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General Electric Co. (GE) resumed its practice of awarding stock grants tied to performance as part of Chief Executive Officer Jeffrey Immelt’s compensation after issuing him stock options last year.
Immelt, whose 2011 salary and bonus were unchanged from 2010, will receive 250,000 performance stock units that convert to shares if GE boosts cash flow from industrial operations and stock returns meet or exceed those of the Standard & Poor’s 500 Index (SPX), according to a U.S. regulatory filing. He received a “special grant” of 2 million stock options last year after previously being paid in the units since 2003.
GE attached similar performance measures to the options after “constructive conversations” with shareholders before the Fairfield, Connecticut-based company’s 2011 annual meeting, according to the proxy statement filed with the Securities and Exchange Commission.
GE fell 2 percent last year, compared with no change in the S&P 500 and a 3 percent decline for industrial companies in the index, even as the world’s largest maker of jet engines and diesel locomotives expanded profit and amassed a record $200 billion order backlog.
Immelt’s realized compensation rose 38 percent to $7.82 million last year. The measure includes his $3.3 million salary, $4 million cash bonus and $447,000 of other compensation, according to the proxy statement. Immelt, 56, declined to accept a bonus in 2008 and 2009 as GE shares underperformed.
Total compensation, including a $10.1 million increase in pension value, was $21.6 million under SEC rules.
Immelt became CEO less than a week before the September 2001 terrorist attacks that pushed the U.S. deeper into a recession. In 2009, amid the worst economic slump since the Great Depression, he cut GE’s dividend for the first time in more than 70 years to preserve cash.
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