"As GE tumbles, board eases Culp’s path to a $230 million payday' by Ryan Beene and Anders Melin Bloomberg, August 21, 2020
General Electric’s board extended chief executive officer Larry Culp’s contract by two years after the coronavirus pandemic upended his plan to turn around the ailing industrial giant.
Culp will lead GE through at least August 2024 with the option for a one-year extension after that, the company said in a regulatory filing. The board also revised how Culp would be compensated, making it easier for him to take home as much as $230 million at the end of his contract.
The extension represents an endorsement of Culp’s revitalization strategy even after the shares tumbled 44 percent this year as the pandemic gutted demand for GE’s jet engines, power equipment, and medical scanners. The new contract also preserves a key stock-based piece of his compensation package to offset the share drop.
The military supplier stayed open and there was talk of a strike as the war machines rolls along.
JPMorgan Chase analyst Steve Tusa expressed surprise at the new plan and noted that it came after Trian Fund Management sold nearly half its GE stake earlier this month.
The stock is now selling at $6.31 a share.
Since taking the reins in late 2018, Culp has slashed debt, sold assets, and focused on turning around GE’s beleaguered gas turbine business, a major source of the company’s cash woes. His efforts caught on with Wall Street last year as GE posted its biggest share-price gain since 1982, when Jack Welch was starting in the top job.
That is where the blame for it all lies.
‘‘Larry has made significant progress in transforming GE’s operations and culture,’’ lead director Tom Horton said by e-mail. ‘‘Larry’s compensation remains overwhelmingly tied to producing results for shareholders, with nearly 90 percent of his annual pay at risk.’’
Is the alleged incentives and gamble supposed to make all us destitute out here better?
He will be walking away with how much, nearly a quarter of a BILLION?
The Boston-based company last month reported double-digit declines in orders across the board for the second quarter. Jet-engine revenue plunged 44 percent as the pandemic crushed air travel, dimming the outlook for aircraft sales.
‘‘COVID-19 clearly put us back,’’ Culp said at the time. ‘‘It will take us a little longer, just because of what’s happened in aviation, in particular, but that said, I have more confidence today than I ever have that we’re going to see this transformation through.’’
GE will be $aved by the Great Re$et.
Will you?
The pandemic also dealt Culp a personal blow by drastically reducing his chances for a big stock payout, a fate the board remedied with his new contract.
When Culp signed on to take the CEO job, the stock fetched around $12.40, and what a deva$tating per$onal blow before recovery!
To push Culp to boost the stock price, the board put in place a big incentive. If GE rose to $31 a share within a few years — a 250 percent increase — Culp would receive as many as 7.5 million shares, valued at more than $230 million at that price. He could earn a partial payout, amounting to tens of millions of dollars, if the stock price increased at least 50 percent. If the price fell short of that threshold, he wouldn’t get any shares.
By February of this year, that lower benchmark was within striking distance, but as the pandemic worsened, GE plummeted.
Culp’s new employment agreement, announced Thursday evening, cancels the old equity grant and replaces it with another that is identical in size and structure but essentially halves the price targets.
Oh, they cut the goal and terms of the agreement because he was going to get nothing, and now he will make out and walk away with $230 million, too!
I'm $o $orry they Globe pu$hed for this lemon!
Under the new terms, Culp will earn his $230 million windfall if the shares reach $16.68 within a few years. If they only get to $13.34, roughly 10 percent above the mark when he became CEO, he will take home $124 million.....
What windfall awaits you, Americans?
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Related:
"Jeff Wilke, a 21-year Amazon veteran who led its consumer business and was long thought to be a successor to chief executive Jeff Bezos, is retiring in early 2021, the company announced Friday. He will be succeeded by Dave Clark, who serves as senior vice president of the company’s worldwide operations, Wilke wrote. (Bezos owns The Washington Post.) In his own memo to staff, Bezos described Wilke as his ‘‘tutor’’ and touted the executive’s contributions to Amazon. ‘‘Jeff’s legacy and impact will live on long after he departs,’’ Bezos wrote....."
He is now unemployed like the rest of us:
"State adds 72,100 new jobs, shrinks unemployment rate but still highest in country" by Sean P. Murphy Globe Staff, August 21, 2020
For a second straight month, Massachusetts recorded the highest unemployment rate in the country, almost 6 percentage points above the national average of 10.2 percent last month, likely due to its aggressive shutdown measures taken in response to the coronavirus last spring.
Yet somehow, according the Globe, Baker is one of the most popular governors in the country as the populace they control calls for further lockdowns.
New York, another state that reacted aggressively, had the second highest unemployment rate at 15.9 percent, while Utah had the lowest, at 4.5 percent. The Massachusetts unemployment rate was almost double New Hampshire’s rate and significantly higher than all other New England states.
The gain of 72,100 jobs last month was fewer than the previous month, when 94,600 jobs were added. After an initial delay in responding to the virus, Massachusetts required masks and social distancing, sharply limited activities both inside and outdoors, and reopened at a cautious pace.
Nice rewriting of history, Globe, along with the historical blind spot regarding city-sacking "protests."
Those measures, while earning the state praise from national public health officials, help explain the big hit taken in the job market, economists say.
Another factor in the state’s big loss of jobs is its reliance on industries especially hard-hit by the shutdown, including health care, education, and travel-related business such as restaurants and hotels.....
You will have to move to Revere to enjoy those.
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At least Culp won't have any problem holding onto his home:
"Overall mortgage delinquency numbers are improving, but the delinquency rate for homeowners who are seriously behind in their payments is soaring, another indication of a bifurcated housing market. Mortgage delinquencies track closely with unemployment. States that have been hard hit with job losses, particularly in the leisure and hospitality industry, are the ones facing the highest numbers of borrowers behind on their payments....."
PFFFFT!
Better check your stock portfolio:
"The S&P 500 ticked higher to close at another all-time high Friday, powered by strength for technology stocks and a couple of reports on the U.S. economy that were better than expected. The benchmark index rose even though the majority of stocks in the index weakened. Despite its record-setting week, the market’s momentum has slowed recently after roaring back from its nearly 34% plunge from late February into March. Investors are still waiting for more clarity on several fronts. The economy has shown some signs of stalling recently, with Friday’s reports from Europe the latest reminder that a steady rise in coronavirus cases may be undermining growth.
WTF?
Is the economy better than expected or is it stalling as growth is undermined by the "viru$?"
They follow a U.S. report from Thursday that showed that the number of workers applying for unemployment benefits picked up last week, but the picture remains mixed. Tech has remained remarkably resilient through the pandemic and continued to churn out big profits as work-from-home and other tech-friendly trends accelerate. The Federal Reserve is continuing to prop up markets and the economy by keeping interest rates at nearly zero and buying reams of bonds, but stimulus from Congress has lapsed, and Democrats and Republicans on Capitol Hill continue to haggle. Investors say the economy and markets need another round of big support from Congress for the recovery to continue.
The only "recovery" they are talking about is the $tock market and tho$e few who are ob$cenely benefiting.
Th $timulu$ over which they are arguing is not about getting you the measly Chump change check. That's cover for dumping trillions more into the stock market.
Beyond Capitol Hill, investors are also waiting for the latest developments in the rising tensions between the world’s two largest economies. China’s Commerce Ministry on Thursday said that Chinese and U.S. trade envoys will hold a meeting by phone “in the near future” to discuss an agreement aimed at resolving their tariff war....."
If that means no shooting war, fine, but the collaboration is leading to a World Communi$t Government with pukes like Bill G at the top of the pyramid and authoritarian potentates at all levels.
