Today's Wall Street Journal details GE CEO Jeff Immelt's most recent compensation. In my last post on this topic, here, I noted that Immelt has already reaped at least $18MM in cash from GE since he took over from Welch.
As the Yahoo-sourced five-year price chart of GE vs. the S&P500 depicts nearby (please click on the chart to see a larger version), Immelt continues to lead GE to underperform the index for yet another year. This makes a total of six years during which he has received millions of dollars in cash, stock and performance units for doing less for his shareholders than a passive S&P Index Fund manager would have accomplished for them.
So, the news today is that Immelt received $8.3MM in "salary and bonus." So that makes a total of roughly $23MM in cash Immelt has now managed to loot from his employer since late 2001, when he began his reign as a failing CEO at GE. If the firm meets certain (fairly low-ball, as I recall from earlier articles) revenue, earnings and cash generation targets, and meets some stock price performance relative to the S&P, Immelt will receive as much as $18.6MM in 2007.
Immelt's base salary was $3.3MM in 2006, to which was added, unbelievably, a cash bonus of $5MM,"citing Mr. Immelt's 'offensive portfolio moves' and GE's 15% earnings-per-share growth in 2006."
Offensive indeed. It's another black day for corporate governance and responsible boards of directors.
Do you think any of these directors would dare to explain this compensation package to a live shareholders' meeting, and expect to make it out of the building in one piece?
I guess there is one consolation. The market is, in effect, voting on Immelt's lackluster performance and financial games, by leaving GE's stock price flat over such a long period. For the past five years, the stock price change is now actually negative.
Nice job, Jeff. And nicer that you have a board full of morons to pay you so handsomely for such mediocre performance.
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