GE Cuts Larry Culp’s 2022 Pay After Shareholder Protest

Nearly 58% of GE shares were voted against the board’s compensation practices at last year’s annual meeting. It is rare for shareholders to withhold their support for such say-on-pay votes at major companies.

For 2022, Mr. Culp stands to receive a $5 million equity award, instead of the $15 million set out in his revised contract, if he and the company meet performance targets. Exceeding those targets or falling short would increase or reduce the award, respectively.

GE reduced Mr. Culp’s potential 2022 pay following discussions with most of its major shareholders last year, the company said in its annual proxy statement.

“There was shareholder concern around the timing, size and structure of the 2020 retention grant made as part of the extension,” GE said in its filing, along with shareholder support for Mr. Culp’s leadership. The company also said it doesn’t plan to make similar changes to its CEO’s pay in future years.

On Thursday, GE reported paying Mr. Culp $22.7 million for 2021, including a cash bonus of $4.2 million and salary of $2.5 million as well as a $15 million equity award. The equity award was made before the 2021 annual meeting, GE said in the filing.

His 2021 pay trailed the $73.2 million that GE reported paying him in 2020, but it roughly matched the $24.6 million paid in 2019, Mr. Culp’s first full year heading the company, securities filings show.

GE said in its proxy that the board would also limit its use of discretion when determining executive bonuses, after shareholders expressed concerns that GE used discretion in 2020 to award bonuses rather than pegging them to performance measures.

The company said Mr. Culp’s bonus for 2021 paid out at 112% of target, reflecting better-than-target free-cash-flow and margin-expansion figures, and worse-than-target revenue growth, as well as a penalty based on companywide safety metrics.

A GE spokeswoman said the company spoke with investors holding about half the company’s shares, and three-quarters of those held by institutional investors, after the failed say-on-pay vote.

Write to Theo Francis at theo.francis@wsj.com