(Reuters) - General Electric Co Chief Executive Officer Jeff Immelt will personally profit if the U.S. conglomerate reaches certain cash and operating profit margin targets over the next three years.
According to a U.S. securities filing on Monday, the compensation committee of GE’s board granted Immelt 200,000 “performance share units,” or PSUs, that will convert into GE stock at the end of three years based on two equally weighted goals.
The first goal is total cash, including GE cash from operating activities and net gains from dispositions. Immelt earns half of the targeted amount of PSUs, if the company reaches $50 billion through 2016, and the full amount if it reaches $55 billion.
The second goal is operating margins. If GE’s operating margin is 16.5 percent by 2016, Immelt earns half, while he earns the full amount if the margin reaches 17 percent.
The profit margin goal is in line with what Immelt has outlined already for the company. GE has said it is targeting 17 percent profit margins for its industrial businesses by 2016, up from 15.7 percent last year.
In addition, the compensation committee granted Immelt 500,000 stock options, consistent with a long-term incentive plan, according to the filing.
The company plans to provide similar incentives to other top GE executives, according to the filing.
Immelt’s salary in 2013 was $3.47 million, his bonus was $5 million and his total compensation was $19.8 million.
Reporting by Lewis Krauskopf; Editing by Tom Brown