GE Proposes Keeping KPMG as External Auditor -- Update

By Thomas Gryta 

General Electric Co. will keep KPMG LLP as its auditor for another year, extending a relationship that dates back more than a century and has been tested recently by accounting problems.

Proxy advisory firms recommended a change in auditor two years ago, and GE has said it would explore making a change. Federal investigators are probing the company's accounting practices after several large write-downs. GE has said its accounting is proper and it is cooperating with the probes.

In its proxy filing, GE said its board decided to keep KPMG for 2020 after receiving feedback from shareholders, including their views on the company's recent financial results, the continuing Securities and Exchange Commission investigation and recent leadership changes at GE.

The company said it continues to review proposals from other audit firms and expects to complete the process in the middle of the year. Last year 89% of votes were cast in favor of keeping KPMG, compared with 65% support in 2018.

KPMG and its predecessor firms have audited GE since 1909, one of the longest auditor-client relationships. The GE account generated almost $80 million in fees for KPMG last year.

Shareholders will vote to approve KPMG and executive compensation, along with the board's directors at a planned May 5 annual meeting in Boston. A shareholder proposed naming an independent board chair, something the GE board opposed. Chief Executive Larry Culp currently serves as chairman.

Mr. Culp received 2019 compensation valued at $24.6 million, including a salary of $2.5 million and a bonus of $5.6 million. Outgoing finance chief Jamie Miller received $10.5 million. GE Aviation CEO David Joyce earned compensation valued at $23.8 million.

In its proxy, the company warned the annual-meeting plans could be altered because of the coronavirus pandemic.

Last week, GE said it would nominate former Defense Secretary Ash Carter to its board, subject to shareholder approval. GE has reduced its board's size in recent years. It shrank from 18 seats to 12 seats two years ago, when the company removed numerous long-term directors and added new blood.

Write to Thomas Gryta at [e-mail]

(END) Dow Jones Newswires

March 12, 2020 17:56 ET (21:56 GMT)

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