GE's chairman and CEO, Jeffrey Immelt, said the compensation committee accepted a proposal from Immelt to waive his 2008 bonus of $12 million for 2008, as well as the $11.7 million he might have earned under his long-term performance award, if GE's fortunes had played out differently.

But last year was a tumultuous one: a year in which the company's shares plunged 56 percent and GE's stock dropped from highs of $38.52 in April to lows of $10.66 earlier this month. GE shares traded 1.7% higher after Immelt said he would pass up his bonus. Commenting on his decision, Immelt said that "earnings came in below what were we expecting," also noting GE's declining stock price.

GE's market cap has dropped to $113 billion and is now the 10th largest U.S. company, down from the second largest market cap company following Exxon Mobil in August.

Mr. Immelt, 52, earned $3.3 million in salary in 2008 and hasn't given himself a raise since 2005. His bonus in 2007 was $5.8 billion.

Attempting to portray the company in a favorable light, Immelt said, "In a tough environment in 2008, "our earnings declined 19 percent, versus a decline in the S&P of 35 percent. That's not the kind of out-performance we like, but it was still better than the broader market."

Saying he believed "that our senior executives' compensation in 2008 should reflect their contribution to GE."

"Mike Neal, head of the capital finance business and a vice chairman, is seeing his bonus drop 25 percent, and CFO and Vice Chairman, Keith Sherin's bonus will be down by 15 percent. John Rice, head of the technology infrastructure group, will receive a 10 percent bonus cut," Immelt said.

"It is important that the Board and I have the freedom to compensate our senior executives in a fair and reasonable way," Mr. Immelt wrote in a note.

GE's financial arm, GE Capital, suffered through a traumatic 2008, when GE was forced to raise cash from Warren Buffett's Berkshire Hathaway among others to retain its Triple-A rating.

The committee defended Immelt's performance, saying, "He performed well in an extraordinarily tough business environment. The committee said most of GE's difficulties were due to its financial services business, and even that unit's annual profit of $8.6 billion was "more than the earnings of most other financial services companies in the world." Return on total capital and margins compare favorably to other industrial companies, the committee added.

Source: GE

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