General Electric last year eliminated bonuses for its senior managers for the first time in its 126-year history, saving millions of dollars after losing money in 2017, the industrial conglomerate said on Monday.
All but one of its top executives did not receive a bonus, the company said. The changes led to steep declines in compensation and reflected the company's poor results in 2017, according to the company's annual proxy.
Former CEO Jeff Immelt, who stepped down on Aug. 1, received $8.1 million in 2017, down from $21.3 million the year before. Compensation includes salary, bonus, stock, options and other income. GE eliminated Immelt's 2017 target bonus of $5.4 million and cut about $1 million from his salary.
Current Chief Executive John Flannery earned $9 million in salary and other compensation last year. The company eliminated a $3 million target bonus for him, GE said.
The company also eliminated bonuses for former Chief Financial Officer Jeff Bornstein, former Vice Chair of Business Innovations Beth Comstock and John Rice, the former CEO of GE's global growth organization. The savings on bonuses and other compensation totaled more than $10 million.
The exception was David Joyce, head of GE's aviation business, who received about $5.2 million. While that was down from $12.6 million in 2016, Joyce received a $1.4 million bonus.
"We are holding leaders accountable for performance," GE said in the proxy, noting operating profit fell 11 percent and that the amount in its bonus pool fell 75 percent. GE reported a net loss of 72 cents a share last year.
"Consistent with this commitment to align pay to performance, the bonuses we paid were concentrated in Aviation and Healthcare, which had outstanding years," the company said.
GE said in the proxy it was not changing compensation for board members, other than to add a $30,000 annual payment for members of the new finance committee.
Directors receive $275,000 a year, and additional amounts depending on their committee assignments, the company said.
(Reporting by Alwyn Scott; Editing by Suzannah Gonzales and Matthew Lewis)