General Electric Co. said it would cut management bonuses if the company fails to meet certain financial targets, as CEO Jeffrey Immelt vowed to cut costs after stepped-up talks with activist investor Nelson Peltz.
Executive payouts will drop 20% if the company doesn't meet its target for $17.2 billion in industrial operating profit this year and falls short of a new goal of lowering "base costs" by $1 billion, to $23.9 billion. GE also set a cost objective of $22.9 billion for next year.
Immelt adopted the goals following talks with Peltz's Trian Fund Management, which took a stake in GE in 2015 after the company slimmed down lending operations to refocus on making jet engines, gas turbines and oilfield equipment. A rally fueled by Immelt's shift fizzled last year, leaving investors with returns that trailed the S&P 500 Index.
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