Citing “poor performance” last year by General Electric, the conglomerate’s board of directors did not award former CEO Jeff Immelt a bonus for 2017, estimating his total compensation at $8.1 million in a filing with the Securities and Exchange Commission.
Under new CEO John Flannery, GE reported a $10 billion loss in the fourth quarter of 2017, after increasing reserves needed to cover unanticipated claims for a GE Capital insurance operation it had discontinued. GE shares traded Tuesday below $15, down $11 from August.
Immelt retired as CEO last August and was paid $270,000 in his first pension payout, having accrued nearly $85 million in the company’s retirement plan over 35 years, according to the company’s investor proxy filed Monday with the SEC. Immelt realized another $25 million in stock compensation awarded in prior years under vesting rules that restricted him collecting those benefits until 2017.
GE revealed Monday its plans to shift its executive compensation policy to a greater reliance on stock awards that vest over time as a way to create incentives for executives to increase value over the long run.
GE paid Immelt $820,000 in relocation benefits after he moved the company’s headquarters to Boston in August 2016 from Fairfield — GE has since consolidated its remaining southwestern Connecticut operations in Norwalk — with Immelt receiving another $660,000 in “relocation tax benefits” as described in GE’s investor proxy. The company calculated at $133,000 what it paid for Immelt’s personal use of company aircraft.
Flannery similarly was denied a 2017 bonus — a decision made with his concurrence, GE stated — with his compensation totaling $9 million last year. His compensation included more than $1.7 million in combined relocation benefits for the Boston move, as well as for costs incurred in moving to a new Chicago headquarters for GE Healthcare which Flannery led prior to his promotion to CEO of GE.
GE reported a 157-1 ratio of its CEO pay to that of its median employee, a GE Healthcare employee in Germany making just over $57,000, with companies required to disclose CEO pay ratios this year and going forward under new SEC rules. In Immelt’s last full year as GE CEO in 2016 when he received $23.1 million in compensation, the company’s CEO pay ratio would have equated to about 375-1, assuming similar pay for the median GE employee that year.
Flannery will preside over his first GE annual meeting on April 25, with the event to be held at a GE center for 3D manufacturing in Imperial, Pa., west of Pittsburgh. Vanguard Group and BlackRock are the two largest holders of GE stock, with 7.1 percent and 6.1 percent respectively of shares outstanding.
Alex.Soule@scni.com; 203-842-2545; @casoulman