In the aftermath of GE's tough 2008, 53-year-old Immelt is passing up a $12M bonus. “Earnings came in below where we expected,” Immelt blogged on Feb. 18.. Citing the global economic collapse and GE’s crumbling stock price, Immelt wrote: “In these circumstances, I recommended to GE’s board of directors that I would not receive a bonus in 2008.” Bravo, Jeff. It’s true the Immelts aren’t going to go hungry any time soon. The GE boss earned $3.3M in salary last year, and collected a $5.8M bonus in '07. Immelt could have made a case for keeping the '08 bonus.
GE recorded an all-time high in revenues, and chalked up its third highest profit year in '08. Another feather in Immelt’s cap: the conglom's earnings sank “only” 19 percent compared to the 35 percent plunge in the S&P 500.
Immelt proved to be a man of his word. He told the Wall Street Journal Feb. 5 that he never wants his compensation to be an “embarrassment” to GE. Pocketing a cool $12M would have opened the corporate icon to the same ridicule and scorn that is deservedly heaped on the greedy gang at American International Group and Merrill Lynch.
Immelt did the right thing. It would have been interesting to see if GE’s board had the backbone to strip Immelt of his bonus had he not told board members to. That would be have been a true test director independence and encouragement for other boards to do the same.
Another question: If GE had such a lousy `08, how in the world did Immelt qualify for a $12M bonus? That is a question for all of Corporate America, which needs to reel in executive comp during these tough times.
(Image via BBC)