GE’s Board Won’t Seek Clawbacks After $200 Billion Meltdown
(Bloomberg) -- General Electric Co. won’t seek reimbursement of compensation paid to former company bosses who presided over an epic collapse that wiped out more than $200 billion in shareholder value.
“After a thorough investigation led by outside, independent counsel and a special committee into shareholder requests, the board has concluded that the company has no sound legal basis to seek clawbacks or other litigation,” GE said in an emailed statement Tuesday.
GE’s market value plunged in 2017 and 2018 amid a series of accounting issues and writedowns in multiple business units. The company and two former chief executive officers, Jeff Immelt and John Flannery, have been named in shareholder lawsuits alleging securities-law violations and other misconduct.
The Wall Street Journal reported the board’s decision earlier.
Some of the shareholder claims were also the subject of a U.S. Securities and Exchange Commission probe that GE recently settled, agreeing to pay a $200 million civil penalty without admitting wrongdoing. The SEC cited multiple failures in GE’s accounting disclosures that misled investors about how the company was generating earnings and cash.
The Boston-based maker of gas turbines and jet engines said it has improved its financial management under current CEO Larry Culp, who took the reins a little more than two years ago.
“Under the current leadership team, we have significantly enhanced our disclosures and internal controls and are a stronger company today,” GE said.
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