GE Agrees to Disclose Business Arrangements with Exec Pay Advisers

December 29, 2006 ( - General Electric Co. has agreed to a request by a group of shareholders to go beyond regulatory requirements and disclose any business ties it may have with the firms that advise it on how to pay its top executives.

Dow Jones Newswires reports a GE spokesman said the company will make this information available in its upcoming proxy statement, which it usually files in early March ahead of the April shareholders’ meeting. In October, a group of 13 institutional investors sent letters to the 25 largest Standard & Poor’s 500 companies requesting the information.

The concern of the institutional investor group is consultants may be reluctant to provide objective advice on executive pay if they rely on management’s approval to win other business at the companies they advise. “It is critical … that a compensation consultant be free of any conflict of interest, perceived or actual,” the letter said, according to the news report.

The group of shareholders plans to announce Tuesday the results of their letter campaign, a spokesman for Connecticut Treasurer Denise Nappier told the news service. He said the shareholders may submit proposals asking investors to vote in favor of the disclosure if companies do not volunteer to make the information public.

As for GE, the company spokesman said GE used the services of New York compensation consulting firm Frederic W. Cook & Co. and had no business agreements with that firm beyond compensation consulting.