New York – General Electric (GE) said it would cut management bonuses if it fails to meet financial targets adopted after talks with activist investor Nelson Peltz.
Executive payouts will drop 20 percent if the company can’t generate $17.2 billion (R217.13 billion) in industrial operating profit this year and lower a measure of “base costs” by $1 billion to $23.9 billion.
GE also set a cost objective of $22.9 billion for next year.
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Chief executive Jeffrey Immelt adopted the goals after pressure from Peltz’s Trian Fund Management, which took a stake in GE in 2015 after the company slimmed down lending operations to refocus on making jet engines, gas turbines and oilfield equipment.
The shares dropped 5.5 percent during the 12 months ended on Tuesday while the S&P 500 Index advanced 14 percent.
“We will continue to hold management accountable to its commitments,” Trian said in a statement.