No one asked General Electric (GE) CEO Jeffrey Immelt to give up his $12 million bonus -- at least as far as anyone knows. But he did.
According to Reuters, "Jeff Immelt has waived his right to a bonus and performance-based pay that would have netted him more than $12 million in cash." The GE board approved that action. Immelt's salary will stay where it is at $3.3 million.
The move is a smart one, at least from the standpoint of public relations and shareholder sentiment. GE's shares have dropped from a 52-week high of $38.52 to under $11, near a period low. Investors are concerned that the company will lose its "Aaa" rating or have to cut its dividend. Immelt has said he will fight to keep both intact.
When looking at Immelt's pay, the only important question is could he have done anything more to help GE's value? The answer is "yes". The company still has some of its old industrial divisions which tend to underperform the economy. There have been questions about why GE holds onto a cyclical media operation like NBCU.
The most important basis on which Immelt can be judged is GE's financial units. They have exposure to consumer and business debt and are likely to experience significant default rates as the recession deepens.
Immelt's fault? Only if he could see the recession coming. That puts him in the same boat as most CEOs who could not see the future.
Douglas A. McIntyre is an editor at 24/7 Wall St.