Larry Culp
GENERAL ELECTRICAbout Larry Culp
H. Lawrence “Larry” Culp, Jr., age 61, is Chairman (since April 2024) and CEO (since June 2022) of GE Aerospace; he previously served as GE’s Chairman & CEO (2018–2024). He holds a BA from Washington College and an MBA from Harvard Business School, and has served as a public-company CEO (Danaher) and director (including GE HealthCare) . Under his leadership in 2024, GE Aerospace delivered operating profit growth of +30% and free cash flow growth of +28%, and generated 65% TSR vs. 17% for the S&P 500 Industrials Index, while completing GE’s multi‑year breakup into three public companies that added over $230B in combined market cap since November 2021 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| GE (pre-spin) | Chairman & CEO | 2018–2024 | Led multi‑year transformation into three independent public companies; combined market caps rose >$230B since Nov 2021 . |
| GE Aerospace | CEO | 2022–present | 2024 opp. profit +30% and FCF +28%; launched FLIGHT DECK lean model . |
| Danaher | CEO & President | 2001–2014 | Prior large‑cap operating CEO experience (bio) . |
| Harvard Business School | Senior Lecturer | 2015–2018 | Academic leadership (bio) . |
| Bain Capital Private Equity | Senior Advisor | 2017–2018 | Investment/operating perspective (bio) . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| GE HealthCare | Director | Current | Current public company board . |
| Danaher; GlaxoSmithKline; T. Rowe Price Group | Director | Prior | Prior public boards (dates not specified in proxy) . |
| Washington College | Board of Visitors & Governors (former Chair) | Current | Non‑profit/academic leadership . |
| Wake Forest University | Trustee | Current | Non‑profit/academic leadership . |
Fixed Compensation
- Employment agreement (effective July 1, 2024) set base salary at $2.0M (down from $2.5M) and increased target bonus to 200% of salary; term through 12/31/2027 with potential mutual extension to 12/31/2028 .
| CEO Summary Compensation (SEC table) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $2,500,000 | $2,500,000 | $2,250,000 |
| Stock Awards | $5,000,021 | $4,999,987 | $78,281,883 |
| Stock Options | $0 | $0 | $0 |
| Non‑Equity Incentive (AEIP bonus) | $525,000 | $5,625,000 | $6,781,250 |
| Change in Pension Value & Deferred Comp. | $151,653 | $1,002,278 | $1,325,765 |
| All Other Comp. | $21,350 | $571,020 | $315,688 |
| SEC Total | $8,198,024 | $14,698,285 | $88,954,586 |
| 2024 Target Annual Program Compensation | Base Salary | Target Bonus % | Target Bonus ($) | Target Equity | Total Target |
|---|---|---|---|---|---|
| Culp (effective structure) | $2,000,000 | 200% | $4,000,000 | $15,250,000 | $21,250,000 |
All other compensation detail (security services, savings plan contributions, etc.) is disclosed; for 2024, security services cost $291,291 and savings plan contributions were $24,150 .
Performance Compensation
Annual Executive Incentive Plan (AEIP) – 2024
- Metrics/weights: Revenue or adjusted revenue growth (20%), Operating Profit (40%), Free Cash Flow (40%); safety modifier ±10% .
- Committee applied negative discretion on total company and Commercial Engines & Services due to missed customer engine deliveries/services expectations .
- CEO AEIP actual payout: $6,781,250 for 2024 .
| AEIP Structure (CEO 2024) | Weighting | Target (per plan table) | Maximum | Actual Payout |
|---|---|---|---|---|
| AEIP bonus opportunity | — | $3,875,000 target; payout range $0–$8,137,500 | $8,137,500 | $6,781,250 |
| Metrics: Revenue/Adj. Revenue | 20% | Not disclosed | Not disclosed | Incorporated in payout |
| Metrics: Operating Profit | 40% | Not disclosed | Not disclosed | Incorporated in payout |
| Metrics: Free Cash Flow | 40% | Not disclosed | Not disclosed | Incorporated in payout |
| Safety modifier | ±10% | — | — | Negative discretion applied at company/business level |
Note: Specific AEIP targets/actuals are not publicly disclosed due to competitive sensitivity; PSU financial targets are also not disclosed, though the design is described (see below) .
