Corporate governance groups won a rare victory over executive compensation as General Electric shareholders voted to reject the pay plans for top executives including CEO Larry Culp and CFO Carolina Dybeck Happe.

The vote at GE’s annual general meeting on Tuesday came out at nearly 58% against the 2020 executive compensation program, which includes a payout of as much as $230 million to Culp.

Larry Culp

Dybeck Happe, who became GE’s CFO in March 2020, earned $2.55 million in salary and annual bonus last year and was awarded another $19.9 million in stock grants.

While so-called “say on pay” votes are advisory and non-binding, Reuters said the GE shareholders’ move would “embolden corporate governance reform advocates who have criticized the shielding of CEOs from the financial fallout of the COVID-19 pandemic and the cost cuts companies often choose to implement.”

“We need GE to invest in America, not just one top executive,” said Carl Kennebrew, national president of the IUE-CWA union, which represents GE workers. “We are glad that shareholders are starting to see it the same way.”

Average shareholder support for U.S. executive pay packages has dropped this year to the lowest level since at least 2016, according to pay data firm Equilar, with five S&P 500 companies having now suffered rejections of their executive pay packages, including IBM and Starbucks, compared with 10 in all of 2020.

More contentious votes are expected this month as shareholders square off with Amazon, ExxonMobil, and others.

At GE, Culp’s $73 million pay package makes him one of the highest-paid public company chief executives on paper in 2020. But what particularly upset governance groups was that the board amended the plan during the coronavirus pandemic last year, lowering his performance targets to make it easier for him to earn stock payouts.

“Once something is already done, typically it’s not undone,” Michael Varner, director of executive compensation research for CtW Investment Group, told the Boston Globe. “[But] there’s very little excuse for a lowering of goals at this level, especially without a lowering of the payout opportunity.”

Last year, the pay awards for GE executives won 73% support from shareholders.

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