General Electric Company (NYSE:GE) has set an industrial operating profit of $17.2 billion for 2017, according to an 8-K filed March 21.
Based on discussions with Trian Fund Management, the industrial giant also raised its targeted reduction in industrial structural costs from $24.9 billion in 2016 to $23.9 billion for 2017. The industrial structural costs include selling, general and administrative costs, adjusted corporate operating profit and other fixed product and service costs.
In addition, General Electric said it is targeting reduced industrial structural costs of $22.9 billion for 2018.
Meanwhile, the industrial giant said its board of directors modified the performance framework for the members of the company’s executive management team, consisting of CEO Jeffrey Immelt and each of his direct reports at the senior vice president level and above.
This year, the executive management team’s bonuses will be increased or decreased from based on achievement of industrial operating profit and industrial structural cost targets.
If both the industrial operating profit target and industrial structural cost targets for 2017 are achieved, bonuses will be increased by 20%. If neither of these targets is achieved, their bonuses will be decreased by 20%. In addition, if only one of these targets is achieved and the other one is missed, there will be no impact on their bonuses.
For 2018, General Electric Company (NYSE:GE) said it will review its performance framework with a goal “to further align incentives around the most critical financial metrics driving long-term shareowner value.”
Trian Fund Management Stake in General Electric
Trian Fund Management, run by Nelson Peltz, held 67.42 million General Electric shares, with a reported value of around $2.1 billion, at the end of 2016.
During the fourth quarter, the hedge fund cut its stake in the company by 5.21 million shares.
Meanwhile, shares of General Electric Company (NYSE:GE) have not been performing well. The stock has lost over 8% during the last three months, 1.66% during the last six months, and nearly 5% during the last 12 months. Shares are down 6.52% year-to-date.