A majority of shareholders at General Electric Co.’s (GE.N) annual meeting rejected the payroll packages of said executives, including CEO Larry Culp, whose compensation for 2020 was $ 73.2 million.
According to preliminary results, 57.7% of shareholders rejected GE’s salary packages, which is a strong rebuke to the leaders of the industrial company, which is in the middle of a challenging turnaround and laid off thousands of workers.
“Although we are disappointed with the preliminary results of the vote, we value and respect the views of shareholders,” the company said. “The Council will take these views into account when assessing executive compensation.”
The voice of the shareholders is advisory, not binding.
Last August, GE extended Culp’s employment agreement until 2024 with a one-year extension. As part of the deal, the company granted him new shares, fueling his payout. There were also lower financial targets that Culp had to meet to receive the new shares.
During the meeting, the company explained that Culp’s contract has been extended because GE’s transformation will take longer than expected due to the coronavirus pandemic. Reduced performance targets in his payroll reflect the pandemic’s uncertainty at the time, the company said.
“The board believes this is in GE’s best interests and our responsibility is … to provide Larry for a longer period of time. So he can continue to drive GE’s transformation,” said Tom Horton. GE’s leading independent director, to shareholders.
Proxy advisors Institutional Shareholder Services Inc (ISS) and Glass Lewis advised shareholders to reject GE’s CEO’s compensation package.
The Union-related Change in Win Investment Group also called on shareholders to reject the plan.
In response to shareholders’ questions later in the meeting, Culp said the company had no plans to increase its dividend at this time.
Our standards: Thomson Reuters’ principles of trust.