Stockholder rails against Immelt's bonuses, options
While the rest of us were ‘‘losing our shirts on GE stock ...”
That's the most arresting clause in the mail General Electric Co. sent out for its annual meeting. Not a management phrase for sure. It's from a disgusted stockholder.
Timothy Roberts of Louisville wants GE to end, “permanently,” all stock options and bonuses.
If Chairman Jeffrey Immelt and his $20 million-a-year crew do a good job, raise their salaries, says Roberts. But no more sweeeteners while ordinary shareholders suck lemons.
This call to revolution in GE's boardroom has about a snowball's chance. Still, it's included — it legally has to be — with other dissident proposals in the proxy statement for the annual meeting April 24 in New Orleans.
But similar “cries from the crowd” have been outvoted before, easily. Big company shareholders seem to go along with paying top executives like royalty, in theory to keep them from jumping ship. It assumes that other companies are clamoring for them.
The rewards are supposed to relate to performance, however. And it's embarrassingly true that $100 invested in GE stock in 2007 was worth only $69 at yearend 2012.
You might not know it from what Immelt takes home. In 2012 he parlayed a $3.3 million salary and $4.5 million bonus into total compensation of $25.8 million. His three vice chairmen, on salaries between $1.8 million and $2.2 million, ended up with $20 million to $25 million total compensation. The company's top lawyer pulled down $16.2 million.
Not that GE bombed in 2012. It takes some hunting to find in a bipolar annual report — a glossy magazine in front, dry as dust in 100-plus pages of backup data — but the world's seventh largest company earned $13.6 billion on $147 billion sales last year. Profits were down a bit from 2011 (but up in per-share terms) and sales were just about even. Despite fluctuations sector to sector, GE's overall results haven't really moved much in the Immelt era.
A little graph of the firm's last five years of stock market performance shows that the recession whacked GE shares more than half in 2008 and '09. They recovered slightly in 2010 and '11 and a bit more last year. They were still 30 percent off the 2007 level, though. The Dow Jones Industrials and Standard & Poor's 500 Stock Index also took a beating. But they did limp upward 14 percent and 9 percent, respectively. So mighty GE has done more poorly than the market as a whole.
What about now? Immelt's letter to shareholders projects “another typical year” in the “Reset Era,” as he calls it.
Among the firm's vast array of businesses — jet engines, locomotives, medical machines and more — there's virtually no mention in the report of “green” energy. Or of nuclear power. Instead, a feeling of back to earth — deep in the earth. Notably America's vast supply of natural gas from shale formations far below, for electric power and vehicle fleets. GE announced a deal just the other day to buy Lufkin Industries, maker of oil field equipment, for $3.1 billion.
“The top priority,” writes Immelt rather surprisingly — in the era of CEO Jack Welch this was a growth company — “remains growing the dividend. ... A high dividend yield is appealing to the majority of our investors.” GE stock currently yields 3 percent-plus. It beats bank interest. But old shareholders got used to better.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Rossi: Penguins’ best bet is on Martin
- Young defensemen make case for future with Penguins
- Elites, media & character
- Spirit Airlines lifts fortunes of Arnold Palmer Regional Airport
- From injuries to front office, Penguins’ season didn’t lack drama
- Crews battling 5-alarm fire at North Union industrial building
- Biertempfel: Observations from a day at the ballpark
- Penguins president: General manager, coach won’t be fired
- Burnett’s stellar start paves way for Pirates’ victory over Diamondbacks
- Sawchik: Young Cubs could threaten for foreseeable future
- Rossi: Crosby, Malkin didn’t sign on for this