Unions blast $47m bonus for GE boss after target lowered
Dramatic rewriting of share price target could trigger investor backlash
The pay package of General Electric chief executive Larry Culp was rewritten to reduce the risk that he would miss out on a windfall. Photograph: David Cerny/Reuters
Unions have blasted a $47 million (€38.3 million) bonus secured by General Electric chief executive Larry Culp this month, after his pay package was rewritten earlier this year to reduce the risk that he would miss out on a windfall.
As Covid-19 vaccine hopes fuelled a stock market rally in November, GE’s shares went above $10 for the first time since March. Now, after 30 days of trading above $10, Mr Culp has locked in a bonus that will pay out at least $46.5 million in 2024 at the earliest.
The bonus has unions seething and could ignite a broader backlash from GE investors. In August, the company rewrote Mr Culp’s 2018 pay plan so he could earn a bonus when shares traded above $10 rather than the original target of $19.
The new plan also preserves Mr Culp’s chances of scoring a maximum $230 million bonus. He now only needs to drive GE’s shares above $16.68 to reap the full amount rather than $31 as his 2018 plan intended.
The pay comes as GE’s aviation unit has cut 20 per cent of its workforce this year to improve margins. – Copyright The Financial Times Limited 2020