“In the United States, shareholders are rebelling in these times of Covid-19”

Losses & profits. Shareholders are rebelling in these times of Covid-19, and more than in previous years. Ahead of annual general meetings, executives of several US multinationals saw their compensation approval rates drop sharply. These are only advisory votes, but the bosses of Starbucks, the drugstore chain Walgreens Boots Alliance or the telecoms and media giant AT&T are in the crosshairs. Last targeted, the CEO of General Electric (GE), Larry Culp, the best illustration of what has happened in recent months.

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In August 2020, while the conglomerate is pursuing a restructuring marked by tens of thousands of layoffs, its board of directors decides to extend Mr. Culp’s contract until 2024 and to raise his compensation plan …, while lowering the financial objectives set at the time of his appointment. He could touch up to $ 232 million (193 million euros) at the end of his mandate, and this prospect has earned him a shower of criticism. The shareholder advisory firm Glass Lewis, which does not house dangerous Bolsheviks, criticizes the board for this policy. And 57.7% of voters opposed it (against 73% in 2020), according to a provisional count published Tuesday, May 4.

The jurisdiction argument

The board of GE attributes to Mr. Culp all the qualities to save the Boston giant. In 2020, he made a profit of 5.2 billion dollars, the amount of his loss in 2019. So do not skimp on the means. An argument of competence taken up at AT&T, where half of the shares expressed yet rejected the executive compensation plan: who better than Jason Kilar, boss of the media division since the takeover of Time Warner in 2018, can develop this activity in within the incumbent US telecoms operator? This justifies, in the eyes of the council, its 52 million dollars – well above the 22 million granted to its CEO, John Stankey.

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Only a handful of large companies show less than 50% support. Their boards of directors do not live with such rebuffs. Rest assured, it’s not the big night yet, if we are to believe the Wall Street Journal. According to the Business Daily, the median compensation of executives of the top 300 listed American companies reached 13.7 million in 2020, almost 1 million more than the previous year.