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General Electric shareholders reject CEO Culp’s payout deal.

General Electric Co. Chief Executive Larry Culp meets with shareholders at the company’s annual meeting in Tarrytown, New York, U.S., May 8, 2019.REUTERS / Alwyn Scott

Major shareholders at General Electric Co’s (AG.N) annual meeting rejected the pay package for appointed executives, including CEO Larry Culp, whose compensation for 2020 was $ 73.2 million.

According to a preliminary study, 57.7% of shareholders reject GE’s pay package, a sharp blow to the executives of industrial companies, which are in the midst of a challenging turnaround and have laid off thousands of employees.

“Although we are disappointed with the results of the initial vote But we value and respect shareholders’ opinions, ”the company said.“ The board takes those views as we assess management compensation. ”

Advisory vote of shareholders is not binding.

GE last August extended Culp’s employment agreement term to 2024 with a one-year option to extend after that. As part of the deal, the company gave him new shares to complement his payout. It also has a lower financial target for Culp to achieve in order to acquire new shares.

During the meeting, the company explained that Culp’s contract was extended as the GE change would take longer than expected due to the coronavirus outbreak. The reduced performance targets in his pay package reflected the uncertainty of the outbreak at the time, the company said.

“The Board believes it is in GE’s best interest and it is our responsibility … to keep Larry safe for a longer period of time, so he can continue to drive GE’s transformation,” said Tom Horton, Director. GE’s independent told shareholders.

Proxy advisor Institutional Shareholder Services Inc (ISS) and Glass Lewis advised shareholders to reject GE’s executive compensation packages.

The Change to Win Investment Group trade union also urged shareholders to reject the plan.

In response to shareholder questions at a later meeting, Culp said the company had no plans to raise dividends at this time.

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