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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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