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By Jessica DiNapoli and Rajesh Kumar Singh
NEW YORK/CHICAGO (Reuters) - A majority of shareholders at General Electric Co's annual meeting rejected the pay packages for named executive officers, including CEO Larry Culp, whose compensation for 2020 tallied $73.2 million.
According to preliminary results, 57.7% of shareholders rejected GE's pay packages, a strong rebuke to executives of the industrial company, which is in the middle of a challenging turnaround and has laid off thousands of workers.
"While we are disappointed with the preliminary results of the vote, we value and respect the views of the shareholders," the company said. "The board will take those views into consideration as we evaluate executive compensation."
The shareholders' vote is advisory, not binding.
GE last August lengthened Culp's employment agreement to 2024, with a one-year option to extend after that. As part of the agreement, the company granted him new shares, fueling his payout. There were also lower financial targets for Culp to meet to receive the new shares.
During the meeting, the company explained that Culp's contract was extended because GE's transformation would take longer than anticipated due to the coronavirus pandemic. The lowered performance goals in his pay package reflected the uncertainty of the pandemic at the time, the company said.
"The board believes it was in GE's best interest and it was our responsibility ... to secure Larry for a longer period of time. So, he can continue driving GE's transformation," Tom Horton, GE's lead independent director, told the shareholders.
Proxy advisors Institutional Shareholder Services Inc (ISS) and Glass Lewis recommended shareholders reject GE's executive compensation package.
Union-affiliated Change to Win Investment Group also urged shareholders to reject the plan.
In response to shareholder questions later in the meeting, Culp said the company has no plans to increase its dividend at this time.
(Reporting by Jessica DiNapoli in New York and Rajesh Kumar Singh in Chicago; additional reporting by Ross Kerber in Boston; Editing by Steve Orlofsky and Paul Simao)