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Larry Culp, CEO of GE Aerospace, received a $89 million salary last year, becoming one of the highest-paid executives of any American company reporting compensation so far this year.
GE Aerospace stock price rose 45% following the dissolution of GE’s company, which was completed in April last year.
Culp’s 2024 compensation, which we disclosed last week, included a $50 million share bonus paid if we met certain financial targets by the end of 2027. This SEC disclosure requirement includes price performance for shares awarded but not paid.
Salaries highlight a major shift in GE. The shares closed at $197 on Friday, trading above $210 for the first time since 2001 in February.
Culp also rebounded from the battling battle over his 2021 salary. That year, GE shareholders rejected Culp’s $230 million wage deal. Salaries make it easier for culp to achieve certain goals due to bonus changes made in 2020 during the COVID-19 pandemic. In 2022, GE’s board of directors and Culp agreed to cut annual equity grants from $15 million to $5 million.
In its latest regulatory filing, GE acknowledged it faces shareholders’ “opposition” to Culp’s one-off stock grant in 2020, claiming last year that it would need to award one share last year to prevent him from leaving the company.
“He could have resigned for other opportunities of his choice, and there was no shortage of interest from other companies,” GE said.
Culp’s compensation makes him one of the highest US executives ever this year. In January, Starbucks reported that new CEO Brian Nicole had been paid $95.8 million. Goldman Sachs paid CEO David Solomon for $39 million.
“After a great year as a standalone company, we believe that (GE’s) board of directors understands and appreciates the incredible value that Rally brings to the business as shareholders lead GE aerospace through the next growth chapter,” GE said.
GE shareholders are unlikely to balk Culp’s latest pay deal, said George Georgeef, a professor at Emory University’s law school.
“It’s really about this consistency and there’s an alignment between the CEO and shareholders because this was not just a cash bonus, it was an equity-based incentive award,” he said.
“I think it’s really hard to get uncomfortable when your 12-month return is 40-50%,” especially for non-technical companies.
