General Electric CEO Gets $73 Million in Stock-Fueled Pay After Waiving Salary

(Bloomberg) -- General Electric Co.’s Chief Executive Officer Larry Culp waived most of his salary and all of his bonus last year, but he still scored total compensation of $73.2 million -- almost all of it from potential stock payouts tied to the company’s future performance.

Culp’s pay package last year included share awards valued at $72.1 million, GE said Thursday in its proxy statement. To cash in, he must guide the maker of jet-engines, medical devices and power equipment to certain targets over several years.

Last year, Culp had earned a salary of about $650,000 before the coronavirus pandemic caused an unprecedented travel collapse, upending the company’s aviation division. In March 2020, he waived the remainder of his $2.5 million base pay as GE announced plans to cut jobs at the unit. He also voluntarily gave up his bonus last year, the proxy revealed, while getting $463,799 in pension and deferred compensation plus almost $20,000 in other pay.

Culp’s pay package echoed that of his counterpart at Boeing Co., a crucial GE customer that was also hammered by the deep aviation slump. Like Culp, Boeing CEO Dave Calhoun waived most of his salary and all of his bonus. While Calhoun pocketed $269,321 and a similar amount in perks, his pay was valued at $21 million including gains he could reap from stock awards if he stays in the job and Boeing achieves certain targets.

Job Cuts

The Covid-19 crisis pushed GE to slash more than $2 billion in costs and preserve more than $3 billion in cash. The jet-engine division, the company’s most profitable unit before the pandemic, bore the brunt of those efforts, with a workforce reduction of 25%, or 13,000 positions. GE Aviation’s boss, John Slattery, warned in November that more jobs would be shed over the next 18 months.

GE shed about 31,000 jobs last year through pandemic-related restructuring and other business overhauls. That brought its total headcount to roughly 174,000 workers at the end of 2020, a 15% reduction from the year before.

In August, GE’s board extended Culp’s contract by two years into 2024 and essentially halved the share price targets needed for him to qualify for share-based pay valued at as much as $232 million by the end of his tenure.

The change came after GE shares plunged to the lowest levels since 1991. The shares rallied in the second half, posting a big enough gain for Culp to qualify for the initial payout threshold under that plan.

GE has continued to seesaw on the stock market this year, with a 30% gain through March 9. But the shares tumbled 12% in the last two days after the Boston-based company revealed a plan to sell its aircraft-leasing operation to AerCap Holdings NV and reiterated a financial forecast that fell short of analyst expectations.

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