-earning business leaders last year ̵

1; a tough time when a pandemic disrupted businesses. Testing and getting millions of Americans hiring. The median CEO was paid $ 13.7 million in 2020, according to an April analysis of the Wall Street Journal.

Asset Manager Allianz Global Investors said the company’s supervisory board decided to vote on AT&T’s executive compensation plan. “It’s linked in performance,” said Allianz’s spokeswoman, adding that long-term incentive payments.

Shareholders have voted on compensation questions from eight companies on the Russell 3000 index, or about 4.2 percent of those who held the vote so far this year, compensation consulting firm Semler Brossy said in a report released last week. That’s twice the rate in the same period last year among the 191 companies holding votes so far.The average support for votes was 89% on the Russell 3000 and 87% for the S&P 500, both of which were below results. Average this time last year

Some of the votes were mistaken at Park Hotels & Resorts. Inc.,

18% of investors supported the executive compensation plan this year, while 30% of the votes supported the pay plan at Marathon Petroleum. Corp

Companies disclosed in the latest regulatory filing

The Covid-19 outbreak left investors more informed about the quality of the company’s management, at least during the crisis, said Jie Cai, a finance professor at Drexel University who studies corporate governance and compensation. Get more and more signs of what their managers’ skills are, they may reward good people and punish the bad, ”he said.

Although voting is not binding, companies often respond to poor performances by adjusting their pay practices in the coming years, Professor Cai said. “The publicity is bad,” he said. There is definitely pressure “

GE chairman and chief executive Larry Culp was paid $ 73.2 million from the Boston company, according to the securities filing. Over the summer, the GE board revised the CEO contract, extending it through 2024 and giving Mr Culp more than $ 100 million in exclusive shares. Give up the remaining salary in April and also reject the cash bonus for this year.

GE’s vote came after a campaign against the compensation vote, with proxy advisers Glass Lewis & Co. and Institutional Shareholder Services advising investors to withhold their support.

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Investment manager Neuberger Berman warned GE ahead of time to suspend support due to Mr. Culp’s contract extension, arguing that Mr Culp’s pay should be reduced as performance targets eased amid the epidemic. The potential payout level should also be lower, ”said Caitlin McSherry, the company’s chief investment officer.

The money manager said the vote did not reflect a lack of faith in Mr. Culp. “We view Larry’s leadership as a key component of GE’s ability to successfully transform the face,” said Mr Mac. Cherry said, “Extending the time with the company was the right decision.”

At a meeting Tuesday, GE Director Tom Horton answered questions about the compensation change and defended the board’s decision. At the start of the epidemic, it was evident that GE’s recovery would take longer than initially planned, Horton said, and the board moved to maintain Mr Calp’s leadership so far. Year 2024

At the time, the committee viewed the move as an adjunct, he said. But it also mentions how the new stock may be viewed as an adjustment to his performance target price.

“The Board believes it is in GE’s best interest and our responsibility as a committee to secure Larry so that he can continue to drive GE’s transformation,” said Horton. If the maximum number of shares is received in 2024, it means that all shareholders will benefit. ”

A GE board spokeswoman said it would take shareholder votes into consideration in assessing compensation programs.

AT&T veteran John Stankey at WarnerMedia late 2019.


image:

Presley Ann / Getty Images

At AT&T, CEO John Stankey and WarnerMedia chief Jason Kilar were paid $ 21 million and $ 52.2 million, respectively, during the first year of operation.Most Mr. Kilar’s packages reflect the stock awards to be paid. Went out over the years

Randall Stephenson, who served as chief executive at AT&T through the end of June, when Mr Stankey took over and served as chairman through January, has a compensation worth $ 29.2 million.

AT&T said the compensation program is aimed at attracting and retaining management talent while taking into account the opinions of shareholders in drawing up a payment plan. Important: The committee will carefully consider today’s advisory vote to ensure that our compensation guidelines remain consistent with these principles, ”AT&T President William Kennard said in a statement.

The Dallas-based company said about 49 percent of shareholders voted to approve executive compensation. But other details about the vote were not disclosed.

Both GE and AT&T performed well below the broader market last year. GE’s total equity returns were negative 2.7 percent in 2020, while AT&T was down 21 percent.The S&P 500 index had a total return of 18.4 percent in 2020.

Write to Thomas Gryta at thomas.gryta@wsj.com, Theo Francis at theo.francis@wsj.com and Drew FitzGerald at andrew.fitzgerald@wsj.com.

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