John F. Welch Jr., General Electric Co.'s chairman and chief executive, got $16.7 million in salary and bonus in 2000, a year in which he chose his successor, announced the biggest acquisition of his career, and again reported record results.
Mr. Welch's total compensation was about $122.5 million in 2000, according to a proxy statement filed with the Securities and Exchange Commission. In addition to his salary of $4 million and bonus of $12.7 million, that figure included a restricted stock award of 850,000 shares, valued at about $48.7 million when it was granted. Also included was $57.1 million realized when Mr. Welch exercised options underlying 1.2 million shares. He received no long-term incentive payments in 2000.
The award of Mr. Welch's salary and bonus, which represented a 25% jump from 1999, was determined by considerations including his "aggressive leadership," his embrace of e-commerce and other initiatives across GE and his selection of the company's next leadership team, according to the GE board's compensation committee.
In November, Mr. Welch named Jeffrey R. Immelt as president and chairman-elect, and said Mr. Immelt would succeed him later this year. A month earlier, Mr. Welch had engineered the proposed acquisition of Honeywell International Inc., GE's biggest-ever deal currently valued at about $35.5 billion. He also said he would postpone his retirement, which had been planned for next month, to close the deal. Mr. Welch, who has been at GE's helm for 20 years and turned 65 in November, has said he will step down by year end.
GE also reported its best-ever financial results in 2000, with net income of $12.74 billion, a 19% increase from the year earlier, and revenue of $129.85 billion, a 16% rise.
For his part, Mr. Immelt, who headed GE Medical Systems before being named to succeed Mr. Welch, received a salary of $1 million, a 62% increase from 1999. His bonus of $2.5 million was a little more than double the $1.2 million he received in 1999. He also received a restricted stock award valued at $15 million when it was granted, and exercised options underlying 139,000 shares, realizing about $6.4 million.
Both men also received stock-option grants. Mr. Welch was granted options on three million shares, representing 6.5% of all options given out last year to about 30,000 employees, with an exercise price of $57.31 apiece. They become exercisable on or after his retirement and expire in September 2010. The compensation committee said the large grant was intended to recognize Mr. Welch's "20 years of outstanding service as CEO" and his efforts to introduce initiatives to boost the company's performance even after he retires. Mr. Immelt received two option grants. In September he was granted 350,000 options with an exercise price of $57.31 and an expiration date in September 2010. In November, when he was named Mr. Welch's successor, he received an additional 200,000 options with an exercise price of $49.38 and an expiration date in November 2010.
In addition, GE spent $33,920 on financial counseling for Mr. Welch in 2000 and $18,796 for his use of a car. The company also spent $70,854 for Mr. Immelt's personal use of company aircraft.
In 4 p.m. trading Friday, GE shares closed down $2.06 at $43.81 in composite trading on the New York Stock Exchange
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