GE Bonus Plan Could Encourage Deal-Making

New incentive pay plan gives Immelt motive to tap NBC cash for deals.

General Electric Co.’s new incentive pay plan gives Chief Executive Officer Jeffrey Immelt motive to tap $16.7 billion from last month’s sale of the rest of NBC to fund industrial acquisitions.

The three-year program will pay Immelt in part for increasing the share of GE’s profit from manufacturing businesses, the company said last week in a Securities and Exchange Commission filing. It replaces an arrangement from 2010 to 2012 that rewarded his success in shrinking the finance unit.

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The new compensation plan gives Immelt incentive to further shrink the finance unit, perhaps by separating the private-label credit card business, and to make acquisitions to fortify the industrial divisions, said Steven Winoker, a Sanford C. Bernstein & Co. analyst in New York, who has a market-perform rating on GE stock.

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