GE plans to split the conglomerate into three companies focused on aviation, healthcare and energy. We can’t know the ultimate outcome of such a split, but there is one absolute certainty: CEO Larry Culp will have extraordinary financial gains.
We know this is a certainty because Culp has an employment contract that guarantees it. It fits with how GE GE, -1.98% has behaved for decades: executives have accumulated wealth regardless of how shareholders fared.
The most recent proxy statement filed with the SEC in March 2021 lists Culp’s total compensation for 2020 as $73,192,032, almost all from two stock awards. That includes a decision by the board in August 2020 to amend Culp’s contract to extend it and offer more performance shares at lower thresholds. Yes, some of the pay is not guaranteed because of vesting requirements. Such awards are theoretically designed to encourage long-term focus and are therefore considered “at risk,” particularly if the goals are rigorous, which they were not in this case.
We know this is a certainty because Culp has an employment contract that guarantees it. It fits with how GE GE, -1.98% has behaved for decades: executives have accumulated wealth regardless of how shareholders fared.
The most recent proxy statement filed with the SEC in March 2021 lists Culp’s total compensation for 2020 as $73,192,032, almost all from two stock awards. That includes a decision by the board in August 2020 to amend Culp’s contract to extend it and offer more performance shares at lower thresholds. Yes, some of the pay is not guaranteed because of vesting requirements. Such awards are theoretically designed to encourage long-term focus and are therefore considered “at risk,” particularly if the goals are rigorous, which they were not in this case.