Long‑Term Incentive (LTI) – PSUs/Options/RSUs
- 2024 CEO annual equity was 100% PSUs; from 2025, CEO annual equity will be 50% PSUs, 30% options, 20% RSUs (aligned with other SLT) .
- PSU metrics: Adjusted EPS and Free Cash Flow with a 3‑year relative TSR modifier; for 2025 PSU design, performance measured cumulatively over 3 years; prior annual PSU tranches measured each year within a 3‑year period .
- Payout ranges: 2024 PSUs and 2024 portion of 2023 PSUs pay 0–175% of target; CEO Incentive Grant pays 0–150% of target .
| 2024 CEO Equity Grants | Grant date | Award type | Target units | Payout range | Exercise price | Grant date fair value |
|---|---|---|---|---|---|---|
| Annual Equity | 5/1/2024 | PSUs | 96,105 | 0–175% (PSUs) | N/A | $15,000,068 |
| 2024 portion of 2023 PSUs | 6/17/2024 | PSUs | 76,504 | 0–175% (PSUs) | N/A | $13,720,227 |
| CEO Incentive Grant | 7/1/2024 | PSUs | 310,289 | 0–150% (EPS CAGR) | N/A | $49,326,642 (max fair value $73,990,043) |
Vesting/holding:
- 2024 stock options/RSUs (for NEOs) vest 50% on the 2nd anniversary and 50% on the 3rd; options priced at the closing price on grant date (e.g., $159.70 for 5/1/2024 awards) .
- PSUs vest based on multi‑year performance; for 2023 PSUs, each calendar year’s targets set and measured annually within a 3‑year period; relative TSR modifier applies; 2025 design moves to cumulative metrics .
CEO Incentive Grant special terms (retention):
- Forfeiture if voluntary departure without good reason before 12/31/2027; upon death/disability/termination without cause or resignation for good reason: greater of actual or target (prorated if before 12/31/2026); with change‑in‑control termination (double trigger within 12 months): greater of actual (through change‑in‑control) or target .
Equity Ownership & Alignment
- Beneficial ownership at 12/31/2024: Culp 1,210,834 shares (<1% of class); none of the named persons’ shares are pledged .
- Outstanding CEO awards (12/31/2024 snapshot): PSUs 133,882 (3/1/2023), 168,184 (5/1/2024), 133,882 (6/17/2024), and 465,434 (CEO Incentive Grant) with disclosed market values; no 2024 stock options for the CEO .
- 2024 realizations: CEO acquired 1,981,724 shares on vesting with pre‑tax value realized of $333,343,753; also spin‑off‑related GEHC and GEV stock awards vested with additional value (noted in footnote) .
- Policies: 10x salary ownership guideline for CEO; one‑year holding period for certain RSUs/PSUs and holding until guidelines met; no hedging and no pledging permitted; all named executives are in compliance .
- No single‑trigger equity vesting upon change‑in‑control for NEO equity awards .
| Potential Equity Benefits (as of 12/31/2024) | Upon Death (RSUs/PSUs) | Upon Disability (RSUs/PSUs) | Upon Retirement (RSUs/PSUs) | Upon Involuntary Termination (RSUs/PSUs) |
|---|---|---|---|---|
| Culp | $90,628,745 | $90,628,745 | $57,420,460 | $11,167,925 |
Employment Terms
- Contract term: through 12/31/2027; potential mutual extension to 12/31/2028 .
- Base salary: $2.0M effective 7/1/2024; target bonus: 200% of salary effective 7/1/2024 .
- Annual LTI from 2025: $15.25M grant date fair value, in 50% PSUs / 30% options / 20% RSUs .
