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GE Aerospace chief executive Larry Culp received $89mn in pay last year, making him one of the highest-paid executives among the American companies that have reported compensation so far this year.
Following GE’s break-up of its corporate enterprises, completed last April, the share price of GE Aerospace, has risen 45 per cent.
Culp’s compensation for 2024, the company disclosed last week, included a $50mn stock bonus that will be paid out if he hits certain financial targets through the end of 2027. GE said Culp’s “compensation actually paid” totalled $285mn. This SEC disclosure requirement includes the price performance for stock awarded but not paid.
The pay underscores a significant turnaround for GE. Its shares closed at $197 on Friday and in February traded above $210 for the first time since 2001.
Culp has also rebounded from a bruising battle over his pay in 2021. That year, GE shareholders rejected a $230mn pay deal for Culp. The pay stemmed from bonus changes the company made in 2020 during the Covid-19 pandemic to make it easier for Culp to hit certain targets. In 2022, GE’s board and Culp agreed to reduce his annual stock grant to $5mn from $15mn.
In its latest regulatory filing, GE acknowledged it faced shareholder “opposition” to Culp’s one-time stock grant in 2020 and argued that awarding him another one-time chunk of stock last year was necessary to keep him from leaving the company.
“He could have stepped down for any other opportunity of his choosing — and there was no shortage of interest from other companies,” GE said.
Culp’s compensation makes him one of the highest-paid US executives so far this year. In January, Starbucks reported new chief executive Brian Niccol was paid $95.8mn. Goldman Sachs paid chief executive David Solomon $39mn.
“Following an outstanding first year as a standalone company, [GE’s] board believes its shareholders understand and appreciate the tremendous value Larry brings to the business as he leads GE Aerospace through its next chapter of growth,” GE said.
GE shareholders are unlikely to balk at Culp’s latest pay deal, said George Georgiev, a professor at Emory University’s law school.
“It is really about the alignment, and because this wasn’t just a cash bonus but this was a stock-based incentive award, there is alignment between the CEO and the shareholders,” he said.
“I think it is really difficult to be displeased when your 12-month return is 40 to 50 per cent,” especially for a non-technology company.
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