By Sahid Fawaz
Today’s news of obscene, irresponsible executive pay comes from GE.
“GE won’t be paying out bonuses for 2017 (with one exception), but even so, CEO John Flannery made $9 million—157 times what the median GE employee earned—for the year. Flannery was promoted to CEO from his role leading GE Healthcare in August.
According to a corporate filing to the SEC made late Monday, David Joyce, CEO of GE Aviation, will be the only executive to receive a bonus for 2017. In addition, some equity awards for 2015 have been cancelled. GE Aviation was the only bright spot in a year of generally poor performance, and Joyce received a bonus of $1.3 million for his efforts. This is the first time in GE’s 127-year history that top executives will not receive bonuses.
GE’s share price suffered throughout 2017, falling 44.8% even as the rest of the market surged. Then, in February 2018, the company announced it would restate its earnings for 2017 and for 2016, reducing earnings by 16 cents a share and 13 cents a share, respectively.
The company says it is continuing to adjust the way bonuses are assessed and paid to align them with shareholder value. This entails evaluating bonuses based on “fewer, higher impact metrics” and paying bonuses in equity rather than in cash.
Even without a 2017 bonus, recently promoted CEO Flannery made 157 times what the median GE employee made. According to an Economic Policy Institute report based on 2016 numbers, the average CEO pay ratio in the U.S. is 271:1. Flannery clocked in below that for 2017, but he only served as CEO for five months. His predecessor, Jeff Immelt, earned an estimated $21.3 million in 2016 and $33 million in 2015, including bonuses. Similar earnings for Flannery would make GE’s CEO pay ratio 372:1 or 576:1, respectively.”
For the rest of the story, visit Fortune here.