Case | HBS Case Collection | April 2005 (Revised May 2005)

Executive Compensation at General Electric (A)

by V.G. Narayanan and Michele Jurgens

Abstract

Faced with falling share prices and the critical eye of the media focused on Jack Welch's retirement plan, newly appointed CEO Jeff Immelt had the challenge of reassessing GE as a leader of corporate integrity and good governance. Presents the changes Immelt initiated in the board of directors, in Immelt's own compensation scheme, and in the compensation scheme for all GE executives, designed to address GE's corporate governance issues. Examines the use of stock options and alternative stock-based incentive schemes, along with the importance of each tool in a total compensation plan. A rewritten version of an earlier case.

Keywords: Executive Compensation; Employee Stock Ownership Plan; Governing and Advisory Boards; Media; Governance; Corporate Accountability;

Citation:

Narayanan, V.G., and Michele Jurgens. "Executive Compensation at General Electric (A)." Harvard Business School Case 105-072, April 2005. (Revised May 2005.)