Immelt Declines His 2008 Bonus

Posted by: Jena McGregor on February 18, 2009

General Electric Chairman and Chief Executive Jeffrey Immelt has declined his 2008 bonus and long-term compensation, the conglomerate’s proxy reveals. In a year when the Fairfield, Conn.-based company’s stock has been battered, GE’s proxy states that Immelt “proposed, and the [compensation committee] agreed, that he would receive no bonus for 2008 and that he would decline the entire $11.7 million earned under his long-term performance award.”

Immelt still won’t be left empty handed. His salary, at $3.3 million, will again be $3.3 million, much higher than most S&P 500 CEOs, whose salaries were an average $1.075 million in 2007, according to The Corporate Library. (Full 2008 averages are not available yet.) His 2008 equity award was $2,044,650, less than half the amount from the year before, and will only be earned if certain
performance goals are met over the next five years.

In a year when GE shareholders suffered so much, it seems a wise, and commendable, move for Immelt to not be taking home extra dough. But what’s interesting is the way this is being communicated. To be sure, GE is not alone here—in the delicate dance all companies do on lightning-rod matters like compensation, it’s surely good for the CEO to be the one declining the award. Back in January, Bank of America CEO Kenneth Lewis also “recommended” that he and other senior executives not receive bonuses. Why isn’t it the board that initially makes that recommendation?

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Reader Comments

Phil

February 18, 2009 10:16 AM

Good step after the terrible stock price performance. What about the rest of the GE senior leadership team? I don't think they delivered a stellar performance last year.

Arthur Mboue

February 18, 2009 12:35 PM

Immelt 2008 salary shows that GE does NOT expect problems in the future. May be GE capital will be O.K.(asymmetric information) Why? this signal, it did not align more GE CEO future interests to the shareholders interests. No FUTURE PENALTY AGAINST HIM
Arthur Mboue, MBA, JD
PS I still expect the financial report brochure for close examination

Denise Lee Yohn

February 18, 2009 08:23 PM

call me skeptical, but i wonder if immelt and others really initiated the decline of a bonus or whether it was hinted at or even suggested by the board (or others)?? perhaps reports of the ceo "recommendation" is just a pr move?

Wally Bock

February 21, 2009 03:32 PM

Here's my question for GE's board: "Why did Immelt have a bonus to decline?"

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