Diversified conglomerate General Electric Co. (GE) has hiked the 2012 total compensation for CEO Jeffrey Immelt by 20 percent from last year. In a filing with the Securities and Exchange Commission, GE said that Immelt and other executives performed "extremely well in a challenging global environment", and that their compensation for the year was commensurate with this performance.
GE noted that under Immelt's leadership, its total shareholder returns grew 21 percent, well ahead of the 16 percent growth in the S&P 500. This return reflected the company's strong Industrial operating results, with 10 percent growth in segment profits, organic segment revenue growth of 8 percent, accelerating margin expansion, and orders backlog of $210 billion at year-end.
Further, GE noted that GE Capital also had a strong year, with segment profits growing 12 percent, while at the same time reducing its ending net investment by 6 percent. The company said the performance allowed GE Capital to restart its dividend to GE and maintain a strong Tier 1 Common Ratio of 10.2 percent.
Immelt received a total payout of $25.81 million in 2012, up 20 percent from $21.58 million in the previous year.
The CEO received a $4.50 million bonus in 2012, representing a 13 percent increase from $4.00 million in the preceding year. Immelt also received a $12.08 million payout under the three-year Long-Term Performance Awards or the LTPA program, which concluded in 2012. However, his base salary remained unchanged from the prior year at $3.30 million.
Immelt's total compensation for 2012 increased from 2011 primarily because of the LTPA payout, which reflects performance over a three-year period. His compensation for 2012 also reflected a $5.35 million increase in pension value, primarily reflecting an increase in his service and age as well as changes in actuarial pension assumptions.
GE's Management Development and Compensation Committee or MDCC said that it's decisions on Immelt's pay reflected his "outstanding leadership" and represented a balanced approach to compensation.
The committee noted that over the last five years, Immelt's salary has remained unchanged and he twice requested that he receive no bonus. During this five-year period, GE's earnings ranked between 4th and 14th in the S&P 500, while Immelt's compensation excluding pension value change ranked between 79th and 329th among S&P 500 CEOs.
In mid-January, GE reported an 8 percent increase in profit for the fourth quarter on higher revenues and margins. Four of the six infrastructure businesses had double-digit growth in orders for equipment, including oil and gas.
Earlier on Monday, GE's board nominated Mary Schapiro, former chairman of the U.S. SEC, as a director of the company. Schapiro will stand for election at GE's annual meeting of shareholders.
Schapiro served as chairman of the SEC from January 2009 through December 2012. Prior to that, she served as CEO of FINRA from 2007 through 2008.
GE closed Monday's trading at $23.62, down $0.15 or 0.63 percent on a volume of 34.95 million shares.
by RTT Staff Writer
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