General Electric chief Larry Culp’s $301m pay deal rejected by shareholders Loading 3rd party ad content Loading 3rd party ad content Loading 3rd party ad content Loading 3rd party ad content

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By Ryan Beene

Shareholders of US giant General Electric have rejected the company’s executive compensation plans in a non-binding vote, snubbing a revised pay package that lowered the bar for chief executive officer Larry Culp to eventually collect as much as $US232 million ($300.8 million).

Almost 58 per cent of shares voting went against the pay deal at GE’s annual meeting on Tuesday (US time). Investors weighed in less than a month after shareholder advisory firm Glass Lewis chided GE’s board for maintaining Culp’s maximum potential payout “in exchange for reduced shareholder value creation.”

GE chief Larry Culp’s proposed pay deal has been voted down by shareholders.

GE chief Larry Culp’s proposed pay deal has been voted down by shareholders.Credit:FDC

The vote amounted to a rebuke of GE’s decision in August to essentially halve the share-price targets needed for Culp to qualify for equity-based compensation valued at as much as $US232 million by the end of his tenure. The revisions were made as part of a two-year contract extension to keep him at the helm through 2024, as the coronavirus pandemic upended his turnaround push at GE. Culp voluntarily forfeited his 2020 annual bonus.

“Securing Larry’s continued leadership was one of the most important steps that we could take during a period of great uncertainty,” GE explained at the time.

Only a handful of S&P 100 companies each year receive less than 50 per cent support for their pay programs. Most plans win the backing of a decisive majority.

The board said on Tuesday it was confident that the continued leadership of Culp and his executive team were in the long-term interests of investors.

“We value the views of our shareholders, and we will gather additional feedback from them as we take into consideration the outcome of the vote and evaluate our executive compensation program moving forward,” a board spokesperson said in a statement.

This year, shareholders are closely scrutinising the various tweaks to executive pay programs that boards made to cushion the blow from the pandemic. AT&T shareholders voted against the company’s executive compensation plan last week, in another non-binding vote.

GE is 2.4 per cent lower in late trade in New York amid a broad slump. The shares climbed 25 per cent this year through Monday, outpacing the 16 per cent advance of an S&P index of US industrial companies. GE rallied strongly late last year in the months after the board revamped Culp’s pay package.

Bloomberg

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