Bloomberg opinion columnist Brooke Sutherland herself called it “Curious case” (curious case). Despite the serious difficulties in which General Electric (GE) has struggled for five years, and tens of thousands of job cuts, its CEO, Larry Culp, will receive a staggering bonus. “Curious”, indeed, because the board of directors has sharply reduced its requirements to keep a boss who has started to raise the bar.
Larry Culp would indeed have put his resignation in the balance, indicate several American media. In mid-August 2020, when the Boston (Massachusetts) group suffered further losses, in its Aerospace division this time, its contract was extended until 2024, with an option for an additional year. And his compensation plan revised upwards … by lowering the financial objectives assigned to him upon his arrival at GE in October 2018.
If the action reaches at least 10 dollars (instead of 19 dollars previously) and remains there for thirty days, he will pocket 47 million dollars (38.6 million euros) in stock options. The title crossed the $ 10 threshold on Wall Street in November 2020, and investment banks believe the financial health of the ailing colossus is improving. The former CEO of Danaher could even earn $ 230 million if GE stock climbs to $ 17 (compared to $ 31 in the starting salary “package”) – a very achievable goal by 2025.
Refocused on three professions
The prospects for an exit from the health crisis, opened up by vaccines against Covid-19, and a more frank economic recovery should benefit GE, now refocused on three businesses: large equipment for power plants (turbines, networks …), Aircraft engines (LEAP manufactured with the French company Safran, among others) and renewable energies (land and sea wind turbines). But the company still has great difficulty generating large free cash flow (free cash flow) and remains heavily in debt.
“How can GE justify this kind of big bonus when workers, their families and communities suffer from job cuts? »Carl Kennebrew, president of the union of employees of GE
” It’s scandalous, indignant Carl Kennebrew, president of the IUE-CWA, the union of employees of GE. How can GE justify this kind of big bonus when workers, their families and communities suffer from job cuts and offshoring? “ This money must, according to him, be “Invested in US GE factories, our jobs”. Mr. Culp improved the financial situation, but thanks to numerous asset disposals and at a high social cost. In early May, the group announced 13,000 job cuts in aviation, and more are looming.
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