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General Electric removed bonuses for its senior management for the first time in its history

General Electric

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The US giant General Electric removed bonuses for its senior management for the first time in its 126-year history last year. The goal of the measure is to save millions of dollars after the company reports losses in 2017.
According to the information, only one of its directors has received additional bonuses. The measure has led to a drastic drop in wage rates, which in turn reflects the company’s poor performance over the past year.
The former CEO Jeff Immelt, who retired in August, has received 8.1 million USD in 2017, compared to 21.3 million USD in the previous year. The current CEO, John Flannery, has received 9 million USD last year without any bonus.
The salaries of managers of most major companies include, besides their salaries, bonuses, shares, share options and other earnings.
According to estimates, General Electric will save over 10 million USD in total by removing bonuses.
The only exception of the rule is David Joyce, who is the manager of the aviation business unit, whose 5.2 million USD salary, including a 1.4 million USD bonus.
“We hold the leaders responsible for the performance”, says the document of GE, which also states that the company’s operating profit has fallen by 11%, and the amount of bonuses that has been earmarked has fallen by 75%. Last year, the company reported a net loss of 0.72 USD per share. “In line with our commitment to link wages to performance, bonuses paid are concentrated in (aviation and healthcare) sectors that have had strong years”, adds the official document of GE.
The company added that they would not change the remuneration for members of the Board, who earn 275,000 USD per year.