- Severance (without cause/good reason): 2x (salary + target bonus) paid over two years; illustrative amount $12,000,000 as of 12/31/2024 .
- CEO Incentive Grant performance/vesting terms as above; “good reason,” “cause,” and “change‑in‑control” definitions outlined in proxy .
- Restrictive covenants: 12‑month non‑compete and non‑solicit post‑termination .
- No single‑trigger vesting on change‑in‑control for NEO equity .
- Pension/deferred comp snapshot: CEO 2024 pension change $1,325,765; deferred bonus program aggregate balance $2,681,439 at year‑end with 2024 earnings of $535,287 .
Board Governance (Culp as Director)
- Combined Chair/CEO structure, counterbalanced by a strong Lead Independent Director (Thomas Horton) and independent committee chairs; Board cites clarity in strategy/accountability and uses independent executive sessions and robust lead director duties to mitigate dual‑role risks .
- Committee leadership (independent): Audit Chair Isabella Goren; Compensation Chair Stephen Angel; Governance Chair Catherine Lesjak .
- Employee directors do not receive director compensation; independent director program detailed separately .
- Director attendance: each current director attended ≥75% of meetings; average 98% in 2024 .
Compensation Structure Analysis
- Mix shift and rigor: CEO base cut to $2.0M while target bonus raised to 200% to increase at‑risk cash pay; from 2025, CEO annual equity includes options (30%) and RSUs (20%) aligning with SLT and market .
- One‑time CEO Incentive Grant: $50M target PSUs tied to 4‑year EPS CAGR through 2027; designed for retention and alignment with 2028 ~$10B operating profit outlook; payout requires both performance and service through term; off‑cycle grants not expected recurrently during this agreement .
- Program tightening: 2025 PSUs move to 3‑year cumulative performance; committee used negative discretion on 2024 bonuses for missed delivery/customer expectations despite strong financial results .
- Governance guardrails: Clawback policy compliant with NYSE 303A.14 and additional misconduct recoupment; prohibition on hedging/pledging; no option repricing or backdating; equity grant timing avoids MNPI windows .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval: 94%; broad shareholder engagement with peers updated post‑spin to focus on aerospace/industrials (e.g., RTX, TransDigm, Honeywell, Boeing, Lockheed, etc.) .
Performance & Track Record
- 2024 performance: operating profit +30%, FCF +28%, orders +32% with remaining performance obligation >$170B; TSR 65% vs. 17% S&P 500 Industrials; established ~$25B capital deployment framework (2024–2026) and returned >$6B to shareholders; $2.7B invested in R&D .
- Transformation: completed spin‑offs of GE HealthCare (Jan 2023) and GE Vernova (Apr 2024); Board highlights value creation >$230B in combined market caps since Nov 2021 .
Risk Indicators & Red Flags
- One‑time CEO equity grant is large by design; Board cites retention and performance linkage with rigorous EPS CAGR target and service condition through 2027; no single‑trigger change‑in‑control vesting and robust clawback mitigate risk .
- Insider selling pressure mitigants: substantial holding requirements and one‑year post‑settlement holding for certain awards; executives must meet ownership guidelines before selling net shares .
- No option repricing; no hedging/pledging; independent committee oversight and high say‑on‑pay support .
Investment Implications
- Alignment: Elevated at‑risk pay (cash and equity), multi‑year EPS/FCF/TSR PSU design, and strict ownership/holding rules align CEO outcomes with shareholder value creation; the 2025 shift to options adds further sensitivity to long‑term stock appreciation .
- Retention and execution: The 4‑year, EPS‑CAGR‑based CEO Incentive Grant with service condition through 2027 reduces near‑term departure risk and centers leadership incentives on meeting the 2028 operating profit ambition; any under‑performance would materially reduce realized pay .
- Overhang/optics: The size of the one‑time PSU grant is noteworthy, but shareholder support (94% say‑on‑pay), clawback/anti‑pledging constraints, and explicit negative discretion in AEIP suggest disciplined governance; watch future disclosures on PSU target rigor and any adjustments .