GE’s Larry Culp gets a pay cut. Sometimes boards listen to shareholders.

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Larry Culp, CEO of General Electric

Christopher Goodney/Bloomberg

General Electric

notice of its annual meeting for 2022 and proxy statement have been posted. Often a power of attorney can be a dry document that does not excite investors. This is not the case this year.

The flow


(ticker: GE) proxy contains a lot for investors to digest. First and foremost, executive compensation. CEO Larry Culp has taken a pay cut. This decision shows that sometimes boards listen to shareholders.

In 2021, shareholders voted against GE’s executive compensation. This so-called advisory vote on pay was not binding. It was more of a reflection of what shareholders think about certain compensation practices. GE is not the only one the company to get shareholders to voice their concerns about executive compensation.

Following last year’s vote, GE met with shareholders representing 52% of total shares outstanding. Board members led approximately 80% of these meetings.

One outcome of the meetings was that GE learned there was “overwhelming support” for Culp’s leadership. It’s not surprising. Culp took over GE when self-inflicted injuries left the company in too much debt and its business in decline. He aggressively repaid debt and helped GE through the Covid pandemic as well as the


(BA) 737 MAX crisis. (GE supplies the engines for the MAX, which was grounded for nearly two years following two fatal crashes).

Another outcome of the meetings was that the board’s compensation committee reduced Culp’s stock incentive compensation to $5 million from $15 million for 2022.

The board has been actively involved in compensation discussions over the past year. He was also active—period. This is another interesting finding from proxy 2022. GE’s board of directors has met 43 times. But that shouldn’t be too surprising either. Management and the board of directors decided to divide GE into three companies: one dedicated to aviation, another to power generation and a third to healthcare. It was, and still is, a huge decision that effectively dismantled one of the biggest and most prestigious American companies of the last century.

A third tidbit from the proxy concerns durabilityy. In 2021, GE announced its intention to be a net zero company by 2050. This means that all of the company’s operations, on a net basis, would not add carbon dioxide to the earth’s atmosphere. (Carbon dioxide is the main gas responsible for global climate change).

GE’s inaugural sustainability report was released in July 2021. The proxy reviews many actions taken recently and the word “sustainability” appears 35 times in the 80-page proxy.

The proxy was posted Thursday evening. However, it does not move actions in any discernible way. GE stock fell about 0.7% in premarket trading.



Dow Jones Industrial Average

futures fell 0.8% and 0.7%, respectively.

Write to Al Root at [email protected]

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