General Electric Co. said Chief Executive Larry Culp agreed to reduce his potential compensation by about $10 million this year, responding to shareholder concerns over changes that GE’s board made to executives’ pay packages in 2020.
In August 2020, the GE GE, +0.88% board revised Culp’s contract, extending it until 2024 and awarding him a special stock grant during the year that was valued at more than $100 million by the end of 2020. Asset managers called the awards poorly linked to the company’s performance, which they characterized as trailing that of GE’s peers.
Nearly 58% of GE shares were voted against the board’s compensation practices at last year’s annual meeting. It is rare for shareholders to withhold their support for such say-on-pay votes at major companies.
For 2022, Culp stands to receive a $5 million equity award, instead of the $15 million set out in his revised contract, if he and the company meet performance targets. Exceeding those targets or falling short would increase or reduce the award, respectively.
GE reduced Culp’s potential 2022 pay following discussions with most of its major shareholders last year, the company said in its annual proxy statement.
“There was shareholder concern around the timing, size and structure of the 2020 retention grant made as part of the extension,” GE said in its filing, along with shareholder support for Culp’s leadership. The company also said it doesn’t plan to make similar changes to its CEO’s pay in future years.
An expanded version of this report appears on WSJ.com.
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