GE Eases CEO’s Path to $230 Million Payout in Contract ExtensionAugust 20, 2020
General Electric Co.’s board extended Chief Executive Officer Larry Culp’s contract by two years after the coronavirus pandemic upended his plan to turn around the ailing industrial giant.
Culp will lead GE through at least August 2024 with the option for a one-year extension after that, the company said in a regulatoryfiling Thursday. The board also revised how Culp would be compensated, making it easier for him to take home as much as $230 million at the end of his contract.
The extension represents an endorsement of Culp’s revitalization strategy at GE even after the shares have tumbled this year as the pandemic gutted demand for the company’s jet engines, power equipment and medical scanners. The new contract also preserves a key stock-based piece of his compensation package after GE shares tumbled 44% this year this year, far worse than the 6.5% drop in a Standard & Poor’s index of U.S. industrial companies.
Since taking the reins in late 2018, Culp has slashed debt, sold assets and focused on turning around GE’s beleaguered gas turbine business, a major source of the company’s cash woes in recent years. His efforts caught on with Wall Street last year, as GE posted its biggest share-price gain since1982, back when Jack Welch was starting his tenure in the top job.
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