GE bonus reset doubles down on bad corporate habit

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Larry Culp was brought in as the boss of GE to sweep away some bad old habits. A new equity award does the opposite, writes johnsfoley.

General Electric extended Chief Executive Larry Culp’s contract by two years to 2024, with the option of adding another year, according to a filing on Aug. 20, and replaced his sign-on incentive package with a new one calculated using a lower share price.

Culp took over at GE in October 2018, and was given an “inducement” that would pay up to $232 million if the share price hit $31, compared with a reference level of $12.40. The new package would pay out the same potential amount, but with a new upper threshold of $16.68 per share. In order to receive the award Culp must remain in service until his contract ends, which can include him moving from chief executive to executive chairman during the fourth year, and becoming a director or consultant in the fifth.

 

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