Updated from 1 a.m. EST
General Electric (GE) said CEO Jeff Immelt declined his 2008 bonus as the company's stock price has dropped amid deteriorating economic conditions.
The Fairfield, Connecticut-based company, which makes everything from locomotives to household appliances, said in a filing with the Securities and Exchange Commission that Immelt also will forgo his $11.7 million long-term performance award.
GE said it accepted Immelt's offer to go without the payments because of its declining stock price.General Electric's shares have fallen 33% so far in 2009 and lost more than half their value last year. The stock closed at $10.81 on Tuesday. The news that Immelt was waiving his right to collect bonus and performance-based pay was first reported by the Financial Times . Immelt began to consider declining his annual bonus and long-term performance award last year after drawing criticism for missing earnings guidance and failing to reverse a slump in the conglomerate's stock price, the Financial Times reported. While Immelt hasn't always evaded scrutiny for GE's results during his eight years at the helm, he is rarely singled out for excessive pay, the newspaper notes. Immelt's decision to turn down the bonus was approved by GE's board this month. Based on how GE fared over the last three years, Immelt was entitled to a long-term performance cash award of almost $12 million, according to the Financial Times. He also stood to get an annual bonus, worth $5.8 million in 2007. The GE board agreed to keep Immelt's annual salary at $3.3 million, said the people familiar with GE's plans. In total, the cash portion of Immelt's compensation will decline 64% from a year ago. He will continue to earn performance-share units, which may be converted into GE stock in five years if the company achieves certain goals on its cash and stock returns, the newspaper reported. Earlier in February, Immelt warned that capping the salaries of bank executives whose companies take taxpayer bailout money undermines the government rescue effort. GE last month reported 44% decline in fourth-quarter net income.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV