Table of Contents
UNITED STATES
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SCHEDULE 14A INFORMATION
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Table of Contents
2023
NOTICE OF
ANNUAL MEETING
AND PROXY
STATEMENT
Table of Contents
Guide to GE’s Proxy Statement
Table of Contents
On behalf of our Board of Directors, we are making these materials available to you (beginning on or about March 22, 2023) in connection with GE’s solicitation of proxies for our 2023 Annual Meeting.
General Electric Company Executive Offices
5 Necco Street,
Boston, MA 02210
WHY ARE WE SENDING YOU
THESE MATERIALS? |
On behalf of our Board of Directors, we are making these materials available to you (beginning on March 14, 2018) in connection with GE’s solicitation of proxies for our 2018 annual meeting of shareowners. |
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Please read these materials and submit your vote and proxy by telephone, mobile device, the Internet, or, if you received your materials by mail, you can also complete and return your proxy card or voting instruction form. |
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WHERE CAN YOU FIND MORE
INFORMATION? |
Check out our annual report as well as our integrated summary report. Be sure not to miss the important supplemental information posted on our proxy website.
www.ge.com/proxy
www.ge.com/annualreport
www.ge.com/ar2017/
integrated-report
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INDEX OF FREQUENTLY
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*To be voted on at the meeting.
Table of Contents
Letter from the Lead Director
GE 2018 PROXY STATEMENT
This overview highlights information contained elsewhere in the proxy statement and does not contain all of the information that you should consider. You should read the entire proxy statement carefully before voting.Fellow Shareholders,
Governance
Dear Shareowners,
The lastpast year has been one of historic transformation for GE as it has been executing its strategic plan to form three industry-leading, global public companies: GE HealthCare, GE Vernova and GE Aerospace. We reached a difficult onemajor milestone in January 2023, with the successful spin-off of GE HealthCare as the first of the three planned independent companies. Today the GE team remains focused on continuing to strengthen and improve the operations of our remaining businesses, as we simultaneously work to be ready for the remaining planned spin-off of GE Vernova, our portfolio of energy businesses. With the success of the GE HealthCare separation as early evidence, the Board continues to believe executing on this plan will best position GE’s shareowners,businesses to deliver long-term growth and no one is more disappointedcreate value for all our stakeholders. In this letter, as I have for the past several years, I would like to offer some additional perspective about the Board’s efforts on your behalf.
Evolving the Board of Directors
As lead director and a member of our Governance & Public Affairs Committee, I have had the opportunity to focus on our recruitment of directors who will bring deep domain expertise and dedicated oversight for each of the three independent companies. This has also entailed careful planning for the evolution of the GE Board: we recognize the importance of maintaining an engaged and well-balanced GE Board during this transition period as some of our existing directors move from GE to the new spin-off companies, and as we also add new directors in anticipation of the planned separations. In September, we announced the board of directors for GE HealthCare, and that board serves as a model of how we plan to mix industry-relevant experience and diversity of skills, expertise and perspectives as we look ahead to the planned boards for GE Vernova and GE Aerospace. We wish several departing directors farewell: Risa Lavizzo-Mourey and Tom Mihaljevic, who joined the GE HealthCare board in January, and Frank D’Souza and Leslie Seidman, who are not standing for reelection when their current terms end in May. We also continue to miss our friend and colleague former U.S. Secretary of Defense Ash Carter, who sadly passed away in October. With these departures, though the individual directors cannot be replaced, we look ahead to the needs of GE Vernova and GE Aerospace in our resultsrecruitment efforts. We are pleased to be nominating Darren McDew and Jessica Uhl as new directors in this proxy, who will bring valuable perspectives that are well aligned with the two future companies.
Executing on Our Strategic Priorities
The steady performance and execution by the GE team over the past several years have laid the foundation for the path ahead. GE’s portfolio actions have made it a simpler, stronger, technology-driven industrial company than your Boardit was just a few years ago. In 2022, GE retired $11 billion of Directors. We take our role as stewards of your investment very seriously, and we have taken a critical look at our operations and processesdebt, bringing total debt reduction since 2018 to assess how we can more effectively protect and increase the value of your investment.over $100 billion. As we approach the annual meeting, I want youremain focused on our objective to understand howcreate two more investment-grade standalone companies, the Board has been working on your behalf.
CEO SUCCESSION
The Board’s most important duty isregularly reviewing the company’s financial and capital allocation plans with management. This has involved considering a widening range of options to choosedeploy surplus capital, which has already translated into the right leadership for the company. Last June, we announced that John Flannery would take over as Chairman and CEO. John iscommencement of a proven leader with financial acumen, operational expertise and a global outlook. He spent much of his career at GE Capital before leading and reshaping GE Healthcare. He’s led GE businessescommon stock repurchase program in Argentina, Japan, India2022 and the United Kingdom. John knows the company incredibly well, but he is also capablepartial redemption of looking at GE with fresh eyes and making difficult decisions that break with the company’s traditions. We believe the last six months have already demonstrated that John is the right person to lead GE.
Prior to John’s appointment, the$3 billion of preferred stock this month. The Board conducted a deep dive to evaluate whether towill continue to combinehave an active dialogue with management about capital allocation priorities as we move forward. We also have seen most of GE’s businesses deliver solid operational and financial performances for 2022 in the Chairmancontext of significant global challenges that included supply chain constraints, inflation, the Russian invasion of Ukraine and CEO roles. enduring effects of the COVID-19 pandemic. The Board commends the GE leadership and teams for their sustained and ongoing achievements.
Delivering for Shareholders
We did not beginremain committed to regular, robust engagement with our shareholders on governance matters. The past year was no exception, as we met with shareholders representing nearly half of all outstanding shares, which was nearly 75% of the processshares held by institutional investors. I participated in a number of these calls and always appreciate the opportunity to speak directly with our large shareholders, answer their questions and hear their feedback. Our governance engagements covered a pre-determined view,range of topics, including the Board’s activities, executive compensation matters and afterGE’s sustainability priorities and reporting. The overarching and most-common theme, however, was a robust debate, ultimately concluded that continuing to have the CEO speak for and lead the companykeen interest in how GE and the Board wasare navigating these areas of corporate governance with the best approachplanned separations in viewview. Informed by those shareholder discussions, we have added specific highlights throughout this year’s proxy where there is key information related to the strategic plan and GE’s path forward.
We look forward to 2023 and beyond for continued performance by the GE businesses to deliver for our customers, shareholders and other stakeholders. These businesses all have important missions and are working to solve global challenges: GE Aerospace is creating a smarter and more efficient future of flight; the GE Vernova businesses are driving electrification and decarbonization through the energy transition; and GE HealthCare, now operating as a standalone company, is driving precision care. On behalf of the size and complexityGE Board, thank you for your continued support of GE.
FURTHER ALIGNING OUR EXECUTIVES WITH SHAREOWNERS
The Board has also been actively reviewing our executive compensation programs. A few years ago, we changed the annual cash bonus program to make it more formulaic and tied to our investor framework. But it is clear to us that more change is needed. To address this, we have revisited each of our executive compensation programs, with a few key, common elements as building blocks. First, to promote greater alignment with our shareowners, we are moving compensation for our senior executives away from cash and toward equity. We are doing away with our long-term performance awards, which pay out in cash, and focusing all long-term rewards on equity. Second, we have also been asking our executives to track and measure too many different metrics and targets, so we will refocus our evaluation criteria on fewer, higher impact metrics. We are also tying bonuses at the individual businesses to their performance, rather than overall company results, which we believe will produce a closer connection between pay and performance and accountability.THOMAS W. HORTON
While our compensation programs did not drive company performance in the way we had hoped, they did hold the senior leadership team accountable. For 2017, the Compensation Committee determined that, for the first time in GE’s history, the senior leaders at GE’s headquarters – our past and present CEOs, CFOs, Vice Chairs, General Counsel and HR directors – would not receive bonuses. We also zeroed out the performance share units awarded to senior leaders in 2015 even though the recipients were technically eligible for a partial payout.
PROTECTING AND GROWING YOUR INVESTMENT
We realize that the company’s track record on M&A and other capital allocation decisions has been disappointing. To increase our oversight of major investment decisions, we have created a new Finance and Capital Allocation Committee of the Board, an important step that mirrors additional management efforts to take a more disciplined approach to capital allocation, including buybacks, dividends and other significant investment decisions as well as M&A. The Board has been deeply engaged in the ongoing portfolio review that is taking a closer look at GE’s businesses and how to maximize their value for the long-term benefit of our shareowners. We are also revisiting the Board’s processes to ensure that we are focused on the topics that are most salient for the company, with a greater emphasis on promoting constructive debate and challenge between our leadership team and the Board. We have also increased our outreach and discussions with major shareowners to better understand investor perspectives and priorities.
HOW WE ARE CHANGING THE BOARD
As part of the Board’s 2017 self-evaluation, we concluded that the Board did not need to be as large as it has been historically, and that reducing the Board to 12 directors would strike the right balance between ensuring sufficiently broad perspectives and expertise and promoting greater dialogue and the heightened sense of accountability that we are trying to drive at all levels of the company. In February, we announced the 2018 slate, which includes Larry Culp, Tom Horton and Leslie Seidman, who will bring additional insight into capital allocation, industrial manufacturing, the aviation industry, accounting and financial reporting.
Our departing directors have all been dedicated and made valuable contributions to GE. In thinking about the Board going forward, we decided to focus on skill sets that were closely aligned to GE’s future portfolio, while also looking at director tenure and each director’s ability to dedicate substantial time to the Board at this critical period. We realize that we need to maintain our Board’s historical focus on cognitive diversity, including attracting directors with different backgrounds, and we will use future refreshment opportunities to continue to advance this important goal. This process will begin with me - I have decided to serve one more term to help facilitate a transition to the next Lead Director and will not stand for reelection in 2019.
The Board is aware of the significant challenges in front of us and we are prepared to meet them. We will continue to work to earn your support, and we are confident and resolute that better days lie ahead for GE and all its stakeholders.
2023 PROXY STATEMENTJohn J. Brennan, Lead Director 1
1
Table of Contents
GE: A New Era Begins
2022 was a year that propelled GE forward. We successfully completed the spin-off of GE HealthCare in January 2023, distributing approximately 80.1% of its common stock to GE shareholders and retaining an approximately 19.9% stake in the company. We are making good progress on our plans to launch GE Aerospace and GE Vernova as industry-leading, global, investment-grade public companies that will unlock greater value for our customers and shareholders. | | As independently run companies, GE Aerospace and GE Vernova will be better positioned to create long-term value as we shape the future of flight and lead the energy transition. |
Solid Foundation
Strong financial position
| ● | We delivered strong full-year results across most of GE’s businesses in 2022, with total company revenue growth, margin expansion, and $4.8 billion of free cash flow.* Our four reporting segments in 2022 are listed below. |
| ● | We strengthened our foundation, retiring an additional $11 billion of debt, bringing total debt reduction to over $100 billion since 2018. |
Improved business and operating performance
We ran our operations better, further embedding lean and decentralization in our businesses.
| ● | Lean transformation: Drove sustainable, impactful improvements in safety, quality, delivery, cost and cash management. We are making progress embedding lean practices and tools deeply into how we work, creating a problem-solving culture where problems are embraced, owned, analyzed and fixed. |
| ● | Decentralization: Moved the decision-making center of gravity closer to the customer, resulting in greater accountability, more transparency and better results for our customers. |
Our progress on these priorities has laid the foundation to launch three companies. More than a year after the announcement to form three independent companies from GE’s businesses, the logic behind—and our conviction in—our historic transformation has only strengthened. Along the way, the feedback from our customers, investors, employees and other stakeholders has been overwhelmingly positive.
| AEROSPACE |  | | HEALTHCARE |  |
MISSION Providing customers with engines, components, avionics and systems for commercial, military and business & general aviation aircraft and a global service network to support these offerings UNITS Commercial Engines and Services, Military, Systems & Other INSTALLED BASE ~40,900 commercial aircraft engines** and ~26,100 military aircraft engines CEO H. Lawrence Culp, Jr. EMPLOYEES ~45,000 2022 REVENUES $26.0 billion | | MISSION Building a healthier future and creating a world where healthcare has no limits UNITS Healthcare Systems, Pharmaceutical Diagnostics INSTALLED BASE 4M+ installations; 2B+ patient exams per year CEO Peter Arduini EMPLOYEES ~49,000 2022 REVENUES $18.5 billion Note: GE HealthCare refers to our reporting segment prior to the spin-off in January 2023, and thereafter refers to GE HealthCare Technologies Inc. |
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| RENEWABLE ENERGY |  | | POWER |  |
MISSION Making renewable power sources more affordable, reliable and accessible for the benefit of people everywhere UNITS Onshore Wind, Offshore Wind, Grid Solutions Equipment and Services, Hydro Solutions, Hybrids Solutions INSTALLED BASE 400+ GW of renewable energy equipment CEO Scott Strazik EMPLOYEES ~36,000 2022 REVENUES $13.0 billion | | MISSION Powering lives and making electricity more affordable, reliable, accessible, and more sustainable UNITS Gas Power, Steam Power, Power Conversion, Nuclear & Other INSTALLED BASE ~7,000 gas turbines CEO Scott Strazik EMPLOYEES ~32,000 2022 REVENUES $16.3 billion |
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| * | Non-GAAP Financial Measure. For information on how these metrics are calculated, see Explanation of Non-GAAP Financial Measures and Performance Metrics on page 75. |
| ** | Including GE and its joint venture partners. |
2 GE 20182023 PROXY STATEMENT
Table of Contents
Board Composition & RefreshmentCreating Value Today and Tomorrow
With the separation of GE HealthCare already completed, we believe the remaining GE businesses are positioned to continue to lead in two critical growth sectors: creating a smarter and more efficient future of flight and driving decarbonization through the energy transition.
Future of Flight Centered around our mission to create a smarter and more
efficient future of flight 
| | Energy Transition Positioned to lead the energy transition, helping the energy sector
solve for sustainability, reliability and affordability 
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| ● In 2022, nearly three billion people flew with our engine technology under wing. We have nearly 41,000 commercial engines at work in more than 70% of global airlines, and a diverse portfolio of more than 26,000 military engines. We take that responsibility seriously, living our purpose to invent the future of flight, lift people up and bring them home safely. ● GE Aerospace is leveraging its best-in-class technology portfolio to develop next generation programs. ● We are continuing our efforts to support the use of sustainable aviation fuel, or SAF, which is vital to enabling the airline industry to meet its decarbonization goals. The RISE program with CFM International (our 50-50 joint venture with Safran) aims to reduce fuel consumption and CO2 emissions by more than 20% compared with today’s most efficient engines. ● We are also developing a new flight test program for a hydrogen combustion engine and an open fan flight test demonstration, both with Airbus, as well as working with NASA and Boeing to develop hybrid electric engines. ● The quality of our technology and product development plans, the energy and collaboration of our team and our unique positioning as the industry’s largest and youngest fleet give us confidence that this business will generate significant value for decades to come. | | | | ● GE’s portfolio of energy businesses, which we call GE Vernova, is helping the energy sector solve for sustainability, reliability and affordability. With approximately 54,000 wind turbines and 7,000 gas turbines installed worldwide, GE Vernova helps generate 30% of the world’s electricity and has a meaningful role to play in the energy transition. ● The planned spin-off of GE Vernova comes as the world faces a 50% increase in electricity demand over the next two decades. Against this backdrop, the strategic imperative to electrify and decarbonize the world is a challenge that GE Vernova was made to meet. ● For our Power business, global gas generation and utilization continues to grow, with strength in Europe and the U.S. Gas remains a fuel of choice on dispatch curves globally to meet growing electricity demand. Our gas turbines have already accumulated more than eight million hours running on blends of hydrogen and similar fuels. ● For our Renewable Energy business, the U.S. Inflation Reduction Act is game-changing. It provides the certainty and stability our customers need to make long-term investments, especially in Onshore Wind. ● While we work on breakthrough technologies for tomorrow, we continue to build and deliver state-of-the-art equipment the world needs today to decarbonize the energy sector while building resilience in more than 170 countries around the world. | |
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GE 2023 PROXY STATEMENT 3
Table of Contents
Notice of 2023 Annual Meeting
Logistics
DATE AND TIME
May 3, 2023, at 10:00 a.m.
Eastern Time
LOCATION
Live Webcast at:
www.virtualshareholdermeeting
.com/GE2023
RECORD DATE
Shareholders of record at the close of business on March 7, 2023, are entitled to attend and vote at the Annual Meeting. On that date, there were 1,090,282,930 shares of common stock of General Electric Company (GE) outstanding and entitled vote.
You are invited to participate in GE’s 2023 Annual Meeting. If you were a GE shareholder at the close of business on March 7, 2023, you are entitled to vote at the Annual Meeting. Even if you plan to attend the live webcast, we encourage you to submit your vote as soon as possible through one of the methods available to you.
Cordially,
MICHAEL HOLSTON,
SECRETARY
YOUR VOTE IS NEEDED ON DIRECTOR ELECTIONS:Agenda
Election of
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| 1 | Elect the 1210 director nominees named in the proxy for the coming year |
 | YOUR BOARD RECOMMENDS A VOTE FOR EACH NOMINEE |
HOW WE ARE CHANGING THE BOARD |
 | Significant refreshment, with increased focus on relevant industry and operational expertise
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| Reduced board size
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| New committee focused on GE portfolio and capital allocation decisions
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GE POLICY:
create an experienced board with expertise in areas relevant to GE
75%
INDUSTRY & OPERATIONS
9/12directors
| | 67%
INVESTOR
8/12directors
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17%
TECHNOLOGY
2/12directors | | 75%
RISK MANAGEMENT
9/12directors |
92%
FINANCE & ACCOUNTING
11/12directors
| | 25%
GOVERNMENT & REGULATORY
3/12directors
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SIGNIFICANT BOARD REFRESHMENT SINCE 2016 ANNUAL MEETING
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Term Limits | | | | | | 7
new
directors | | 11
retired
directors |
+ | | | | |
Retirement Age | 
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+ | | | | |
Annual Board evaluation
| | | | | | over last 2 years
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FOR each director nominee | Page 7 |
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See page 1 for a Letter from the Lead Director |
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| 2 | Advisory approval of our named executives’ compensation (Say-on-Pay) |
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FOR | Page 26 |
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See page 26 for a Letter from the Management Development & Compensation Committee |
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| 3 | Advisory vote on the frequency of future advisory votes on our named executives’ compensation (Say-on-Frequency) |
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ONE YEAR | Page 61 |
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| 4 | Ratify the selection of Deloitte as independent auditor for 2023 |
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FOR | Page 62 |
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| 5 | Vote on the shareholder proposals included in the proxy, if properly presented at the meeting |
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AGAINST each proposal | Page 64 |
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| HOW YOU CAN VOTE |
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Via the internet
at www.proxyvote.com, or at the website indicated on the materials provided to you by your broker |
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By Telephone
Call the telephone number on your proxy card or voting instruction form |
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By Mail
Sign, date and return your proxy card or voting instruction form |
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| If you are a beneficial owner and received a voting instruction form, please follow the instructions provided by your bank or broker to vote your shares. |
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We have created an Annual Meeting website at https://www.ge.com/annualmeeting to make it easy to access our 2023 Annual Meeting materials. At the Annual Meeting website you can find an overview of the items to be voted, the proxy statement and the annual report to read online or to download, as well as a link to vote your shares.
WHERE CAN YOU FIND MORE INFORMATION?
Where can I find out more information? See Voting and Meeting Information on page 71.
4 GE 2023 PROXY STATEMENT
Table of Contents
Shareholder Engagement in 2022
We have ongoing and robust engagement with our shareholders that includes governance-focused engagement meetings throughout each year. We value being close to our shareholders and hearing their feedback directly, as we seek to continuously improve GE’s performance, programs and reporting. The governance engagements highlighted below are in addition to the regular discussions that our senior leadership and Investor Relations teams have with many institutional and retail shareholders, which often include governance, sustainability and similar matters as well.
| Who We Met With | | | | | |
| | | | | |
| 74% | Engaged with shareholders representing approximately 74% of outstanding shares held by institutional investors | |  | 53% | Represents approximately 53% of total outstanding shares |
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| Regular Outreach to Engage with Shareholders | |
| Taking Actions Informed by Shareholder Feedback | | |
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| | | | |
| STRATEGY | See Page 18  | | BOARD OF DIRECTORS | See Page 7 |
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JOINING THE BOARD SINCE THE 2017 ANNUAL MEETING● Executing on plan to launch three independent companies. In January, we completed the separation of our HealthCare business with the spin-off of GE HealthCare. We continue to work towards our second planned spin-off for GE Vernova, our portfolio of energy businesses.
| ● Our Path Forward. Based on shareholders’ interest, we have highlighted sections in this year’s proxy statement detailing key progress, actions and expectations related to the spin-offs with call-out boxes labeled “Our Path Forward.” | | ● Named two new directors with industry and operating expertise to the GE Board aligned with our strategic transformation. We are continuing ongoing director recruitment so that the planned future GE Vernova and GE Aerospace companies will both have dedicated boards with deep domain expertise, as with GE HealthCare. ● Committee leadership refreshment. The Board appointed new chairs for both the Management Development & Compensation Committee and the Governance & Public Affairs Committee during the past year. |
| | RETIRING FROM BOARD |
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| EXECUTIVE COMPENSATION | See Pages 26 & 27 | | SUSTAINABILITY | See Page 18 |
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 2017:● Flannery, Garden
2018:Compensation decisions for NEOs. Culp, Horton, Seidman● New design for PSU awards. In response to shareholder feedback, we modified the design of the 2023 PSU awards to measure performance based on the average of three consecutive one-year performance periods, modified by a three-year relative TSR. ● Enhanced disclosure. In addition to executive compensation highlights related to the spin-offs, this year’s proxy statement features a variety of disclosure enhancements informed by shareholder feedback, including a redesigned Compensation Discussion & Analysis (CD&A) section. |  | 
| |  2017:● Immelt, Lane, McAdam
2018:Climate reporting. Dekkers, Henry, Hockfield, Jung, Lazarus, Mollenkopf, Rohr, Schapiro |
GE POLICY:
retirement age 75
DIVERSITY OF TENUREWe reported Scope 3 emissions for use of sold products for the first time for our Power and Aerospace businesses in the Sustainability Report, with business-specific views of the technology roadmaps to make progress toward net zero by 2050.
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GE POLICY:
balanced mix of both deep GE knowledge & new perspectives
TERM LIMIT POLICY:
15 years
|  |
GE POLICY:
2023 PROXY STATEMENT 5build a cognitively diverse board representing a range of backgrounds
 |  |  |  |  |
2ethnically
diverse
| 2women
| 3born
outside
the US
| 10current
& former
CEOs
| 3government
& regulatory
experience
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The Board is committed to building upon its diversity with future refreshment and to interviewing female and ethnically diverse candidates for all vacancies
GE POLICY:
all non-management directors must be independent
11/12
director nominees are independent
 |
92%
independent (all director nominees except CEO)
| 92%
meet heightened committee independence standards
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Significantly reducing size in 2018 to enhance dialogue and promote accountability
| Annual director elections with majority voting standard
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| Proxy access at 3%, 3 years, 20% of Board, up to 20 shareowners can aggregate
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2
Table of Contents
6GE 20182023 PROXY STATEMENT
Table of Contents
Qualifications and Attributes
Board Nominees
The Board recommends a vote for the 12 director nominees set forth below. The committee memberships indicate the anticipated composition of the committees of the Board following the annual meeting.Annual Meeting, if each nominee is elected. For information on committee compositiona description of committees as of the date of this proxy and committee activities during 2022, see“Board Operations”Committees on page 17.
Our director nominees’ primary qualifications and attributes are highlighted in the following matrix. The Boardmatrix is nominating three new directors onintended as a high-level summary and not an exhaustive list of each director’s skills or contributions to the 2018 slate: Larry Culp, Tom Horton and Leslie Seidman.Board.
| | | Name | | Age | | Director since | | Primary Occupation & Other Public Company Boards | A | C | F | G |
 | | Bazin  | | 56 | | 2016 | | Chair & CEO, AccorHotels
Boards: AccorHotels, China Lodging Group | | | • | • |
 | | Beattie  | | 57 | | 2009 | | CEO, Generation Capital & Former CEO, The Woodbridge Company
Boards: Baker Hughes, a GE company, Maple Leaf Foods, Acasta Enterprises | ⦿, ◼ | • | | |
 | | Brennan  | | 63 | | 2012 | | Chair Emeritus & Senior Advisor, The Vanguard Group
Boards: American Express | ◼ | ⦿ | | |
 | | Culp  | | 54 | | Nominee
NEW | | Senior Lecturer, Harvard Business School &
Former President & CEO, Danaher Corporation
Boards: T. Rowe Price | | • | • | |
 | | D’Souza  | | 49 | | 2013 | | CEO, Cognizant Technology Solutions
Boards: Cognizant | | • | | • |
 | | Flannery  | | 56 | | 2017
NEW | | Chair & CEO, General Electric | | | | |
 | | Garden | | 56 | | 2017
NEW | | Chief Investment Officer & Co-Founder, Trian Fund Management
Boards: Bank of New York Mellon, Pentair | | • | • | |
 | | Horton | | 56 | | Nominee
NEW | | Senior Advisor, Warburg Pincus & Former Chairman & CEO, American Airlines
Boards: Qualcomm, Walmart | ◼ | | | • |
 | | Lavizzo-Mourey  | | 63 | | 2017
| | Professor, University of Pennsylvania & Former President & CEO, Robert Wood Johnson Foundation
Boards: Hess | | • | | ⦿ |
 | | Mulva  | | 71 | | 2008 | | Former Chair & CEO, ConocoPhillips
Boards: Baker Hughes, a GE company, General Motors | ◼ | | ⦿ | |
 | | Seidman  | | 55 | | Nominee
NEW | | Former Chair, Financial Accounting Standards Board
Boards: Moody’s | ◼ | | • | |
 | | Tisch | | 65 | | 2010 | | President & CEO, Loews
Boards: Loews and its consolidated subsidiaries | | | • | • |
All director nominees other than the CEO are independent
| ATTENDANCE | QUALIFICATIONS AND ATTRIBUTES | COMMITTEES |
All director nominees attended at least 75% of the meetings of the Board and committees on which they served in 20172022, and on average we had a 95% attendance rate in 2022. |  | QUALIFICATIONS | | AAudit Committee
CCompensation Committee
FFinance Committee
GGovernance Committee
● Member
⦿Chair
◼Financial Expert & Member
|
|  | Industry & Operations |   | Technology
Risk
Management | A | Audit Committee |  | Member |
 |  | Finance & Accounting |   | Risk Management
Global | C | Compensation Committee |  | Chair |
 |  | Investor
 | 
and Ethnic
Diversity | Government & Regulatory
G | Governance Committee |  | Financial Expert |
 | Technology | | | | | | |
3Financial acumen. The Board has determined that each of Mses. Goren, Lesjak, Reynolds and Uhl are “audit committee financial experts” (per SEC rules), and each of these directors is “financially literate” (per NYSE rules).
Key Corporate Governance Practices
● 9 out of 10 director nominees are independent
● Annual election of all directors by majority vote
● No supermajority vote provisions in governing documents
● Annual review of Board leadership structure
● Annual Board and committee self-evaluations
● Board-level oversight of ESG matters
● Strong lead director with clearly delineated duties
● Dual-pronged Board refreshment mechanisms (age & term limits)
● Regular executive sessions of independent directors
● Board and committees may hire outside advisors independently of management
● Proactive year-round shareholder engagement program
● Clawback policy that applies to all cash and equity incentive awards
● Prohibition on hedging & pledging
● Strong stock ownership guidelines and retention provisions
● “Overboarding” limits for directors
● No poison pill or dual-class shares
● Shareholder right to call special meetings (at 10%)
● Proxy access by-law provisions on market terms
GE 2023 PROXY STATEMENT 7
Table of Contents
GE 2018 PROXY STATEMENTNominee Biographies
Board & Committees
FULL BOARD |
 | |  | | 2017 MEETINGS
15, including 4 formal meetings of the
independent directors
|
CHAIR
CHAIRMANJohn Flannery
H. Lawrence
Culp, Jr. Director Since: 2018 Age: 59 Birthplace: United States Chairman and CEO, General Electric, Boston, MA
(since 2018) and CEO, GE Aerospace, Cincinnati, OH (since 2022) | | LEAD DIRECTOR
Jack Brennan | | |
BOARD RHYTHMThomas
Horton
| | |
8/year
Regular meetings
2+/year
Business visits for each director
Calls
Between meetings as needed
| | 1/year
Strategy sessionDirector Since: 2018
1/year
Governance & investor feedback review
1/year
Board self-evaluationAge: 61
|
A TYPICAL GE BOARD MEETING ... 2 DAYS, 8X/YEARBirthplace:
|
United States
INDEPENDENT RECENT FOCUS AREAS
|
– | Leadership transitions, particularly for the CEO
|
– | Review of GE’s portfolio
|
– | Creation of Baker Hughes, a GE company
|
– | Capital allocation, including dividend policy and pension funding
|
– | Business performance reviews, particularly in Power
|
– | GE Capital and Insurance
|
– | Partner, Global Infrastructure Partners, an infrastructure
investment fund, New product launches (e.g., LEAP engine) |
COMMITTEES FOLLOWING THE ANNUAL MEETING
For a description of committees as of the date of this proxy and committee activities during 2017, see“Board Operations” on page 17.
AUDITYork, NY (since 2019)
|
 CHAIR:Geoff Beattie
MEMBERS:Jack Brennan, Tom Horton, Jim Mulva & Leslie Seidman
| OVERSIGHT AND FOCUS AREAS
–Financial reporting
–KPMG
–Internal audit
–Accounting policies (e.g., revenue recognition, long-term service agreements)
–Compliance
–Significant litigation and investigations
|
FINANCE & CAPITAL ALLOCATION
|
 CHAIR:Jim Mulva
MEMBERS:Sébastien Bazin, Larry Culp, Ed Garden, Leslie Seidman & Jim Tisch
| OVERSIGHT AND FOCUS AREAS
–Capital allocation framework
–Financial risk
–Investments and uses of cash (e.g., dividends, buybacks, R&D)
–Ongoing GE portfolio review
–M&A activity
–GE Capital structure
|
GOVERNANCE & PUBLIC AFFAIRS
|
 CHAIR:Risa Lavizzo-Mourey
MEMBERS:Sébastien Bazin, Frank D’Souza, Tom Horton & Jim Tisch
| OVERSIGHT AND FOCUS AREAS
–Director recruitment and board composition
–GE leadership structure
–Board governance processes
–Climate change-related risk
–Political & lobbying strategy and spending
–Sustainability, environmental, human rights & supply chain practices
|
MANAGEMENT DEVELOPMENT & COMPENSATION
|
 CHAIR:Jack Brennan
MEMBERS:Geoff Beattie, Larry Culp, Frank D’Souza, Ed Garden & Risa Lavizzo-Mourey
| OVERSIGHT AND FOCUS AREAS
–CEO and management succession
–CEO and senior executive performance evaluations & compensation plans
–Equity planning
–Retention of critical talent
–Employee benefit plans
|
4
Table of Contents
GE 2018 PROXY STATEMENT
Compensation
YOUR VOTE IS NEEDED ON
MANAGEMENT PROPOSAL #1 | Advisory approval of our named executives’ compensation for 2017 |  | YOUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL |
Compensation Profile |
PRIMARY COMPENSATION ELEMENTS FOR 2017 |
| Salary | Bonus | LTPAs | PSUs | Options | RSUs |
Who receives | All named executives | All named executives
except CEO |
When granted | Reviewed every
18 months | Annually in February or March for prior year | Every 3 years – final cycle 2016-2018 | Generally annually |
Form of delivery | Cash | | Generally cash | Equity |
Type of performance | Short-term emphasis | Long-term emphasis |
Performance period | Ongoing | 1 year | 3 years | Generally 5-year vesting period |
How payout is determined | Committee judgment | Formulaic & committee judgment | Formulaic; committee verifies performance before payout | Formulaic; depends on stock price on exercise/vest date |
Most recent performance measures | N/A | 7 financial metrics + strategic goals | 5 financial metrics | 2 financial metrics + relative TSR modifier | Stock price appreciation |
What is incentivized | Balance against excessive risk taking | Deliver onannualinvestor framework | Deliver onlong-terminvestor framework | Outperform peers | Increase stock price | Balance against excessive risk taking |
Promoting Accountability Through Pay |
2017 ANNUAL BONUSES (CASH) |
Result:Overall bonus pool funded at 24% of target, but no bonuses for named executives other than CEO of Aviation |
|
2015–2017 PERFORMANCE SHARE UNITS (EQUITY) |
Result:Executives received none of the PSUs based on determination by the Compensation Committee |
See“How Our Incentive Compensation Plans Paid Out for 2017” on page 30 for more information on how these plans work. Metrics denoted with a * are non-GAAP financial measures. For information on how we calculate the performance metrics, see“Explanation of Non-GAAP Financial Measures and Performance Metrics” on page 52.
5
Table of Contents
GE 2018 PROXY STATEMENT
2017 Compensation Decisions
CEO TRANSITION AND KEY CHANGES
| | NEW CEO (Flannery) | | FORMER CEO (Immelt) | | |
| Salary | | $2M | | $3.8M | ↓47% | | Less cash focus |
Target
Bonus | | $3M | | $5.4M | ↓44% | |
| 2017 Bonus | | $0 | | $0 | | | Accountable for
performance |
| LTPA | | Pays in stock | | Pays in cash | | | Promotes
alignment
with
investors |
| Equity | | Greater % of pay | | Lower %
of pay | | |
Stock
Ownership
Requirement | | 10x salary | | 10x salary | | |
2017 Summary Compensation
(in thousands)
| Name & Principal Position | Year | Salary | Bonus | PSUs &
RSUs | | Stock
Options | LTPAs | Pension &
Deferred
Comp. | All Other
Comp. | SEC Total | | Adjusted
SEC Total** | |
| | | | | | | | | | | | | |
John Flannery*
Chairman & CEO | 2017 | $1,738 | $0 | N/A | | $2,076 | $0 | $3,255 | $1,932 | $9,001 | | $5,801 | |
Jamie Miller*
SVP & CFO | 2017 | $1,335 | $0 | $1,811 | | $519 | $0 | $1,155 | $238 | $5,058 | | $3,903 | |
David Joyce
Vice Chair & CEO,
Aviation | 2017 | $1,450 | $1,385 | $695 | | $692 | $0 | $674 | $265 | $5,161 | | $4,487 | |
| 2016 | $1,333 | $1,524 | $6,212 | | $750 | $0 | $2,524 | $239 | $12,583 | | $10,059 | |
Jeff Immelt
Former Chairman
& CEO | 2017 | $2,864 | $0 | N/A | | N/A | $0 | $3,373 | $1,873 | $8,111 | | $4,982 | |
| 2016 | $3,800 | $4,320 | $4,673 | | $2,142 | $1,624 | $3,580 | $1,185 | $21,325 | | $17,962 | |
Jeff Bornstein
Former Vice Chair
& CFO | 2017 | $1,775 | $0 | $8,141 | *** | $692 | $0 | $3,796 | $163 | $14,568 | *** | $10,836 | *** |
| 2016 | $1,688 | $1,920 | $1,532 | | $750 | $739 | $2,882 | $395 | $9,906 | | $7,082 | |
Beth Comstock
Former Vice Chair,
Business Innovations | 2017 | $1,604 | $0 | $695 | | $692 | $0 | $5,850 | $186 | $9,028 | | $3,207 | |
| 2016 | $1,500 | $1,248 | $6,211 | | $750 | $550 | $2,046 | $175 | $12,479 | | $10,460 | |
John Rice
Vice Chair, Former CEO,
Global Growth
Organization | 2017 | $2,800 | $0 | $695 | | $692 | $0 | $2,552 | $1,138 | $7,877 | | $5,586 | |
| 2016 | $2,625 | $3,278 | $1,532 | | $750 | $1,181 | $4,184 | $1,612 | $15,162 | | $11,213 | |
* | Under applicable SEC rules, we have excluded Mr. Flannery’s and Ms. Miller’s compensation for 2016 as they were not named executives during that year.
|
** | For a description of the amounts reported in the Adjusted SEC Total column, see“Adjusted SEC Total” on page 39.
|
*** | Includes RSU awards with a grant date fair value of $7.7 million that were subsequently cancelled. Excluding these cancelled RSU awards, Mr. Bornstein’s SEC Total was $6.9 million, and his Adjusted SEC Total was $3.2 million.
|
Compensation Changes for 2018
SALARY REVIEW CYCLE |
 Increased for officers from 18 to 24-month intervals |
|
SIMPLER ANNUAL BONUS PLAN |
Metrics focus on: earnings and cash generation |
Bonus pool funding for businesses determined by business results … promoting accountability, rewarding performance |
|
EQUITY AWARDS |
Greater percentage of overall executive pay |
Generally shifting toward RSUs (away from options) for broader executive population, with 3-year vesting period |
LONG-TERM PERFORMANCE AWARDS |
Terminating cash LTPA program after conclusion of current performance cycle |
|
2018 PERFORMANCE SHARE UNITS |
One metric: GE TSR v. S&P 500 |
|
Threshold | Target | Maximum |
35th percentile | 55th percentile | 80th percentile |
Earn 25% | Earn 100% | Earn 175% |
| | |
3-year performance periodUse of relative metric promotes flexibility in ongoing portfolio reviewOne-year mandatory hold post-vesting |
6
Table of Contents
GE 2018 PROXY STATEMENT
Other Compensation Proposal
YOUR VOTE IS NEEDED ON MANAGEMENT PROPOSAL #2:
Approve the renewal of the GE International Employee Stock Purchase Plan
|
| YOUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL |
RENEWING THE GE INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
– | Approve an additional 50 million shares that can be issued pursuant to theGE International Employee Stock Purchase Plan,which allows eligible employees located outside the U.S. to dedicate up to 10% of their paychecks to the purchase of GE shares, with a 15% match by GE |
– | Approval expected to provide sufficient shares to last for ten years |
– | Encourages eligible employees to acquire an ownership interest in GE, further aligning them with investors |
– | Approximately 21,400 employees participated in the plan in 2017, purchasing 2.9 million shares |
– | Total dilution over the life of the plan expected to be approximately 0.61% based on current shares outstanding |
Audit
YOUR VOTE IS NEEDED ON MANAGEMENT PROPOSAL #3:
Ratification of our selection of KPMG as independent auditor
|
| YOUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL |
In engaging KPMG for 2018, we reviewed:
|
–KPMG’s performance on GE audit
includes results of internal, worldwide survey
–KPMG’s capability & expertise in handling breadth & complexity of our worldwide operations
–KPMG’s known legal & regulatory risks
includes interview with KPMG’s chairman & review of the number of audit clients with restatements as compared to other Big 4 firms
| | –External data on audit quality & performance includes recent PCAOB reports on KPMG & peer firms
–Appropriateness of KPMG’s fees on both an absolute basis & relative to peer firms
|
| –KPMG’s tenure & independence
including benefits & independence risks of long-tenured auditor & controls/processes that help ensure KPMG’s independence
|
| | | |
BENEFITS OF A LONG-TENURED AUDITOR
HIGHER AUDIT QUALITY
–Institutional knowledge & deep expertise through 100+ years of experience with GE & 1,400+ statutory GE audits in 90+ countries
| | EFFICIENT FEE STRUCTURE
–Familiarity with GE business keeps costs competitive
| | NO ONBOARDING OR EDUCATING
NEW AUDITOR
–Saves management’s time & resources
|
INDEPENDENCE CONTROLS
THOROUGH AUDIT
COMMITTEE OVERSIGHT | | RIGOROUS LIMITS ON
NON-AUDIT SERVICES | | STRONG INTERNAL KPMG
INDEPENDENCE PROCESS | | ROBUST REGULATORY
FRAMEWORK |
–Includes private meetings with KPMG (8X+ per year)
–Annual evaluation
–Committee–directed process for selecting lead audit engagement partner
| | –Audit Committee preapproves non-audit services
–Certain types of otherwise permissible services prohibited
–KPMG engaged only when best-suited for the job
| | –Includes periodic internal quality reviews
–Large number of partners staffed on GE audit (~400)
–Lead audit engagement partner rotation every 5 years
| | –KPMG subject to PCAOB inspections, Big 4 peer reviews & PCAOB/SEC oversight
|
KPMG Fees
| (in millions) | | Audit1 | | Audit-related2 | | Tax3 | | All Other4 | | Total |
| 2017 | | $95.8 | | $45.4 | | $1.7 | | $0.0 | | $142.9 |
| 2016 | | $81.5 | | $6.9 | | $1.5 | | $0.0 | | $89.9 |
1 | Audit & review of financial statements for GE and BHGE 10-K/10-Q, internal control over financial reporting audit, statutory audits; year-over-year increase largely driven by the BHGE audit ($32.3 million), which offset significantly lower recurring costs for the GE audit ($63.5 million). |
2 | Assurance services, M&A due diligence and audit services; year-over-year increase driven by carve-out audits for businesses in advance of transactions, including GE Oil & Gas ($30.0 million) our Water business ($4.3 million) and Industrial Solutions ($8.1 million). |
3 | Tax compliance & tax advice/planning. |
4 | GE did not engage KPMG for any other services. See“Audit” on page 57 for more information. |
WHAT WE ARE PAYING FOR |
|
2 | 1,400+ | ~400 |
public company
audits | statutory
audits globally | partners |
REASONS FOR THE YEAR-OVER-YEAR INCREASE |
– | Additional audit for Baker Hughes, a GE company |
– | Carve-out audits for GE Oil & Gas, our Water business, and Industrial Solutions ahead of transactions |
7
Table of Contents
GE 2018 PROXY STATEMENT
2018 Shareowner Proposals
YOUR VOTE IS NEEDED ON THE FOLLOWING PROPOSALS |
 | YOUR BOARD RECOMMENDS A VOTE AGAINST THESE PROPOSALS |
| | Proposal | | Proponent | | What the proposal asks for | | Why the Board recommends a vote
Against the proposal |
1 | | Independent chair
see page 60 | | Kenneth
Steiner | | Require board chair to be independent at thenext CEO transition | | The Board conducted a thorough review at thetime of the CEO transition, and GE continues tobelieve that our present leadership structure isthe most effective for GE |
2 | | Cumulative voting
see page 61 | | Martin
Harangozo | | Allow shareowners to aggregate their shares &vote all for one or more nominees | | Directors should be elected & accountable to all shareowners, not special interests |
3 | | Deduct impact of stock buybacks from executive pay
see page 62 | | Myra Young | | Do not use earnings per share or financial ratiosin setting executive pay targets unless theimpact of stock buybacks is excluded | | GE’s Compensation Committee should not berestricted from setting performance goals thatreflect the company’s capital allocation strategy;buybacks had no impact on compensationfor 2017 |
4 | | Lobbying report
see page 63 | | NCPPR* | | Provide annual report on GE’s direct and indirectlobbying activity | | GE already provides comprehensive disclosureof its political & lobbying activities and believesthat further disclosure is unnecessary |
5 | | Buyback report
see page 64 | | Dennis
Rocheleau | | Prepare and mail to shareowners attendingthe 2018 annual meeting in person, and uponrequest, a report on GE’s buyback activity from2008–2017, including rationale for repurchaseprograms and metrics on administration | | GE already discloses details on its buybacks andstrategy in its quarterly and annualSEC filings, and preparing and mailing anadditional hard copy report is inefficient andunnecessary |
6 | | Written consent
see page 65 | | William
Steiner | | Allow shareholders to act by written consent | | GE already has a low threshold (10%) forcalling special meetings and active investoroutreach, making action by written consentunnecessary |
* | NCPPR = National Center for Public Policy Research |
How to Submit a Proposal for Next Year
| | Proposals to include in proxy* | | Director nominees to include
in proxy (proxy access)** | | Other proposals/nominees to
be presented at annual meeting** |
Minimum GE stockownership requirement | | $2,000 | | 3% for 3 years (up to 20shareowners can aggregate) | | 1 share |
Deadline for GE to receive | | Close of business on 11/14/18 | | Between 10/15/18 and close of business on 11/14/18 |
Where to send | | By mail:Corporate Secretary, General Electric Company, at the address listed on the inside front cover of thisproxy statement |
| | By email:shareowner.proposals@ge.com | | |
What to include | | Information required by SEC rules | | Information required by our by-laws |
* | Proposals must satisfy SEC requirements, including Rule 14a-8 |
** | Proposals not submitted pursuant to SEC Rule 14a-8, as well as any director nominees, must satisfy GE’s by-law requirements, which are available on GE’s website (see“Helpful Resources” on page 73) |
8
Table of Contents
GE 2018 PROXY STATEMENT
Annual Meeting
 | | You are invited to attend GE’s 2018 annual meeting. This page contains important information about the meeting, including how you can make sure your views are represented by voting today. Be sure to also check out our annual report and integrated summary report at the websites below.
Cordially,
Alex Dimitrief, Secretary
|
|
LOGISTICS
|
| |
DATE:
April 25, 2018
TIME:
10:00 a.m. Eastern Time
WEBCAST:
www.ge.com/investor-relations
LOCATION:
GE Additive Customer
Experience Center
101 N. Campus Drive
Imperial, Pennsylvania 15126
ATTENDING IN PERSON:
You must be a GE shareowner as of the record date, and you must bring your admission card & photo ID. Follow the instructions on page 69 or on our proxy website
| |  |
VOTING Q&A
Who can vote?
Shareowners as of our record date, February 26, 2018
How many shares are entitled to vote?
8.7 billion common shares (preferred shares are not entitled to vote)
How many votes do I get?
One vote on each proposal for each share you held as of the record date (see first question above)
Do you have an independent inspector of elections?
Yes, you can reach them at IVS Associates, 1000 N. West St., Ste. 1200, Wilmington, DE 19801
Can I change my vote?
Yes, by voting in person at the meeting, delivering a new proxy or notifying IVS Associates in writing. But, if you hold shares through a broker, you will need to contact them
Is my vote confidential?
Yes, only IVS Associates & certain GE employees/agents have access to individual shareowner voting records
How many votes are needed to approve a proposal?
Majority of votes cast; abstentions & broker non-votes generally are not counted & have no effect
Where can I find out more information?
See“Voting & Meeting Information” on page 67
|
AGENDA
|
Elect the 12 directors named in the proxy for the coming year
|
 Your Board recommends a voteFOR each director nominee |
read more on page 10
|
Approve our named executives’ compensation in advisory vote
|
Your Board recommends a voteFORthis proposal |
read more on page 27
|
Approval of the GE International Employee Stock Purchase Plan
|
Your Board recommends a voteFOR this proposal |
read more on page 55
|
Ratification of the selection of KPMG as independent auditor for 2018
|
Your Board recommends a voteFOR this proposal |
read more on page 57
|
Vote on shareowner proposals included in proxy if properly presented at the meeting
|
 Your Board recommends a voteAGAINST each proposal |
read more on page 60
|
Shareowners also will transact any other business that properly comes before the meeting
|
Do you hold shares directly with GE
or in the Retirement Savings Plan (RSP)? | | Do you hold shares through
a bank or broker? |
 | | Use the Internet at
www.proxypush.com/GE
| | Use the Internet at
www.proxyvote.com
|
 | | Call toll-free(US/Canada)
1-866-883-3382
| | Call toll-free(US/Canada)
1-800-454-VOTE (8683)
|
 | | Mail your signed
proxy form
| | Mail your signed
voting instruction form
|
Check out our annual report & integrated summary report
www.ge.com/annualreport
www.ge.com/ar2017/integrated-report
|
9
Table of Contents
GE 2018 PROXY STATEMENT
ELECTION OF DIRECTORS:
What are you voting on?At the 2018 annual meeting, 12 directors are to be elected to hold office until the 2019 annual meeting and until their successors have been elected and qualified.
| | All nominees are current GE Board members who were elected by shareowners at the 2017 annual meeting except for John Flannery, who was appointed to the Board in August 2017, Ed Garden, who was appointed to the Board in October 2017 and Larry Culp, Tom Horton and Leslie Seidman, | |  | YOUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL |
| | whose Board service would commence upon his or her respective election at the annual meeting. |
| | | |
Sébastien M. Bazin | | W. Geoffrey Beattie | | John J. Brennan |
 | DIRECTOR SINCE:2016
AGE:56
BIRTHPLACE:
FRANCE
INDEPENDENT
QUALIFICATIONS:
 | |  | DIRECTOR SINCE:2009
AGE:57
BIRTHPLACE:
CANADA
INDEPENDENT
QUALIFICATIONS:
 | |  | DIRECTOR SINCE:2012
AGE:63
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
 |
Chairman and CEO, AccorHotels, a global hotel company, Paris, France (since 2013)Finance & Accounting, Risk Management
PRIOR BUSINESS EXPERIENCE● –CEO, Europe Colony Capital, a private investment firm (1997–2013)Industry & Operations, Investor
–Group Managing Director, CEO and General Manager, Immobilière Hôtelière (1992–1997)
–Began career in 1985 in U.S. finance sector, becoming Vice President, M&A, PaineWebberFinance & Accounting
CURRENT PUBLIC COMPANY BOARDS
–General Electric
–AccorHotels
–China Lodging Group*
PAST PUBLIC COMPANY BOARDS
–Vice Chairman, Carrefour, a multinational French retailer
OTHER POSITIONS
–Vice Chairman, Supervisory Board, Gustave Roussy Foundation, cancer research fundingIndustry & Operations
–Chairman, Théâtre du Châtelet
EDUCATION
–Sorbonne University
–MA (Economics), Sorbonne University
| | CEO, Generation Capital, a private investment company, Toronto, Canada (since 2013)Investor
PRIOR BUSINESS EXPERIENCE
–CEO, The Woodbridge Company, a multinational Canadian company that is the majority shareholder of Thomson Reuters, a large information technology company (1998–2012)Investor, Technology, Finance & Accounting
–Deputy chairman, Thomson Reuters (2000–2013)
–Partner at Toronto law firm Torys (prior to joining The Woodbridge Company)
CURRENT PUBLIC COMPANY BOARDS
–General Electric
–Baker Hughes, a GE company (lead director, chairman of Governance and Nominating Committee)
–Maple Leaf Foods (chairman of Governance Committee)
–Acasta Enterprises, a special purpose acquisition corporation that has announced investments in consumer staples and commercial aviation finance businesses (chairman)Investor
PAST PUBLIC COMPANY BOARDS
–Royal Bank of CanadaRisk Management
–Thomson Reuters
OTHER POSITIONS
–Chairman, Relay Ventures, a Canadian venture capital firm
–Director, DBRS, a rating agency
EDUCATION
–Law degree, University of Western Ontario
| | Chairman Emeritus and senior advisor, The Vanguard Group, Malvern, PA (since 2010) Investor
PRIOR BUSINESS EXPERIENCE
–Chairman and CEO, Vanguard, a global investment management company (CEO 1996–2008; Chairman 1998–2009)
–CFO and president, Vanguard (joined in 1982)Finance & Accounting
PRIOR REGULATORY EXPERIENCE
–Former chairman, Board of Governors of Financial Industry Regulatory Authority (FINRA), financial services industry regulatorRisk Management, Regulatory
–Former chairman, Financial Accounting Foundation, overseer for financial accounting/reporting standard-setting boardsFinance
CURRENT PUBLIC COMPANY BOARDS
–General Electric
–American Express
PAST PUBLIC COMPANY BOARDS
–The Hanover Insurance Group
–LPL Financial Holdings
OTHER POSITIONS
–Director, Rockefeller Capital Management
–Director, Guardian Life Insurance Company of America
–Chairman, The Vanguard Charitable Endowment Program
–Chair, Board of Trustees, University of Notre Dame
EDUCATION
–Dartmouth College
–MBA, Harvard University
|
|
10
Table of Contents
GE 2018 PROXY STATEMENT
H. Lawrence Culp, Jr. | | Francisco D’Souza | | John L. Flannery |
 | DIRECTOR SINCE:NEW
AGE:54
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
 | |  | DIRECTOR SINCE:2013
AGE:49
BIRTHPLACE:
KENYA
INDEPENDENT
QUALIFICATIONS:
 | |  | DIRECTOR SINCE:2017
AGE:56
BIRTHPLACE:
UNITED STATES
QUALIFICATIONS:
 |
Senior Lecturer, Harvard Business School, Boston, MA (since 2015) and Senior Advisor, Bain Capital Private Equity, a global private equity firm Boston, MA (since 2017)(2017–2018)●Investor PRIOR BUSINESS EXPERIENCE
–Senior Advisor, Danaher, designer, manufacturer and marketer of industrial and consumer products (2014–2016)Lecturer, Harvard Business School (2015–2018) Industry & Operations●
–Former CEO and President, Danaher (2000–(2001–2014);, a global science and technology company operating in the healthcare, environmental and applied-end markets; joined Danaher subsidiary Veeder-Root in 1990, serving in a number of leadership positions within Danaher, including COOFinance & Accounting, Industry & Operations
and, following his retirement, Senior Advisor (2014–2016)CURRENT PUBLIC COMPANY BOARDS ● – General Electric● GE HealthCare PAST PUBLIC COMPANY BOARDS ● GlaxoSmithKline ● Danaher ●T. Rowe Price Group InvestorPAST PUBLIC COMPANY BOARDS
–GlaxoSmithKlineIndustry & Operations
–Danaher
– Member and former Chairman, Board of Visitors & Governors, Washington College
–●Member, Board of Trustees, Wake Forest University –Washington College
Business School | | GE COMMITTEE MEMBERSHIP ● Governance PRIOR BUSINESS EXPERIENCE ● Senior Advisor, Warburg Pincus LLC, a private equity firm focused on growth investing (2015–2019) ● Chairman, American Airlines Group, one of the largest global airlines (formed following the merger of AMR Corporation and US Airways) (2013–2014) ● Chairman and CEO, American Airlines (2011–2014) ● Chairman and CEO, AMR (parent company of American Airlines) (2010–2013) ● EVP and CFO, AMR (2006–2010) ● Vice Chairman and CFO, AT&T (2002–2006) ● SVP and CFO, AMR (2000–2002); joined AMR in 1985, serving in various finance and management roles CURRENT PUBLIC COMPANY BOARDS ● General Electric ● Walmart (lead director) PAST PUBLIC COMPANY BOARDS ● Qualcomm ● EnLink Midstream OTHER POSITIONS ● Executive Board Member, Cox School of Business, Southern Methodist University EDUCATION ● Baylor University ● MBA, Southern Methodist University | |
8 GE 2023 PROXY STATEMENT
Table of Contents
| | | Board Leadership | | |
| CEO, Cognizant Technology SolutionsCHAIR: Audit Committee*
Isabella
Goren Director Since: 2022 Age: 62 Birthplace:
Ukraine INDEPENDENT Former Chief Financial Officer of American Airlines and AMR Corporation, a multinational ITglobal airline, Fort Worth, TX(2010-2013) | | CHAIR: Compensation Committee Stephen
Angel Director Since: 2022 Age: 67 Birthplace:
United States INDEPENDENT Chairman and Former CEO, Linde, a global industrial gases and engineering company, Teaneck, NJDublin, Ireland (since 2007)2022) | | Technology, FinanceCHAIR: Governance & Accounting, Industry & OperationsPublic Affairs Committee
Paula Rosput
Reynolds Director Since: 2018 Age: 66 Birthplace:
United States INDEPENDENT President and CEO, PreferWest LLC, a business advisory firm, Seattle, WA (since 2009) |
| GE COMMITTEE MEMBERSHIP ●Audit (Chair)* PRIOR BUSINESS EXPERIENCE–●CFO, American Airlines and AMR Corporation (2010-2013) ●Senior Vice President, Cognizant (2007–2012) –Customer Relationship Marketing, American Airlines and AMR Corporation (2006-2010)●Vice President, American Airlines (1998-2006) ●President, AMR Services (1996-1998) ●Previously served in various management positions at American Airlines (1986-1996) ●Chemical Engineer, Dupont (1983-1985) CURRENT PUBLIC COMPANY BOARDS ●General Electric ●Marriott International PAST PUBLIC COMPANY BOARDS ●Gap ●LyondellBasell Industries OTHER POSITIONS ●Director, MassMutual ●Director, National Association of Corporate Directors, North Texas ●Member of the Advisory Board, The University of Texas at Austin, Cockrell School of Engineering ●Member of the Executive Board, Lyle School of Engineering, Southern Methodist University EDUCATION ●University of Texas at Austin ●MBA, Southern Methodist University * Upon reelection to the Board, Ms. Goren will become Chair of the Audit Committee | | GE COMMITTEE MEMBERSHIP ●Compensation (Chair) PRIOR BUSINESS EXPERIENCE ●CEO, Linde (2018-2022) ●President & CEO, Praxair (subsequently Linde) (2007-2018) ●President & COO, Cognizant (2003–2006)–Co-founded Cognizant (1994)
–Praxair (2006-2007)●EVP, North America, Europe and Asia, Praxair (2001-2006) ●Previously held various roles at Dun & Bradstreet General Electric (1979-2001)CURRENT PUBLIC COMPANY BOARDS –Cognizant
–Board Co-Chair, New York Hall of Science
–Trustee, Carnegie MellonLinde (Chair)●PPG Industries PAST PUBLIC COMPANY BOARDS ●Praxair (Chair) EDUCATION ●North Carolina State University –International Advisory Panel Member, Banco Santander
–University of East Asia
–MBA, Carnegie Mellon University
Loyola College | | CEO and Chairman, General Electric, Boston, MA (since August and October 2017, respectively)GE COMMITTEE MEMBERSHIP
Finance & Accounting, Industry & Operations●
Audit●Governance (Chair) PRIOR BUSINESS EXPERIENCE –SVP, GE,●Vice Chairman and Chief Restructuring Officer, American International Group (2008–2009) ●Chairman, President and CEO, GE Healthcare (2014–2017) –SVP, Business Development GE (2013–2014)
–SVP, GESafeco Insurance Company of America (2005–2008)●Chairman and President & CEO, GE India (2009–2013) –Joined GE CapitalAGL Resources (1998–2005)●CEO, Duke Energy Power Services, Duke Energy (1995–1998) ●Previously served in 1987, serving in a number ofvarious leadership positions in the leveraged financeat Associated Power Services, Pacific Gas Transmission Co. and private equity sectorsPacific Gas and as President & CEO of GE Equity (2002–2003), head of the Bank Loan Group (2003–2005), and President & CEO of GE Capital Asia Pacific (2005–2009) Electric Company Finance & Accounting, Risk Management, Investor
CURRENT PUBLIC COMPANY BOARDS –Former BP●National Advisory Board Member, Columbia University, Mailman School of Public Health Grid UK (Chair)PAST PUBLIC COMPANY BOARDS ●Air Products & Chemicals ●Anadarko Petroleum ●BAE Systems ●CBRE Group ●Circuit City Stores ●Coca-Cola Enterprises ●Delta Air Lines ●TransCanada EDUCATION –Fairfield University
–MBA, University of Pennsylvania
|
 ●Wellesley College |
GE 2023 PROXY STATEMENT 119
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GE 2018 PROXY STATEMENT
Edward P. Garden | | Thomas W. Horton | | Risa Lavizzo-Mourey |
 | DIRECTOR SINCE:2017
AGE:56
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
| |  | DIRECTOR SINCE:NEW
AGE:56
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
 | |  | DIRECTOR SINCE:2017
AGE:63
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
 |
Sébastien
Bazin Director Since: 2016 Age: 61 Birthplace:
France INDEPENDENT Chairman and CEO, AccorHotels, a global hotel company, Paris, France (since 2013) | | Edward
Garden Director Since: 2017 Age: 61 Birthplace:
United States INDEPENDENT Chief Investment Officer and Founding Partner, Trian Fund Management, L.P., an investment management firm, New York, NY (since 2005) | | InvestorCatherine
LesjakDirector Since: 2019 Age: 64 Birthplace:
Canada INDEPENDENT Former Chief Financial Officer, HP, a global technology company, and its predecessor, Hewlett-Packard, Palo Alto, CA (2007-2018)
|
GE COMMITTEE MEMBERSHIP ●Compensation ●Governance PRIOR BUSINESS EXPERIENCE–●CEO, Europe Colony Capital, a private investment firm (1997–2013) ●Group Managing Director, CEO and General Manager, Immobilière Hôtelière (1992–1997) ●Began career in 1985 in U.S. finance sector, becoming Vice President, M&A, PaineWebber CURRENT PUBLIC COMPANY BOARDS ●General Electric ●AccorHotels, including Accor Acquisition Company (sponsored by Accor) PAST PUBLIC COMPANY BOARDS ●Huazhu Group ●Carrefour ●Banyan Tree Holding OTHER POSITIONS ●Vice Chairman, Supervisory Board, Gustave Roussy Foundation, cancer research funding ●Chairman, Safar Ventures EDUCATION ●Sorbonne University ●MA (Economics), Sorbonne University | | GE COMMITTEE MEMBERSHIP ●Compensation PRIOR BUSINESS EXPERIENCE ●Vice Chairman and Director, Triarc Companies (subsequently The Wendy’s Company and previously Wendy’s/Arby’s Group) (2004–2007) and Executive Vice President (2003–2004) Finance & Accounting●–Managing Director, Credit Suisse First Boston (1999–2003) Finance & Accounting●
–Managing Director, BT Alex Brown (1994–1999)Finance & Accounting
CURRENT PUBLIC COMPANY BOARDS –●Janus Henderson Group PAST PUBLIC COMPANY BOARDS ●Invesco ●Legg Mason ●The Bank of New York Mellon (Chairman of Human Resources and Compensation Committee) Finance & Accounting, Risk Management●
–Pentair, an industrial manufacturing companyIndustry & Operations
PAST PUBLIC COMPANY BOARDS
–The Wendy’s Company
| | Senior Advisor, Industrials and Business Services Group, Warburg Pincus LLC, a private equity firm focused on growth investing, New York, NY (since 2015)GE COMMITTEE MEMBERSHIP
Investor●
Audit●Governance PRIOR BUSINESS EXPERIENCE –Chairman, American Airlines Group, one of the largest global airlines (formed following the merger of AMR Corp and US Airways) (2013–2014) Industry & Operations●
–Chairman andInterim Chief Operating Officer, HP (2018–2019)●Interim CEO, American Airlines (2011–2014) Hewlett Packard (2010) Industry & Operations●
–Chairman and CEO, AMR (parent company of American Airlines) (2010–2013) Industry & Operations
–EVP and CFO, AMR (2006–2010)Finance & Accounting
–Senior Vice Chairman and CFO, AT&T (2002–2006)Finance & Accounting
–SVP and CFO, AMR (2000–2002); joined AMR in 1985, serving in various finance and management rolesIndustry & Operations
CURRENT PUBLIC COMPANY BOARDS
–Qualcomm (lead director)
–Walmart
OTHER POSITIONS
–Executive Board Member, Cox School of Business, Southern Methodist University
–Board Member, National Air and Space Museum
EDUCATION
–Baylor University
–MBA, Southern Methodist University
| | Professor, University of Pennsylvania, Philadelphia, PA (since 2018) and Former President and CEO, Robert Wood Johnson Foundation, Princeton, NJTreasurer, HP (2003–2017)2007)●Industry & Operations PRIOR BUSINESS EXPERIENCE
–SVP, Robert Wood Johnson Foundation, largest U.S. philanthropic organization dedicated to healthcare (2001–2003)
PRIOR ACADEMIC EXPERIENCE
–Sylvan Eisman Professor of Medicine and Health Care Systems (1995–2001), Director, Institute on Aging (1994–2002), Chief of Geriatric Medicine (1986–1992), University of Pennsylvania Medical SchoolIndustry & Operations
PRIOR GOVERNMENT EXPERIENCE
–Deputy Administrator, Agency for Health Care Research and Quality (1992–1994)Government
–Co-Chair, White House Health Care Reform Task Force, Working Group on Quality of Care (1993–1994)
–Advisory Committee Member, Task Force on Aging Research (1985–1992)
–Advisory Committee Member, National Committee for Vital and Health Statistics (1988–1992)
–Advisory Committee Member, President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry (1997–1998)
CURRENT PUBLIC COMPANY BOARDS
–General Electric
–Hess, a global, independent energy companyIndustry & Operations
PAST PUBLIC COMPANY BOARDS
–Genworth FinancialRisk Management
–Beckman Coulter
OTHER POSITIONS
–Trustee, Smithsonian Institution Board of Regents
–Board of Fellows, Harvard Medical School
–Member, National Academy of Medicine
EDUCATION
–U. of Washington & SUNY Stony Brook
–MD, Harvard Medical School
–MBA, University of Pennsylvania
|
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12
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GE 2018 PROXY STATEMENT
James J. Mulva | | Leslie F. Seidman | | James S. Tisch |
 | DIRECTOR SINCE:2008
AGE:71
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
 | |  | DIRECTOR SINCE:NEW
AGE:55
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
 | |  | DIRECTOR SINCE:2010
AGE:65
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
 |
Former Chairman, President and CEO, ConocoPhillips, an integrated global energy company, Houston, TX (since 2012)Industry & Operations
PRIOR BUSINESS EXPERIENCE
–Chairman, President and CEO, ConocoPhillips (President and CEO 2002–2012; Chairman 2004–2012)
–Previously served in various leadership positions within the financial organization at Phillips Petroleum,HP and Hewlett Packard, including CFO, chairmanas Global Controller, Software Solutions; Controller and CEOCredit Manager for Commercial Customers; and as Manager, Financial Operations, Enterprise Marketing and Solutions (joined Hewlett Packard in 1986)Finance & Accounting, Risk Management
CURRENT PUBLIC COMPANY BOARDS –Baker Hughes, a ●PROS Holdings ●GE company –General MotorsHealthCareIndustry & Operations
PAST PUBLIC COMPANY BOARDS –Statoil, a leading oil and gas company based in NorwayIndustry & Operations●
SunPower (Chair, Audit Committee)OTHER POSITIONS –Chair, ●Board, Haas School of Visitors, M.D. Anderson Cancer Center, a leading cancer center Industry & Operations–Chair,Business, University of Texas, Medical Board of AdvisorsCalifornia, BerkeleyIndustry & OperationsEDUCATION
–Former chairman, American Petroleum Institute
–Stanford University of Texas
–●MBA, University of Texas | | Former Chairman, Financial Accounting Standards Board (FASB), independent organization responsible for financial accounting and reporting standards, Norwalk, CT (2010–2013)Finance & Accounting, Regulatory
PRIOR BUSINESS EXPERIENCE
–Board Member, FASB (2003–2013)
–Financial reporting consultant (1999–2003)
–Staff Member, FASB (1994–1999)
–Vice President, Accounting Policy, JP Morgan (1987–1996) Finance & Accounting
–Auditor, Arthur Young (1984–1987)
CURRENT PUBLIC COMPANY BOARDS
–Moody’s, provider of credit ratings, research and analytical tools (chairman, Audit Committee)Finance & Accounting
OTHER POSITIONS
–Founding Director, Pace University Center for Excellence in Financial Reporting (since 2014)Finance & Accounting
–Board of Governors, Financial Industry Regulatory Authority (FINRA), financial services industry regulatorRisk Management, Regulatory
–Advisor, Idaciti, developer of financial reporting and analysis softwareFinance & Accounting, Industry & Operations
–Certified Public Accountant (Inactive)Finance & Accounting
EDUCATION
–Colgate University
–MS (Accounting), New York University
| | President and CEO, Loews Corp., a diversified holding company with subsidiaries involved in energy, insurance, packaging and hospitality, New York, NY (since 1998)Finance & Accounting, Industry & Operations, Investor
CURRENT PUBLIC COMPANY BOARDS
–General Electric
–Loews and two of its subsidiaries, CNA Financial, a property and casualty insurance company, and Diamond Offshore Drilling (chairman), an offshore drilling contractorIndustry & Operations, Risk Management
OTHER POSITIONS
–Director, Mount Sinai Medical Center, a leading U.S. hospital Industry & Operations
–Former director, Federal Reserve Bank of New York, a government-organized financial and monetary policy organization
–Director, WNET (nonprofit)
–Director, New York Public Library
–Director, Partnership for New York City
–Member, Council on Foreign Relations
–Member, American Academy of Arts & Sciences
EDUCATION
–Cornell University
–MBA, University of Pennsylvania
|
 |
1310 GE 2023 PROXY STATEMENT
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GE 2018 PROXY STATEMENT
DIRECTOR RECRUITMENT
PROCESS
| | | | |
 Darren
McDew Director Since: 2023 Age: 62 Birthplace:
United States INDEPENDENT Retired Four-Star General, United States Air Force, and Former Commander of U.S. Transportation Command, Scott Air Force Base, Illinois (2015 - 2018) |
| Jessica Uhl
New Director Nominee Age: 55 Birthplace:
United States INDEPENDENT Former Chief Financial Officer, Shell plc, a global energy and petrochemical company, London, England (2017-2022) | | |
DIRECTOR “MUST-HAVES”GE COMMITTEE MEMBERSHIP
–Leadership experience
–Highest personal●Governance PRIOR GOVERNMENT EXPERIENCE ●Four-star general who served for 36 years in the United States military before retiring in October 2018. ●Commander, U. S. Transportation Command, the single manager for global air, land and sea transportation for the U.S. Department of Defense from 2015 to 2018. ●Held various leadership roles across the U. S. Military, including Vice Director for Strategic Plans and Policy for the Joint Chiefs of Staff, Military Aide to the President, Director of Air Force Public Affairs, and Chief of Air Force Senate Liaison Division CURRENT PUBLIC COMPANY BOARDS ●General Electric ●Abbott Laboratories ●Parsons Corporation OTHER POSITIONS ●Director, United Services Automobile Association (USAA) ●Director, Boys & professional ethics –IntegrityGirls Club of America●Advisor, U. S. Innovative Technology EDUCATION ●Virginia Military Institute ●MS, Aviation Management, Embry-Riddle Aeronautical University | | GE COMMITTEE MEMBERSHIP ●Audit* PRIOR BUSINESS EXPERIENCE ●CFO, Shell plc (2017-2022) ●Executive Vice President, Finance, Integrated Gas, Shell plc (2016-2017) ●Executive Vice President, Finance, Upstream Americas, Shell plc (2014-2015) ●Vice President, Finance,
Unconventionals, Shell plc (2013-2014) ●Vice President, Controller, Upstream and Projects and Technology, Shell plc (2010-2012) ●Vice President, Finance, Shell Lubricants, Shell plc (2009-2010) ●Head of External Reporting, Shell plc (2007-2009) ●Vice President, Business Development, Shell Renewables, Hydrogen & values–A passionC02, Shell plc (2005-2006)●Finance Manager, Shell Solar, Shell plc (2004-2005) CURRENT PUBLIC COMPANY BOARDS ●Goldman Sachs PAST PUBLIC COMPANY BOARDS ●Shell plc OTHER POSITIONS ●Vice Chair, Mission Possible Partnership ●Strategic Advisor, Breakthrough Energy ●Advisory Board, Columbia Center for learning –Inquisitive & objective perspective
–A senseGlobal Energy Policy●Trustee, Rocky Mountain Institute EDUCATION ●University of priorities & balance –Talent development experience
California, Berkeley ●MBA, INSEAD, France * Upon election to the Board, Ms. Uhl will be appointed to the Audit Committee | | |
GE 2023 PROXY STATEMENT 11
How We Are Changing the Board
The Governance & Public Affairs Committee (the Governance(Governance Committee) is charged with reviewing the composition of the Board and refreshing it as appropriate. With this in mind, the committeeGovernance Committee continuously reviews potential candidates and recommends nominees to the Board for approval. The Board takes a thoughtful approach to its composition to maintain alignment with the company’s evolving corporate strategy.
OUR PATH
FORWARD | In connection with the spin-off of GE HealthCare in January 2023, a new board of directors assumed their roles at that company as it began operating independently. Current GE directors H. Lawrence Culp, Jr. and Catherine Lesjak also serve on the GE HealthCare board, and former GE directors Risa Lavizzo-Mourey and Tomislav Mihaljevic transitioned from the GE Board to the GE HealthCare board at the time of the spin-off. They were joined by GE HealthCare’s CEO Peter Arduini and five new independent directors as GE HealthCare became a public company. The director recruitment efforts continue as we look ahead to the planned separation of GE Vernova and GE Aerospace into independent companies. At the upcoming GE Annual Meeting, shareholders will have the opportunity to elect for the first time two new directors who bring decades of experience relevant to the future companies: Darren McDew and Jessica Uhl. They were recommended as directors by a search firm and by management, respectively. |
Director Selection Process
As discussed in more detail under“How We AssessOur Governance Committee, together with the full Board, Size”is responsible for establishing criteria, screening candidates and evaluating the qualifications of persons who may be considered for service on our Board. The Governance Committee considers all shareholder recommendations for director candidates. The following describes the Board’s selection process:
| 1 | SUCCESSION PLANNING | |
| The Governance Committee prioritizes experiences and attributes to support the current and long-term needs of the company, within the context of the current Board structure, diversity, and mix of skills and experience. |
| 2 | IDENTIFICATION OF CANDIDATES | |
| The Governance Committee engages in a search process to identify qualified director candidates, which process may include the use of an independent search firm, and assesses candidates’ skills, experience and background and their alignment with the company’s portfolio and strategy. |
| 3 | INTERVIEWING CANDIDATES | |
| Qualified director candidates are typically interviewed by the Chairman and CEO, Governance Committee chair, lead director and other members of the Governance Committee, as well as other members of the Board and management, as necessary. |
| 4 | DECISION AND NOMINATION | |
| After determining that the director candidates meet the priorities established by the Governance Committee and will serve in the best interests of the company and its shareholders, the Governance Committee recommends, and the full Board approves, director candidates for appointment to the Board and election by shareholders. |
| 5 | ELECTION | |
| The shareholders consider the nominees and elect directors by majority vote to serve one-year terms. |
| 6 | ONGOING ASSESSMENT | |
| The Governance Committee regularly assesses the composition of the Board to maintain alignment with the company’s strategy, and in connection with the Board’s nomination of a slate of directors the Governance Committee reviews considerations including past contributions by each director; the skills, experiences and diversity represented on the Board; and the results of previous shareholder votes. |
Director Recruitment Priorities
RECRUITMENT PRIORITIES GOING FORWARD
| ● | Domain expertise aligned with the planned spin-offs |
| | |
| ● | Operational experience |
| | |
| ● | Capital allocation / finance |
| | |
| ● | Government / regulatory |
| | |
| ● | Technology / digital |
| | |
| ● | Diversity |
DIRECTOR “MUST- HAVES”
| ● | Leadership experience |
| | |
| ● | Highest personal & professional ethics |
| | |
| ● | Integrity & values |
| | |
| ● | A passion for learning |
| | |
| ● | Inquisitive & objective perspective |
| | |
| ● | A sense of priorities & balance |
| | |
| ● | Talent development experience |
HOW YOU CAN RECOMMEND A CANDIDATE
Write to the Governance Committee, c/o Corporate Secretary, GE, at the address listed on the inside front cover of this proxy statement and include all information that our by-laws require for director nominations.
HOW WE REFRESH THE BOARD
| ● | Board evaluation. Each year, the Board assesses its effectiveness through a thorough evaluation at the Board and committee levels to assess the effectiveness of the directors and their ability to work as a team in the long-term interest of the company. See How We Evaluate the Board’s Effectiveness on page 16. |
| | |
| ● | Term limits. The Board has a 15-year term limit for independent directors. |
| | |
| ● | Age limits. With limited exceptions, directors may not be renominated to the Board after their 75th birthday. |
See the Board’s Governance Principles (see Helpful Resources on page 15,77) for more information on these policies.
12 GE 2023 PROXY STATEMENT
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Important Factors in 2017 the committee recommended, and theAssessing Board agreed, to significantly reduce the size of the Board to 12 directors, while at the same time adding three new directors. The Board has experienced significant refreshment over the past two years, and of the 12 nominees proposed for election, seven are new to the Board in the last two years.
IMPORTANT FACTORS IN ASSESSING BOARD COMPOSITION
Composition
The Governance Committee strives to maintain an independent boardBoard with broad and diverse experience and judgment that is committed to representing the long-term interests of our shareowners.shareholders. The committeeGovernance Committee considers a wide range of factors when selecting and recruiting director candidates, including:
Creating an experienced, qualified Board with high personal integrity and character, and expertise in areas relevant to GE.
The Governance Committee seeks directors who possess extraordinary leadership qualities and demonstrate a practical understanding of organizations, processes, people, strategy, risk management and how to drive change and growth. Additionally, we believe directors should have experience in identifying and developing talent, given the Board’s role in human capital management and succession planning. In addition to these threshold qualities, we seek directors who bring to the Board specific types of experience relevant to GE and the company’s strategy.
Enhancing the Board’s diversity of background.
For decades, GE has been committed to building a cognitively diverse Board comprised of individuals from different backgrounds and with a range of experiences and viewpoints. Specifically, under the Board’s diversity policy, the Governance Committee considers attributes such as race, ethnicity, gender, cultural background and professional experience when reviewing candidates for the Board and in assessing the Board’s overall composition. The Board is committed to using refreshment opportunities to strengthen its cognitive diversity. Additionally, the Governance Committee is committed to considering the candidacy of women and racially and ethnically diverse candidates for future vacancies on the Board. To accomplish this, the Governance Committee will continue to require that search firms engaged by GE include a robust selection of women and racially and ethnically diverse candidates in all prospective director candidate pools. The Governance Committee reviews its effectiveness in balancing these considerations when assessing the composition of the Board.
Complying with regulatory requirements and the Board’s independence guidelines.
The Governance Committee considers regulatory requirements affecting directors, including potential competitive restrictions. It also looks at other positions the director has held or holds (including other board memberships), and the Board reviews director independence.
How We Assess Board Size
The Governance Committee takes a fresh look at Board size each year, consistent with the Board’s Governance Principles (see Helpful Resources on page 77). Based on the Board’s recent self-evaluations, assessment of trends with peer companies, and taking into account investor feedback, the Board anticipates it will continue to maintain approximately its current size. However, the Board may add additional directors in connection with our planned spin-offs.
– | Ensuring an experienced, qualified Board with expertise in areas relevant to GE.The committee seeks directors who possess extraordinary leadership qualities anddemonstrate a practical understanding of organizations, processes, strategy, riskmanagement and how to drive change and growth. Additionally, we believe directorsshould have experience in identifying and developing talent, given the Board’s role insuccession planning. In addition to these threshold qualities, we seek directors whobring to the Board specific types of experience relevant to GE:
|
| | Board Skills and Experience |
 9/10 | INDUSTRY & OPERATIONS EXPERIENCE |
 |  |
| We have sought directors with leadershipmanagement and operational experience in the industries in which we compete. For example, in the last two years we have added directors with industrial manufacturing,power, aviation and healthcaretechnology expertise. |
| INVESTOR EXPERIENCE
|
 |  |
| To ensure strong alignment with our investors, we have added directors who have experience overseeing investments and investment decisions. We believe that these directors can help focus management and the Board on the most critical value drivers for the company, including with respect to setting executive compensation targets and objectives.
|
9/10 | FINANCE & ACCOUNTING EXPERIENCE |
 |  |
| GE uses a broad set of financial metrics to measure its performance, and accurate financial reporting and robust auditing are critical to our success. We have added a number of directors who qualify as audit committee financial experts, and we expect all of our directors to have an understanding of finance and financial reporting processes. |
4/10 | INVESTOR EXPERIENCE To promote strong alignment with our investors, we have added directors who have experience overseeing investments and investment decisions. We believe that these directors can help focus management and the Board on the most critical value drivers for the company, including with respect to setting executive compensation targets and objectives. |
 4/10 | TECHNOLOGY EXPERIENCE |
 |  |
| As a digitalhigh-tech industrial company and leading innovator, we seek to add additional directors with technology backgrounds because our success depends on developing and investing in new technologies and ideas. Technology experience has become increasingly important as we intensify our focusproducts become more reliant on the Industrial Internet.digital applications. |
 10/10 | RISK MANAGEMENT EXPERIENCE |
 |  |
| In light of the Board’s role in overseeing risk management and understanding the most significant risks facing the company, including cybersecurity risk,strategic, operational, financial, legal and compliance and reputational risks, we continue to requireseek directors with experience in risk management and oversight. |
 10/10 | GOVERNMENT AND REGULATORYGLOBAL EXPERIENCE
|
 |  |
| We have addedseek directors with global business experience because GE’s continued success depends on continuing to grow our businesses outside the United States. For example, in governmental and regulatory organizations because many2022, 57% of GE’s businesses are heavily regulated and are directly affected by governmental and regulatory actions and socioeconomic trends.our revenue was attributable to activities outside the United States. |
GE 2023 PROXY STATEMENT 1413
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Board Leadership Structure
GE believes that independent board oversight is an essential component of strong corporate performance. We also believe that the decision as to whether the positions of Chairman and CEO should be combined or separated, and whether an executive or an independent director should serve as the Chairman should be based upon the circumstances facing the company. Maintaining flexibility on this policy allows the Board to choose the leadership structure that will best serve the interests of the company and its shareholders at any particular time.
WHY OUR BOARD LEADERSHIP STRUCTURE IS APPROPRIATE FOR GE 2018 PROXY STATEMENTAT THIS TIME. The Board continues to believe that its current leadership structure, which has a combined role of Chairman and CEO, counterbalanced by a strong independent Board led by a lead director and independent directors chairing each of the Board committees, is in the best interests of GE and its shareholders. In the Board’s view, this structure allows Mr. Culp, as Chairman and CEO, to drive strategy and agenda setting at the Board level, while maintaining responsibility for executing on that strategy as CEO. At the same time, our lead director, Thomas Horton, works with Mr. Culp to set the agenda for the Board and also exercises additional oversight on behalf of the independent directors. In addition, the Board believes that combining the roles of Chairman and CEO is important to provide clarity on decision-making and accountability as we execute on our strategic transformation into three independent companies, and any potential conflicts that might result from combining the roles can be effectively mitigated through the duties of our lead director. The Board will continue to review the appropriateness of this structure and consider shareholder feedback from our ongoing engagements.
HOW WE SELECT THE LEAD DIRECTOR. The Governance Committee reviews potential candidates’ qualifications and attributes, including leadership and previous public company experience, and considers feedback from the current lead director, other Board members and the Chairman. The Governance Committee then makes a recommendation to the Board’s independent directors, who after review, elect the lead director. Thomas Horton, former Chairman and CEO of American Airlines, was first elected as the lead director in September 2018.
The Lead Director’s Role
The lead director has the following responsibilities (and may also perform other functions at the Board’s request), as detailed in the Board’s Governance Principles:
—● | EnhancingBoard leadership — provides leadership to the Board’s diversityBoard in any situation where the Chairman’s role may be perceived to be in conflict, and chairs Board meetings in the absence of background.the Chairman
|
| |
| ● | Board agenda, schedule & information — approves the agenda (with the ability to add agenda items), schedule and information sent to directors and calls additional meetings as needed |
| |
| ● | Leadership of independent director meetings — calls and leads independent director meetings, which are regularly scheduled (in addition to the numerous informal sessions that occur throughout the year) without any management directors or GE employees present |
| |
| ● | Chairman-independent director liaison — regularly meets with the Chairman and serves as liaison between the Chairman and the independent directors (although every director has been committeddirect access to the Chairman) |
| |
| ● | Shareholder communications — makes himself/herself available as the primary Board contact for decades to building a cognitively diverse direct communication with our significant shareholders |
| |
| ● | Board comprising individuals from different backgrounds andgovernance processes — works with a range of experiences and viewpoints. Specifically, under the Board’s diversity policy, the Governance Committee considers attributes such as race, ethnicity, gender, cultural background and professional experience when reviewing candidates for the Board and in assessingto guide the Board’s overall composition. Thegovernance processes, including the annual Board acknowledges thatself-evaluation and the newannual Chairman’s evaluation |
| |
| ● | Board leadership structure review — oversees the Board’s periodic review and smaller Board will be less diverse following the retirementevaluation of several directors in 2018, including GE’s three longest-tenured directors, all of whom are women. The Board is committed to using future refreshment opportunities to strengthen its cognitive diversity, beginning with the recruitment of a new director in 2019, following Jack Brennan’s retirement. To accomplish this,leadership structure |
| |
| ● | Committee chair selection — advises the Governance Committee will continue to require that search firms engagedin choosing committee chairs |
|  | | CHAIRMAN OF
THE BOARD & CEO |
| | | |
|  | | LEAD DIRECTOR elected solely by GE include a robust selection of women and ethnically diverse candidates in all prospective director candidate pools. In addition, the Governance Committee is committed to interviewing women and ethnically diverse candidates for all future vacancies on the Board.
independent directors |
— | | | |
|  | | Complying with regulatory requirementsCHAIRS
The chairs of our Audit,
Compensation and the Board’s independence guidelines. The committee considers regulatory requirements affecting directors, including potential competitive restrictions. It also looks at other positions the director has held or holds (including other board memberships), and the Board reviews director independence.
Governance committees
are independent |
CANDIDATE RECOMMENDATIONS.The committee considers all shareowner recommendations for director candidates. We evaluate them
Considerations
in selecting current
lead director: THOMAS HORTON | |  |
Mr. Horton was first elected to our Board at the same manner as candidates suggested by other2018 Annual Meeting. During his tenure on our Board, he has established strong working relationships with his fellow directors and candidates suggested by third-party search firms,garnered their trust and respect. Furthermore, he has demonstrated strong leadership skills, independent thinking and a deep understanding of our businesses and their industries.
The independent directors’ decision to select Mr. Horton as lead director took into account the tenures and capabilities of each independent director, along with a potential candidate’s willingness and ability to serve as lead director, understanding that the position entails significant responsibility and time commitment. The Board considered that Mr. Horton also serves as lead independent director for Walmart. However, in reviewing Mr. Horton’s time commitment at Walmart, the independent directors noted that Walmart has three separate positions for CEO, chairman, and lead independent director, which the company retains frommitigated concerns about Mr. Horton’s ability to dedicate sufficient time to timethe role as GE’s lead director under the circumstances.
14 GE 2023 PROXY STATEMENT
Table of Contents
Board Governance Practices
Our Board seeks to help identify potential candidates. Mr. Garden was recommended for the Board by Trian Fund Management, L.P., a GE shareowner. Mr. Culp was originally recommended for the Board by a shareowner, and Mr. Horton and Ms. Seidman were originally recommended by management.
How We Assess Board Size
The Governance Committee takes a fresh look at Board size each year, consistentoperate with the Board’s Governance Principles (see“Helpful Resources”highest degree of effectiveness, supporting a dynamic boardroom culture of independent thought and intelligent debate on page 73). In fall 2017, the committee recommended reducing the sizecritical matters. We take a comprehensive, year-round view of the Board. The committee made this recommendation following the Board’s self-evaluationcorporate governance and in light of the broader GE portfolio review, including the narrower scope of GE’s activities following the GE Capital exit plan, assessment of trends with peer companies and taking into account investor feedback. The Board announced itsour adoption of the committee’s recommendation in November 2017 by setting a target board size of 12 directors for the 2018 proxy slate. Thebest practices impacts our leadership structure, Board composition and recruitment, director engagement, and accountability to shareholders. Our Board and committee believe that reducingevaluation process allows for annual assessment of our Board practices and the size of the Board will enhance the operational oversight of the Board.opportunity to identify areas for improvement.
RECRUITMENT PRIORITIES GOING FORWARD |
 Cognitive diversityIndustry expertiseCapital allocation expertiseTechnology expertise |
HOW YOU CAN RECOMMEND A CANDIDATE |
Write to the Governance Committee, c/o Corporate Secretary, GE, at the address listed on the inside front cover of this proxy statement, and include all information that our by-laws require for director nominations.
|
HOW WE REFRESH THE BOARD |
–Term limits.The Board has a 15-year term limit for independent directors.
–Age limits.With limited exceptions, directors may not be renominated to the Board after their 75th birthday.
|
| |
| Annual Evaluation Process |
| |
| The Governance Committee oversees and approves the annual formal Board evaluation process and determines whether it is appropriate for the evaluations to be conducted by the lead director or an independent consultant each year. In 2022, the evaluation process was conducted by Mr. Horton as lead director. |
| |
| |
| | |
| | |
| 1 | WRITTEN QUESTIONNAIRES |
| | Directors completed written questionnaires, which are benchmarked and refreshed each year focusing on page 19.the performance of the Board and each of its committees. |
| | |
| | |
| | |
| | |
| | |
| 2 | INDIVIDUAL INTERVIEWS |
| | The lead director conducted one-on-one interviews with each member of the Board focused on: |
| | |
| ● | reviewing the Board’s and its committees’ performance over the prior year; and |
| | |
| ● | identifying areas for potential enhancements of the Board’s and its committees’ processes going forward. |
| | |
| | |
| | |
| | |
| 3 | DISCUSSION OF RESULTS |
| | The lead director reviewed the written questionnaire and interview responses with the chairs of each committee and then met with the full Board to discuss the findings from the evaluation. |
| | |
| | |
| | |
| 4 | USE OF FEEDBACK |
| | The Board and each of its committees developed plans to take actions based on the results, as appropriate. |
See the Board’s Governance Principles (see“Helpful Resources” on page 73) for more information on these policies.
GE 2023 PROXY STATEMENT 15
Table of Contents
Board Operations
| 2022 Areas of Focus | |
● Long-term strategy and business portfolio reviews, including oversight of our strategic transformation ● Strategy for the energy transition and climate change ● Capital structure and liquidity, particularly in connection with our plan to create three investment grade rated public companies | ● Business operating and performance reviews ● Sustainability, including external reporting ● Management succession planning ● Aviation sector recovery, and current industry dynamics ● Enterprise risk management |
A Typical GE Board Meeting
GE 2018 PROXY STATEMENT
How We Assess Director Independence
BOARD MEMBERS.The Board’s Governance Principles require all non-management directorsDuring 2022, the Board held seven regularly scheduled meetings, plus five special meetings. Five regularly scheduled meetings were held in-person and two regularly scheduled meetings were held virtually, and the schedules were adjusted to be independent.accommodate director participation from different time zones. All of our director nominees (listed under“Election of Directors” on page 10) other than Mr. Flannery are independent, as are retiring directors Messrs. Dekkers, Henry, Mollenkopf and Rohr, and Mses. Hockfield, Jung and Lazarus. Former directors Messrs. Lane and McAdamspecial meetings were independent throughout the period they served on our Board. Mr. Immelt, as our former CEO and chair, was not independent.held virtually.
—1 | BEFORE THEMEETING | The Board’s guidelines.For a director to be considered independent, the Board must determine that he or she does not have any material relationshipcommittee chairs:
prep meetings with GE. The Board’s guidelines for director independence conform to the independence requirements in the New York Stock Exchange’s (NYSE) listing standards. In addition to applying these guidelines, which you can find in the Board’s Governance Principles on GE’s website (see“Helpful Resources” on page 73), the Board considers all relevant factsmanagement, auditors and circumstances when making an independence determination.outside advisors
| Management:
internal prep meetings |
—2 | THURSDAY
(DAY 1) | Applying the guidelines in 2017.Daytime:In assessing director independence for 2017, the
Board considered relevant transactions, relationships and arrangements, including relationships amongcommittee meetings & Board members, their family members and the company. For details, see“Relationships and Transactions Considered for Director Independence” below.meeting
| Evening:
informal gathering with management & Board working dinner |
| 3 | FRIDAY
(DAY 2) | Early morning:
independent directors’ breakfast session | Daytime:
full Board meeting (including reports from each committee chair) followed by an executive session |
| 4 | AFTER THEMEETING | Management:
debrief sessions to discuss & respond to Board follow-up items |
| | | | |
| Full Board 12 meetings in 2022 | |
| | | | |
| Chairman
H. Lawrence
Culp, Jr. | | Lead Director
Thomas Horton | |
|  | |  | |
| | | | |
| | | | |
| Independent
Director Meetings The independent directors meet regularly in executive sessions at scheduled Board meetings. They may have other special meetings throughout the year. These executive sessions are designed to promote candor and discussion of matters in a setting that is independent of the Chairman and CEO. The lead director chairs each of these executive sessions. | |
| | | | |
COMMITTEE MEMBERS.The GE Board in Action: 2022 HighlightsAll members
Our Board recognizes that its oversight of our strategic priorities and responsibility to GE shareholders requires a personal and professional commitment that extends well beyond regularly scheduled Board meetings. Ongoing and meaningful engagement with the Audit Committee, Management Developmentbusiness is critical to staying informed and Compensation Committee (the Compensation Committee),provides the type of insight that allows our directors to provide effective guidance to our leadership team and Governance Committee must be independent, as defined by the Board’s Governance Principles. Some committee members must also meet additional standards:to engage in constructive dialogue with each other.
—ENGAGEMENT WITH SHAREHOLDERS Governance Discussions Engagement with shareholders included Thomas Horton (lead director) DIRECTOR EDUCATION Ongoing Functional Deep Dives Periodic sessions with insurance and legal teams Kaizen Events Participation in education sessions on Lean fundamentals and other lean events New Director Orientation Full orientation program for new directors | Heightened standardsENGAGEMENT WITH THE BUSINESSES
Regular Board Calls Provide an opportunity for Audit Committee members.Under a separate SEC independence requirement, AuditCommittee members may not accept any consulting, advisory or other fees from GE or anythe CEO and the rest of its subsidiaries, except compensation for Board service. |
— | Heightened standards for members of the Compensation and Governance Committees.As a policy matter, the Board also applies a separate, heightened independence standard to members of the Compensation and Governance Committees: no member of either committee may be a partner, member or principal of a law firm, accounting firm or investment banking firm that accepts consulting or advisory fees from GE or a subsidiary. In addition, in determining that Compensation Committee members are independent, NYSE rules require the Board to consider their sourcesdiscuss company operations in real-time
Quarterly Senior Leadership Meetings Director attendance and presentations Business Visits and Functional Deep Dives Provide opportunity for direct employee interaction and better understanding of compensation, including any consulting, advisory or other compensation paid by GE or a subsidiary.culture |
The Board has determined that all members of the Audit, Compensation and Governance Committees, as well as the Technology & Industrial Risk Committee (the Industrial Risk Committee) and the Finance & Capital Allocation Committee (the Finance Committee), are independent and also satisfy any committee-specific independence requirements.
Relationships and Transactions Considered for Director Independence
| | | | | | GE Transaction & 2017 Magnitude |
Director/
nominee | | Organization | | Relationship | | Sales to GE
Greater of <1% of
other company’s
revenues and
<$1 million
 | | BUSINESS AND STRATEGY REVIEW SESSIONS Purchases from● Director participation at strategy sessions for GE
Aerospace (September)
●<1% of other
company’s revenues Director participation at strategy reviews for GE Vernova (October) SITE VISITS BY DIRECTORS ● GE Global Research Center in Niskayuna, NY ● GE Gas Power in Schenectady, NY ● GE Gas Power in Greenville, SC ● GE Aerospace in Evendale, OH ● GE HealthCare in Waukesha, WI GE LEADERSHIP MEETINGS ● Director participation in quarterly leadership meetings for top ~900 company executives | |
Indebtedness
to GE
<1% of GE’s assets
| | |
Bazin | | AccorHotels | | Chair & CEO | |  | | N/A | | N/A |
D’Souza | | Cognizant | Regular calls with CEO | CEO & director | | | | N/A | | N/A |
Garden | | Triland Partners LP | | Brother is executive & owner | | | | N/A | | N/A |
McAdam | | Verizon | | Chair & CEO | | | | | | |
Mollenkopf | | Qualcomm | | CEO & director | | | | N/A | | |
Tisch | | Loews | | President & CEO | | | | N/A | | |
All directors | | Various charitable organizations | | Executive, director or trustee | | Charitable contributions from GE
<1% of the organization’s revenues |
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Table of Contents
GE 2018 PROXY STATEMENT
Board Operations
AN INTRODUCTION TO HOW OUR BOARD OPERATES |
The Board is elected by shareowners to oversee management and assure that shareowners’ long-term interests are being served. In 2017, there were eight regularly scheduled Board meetings. A significant portion of the Board’s oversight responsibilities is carried out through its independent committees.Committees
WHAT’S CHANGED SINCE OUR LAST PROXY STATEMENT? | | | | | | | | | |
New Finance & Capital Allocation Committee.The Board decided to create the committee, which began meeting in December 2017, to assist in the oversight of significant M&A activity and other capital allocation decisions, such as investments (including R&D), buybacks and dividends.
Phasing out the Technology & Industrial Risk Committee.In light of the smaller Board, following the annual meeting, we will be phasing out the committee and reallocating its oversight responsibilities to the full Board and other committees.
COMMITTEE COMPOSITION Listed to the right are the current members of each committee. Independence. |
Independence.All committee members satisfy the NYSE’s and GE’s definitions of independent director.All committee members satisfy the NYSE’s and GE’s definitions of independence.
Financial acumen.Ms. Schapiro and Messrs. Bazin, Beattie, Mulva and Rohr are “audit committee financial experts” (per SEC rules), and each of these directors, as well as Mr. Henry, are “financially literate” (per NYSE rules). New appointees to the Audit Committee following the annual meeting, Messrs. Brennan and Horton and Ms. Seidman, are also “audit committee financial experts.”
Each committee meets periodically throughout the year, reports its actions to the Board, receives reports from senior management, annually evaluates its performance and can retain outside advisors. Formal meetings are typically supplemented with additional calls and sessions.
COMMITTEE RESPONSIBILITIES The key responsibilities of each committee are listed to the right. For more detail, see the Governance Principles and committee charters (see Helpful Resources on page 77). | Audit |
The primary responsibilities of each committee are listed to the right. For more detail, see the Governance Principles and committee charters on GE’s website (see“Helpful Resources” on page 73).
| Full BoardGovernance & Public Affairs | | Management Development & Compensation |
  | | 6 meetings in 2022 | | 9 meetings in 2022 |
Chair
Leslie Seidman Other Members
D’Souza, Goren,
Lesjak & Reynolds |  | | Chair
Paula Rosput Reynolds Other Members
Bazin, Horton
& Lesjak |  | | Chair
Stephen Angel Other Members
Bazin, D’Souza, &
Garden | 
|
| |
CHAIRMAN, JOHN FLANNERY &
LEAD INDEPENDENT DIRECTOR,
JACK BRENNAN
|
|
In 2017, the Board focused on:
–Leadership transitions, particularly for the CEO
–Review of GE’s portfolio
–Creation of Baker Hughes, a GE company
–Capital allocation, including dividend policy and pension funding
–Business performance reviews, particularly in Power
–GE Capital and Insurance
–New product launches (e.g., LEAP engine)
|
|
15 MEETINGS IN 2017
(incl. 4 independent director meetings)
|
|
MEMBERS
|
|
Bazin
Beattie
Brennan
D’Souza
Dekkers
Flannery
| Garden
Henry
Hockfield
Jung
Lavizzo-Mourey
Lazarus
| Mollenkopf
Mulva
Rohr
Schapiro
Tisch
|
|
|
KEY OVERSIGHT RESPONSIBILITIES |
|
–Corporate strategy
–Capital allocation
–Business development
–Risk management, including cybersecurity (except as delegated to the committees)
|
|
|
TYPICAL UPDATES AT EVERY MEETING
|
|
–Operations (CFO)
–Global growth (CEO of GGO)
–Key businesses (business CEOs)
|
Audit |
 |
|
|
CHAIR, MARY SCHAPIRO*
|
|
Key priorities for 2017 included:
–New revenue recognition standard
–Long-term service agreement accounting
–Financial reporting changes
–Oversight of significant litigation and investigations
–Accounting for Baker Hughes, a GE company
|
|
12 MEETINGS IN 2017
|
|
MEMBERS
|
|
Beattie
Henry
| Mulva
Rohr
| Schapiro
|
|
|
KEY OVERSIGHT RESPONSIBILITIES |
|
–Independent auditor engagement
–Financial reporting and accounting standards
–Internal audit functions (Corporate Audit Staff)
–Disclosure and internal controls
–Compliance and integrity programs
* Geoff Beattie will become the Audit Committee chair following the annual meeting.
|
17
Table of Contents
GE 2018 PROXY STATEMENT
Finance & Capital
Allocation |
 |
|
|
CHAIR, JIM MULVA
|
|
The Finance & Capital Allocation Committee was established in December 2017, and since then has focused on:
–Portfolio assessment and M&A activity
–GE Capital structure
–Funding options for Insurance
|
|
3 MEETINGS IN 2017
|
|
MEMBERS
|
|
Bazin
Garden
Mulva
| Rohr
Tisch
|
|
|
KEY OVERSIGHT RESPONSIBILITIES |
|
–Capital allocation and liquidity
–Dispositions and M&A activity
–Financial and capital structure risks
–Organic investments
–Dividends and buybacks
–Pension liabilities
|
Governance &
Public Affairs |
 |
|
|
CHAIR, SHELLY LAZARUS*
|
|
Key priorities for 2017 included:
–Reviewing the company’s leadership structure in connection with the CEO transition
–Assessing GE’s Board composition
–Identifying new directors for 2018
–Board governance processes
–Political/lobbying strategy
–Environmental, human rights and supply chain practices
|
|
8 MEETINGS IN 2017
|
|
MEMBERS
|
|
Brennan
Garden
Hockfield
Jung
| Lavizzo-Mourey
Lazarus
Tisch
|
|
|
KEY OVERSIGHT RESPONSIBILITIES |
|
–Director recruitment
–Corporate governance
–Board committee structure and membership
–Annual Board self-evaluation
–Conflict-of-interest reviews
–Director compensation
–GE positions on corporate social responsibilities
–Political spending and lobbying
* Risa Lavizzo-Mourey will become the Governance Committee chair following the annual meeting.
|
Management
Development &
Compensation |
 |
|
|
CHAIR, JACK BRENNAN
|
|
Key priorities for 2017 included:
–Overseeing the CEO succession process
–Succession for other key management roles
–Retention of critical talent
–Redesign of our executive compensation programs for 2018
–Re-look at employee benefit programs
|
|
8 MEETINGS IN 2017
|
|
MEMBERS
|
|
Brennan
Dekkers
Garden
| Jung
Lazarus
Rohr
|
|
|
KEY OVERSIGHT RESPONSIBILITIES |
|
–CEO and senior executive performance evaluations
–CEO and senior executive compensation
–Executive succession planning
–Development and selection of senior management
–Incentive compensation programs
|
Technology & Industrial Risk |
  |
|
|
CO-CHAIRS, MARIJN DEKKERS &
SUSAN HOCKFIELD
|
|
Key priorities for 2017 included:
–Product risks
–Cybersecurity
–Engineering, procurement and construction projects
–Military sales
–Nuclear activities
–Intellectual property risks
|
6 MEETINGS IN 2017
|
|
MEMBERS
| |
| | |
| |
| |
| | | | | | | |
| | | | | | | |
| Recent Activities and Key Focus Areas |
D’Souza● Overseeing the simplification of the company’s financial reporting
Dekkers● Overseeing the independent auditor, including the detailed audit plan and budget
● Conducting cross-functional reviews with internal audit staff, tax, cyber/IT and compliance ● Overseeing the enterprise risk management framework and risk assessment measures ● Overseeing material litigation strategy and the compliance and cybersecurity programs | | Hockfield● Overseeing the development of the company’s sustainability and environmental, social and governance (ESG) commitments and strategies and enhancements to disclosure
Mollenkopf● Reviewing the Board’s leadership structure and committee composition
● Identifying and recruiting new directors ● Overseeing the company’s safety programs and performance ● Overseeing management of environmental remediation efforts | | Following● Reviewing critical talent to support the annual meeting, the committee will be phased outneeds of GE with focus on human capital management, succession planning, diversity and its key oversight responsibilities will be reallocated as set forth below:talent development and retention
● Focusing on increased alignment of pay and performance through effective short- and long-term incentive compensation design ● Engaging with shareholders and reviewing feedback and external benchmarking of compensation practices ● Overseeing cultural transformation for GE, prioritizing leadership behavior |
| | | | | | | | |
KEY OVERSIGHT RESPONSIBILITIESOur Path Forward |
● Overseeing the carve-out audits for the spin-off companies, preparation of the Form 10 registration statements and standalone readiness of the compliance, internal audit, digital technology, enterprise risk and other key functions in connection with the spin-offs | | ● Leading the director recruitment efforts in connection with the planned formation of three independent public companies | | ● Overseeing talent recruitment, development and placement/ retention in connection with the planned business separations and transition to three standalone companies |
| | | | | | | |
–TechnologyKey Responsibilities and product risk and strategy |
| Board●–Cybersecurity Board–Investments and science, technology Financeand software initiatives
–Science and technology trends Board–R&D operations,Oversees GE’s independent auditor, including the GRC audit plan and budget, and monitors independence and performance●Oversees the effectiveness of GE’s financial reporting processes and systems ●Discusses with auditor and management key reporting practices (including non-GAAP measures), critical audit matters and new accounting standards ●Monitors the effectiveness of GE’s internal controls ●Reviews and evaluates the scope and performance of the internal audit staff and compliance program ●Oversees the company’s enterprise risk management and cybersecurity programs ●Monitors GE’s significant litigation and investigations ●Oversees external reporting on sustainability matters in coordination with the Governance Committee
| | ●Oversees the Board’s governance processes, including all significant governance policies and procedures ●Oversees company policies and strategies related to climate change management, political spending & lobbying, human rights, and environment, health & safety ●Oversees external reporting on sustainability matters in coordination with the Audit Committee ●Reviews and makes recommendations to the Board & Financewith respect to director independence ●–Climate-changeReviews Board composition and compensation in connection with long-term strategy and identifies new directors for GE●Oversees Board and committee self-evaluations ●Reviews conflicts of interest, as applicable | | ●Oversees GE’s executive compensation policies, practices and programs ●Reviews material elements of executive compensation, including equity awards, deferred compensation, severance and perquisites ●Oversees and approves goals and objectives for performance-based equity awards and evaluates performance against those goals ●Evaluates and approves compensation of the CEO ●Reviews risk assessment of compensation policies and practices ●Oversees development of executive succession plans, including recruitment, development and retention efforts for all employees ●Oversees strategies and policies related risks Governanceto human capital management, including matters such as diversity, equity and inclusion, workplace environment and culture, and talent recruitment, development, engagement and retention |
GE 2023 PROXY STATEMENT 1817
Table of Contents
Key Areas of Board Members Are Encouraged to Visit at Least Two GE Businesses Per YearOversight
GE PRACTICE.We encourage our directors to meet with GE senior managers throughout the company. To facilitate this contact, directors are encouraged to make at least two visits to GE businesses each year, typically unaccompanied by corporate management. Priority goes to those businesses identified as strategically important during the company’s annual financial and strategic planning sessions as well as any that were recently acquired or are a particular focus of risk oversight. These visits also serve as an important tool in the Board’s succession planning process for the CEO and the rest of the senior leadership team.
| | | Strategy The Board has oversight responsibility for management’s establishment and execution of corporate strategy, and elements of strategy are discussed at every regularly scheduled Board meeting. The Board also engages directly with the leaders of GE’s businesses and regularly reviews the businesses’ strategic and operational priorities, competitive environment, market challenges, economic trends and regulatory developments. GE’s annual long-term strategy process focuses on key strategic questions identified for each business. The leadership teams from the businesses discuss these questions, and their business priorities for the coming year as informed by the long-term strategy process, with the Board during strategy sessions in December of each year. A long-term orientation and these key strategic questions continue to be integrated with how we set multi-year priorities across our businesses, as well as our budgets and operational and financial objectives. The Board at meetings throughout the year also regularly discusses capital allocation plans, the company’s performance against its operating plan and annual budget and potential mergers, acquisitions and dispositions with a view toward alignment with our strategic priorities. |
| | 10 BUSINESS VISITS IN 2017
| |
OUR PATH
FORWARD | | | |
| | UNITED STATES
| |
|  | Additive, Cincinnati, Ohio
| |
|  | Aviation, Cincinnati, Ohio
| |
|  | In 2021, the full Board conducted a rigorous portfolio and business strategy review over several months, culminating in the announcement of the plan to separate GE’s businesses into three industry-leading public companies, focusing on the growth sectors of healthcare, aviation and energy. During 2022, the Board remained closely engaged with our ongoing execution for this strategic transformation, while also continuing to conduct rigorous reviews of business strategy and performance. In January 2023, we completed a spin-off to separate GE Capital, Norwalk, Connecticut | |
|  | Global Research Center, Niskayuna, New York
| |
|  | Healthcare, Chicago, Illinois
| |
|  | Oil & Gas, Houston, Texas | |
|  | Power, Schenectady, New York
| |
| | | |
| | EUROPE
| |
|  | Oil & Gas, Florence, Italy
| |
| | | |
| | ASIA | |
|  | Digital, Shanghai, China
| |
|  | Healthcare, Beijing, China
| |
| | | HealthCare, creating a global leader in precision healthcare. The Board continues to oversee the strategic transformation as we work to drive long-term growth and value for customers, investors and employees with the planned launch of GE Vernova and GE Aerospace as standalone companies with a second spin-off. |
How We EvaluateEnterprise Risk Management
Risk assessment and risk management are the Board’s Effectiveness
ANNUAL EVALUATION PROCESS. Each year,responsibility of the lead director or an independent consultant interviews each director to obtain his or her assessment of director performance, Board dynamicscompany’s management, and the effectivenessBoard has oversight responsibility for those processes. The Audit Committee assists with the oversight of the company’s enterprise risk management framework, and the Board has also delegated specific risk oversight responsibility to committees of the Board based on the expertise of those committees. Our Governance Principles and its committees. In 2017,committee charters define the risk areas for which each committee has ongoing oversight responsibility, while the Board used an independent outside consultant to conduct the assessment. The interviews focused on:
—reviewing the Board’s performance over the prior year and a half; and
—identifying areas for potential enhancements of the Board’s processes going forward.
At times, directors may also complete written assessments. After the self-evaluation in 2017, the outside consultant reviewed the results with the lead director and chair of the Governance Committee and then met with the full Board to discuss the findings from the evaluation. For more information on this evaluation process, see the Board’s Governance Principles (see“Helpful Resources” on page 73).
CHANGES MADE IN RESPONSE TO 2017 EVALUATIONS.In response to feedback received from our directors in 2017, the Board made a number of changes, including:
—creating a Finance & Capital Allocation Committee;
—reducing the size of the Board to 12 directors for the 2018 slate, including three new directors; and
—contemporizing the format of Board meetings by fostering more rigorous dialogue through interactive deep dives related to the most salient topics facing the company.
19
Table of Contents
GE 2018 PROXY STATEMENT
Board Leadership
Structure
Our CEO serves as the chairman of the Board. An independent director serves as the Board’s lead director, with broad authority and responsibility over Board governance and operations.
WHY OUR BOARD LEADERSHIP STRUCTURE IS APPROPRIATE FOR GE AT THIS TIME.The Board regularly reviews its leadership structure, and the Board conducted a deep dive to evaluate whether to continue to combine or to split the chair and CEO roles in the months leading up to the company’s recent CEO transition. After considering the perspectives of the independent directors, the views of our significant shareowners, voting results of recent independent chair proposals at GE, academic research, practical experience at peer companies, and benchmarking and performance data, the Board determined that appointing Mr. Flannery as chair and CEO (following a brief transition period in which Mr. Immelt continued to serve as the chair after retiring as CEO) was in the best interests of the company and its shareowners. In the Board’s view, this structure continues to allow our CEO to speak for and lead the company and Board while also providing for effective oversight and independent leadership by an independent director. The Board will continue to monitor the appropriateness of this structure.
HOW WE SELECT THE LEAD DIRECTOR.The Governance Committee considers feedback from the current lead director, our Board members and the chairman, and then makes a recommendation to the Board’s independent directors. The independent directors elect the lead director, taking into account the recommendation of the committee. Jack Brennan, chair emeritus of the Vanguard Group, was elected as the lead director in 2014. Under the Board’s Governance Principles, Mr. Brennan also serves as chair of the Compensation Committee. In the event of Mr. Brennan’s incapacity, the chair of the Governance Committee would serve as the lead director until the independent directors selected a new lead director.
BOARD LEADERSHIP STRUCTURE |
THE LEAD DIRECTOR’S ROLE.The lead director focuses on overseeing the Board’s processes and prioritizing the right matters. Specifically, the lead director has the following responsibilities (and may also perform other functions at the Board’s request), as detailed in the Board’s Governance Principles:
— | Board leadership —provides leadership to the Board in any situation where the chairman’s role may be perceived to be in conflict, and chairs meetings when the chairman is absent |
— | Leadership of independent director meetings —leadsindependent director meetings, which are scheduled at least three times per year (in addition to the numerous informalsessions that occur throughout the year) without any management directors or GE employees present |
— | Additional meetings —calls additional Board or independentdirector meetings as needed |
— | Chairman-independent director liaison —regularly meets withthe chairman and serves as liaison between the chairman and the independent directors |
— | Shareowner communications —makes himself/herself availablefor direct communication with our major shareowners |
— | Board priorities —works with the chairman to propose an annual schedule of major Board discussion items |
— | Board agenda, schedule & information —approves the agenda,schedule and information sent to directors |
— | Board governance processes —works with the GovernanceCommittee to guide the Board’s governance processes, includingsuccession planning and the annual Board self-evaluation |
— | Board leadership structure review —oversees the Board’s periodic review and evaluation of its leadership structure |
— | Chairman evaluation —leads annual chairman evaluation |
— | Committee chair selection —advises the GovernanceCommittee in choosing committee chairs |
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Table of Contents
GE 2018 PROXY STATEMENT
How We Oversee & Manage Risk
A disciplined approach to risk is important in a diversified organization like ours to ensure that we are executing according to our strategic objectives and that as a company we only accept risk for which we are adequately compensated.
Board Oversight
The Board has oversight for risk management at GE with a focuswhole focuses on the most significant risks facing the company, including strategic, operational, financial and legal and compliance risks. With the phasing out of the Industrial Risk Committee, the Board is also assuming responsibility for the oversight of cybersecurity risk and certain other risk focus areas that were previously subject to the Industrial Risk Committee’s oversight, such as product quality, sourcing and supply chain risks.company. Throughout the year, the Board and the committees to which it has delegated responsibility dedicate a portion of their meetings to review and discuss specific risk topics in greater detail.
FollowingGE’s Chief Risk Officer coordinates the annual meeting,company’s enterprise risk management framework and reports regularly to the Board’s delegated responsibilityAudit Committee and the full Board on risk topics. During 2022, reviews with the Audit Committee or Board have included discussions of top enterprise risks, risk management processes at the GE business-level, and risks related to the company’s strategic planning and priorities. Additionally, during 2022, the Audit Committee spent significant time reviewing key risks and standalone readiness related to the GE HealthCare spin-off.
We typically organize enterprise risks into the broad categories of strategic, operational, financial, legal and compliance, and reputational risks. Risks identified through our risk management processes are prioritized and, depending on the probability and severity of the risk as well as the immediacy of the risk assessed, escalated as appropriate. Senior management discusses these risks regularly with the risk owners within the businesses or at the corporate level. Risk leaders within the businesses and corporate functions are responsible for identifying key risks and presenting risk assessments to senior management and, when appropriate, to the full Board or the relevant Board committee. For example, each GE business discusses its top enterprise risks during quarterly operating reviews, as well as risk mitigation strategies and other related considerations. In addition, at regularly scheduled Board meetings, GE business leaders review their risk management programs and top risks with the Audit Committee, which is responsible for the oversight of specificGE’s overall enterprise risk management framework. The GE business leaders also present periodically to the full Board. For a discussion of key risks that could have a material adverse effect on our business, reputation, financial position and results of operations, please refer to the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2022.
Sustainability
GE is rising to the challenge of building a world that works, with a focus on opportunities for our technology in the future of smarter and more efficient flight and the energy transition to drive decarbonization. In connection with the planned spin-offs, we have worked across GE to ensure that the independent companies we are creating will operate with sustainability at their core on day one. We are fully seizing the opportunity to focus on the critical global needs in energy and aviation, merging the legacy of GE’s technology and culture and the best-in-class expertise of modern sustainability programs.
We recognize the importance of these topics to our shareholders and other stakeholders, and sustainability is a driving force behind the work we do and the company’s long-term value. More information that may be of interest to a variety of stakeholders about GE’s sustainability approach, priorities and performance, including about safety, greenhouse gas emission reductions for our own operations and for our products, including Scope 3 emissions from use of sold products, environmental stewardship, diversity and inclusion (as also discussed further below), supply chain and human rights and other matters, can be found in our Sustainability Report. Among other things, the Sustainability Report includes our ambition to be a net zero company by 2050, targets for reducing Scope 1 and Scope 2 emissions, Scope 3 reporting for use of sold products and TCFD-aligned reporting on climate-related risks.
Sustainability is an integrated aspect of how we think about strategy and risk. Our Board committees will be as set forth below.
Management’s Risk Assessment & Mitigation Processesand management believe the long-term interests of shareholders are advanced by responsibly addressing the concerns of other stakeholders and interested parties including employees, recruits, customers, suppliers, GE communities, government officials and the public at large. We believe the integration of a sustainability lens with our daily operations, culture and company priorities is important to driving results. At the Board level, these topics often span multiple functional categories and areas of oversight, and therefore oftentimes involve discussion at the full Board level rather than individual committees. In addition, our Governance Committee has oversight responsibility for GE’s priorities and external reporting related to sustainability matters, and our Audit Committee also plays a role in the oversight of such external reporting, including reporting on these matters in SEC filings and data quality related to this reporting.
The Board’s risk oversight process builds upon management’s risk assessmentFor additional reporting on sustainability and mitigation processes, which include reviewsESG matters, see our ESG webpages, our 2021 Sustainability Report, our 2021 Human Rights Report and our 2021 Diversity Annual Report (see Helpful Resources on page 77). |
| | | |
| Our Reach | | |
 | ENERGY TRANSITION 1/3 of strategic and operational planning; executive development and evaluation; compliance under the company’s codeworld’s electricity generated with the help of conduct, The Spirit & The Letter, laws and regulations; the company’s integrity programs; health, safety and environmental compliance; financial reporting and controllership; and informationour technology and cybersecurity programs. |  | FUTURE OF FLIGHT 3 out of 4 commercial flights powered by GE or partner engines |
2118 GE 2023 PROXY STATEMENT
Table of Contents
Board Oversight
Key Areas Related to Strategy, Risk & Sustainability
| FULL BOARD | | AUDIT COMMITTEE
|
● Long-term strategy ● Most significant risks facing GE ● Reviews with each business ● Financial performance ● Energy transition and climate change | | ● Financial statements, systems & reporting ● Regulatory, compliance and litigation risks ● Cybersecurity ● Enterprise risk management framework ● Auditors (internal and external) |
| | |
GOVERNANCE & PUBLIC
AFFAIRS COMMITTEE | | MANAGEMENT DEVELOPMENT &
COMPENSATION COMMITTEE |
● Corporate governance ● Legislative, regulatory and public policy matters ● Environmental, health and safety matters ● Support of full Board’s oversight on climate change ● External reporting related to sustainability/ESG matters | | ● Human capital management, including diversity and pay equity ● Talent development ● Succession planning ● Executive compensation |
Key Governance Processes
Management Level
| | | | | | |
OPERATING
REVIEWS |  | ORGANIZATION &
TALENT REVIEWS | | LONG-TERM
STRATEGY REVIEWS | | BUDGET
PROCESS |
Quarterly GE CEO reviews with each business on their operating priorities, execution against plan and top risks | | Annual GE CEO review dedicated to organization and critical talent strategy to drive business results, including action plans related to cultural transformation and diversity | | Annual long-range review of business strategy, technology roadmap and competitive position, including investment requirements to deliver sustainable growth | | Annual budget planning process, designed to focus near-term financial execution and investments profile to deliver long-term strategic objectives |
Enterprise Risk Management Framework
Strategic
Risk | | Operational
Risk | | Financial
Risk | | Legal &
Compliance
Risk | | Reputational
Risk |
GE 20182023 PROXY STATEMENT19
Table of Contents
How We Get Feedback from InvestorsOther Governance Policies & Practices
We Have a Robust Investor Engagement ProgramDirector Attendance at Meetings
We conduct extensive governance reviews (i.e., assessing trends in global governance)The Board expects directors to attend all meetings of the Board and investor outreach throughout the year involvingcommittees on which the director serves as well as the Annual Meeting.
BOARD/COMMITTEE MEETINGS. In 2022, each of our current directors attended at least 75% of the meetings held by the Board and committees on which the member served during the period the member was on the Board or committee. Average attendance by our directors senior management, investor relationsfor these meetings was 95% during 2022.
ANNUAL SHAREHOLDERS MEETING. All of our then-serving directors attended the 2022 Annual Meeting.
Board Integrity Policies
CODE OF CONDUCT. All directors, officers and legal departments. This ensuresemployees of GE must act ethically at all times and in accordance with GE’s code of conduct (The Spirit & The Letter). Under the Board’s Governance Principles, the Board does not permit any waiver of any ethics policy for any director or executive officer. The Spirit & The Letter, and any amendments to the code that managementwe are required to disclose under SEC rules, are posted on GE’s website (see Helpful Resources on page 77).
CONFLICTS OF INTEREST. All directors are required to recuse themselves from any discussion or decision affecting their personal, business or professional interests. If an actual or potential conflict of interest arises, the director is required to promptly inform the chairman/CEO and the Board understandlead director. The Governance Committee reviews any such conflict of interest. If any significant conflict cannot be resolved, the director involved is expected to resign.
Limits on Director Service on
Other Public Boards
GE POLICY. As discussed in detail in the Board’s Governance Principles, and considersummarized in the issues that matter most to our shareowners so GE can address them effectively.
Howtable below, the Board Receives Direct Feedback from Major Institutional Investors
STRATEGY AND BUSINESS MATTERS.Fromhas adopted policies designed to help ensure that all our directors have sufficient time to time, the company invites major institutional investorsdevote to meet with GE’s independent directors. This complements management’s investor outreach program and allows directors to directly solicit and receive investors’ views on GE’s strategy and performance.GE matters.
| | PERMITTED # OF PUBLIC COMPANY BOARDS
(INCLUDING GE) |
Public company
executives | | 2* |
| Other directors | | 4 |
| | PERMITTED # OF PUBLIC COMPANY AUDIT COMMITTEES
(INCLUDING GE) |
Audit Committee
member | | 3** |
| | OTHER RESTRICTIONS |
| Lead Director | | Typically, should not serve as lead director, chair or CEO of another public company |
| |
| * | Service on the board of a public company for which a director serves as an executive, together with service on the board of any public company subsidiary or public affiliates as part of the director’s executive responsibilities, shall count as one board for purposes of this limit. |
| ** | Unless the member is a retired certified public accountant, CFO, controller or has similar experience in which case the limit for such member shall be four public company audit committees (including GE) if the Board affirmatively determines that such service does not impair service on GE’s Audit Committee. |
GOVERNANCE AND COMPENSATION MATTERS.HOW LIMITS WERE APPLIED TO HORTON. OurIn appointing Mr. Horton as lead director, regularly accompanies management on its governance-focused roadshow with a number of significant investors. In late 2017 and early 2018, ourthe independent directors considered the fact that Mr. Horton is also the lead director participatedfor Walmart. In reviewing Mr. Horton’s time commitment at Walmart, the independent directors noted that Walmart has three separate positions for CEO, chairman and lead independent director, mitigating the potential time commitment of the lead director. The Board determined that Mr. Horton could serve in discussions with a number of our largest investors to solicit feedback onboth roles under the Board’s composition, executive compensation programs and the Board’s role in overseeing the company’s strategy and portfolio transformation.circumstances.
How We Incorporated Investor Feedback Over the Past Year
In 2017, we sought feedback from investors on a number of issues, and the Board decided to:
HOW YOU CAN FIND MORE INFORMATION ABOUT OUR GOVERNANCE PRACTICES Each year we review GE’s governance documents and update them as appropriate. These documents include the Board’s Governance Principles — which include our director qualifications and director independence guidelines — as well as Board committee charters. The web links for these materials can be found under Helpful Resources on page 77. | Reduce the size of the Board to 12 directors; |
— | Establish the Finance Committee to enhance oversight of capitalallocation decisions; |
— | Simplify our executive compensation programs by reducing the number of metrics and individual programs; |
— | Create greater shareowner-management alignment by deliveringa greater percentage of executive compensation in the form of equity rather than cash; and |
— | Simplify our investor presentations by reducing the numberof metrics reported. |
Investor Outreach and Our 2017 Say-On-Pay Vote
At our 2017 annual meeting, 89% of shareowners expressed support for the compensation of our named executives. Following the meeting, we met with our largest investors to review compensation actions for the past year and discuss our say-on-pay vote.
As part of its assessment of GE’s executive compensation programs, the Compensation Committee reviewed these voting results, evaluated investor feedback and considered other factors discussed in this proxy statement, including the alignment of our compensation program with the long-term interests of our shareowners and the relationship between risk-taking and the incentive compensation we provide to our named executives.
OUR INVESTOR ENGAGEMENT PROGRAM |
After considering these factors, the committee decided to make the following changes to increase management accountability and more closely align management’s interests with shareowners:
— | Deliver a greater percentage of executive compensation in theform of equity rather than cash; |
— | Terminate the Long-Term Performance Awards program, which pays awards in cash, after the end of the 2018 performance cycle; |
— | Broaden our Performance Share Unit program across our senior executive ranks; and |
— | Simplify the performance metrics used across our incentive compensation programs. |
These changes are discussed in more detail under“Changes to Our Compensation Plans for 2018,” on page 29.
| HOW YOU CAN COMMUNICATE WITH YOUR BOARD |
The Audit Committee and the independent directors have established procedures to enable anyone who has a comment or concern about GE’s conduct — including any employee who has a concern about our accounting, internal accounting controls or auditing matters — to communicate that comment or concern directly to the lead director or to the Audit Committee. Information on how to submit these comments or concerns can bebe found on GE’s website (see“Helpful Resources”Resources on page 73)77). |
2220 GE 2023 PROXY STATEMENT
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How We Assess Director Independence
GE 2018 PROXY STATEMENTBOARD MEMBERS.
OtherThe Board’s Governance Policies & Practices
Director Attendance at MeetingsThe Board expectsPrinciples require all non-management directors to attend all meetingsbe independent. All of our director nominees (shown under Election of Directors on page 6) other than Mr. Culp are independent. In addition, Mr. D’Souza and Ms. Seidman, who are not standing for reelection at the Annual Meeting, Drs. Lavizzo-Mourey and Mihaljevic, who served on the Board and the committeesuntil January 2023, Mr. Carter, who served on which the director serves as well as the annual shareowners meeting.
BOARD/COMMITTEE MEETINGS.In 2017, each of our current directors attended at least 75% of the meetings held by the Board until October 2022, and committeesJames Tisch, who served on which the member servedBoard until May 2022, were each determined to be independent during the period the member wasthey served on the Board or committee.
ANNUAL SHAREOWNERS MEETING.15 out of 18 director nominees for 2017 attended the 2017 annual meeting.
Board Integrity Policies
CODE OF CONDUCT.All directors, officers and employees of GE must act ethically at all times and in accordance with GE’s code of conduct (contained in the company’s integrity policy, The Spirit & The Letter). Under the Board’s Governance Principles, the Board does not permit any waiver of any ethics policy for any director or executive officer.The Spirit & The Letter, and any amendments to the code that we are required to disclose under SEC rules, are posted on GE’s website (see“Helpful Resources” on page 73).
CONFLICTS OF INTEREST.All directors are required to recuse themselves from any discussion or decision affecting their personal, business or professional interests. If an actual or potential conflict of interest arises, the director is required to promptly inform the CEO and the lead director. The Governance Committee reviews any such conflict of interest. If any significant conflict cannot be resolved, the director involved is expected to resign.
Limits on Director Service on Other Public Boards
GE POLICY.As discussed in detail in the Board’s governance documents, and summarized in the table below, the Board has adopted policies to ensure that all of our directors have sufficient time to devote to GE matters.Board.
| ● | | Permitted # of public company boards
(including GE)The Board’s guidelines. |
Public company CEOs | | 3 |
Other directors | | 5 |
| | Permitted # of public company
audit committees (including GE) |
Audit Committee Chair | | 2 |
Audit Committee member | | 3 |
| | Other restrictions |
Lead Director | | Can’t serve as leadFor a director chairman
to be considered independent, the Board must determine that he or CEO of another public company |
HOW WE APPLIED TO TISCH.The Board determined to waive the first limitation for Mr. Tisch, who is CEO of Loews, because the three other public company boards on which he serves are all within Loews’s consolidated group of companies. Loews is a diversified holding company whose business operations are entirely conducted through its subsidiaries. Two of these subsidiaries, CNA Financial (89% owned) and Diamond Offshore Drilling (53% owned), accounted for more than 80% of Loews’s revenues over the past three years. Mr. Tisch serves on the boards of these subsidiaries and on the holding company’s board. Since Mr. Tisch’s responsibilities as a board member of these companies are integrally related to and subsumed within his role as CEO of Loews, the Board believes that this board service does not meaningfully increase his time commitments or fiduciary duties, as would be the case with service on unaffiliated public company boards.
HOW WE APPLIED TO BAZIN.Mr. Bazin isshe does not have any material relationship with GE. The Board’s guidelines for director independence conform to the independence requirements in the New York Stock Exchange’s (NYSE) listing standards. In addition to applying these guidelines, which you can find in compliance with GE’s policy on public board service as he serves on three public company boards, including GE. In assessing the time commitment for these boards, we note that Mr. Bazin serves on two of those boards in connection with his role as CEO of AccorHotels. In addition to serving as the Chairman of Accor, he serves on the board of China Lodging Group, in which Accor owns a stake. Accor and China Lodging Group have also entered into a strategic alliance pursuant to which China Lodging Group is the master franchiser for Accor’s economy hotel business in China.
Independent Oversight of Political Spending
The Governance Committee, composed solely of independent directors, oversees the company’s political spending and lobbying. This includes political and campaign contributions as well as any contributions to trade associations and other tax-exempt and similar organizations that may engage in political activity. As part of its oversight role in public policy and corporate social responsibility, the committee is responsible for the following:
— | Policy oversight.A yearly review of GE’s political spending policies and lobbying practices.
|
— | Budget oversight.Approval of GE’s annual budget for political activities and a semi-annual review of how it is being spent.
|
— | Reporting.Issuance of a yearly report on the company’s political spending, which is available on our Sustainability website (see“Helpful Resources” on page 73).
|
HOW YOU CAN FIND MORE INFORMATION ABOUT OUR GOVERNANCE PRACTICES
Each year we review GE’s governance documents and modify them as appropriate. These documents include the Board’s Governance Principles — which include(see Helpful Resources on page 77), the Board considers all relevant facts and circumstances when making an independence determination.
|
| |
| ● | Applying the guidelines in 2022. In assessing director independence for 2022, the Board considered relevant transactions, relationships and arrangements, including relationships among Board members, their family members and the company, as described below. |
COMMITTEE MEMBERS. All members of the Audit Committee, Management Development & Compensation Committee, and Governance Committee must be independent, as defined by the Board’s Governance Principles. Committee members must also meet additional committee-specific standards:
| ● | Heightened standards for Audit Committee members. Under a separate SEC independence requirement, Audit Committee members may not accept any consulting, advisory or other fees from GE or any of its subsidiaries, except compensation for Board service. |
| |
| ● | Heightened standards for members of the Management Development & Compensation and Governance Committees. As a policy matter, the Board also applies a separate, heightened independence standard to members of the Management Development & Compensation and Governance Committees: no member of either committee may be a partner, member or principal of a law firm, accounting firm or investment banking firm that accepts consulting or advisory fees from GE or a subsidiary. In addition, in determining that Management Development & Compensation Committee members are independent, NYSE rules require the Board to consider their sources of compensation, including any consulting, advisory or other compensation paid by GE or a subsidiary. |
The Board has determined that all members of the Audit, Management Development & Compensation and Governance Committees are independent and also satisfy applicable committee-specific independence requirements.
Relationships and Transactions Considered for Director Independence
The Board considered the following relationships and transactions in making its determination that all director nominees and all directors that served since the 2022 Annual Meeting, other than Mr. Culp, are independent.
2022 TRANSACTIONS CONSIDERED FOR DIRECTOR INDEPENDENCE
| * | Mr. Tisch served as our director qualifications and director independence guidelines — as well as Board committee charters. The web linksuntil our 2022 Annual Meeting on May 4, 2022, at which he did not stand for these materials can be found under“Helpful Resources” on page73, and you can receive copies upon request.reelection. |
GE 2023 PROXY STATEMENT 2321
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GE 2018 PROXY STATEMENT
Related Person Transactions
& Other Information
HOW WE REVIEW AND APPROVE TRANSACTIONS.We review all relationships and transactions in which the company and our directors and executive officers or their immediate family members participate if the amount involved exceeds $120,000. The purpose of this review is to determine whether they have a material interest in the transaction, including an indirect interest. The company’s legal staff is primarily responsible for making these determinations based on the relevant facts and circumstances, and for developing and implementing processes and controls for obtaining information about these transactions from directors and executive officers. In addition, the Governance Committee reviews and approves any such related person transaction. As described in the Governance Principles, which are available on GE’s website (see Helpful Resources on page 77), in the course of reviewing and approving a disclosable related person transaction, the Governance Committee considers the factors described below. As SEC rules require, we disclose in thisour proxy statement all such transactions that are determined to be directly or indirectly material to a related person. In addition, the Governance Committee reviews and approves or ratifies any suchDuring 2022, there were no related person transaction. As describedtransactions that met the requirements for disclosure in the Governance Principles, which are available on GE’s website (see“Helpful Resources” on page 73), in the course of reviewing and approving or ratifying a disclosable related person transaction, the committee considers the factors in the box to the right.this proxy statement.
| | |
| FACTORS USED IN ASSESSING RELATED PERSONTRANSACTIONS |
—
| ● | Nature of related person’s interest in transaction —
|
| ● | Material transaction terms, including amount involved and type of transaction —
|
| ● | Importance of transaction to related person and GE —
|
| ● | Whether transaction would impair a director or executive officer’s judgment to act in GE’s best interest —
|
| ● | Any other matters the committee deems appropriate, including any third-party fairness opinions or other expert reviews obtained in connection with the transaction |
| | |
TRANSACTIONS FOR 2017.During 2016, Triland Partners Limited Partnership,For a company in which Mr. Garden’s brother, Thomas Garden, is the managing general partner and sole owner, entered into transactions with a GE affiliate for the development and acquisitiondescription of shareholder derivative lawsuits involving certain renewable energy projects. These transactions were entered into before Mr. Garden joined the Board, and payments to Triland Partners by the GE affiliate during 2017 and 2018 for reimbursable expenses, overhead, and profit were approximately $950,000.
Stock Ownership Information
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (Exchange Act) requires GE’s directors and executive officers, and persons who beneficially own more than 10% of our common or preferred stock, to file reports with the SEC regarding their initial stock ownership and changes in their ownership.
GE PRACTICES.As a practical matter, GE assists its directors (other than Mr. Garden whose filings are made on his behalf by personnel at Trian Fund Management, L.P. (Trian)) and executive officers by
monitoring transactions and completing and filing Section 16 reports on their behalf.
TIMELINESS OF 2017 REPORTS.Based solely on a review of the reports filed for fiscal 2017 and related written representations, we believe that all of our executive officers and directors filed the required reports on a timely basis under Section 16(a).
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GE 2018 PROXY STATEMENT
Common Stock & Total Stock-Based Holdings Table
The following table includes all GE stock-based holdings, as of December 31, 2017, of our directors and nominees, named executives, current directors and executive officers as a group, and beneficial owners of more than 5% of our common stock.
| Directors & Nominees | | Common Stock | | Total |
| Sébastien M. Bazin | | 0 | | 19,619 |
| W. Geoffrey Beattie | | 883,088 | | 1,014,613 |
| John J. Brennan | | 35,000 | | 111,797 |
| H. Lawrence Culp, Jr. | | 12,592 | | 12,592 |
| Francisco D’Souza | | 91,500 | | 145,806 |
| Marijn E. Dekkers | | 41,000 | | 87,418 |
| Edward P. Garden | | 70,851,055 | | 70,853,818 |
| Peter B. Henry | | 0 | | 17,590 |
| Susan J. Hockfield | | 0 | | 92,446 |
| Thomas W. Horton | | 0 | | 0 |
| Andrea Jung | | 7,519 | | 160,832 |
| Risa Lavizzo-Mourey | | 15,000 | | 21,598 |
| Rochelle B. Lazarus | | 38,372 | | 262,322 |
| Steven M. Mollenkopf | | 5,500 | | 18,513 |
| James J. Mulva | | 4,105 | | 155,944 |
| James E. Rohr | | 57,425 | | 89,587 |
| Mary L. Schapiro | | 7,100 | | 49,205 |
| Leslie F. Seidman | | 0 | | 0 |
| James S. Tisch | | 3,540,000 | | 3,630,773 |
| Total | | 75,589,256 | | 76,744,473 |
| | Common Stock |
| Named Executives | | Stock | | Options | | Total |
| John L. Flannery | | 683,109 | | 2,090,000 | | 4,043,709 |
| Jamie L. Miller | | 240,207 | | 935,000 | | 2,019,207 |
| David L. Joyce | | 537,287 | | 3,584,000 | | 4,610,975 |
| Jeffrey R. Immelt | | 2,607,745 | | 1,100,000 | | 4,403,324 |
| Jeffrey S. Bornstein | | 264,383 | | 4,143,500 | | 4,493,717 |
| Elizabeth J. Comstock | | 271,099 | | 2,621,500 | | 3,003,912 |
| John G. Rice | | 601,502 | | 5,690,000 | | 6,870,292 |
| Total | | 5,205,332 | | 20,164,000 | | 29,445,136 |
| Current Directors & Executives | | Common Stock | | Total |
| As a group (23 people) | | 92,016,775 | | 97,511,923 |
| | | | | |
| 5% Beneficial Owners | | Common Stock | | |
| BlackRock, Inc. | | 531,736,188 | | |
| The Vanguard Group | | 613,678,452 | | |
| Total | | 1,145,414,640 | | |
PERCENTAGE OWNERSHIP |
—No director or named executiveowns more than one-tenth of 1% of the total outstanding shares of GE common stock. Funds managed by Trian, of which Mr. Garden is the Chief Investment Officer, own 0.8% of our outstanding shares, though Mr. Garden disclaims beneficial ownership of these shares.
—BlackRock and Vanguardown 6.1% and 7.1%, respectively, of our total outstanding shares.
|
COMMON STOCK.This column shows beneficial ownership of our common stock as calculated under SEC rules. Except to the extent noted below, everyone included in the table has sole voting and investment power over the shares reported. None of the shares are pledged as security by the named person, although standard brokerage accounts may include non-negotiable provisions regarding set-offs or similar rights.1For the named executives, this column also includes shares that may be acquired under stock options that are currently exercisable or will become exercisable within 60 days (see the Options sub column).
TOTAL.This column shows the individual’s total GE stock-based holdings, including voting securities shown in the Common Stock column (as described above), plus non-voting interests that cannot be converted into shares of GE common stock within 60 days, including, as appropriate, PSUs, RSUs, DSUs, deferred compensation accounted for as units of GE stock, and stock options. PSUs include awards granted in 2015 that were ultimately cancelled in February 2018. As described under“Director Compensation” on page 53, directors must hold the DSUs included in this column until one year after leaving the Board.
COMMON STOCK & TOTAL.Both columns include the following shares over which the named individual has shared voting and investment power through family trusts or other accounts: Beattie (883,088),2Dekkers (40,000), Garden (70,851,055),3Jung (69), Lazarus (8,000), Mulva (4,105), Rohr (57,425) and Tisch (3,540,000).4
CURRENT DIRECTORS & EXECUTIVES.These columns show ownership by our current directors and executive officers (therefore excluding any shares owned by Mr. Culp, Mr. Horton, Ms. Seidman, Mr. Immelt, Mr. Bornstein or Ms. Comstock). This row includes: (1) 14,174,000 shares that may be acquired under stock options that are or will become exercisable within 60 days, (2) 5,000 RSUs that vested within 60 days, and (3) 75,386,336 shares over which there is shared voting and investment power. Current directors and executive officers as a group own approximately 1.1% of GE’s total outstanding shares, including those shares owned by the Trian Entities (as defined below).
5% BENEFICIAL OWNERS.This column shows shares beneficially owned by BlackRock, Inc., 55 East 52nd Street, New York, NY 10055, and The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355, as follows:
| (# of shares) | | BlackRock | | Vanguard |
| Sole voting power | | 460,148,712 | | 12,198,552 |
| Shared voting power | | 0 | | 1,908,608 |
| Sole investment power | | 531,736,188 | | 599,874,537 |
| Shared investment power | | 0 | | 13,803,915 |
The foregoing information is based solely on a Schedule 13G/A filed by BlackRock with the SEC on February 8, 2018, and a Schedule 13G/A filed by Vanguard with the SEC on February 9, 2018, as applicable.
See footnotes on next page.
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GE 2018 PROXY STATEMENT
1 | For Mr. Garden, this column refers to 70,851,055 shares owned by the Trian Entities (as defined below). Trian, an institutional investment manager, serves as the management company for Trian Partners, L.P., Trian Partners Master Fund, L.P., Trian Partners Master Fund (ERISA), L.P., Trian Partners Parallel Fund I, L.P., Trian Partners Strategic Investment Fund II, L.P., Trian Partners Strategic Investment Fund-A, L.P., Trian Partners Strategic Investment Fund-N, L.P., Trian Partners Strategic Investment Fund-D, L.P., Trian Partners Strategic Fund-G II, L.P., Trian Partners Strategic Fund G-III, L.P., Trian Partners Co-Investment Opportunities Fund, Ltd., Trian SPV (Sub) X, L.P., Trian Partners Strategic Fund-K, L.P. and Trian Partners Strategic Fund-C, Ltd. (collectively, the Trian Entities) and as such determines the investment and voting decisions of the Trian Entities with respect to the shares of the company held by them. None of such shares are held directly by Mr. Garden. Of such shares, 37,711,617 shares are currently held in the ordinary course of business with other investment securities owned by the Trian Entities in co-mingled margin accounts with a prime broker, which prime broker may, from time to time, extend margin credit to certain Trian Entities, subject to applicable federal margin regulations, stock exchange rules and credit policies. Mr. Garden is a member of Trian Fund Management GP, LLC, which is the general partner of Trian, and therefore is in a position to determine the investment and voting decisions made by Trian on behalf of the Trian Entities. Accordingly, Mr. Garden may be deemed to indirectly beneficially own (as that term is defined in Rule 13d-3 under the Exchange Act) the shares owned by the Trian Entities. Mr. Garden disclaims beneficial ownership of such shares for all other purposes. |
2 | For Mr. Beattie, this refers to 16,390 shares owned by family trusts, 66,698 shares held through a holding company and 800,000 shares held through an investment company. Mr. Beattie disclaims beneficial ownership of those shares held through the investment company. |
3 | As described in note 1 above, these shares are owned by the Trian Entities. |
4 | For Mr. Tisch, this refers to 540,000 shares owned by a Tisch family trust and 3,000,000 shares owned by Loews Corporation, of which Mr. Tisch is the CEO, President, a director and shareholder. Mr. Tisch disclaims beneficial ownership of the shares owned by Loews Corporation except to the extent of his pecuniary interest, if any, in those shares. |
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GE 2018 PROXY STATEMENT
Management Proposal No. 1
ADVISORY APPROVAL OF OUR NAMED
EXECUTIVES’ PAY
|
What are you voting on?
In accordance with Section 14A of the Exchange Act, we are asking shareowners to vote on an advisory basis to approve the compensation paid to our named executives, as described in this proxy statement.
Why the Board recommends a vote FOR the say-on-pay proposal. The Board believes that our compensation policies and practices are effective in achieving the company’s goals of:
–Promoting accountabilityfor performance.
–Rewardingsustained financial and operating performance and withholding compensation when those objectives are not achieved.
–Aligningour executives’ interests with those of our shareowners to create long-term value.
–Motivatingexecutives to remain with us for long and productive careers.
Impact of the say-on-pay vote.This advisory proposal, commonly referred to as a “say-on-pay” proposal, is not binding on the Board. However, the Board and the Compensation Committee will review and consider the voting results when evaluating our executive compensation program.
We hold say-on-pay votes annually.Under the Board’s policy of providing for annual say-on-pay votes, the next say-on-pay vote will occur at our 2019 annual meeting.
|
| YOUR BOARD RECOMMENDS A VOTE FOR THE SAY-ON-PAY PROPOSAL |
Overview of Our Executive
Compensation Program
Although the executive compensation discussion in this proxy statement focuses on the compensation decisions for our named executives — John Flannery (Chair & CEO), Jamie Miller (SVP & CFO), David Joyce (Vice Chair & CEO of Aviation), Jeff Immelt (Former Chair & CEO), Jeff Bornstein (Former Vice Chair & CFO), Beth Comstock (Former Vice Chair & CEO, Business Innovations) and John Rice (Vice Chair & Former CEO, Global Growth Organization) — our executive compensation programs apply broadly across GE’s employee ranks. Approximately 3,800 executives receive equity incentives and participate in our annual cash bonus plan, and a subset of our senior executives participate in our long-term performance award program. We strive to pay fair and competitive wages to all of our employees, considering the specific job markets in which they work and peer compensation.
Key Considerations in Setting Pay
This section describes the key considerations the Compensation Committee takes into account when designing pay programs and making compensation decisions. This past year was a difficult one for the company, and management’s execution on the company’s operating framework fell substantially short of expectations. As a result, these plans paid out significantly less than in prior years, and the committee determined that our named executives, other than Mr. Joyce, would not receive annual cash bonuses for 2017. Additionally, the committee decided to cancel the 2015 PSU awards, despite the fact that one of the performance goals was met for the period. These results also played a part in the committee’s decision to undertake a comprehensive evaluation of our compensation programs, solicit investor feedback and, ultimately, make changes to our compensation programs for 2018. We believe these changes will drive better performance and alignment with investors, while continuing to promote accountability, as further described below.
EMPHASIS ON CONSISTENT, SUSTAINABLE AND RELATIVE PERFORMANCE
Our compensation program provides the greatest pay opportunity for named executives who demonstrate superior performance for sustained periods of time. It also rewards them for executing GE’s strategy through business cycles. In evaluating performance consistency, we also weigh the performance of each named executive relative to peers in the relevant industry segment or function.
CHALLENGING PERFORMANCE METRICS ALIGNED TO OUR INVESTOR FRAMEWORK
We typically set performance metrics for our incentive compensation programs that match our short-term and long-term operating frameworks. We set target performance levels that are challenging but achievable with good performance, and maximum performance levels that represent stretch goals.
EMPHASIS ON FUTURE PAY OPPORTUNITY VERSUS CURRENT PAY
The Compensation Committee strives to provide an appropriate mix of compensation elements, including finding a balance between current and long-term compensation and between cash and equity incentive compensation. Cash payments primarily are aligned with and reward more recent performance, while equity awards encourage our named executives to continue to deliver results over a longer period of time and also serve as a retention tool. The committee believes that most of our named executives’ compensation should be contingent on company performance, primarily long-term operating and stock-price performance. Consistent with this belief, the committee has decided to terminate the cash-based Long-Term Performance Award (LTPA) program, after the conclusion of the current performance cycle in 2018, and in the future, we expect a greater percentage of our executive compensation to be paid in the form of equity.
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former GE 2018 PROXY STATEMENT
COMPENSATION COMMITTEE JUDGMENT
Our compensation programs balance arrangements where the payouts are tied to specific quantitative performance objectives with those where the committee evaluates a broad range of quantitative and qualitative factors, such as reliability in delivering financial and growth targets, sustainability-focused measures (including performance in light of risk assumed), performance in the context of the economic environment relative to other companies, a track record of integrity, good judgment, the ability to create further growth and lead others, and the absolute size of total pay packages. The committee exercised its discretion with respect to the 2017 awards by determining not to pay a bonus to most of our named executives and by cancelling the 2015 PSU awards, despite the fact that one of the performance goals was met.
BALANCE BETWEEN OVERALL COMPANY AND BUSINESS UNIT RESULTS
The committee believes that the named executives, as key members of the company’s leadership team, share the responsibilityBoard, refer to support GE’s overall goals and performance. This compensation philosophy is most clearly reflected in our annual equity incentive grants, which tie executives’ pay across our businesses to overall company performance. In addition, the committee believes that there should also be clear accountability for the performance of one’s business or function. As a result, beginning in 2018, the annual cash bonus program will be funded at each of our top-tier businesses based upon individual business results, while our corporate executives (other than our segment CEOs) who have broad horizontal responsibilities across GE, will continue to be compensated based upon overall GE results.
CONSIDERATION OF RISK
Our compensation programs are balanced and also focused on the long term so that our named executives can achieve the highest compensation through consistent superior performance over sustained periods of time. In addition, large amounts of compensation are usually deferred or realizable only upon retirement, providing strong incentives to manage for the long term while avoiding excessive risk-taking in the short term. Compensation is also balanced among current cash payments, deferred cash and equity awards. Our equity awards also have specific holding requirements for senior executives, which also discourages excessive risk taking. The Compensation Committee retains discretion to adjust compensation pursuant to our clawback policy as well as for quality of performance and adherence to company values. See“ClawbacksNote 24. Commitments, Guarantees, Product Warranties and Other Remedies for Potential Misconduct” on page 51 for more information.
Primary Compensation Elements for 2017
The table below sets forth the primary elements of our executive compensation programs. In 2017, the Compensation Committee decided to terminate the LTPA program after the current award cycle concludes in 2018. Additionally, the committee decided not to award any PSUs to the executive team in 2017. In February 2018, the committee made PSU grants to our current named executives. See“Changes to Our Compensation Plans for 2018” on page 29.
| Salary | Bonus | LTPAs | PSUs | Options | RSUs |
Who receives | All named executives | All named executives
except CEO |
When granted | Reviewed every
18 months | Annually in February or
March for prior year | Every 3 years –
final cycle 2016-2018 | Generally annually |
Form of delivery | Cash | | Generally cash | Equity |
Type of
performance | Short-term emphasis | Long-term emphasis |
Performance
period | Ongoing | 1 year | 3 years | Generally 5-year vesting period |
How payout
determined | Committee judgment | Mix of formulaic
pool funding
& committee
judgment | Formulaic; committee verifies performance
before payout | Formulaic; depends on stock price on exercise/vest date |
Most recent performance
measures | N/A | 7 financial metrics &
strategic goals | 5 financial metrics | 2 financial metrics & relative TSR modifier | Stock price appreciation |
What is incentivized | Balance against
excessive risk taking | Deliver on annual
investor framework | Deliver onlong-term
investor framework | Outperform peers | Increase stock price | Balance against
excessive risk taking |
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GE 2018 PROXY STATEMENT
Changes to Our Compensation Plans for 2018
As part of our ongoing re-look at the company, we are making significant changes to our executive compensation programs. These changes are designed to simplify our programs, in terms of both number of programs and goals, and to more closely align leaders across the company to our investors.
SHIFT FROM CASH TO EQUITY.Going forward we expect a greater percentage of our leadership team’s compensation to be paid in equity, rather than cash. The most significant reflection of this change was the Compensation Committee’s decision to eliminate the LTPA program, which pays out in cash, at the conclusion of its current cycle in 2018. The shift to equity is also reflected in Mr. Flannery’s salary, which is 47% lower than the salary paid to Mr. Immelt.
FEWER GOALS, WITHOUT OVERLAPS.Beginning in 2018, we will have fewer goals in our compensation programs. In addition to eliminating the goals that determined payouts under the LTPA after the current performance cycle, we will also reduce the number of goals used to determine annual bonuses to focus on two — an earnings metric and a cash metric. By contrast, the 2017 bonus program had five financial performance goals and, for the CEO and his direct reports, two modifiers, as well as a series of strategic goals.
Consistent with prior years, we will disclose the threshold, target and maximum goals for these performance metrics in the 2019 proxy.
2018 PSUshave an approximately three-year performance cycle and will pay out in equity based upon a single performance metric: GE Total Shareholder Return (TSR) versus the S&P 500 from the grant date of February 26, 2018 through December 31, 2020. PSUs will be earned as follows (with proportional adjustment for performance between threshold, target and maximum):
Threshold | Target | Maximum |
35th percentile | 55th percentile | 80th percentile |
Earn 25% | Earn 100% | Earn 175% |
The Compensation Committee determined that a single TSR-based metric for the PSUs was appropriate given the difficulty in setting other performance targets during the ongoing portfolio review. Achievement of the performance metric will be adjusted to reflect any change in GE’s capital structure. Additionally, any equity awarded to our executives as a result of the vesting of the PSUs will have a mandatory one-year hold period, regardless of whether the executive has satisfied the company’s stock ownership requirement. Following the completion of our portfolio review, the committee anticipates using operating metrics for determining the performance conditions of any future PSU grants.
Our current named executives received the following 2018 PSU awards: Mr. Flannery (800,000), Ms. Miller (200,000) and Mr. Joyce (116,700). These awards were larger than what otherwise might have been awarded due to the fact that no PSUs were awarded in 2017.
FOCUS ON BUSINESS PERFORMANCE.Our bonus program going forward will be funded for each segment (e.g., Power, Aviation) based solely on the segment’s performance, rather than being based on company performance. Funding of the bonus pool for eligible employees at Corporate will continue to be based on companywide results, with certain functions within Corporate having separate, function-specific targets and pool funding.
GENERAL SHIFT FROM OPTIONS TO RSUs.Equity awards for our broader leadership team will generally be granted in RSUs, rather than options, and these awards will generally vest over three years, rather than five, which we believe is more consistent with peer programs and aligned to current goal setting. We expect that the CEO will only receive PSUs, and that his direct reports at the senior vice president level and above will receive a mix of RSUs and PSUs.
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GE 2018 PROXY STATEMENT
How Our Incentive Compensation Plans Paid Out for 2017
This section provides an overview of how GE performed against the goals established under its 2017 annual bonus program and the 2015 PSUs. See“Compensation Actions for 2017” on page 34 for amounts paid to the named executives as well as how we assessed their individual performance. See“Long-Term Performance Awards (LTPAs)” on page 44 for information on our 2016–2018 LTPAs.
2017 Annual Bonuses
BONUS POOL FUNDED AT 24%.The Corporate bonus pool was funded at 24%, based on achievement of only 20% of our financial goals and 35% of our strategic goals, which were weighted at 75% and 25%, respectively. However, none of our named executives other than David Joyce, Vice Chair & CEO, Aviation, received a bonus for 2017. The results for the Corporate bonus pool funding are shown below.
FUNDING METRICS FOR THE 2017 ANNUAL BONUS POOL.For the 2017 annual bonus program, the Compensation Committee established the following five financial goals, each weighted 15% (in addition to strategic goals), for funding the company’s bonus pool: (1) Industrial Operating + GE Capital Verticals EPS; (2) Industrial segment organic revenue growth; (3) Industrial operating margin expansion; (4) operating cash flow; and (5) Predix-powered + software orders.
ADJUSTMENTS TO BONUS PROGRAM. The Compensation Committee maintains authority to adjust performance metrics under the bonus program. In March 2017, the committee modified the performance framework for the CEO and his direct reports at the senior vice president level and above (including all of the named executives) so that their bonuses could also be increased or decreased by 20% from what otherwise would have been payable based on achievement of two additional targets (if both targets were achieved, there would have been a 20% increase, and if both targets were missed, there would have been a 20% decrease, with no adjustment for achieving one target but missing the other). Specifically, a target was set for Industrial operating profit* of $17.2 billion for 2017, and a second target was set for reducing Industrial structural costs* by $1 billion from $24.9 billion in 2016 to $23.9 billion in 2017. The Industrial structural cost reduction target was achieved ($1.7 billion for 2017), but the Industrial operating profit target was not met ($13.9 billion for 2017), and as a result there was no impact on bonuses. For more information on how these metrics are calculated, see“Explanation of Non-GAAP Financial Measures and Performance Metrics” on page 52.
HOW WE PERFORMED AGAINST OUR
STRATEGIC GOALS
— | DRIVE EXECUTION.GE’s execution fell significantly short of expectations in 2017. The company did not meet its goals to achieve 3–5% organic revenue growth and 100 basis points of margin expansion, despite beating expectations in taking out $1.7 billion of structural cost. Additionally, operational improvement around cash generation and, in particular, inventory management did not meet our goals. While the company did not meet its overall targets, several of our operating segments, including Aviation and Healthcare, executed well on revenue growth, margins, and cash. |
— | SIMPLIFY THE COMPANY AND RUN CORPORATE TO ADD VALUE. We took actions to simplify the cost structure of the company in 2017, including reducing Industrial structural cost by $1.7 billion (ahead of target) and reducing the size of Corporate. We are working to drive a culture of increased transparency and accountability at all levels of the company to better anticipate and mitigate against the performance and cost issues we experienced in Power and Insurance in 2017. In addition, as discussed elsewhere in this proxy, we are simplifying the Board by reducing its size from 18 to 12 directors, and adding three new directors with relevant industry experience and operational skills. |
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GE 2018 PROXY STATEMENT
— | CREATE A MORE VALUABLE PORTFOLIO. In July 2017, GE completed the combination of our legacy Oil & Gas business with Baker Hughes, creating Baker Hughes, a GE company, a full stream oil and gas company. GE also completed the sale of the Water business and disposed of the remaining financial services assets under the GE Capital exit plan. Although an agreement was reached for the sale of Industrial Solutions during the year, the transaction did not close during the year as originally anticipated. The company made significant progress in identifying markets and industries where it expects to focus in the future.
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— | MAKING BIG BETS ON THE FUTURE OF INDUSTRIAL PRODUCTIVITY.The company made significant progress on Digital and Additive manufacturing initiatives, which we see as key to our future productivity. Digital increased Predix orders by more than 100%, with more than 1,000 customers on Predix-powered solutions at the end of 2017. The team successfully integrated ServiceMax, Meridium and other acquisitions. In light of this rapid growth, additional time was spent stabilizing the platform and ensuring scalability for customers. The company also decided to focus sales efforts on customers in GE’s core vertical Industrial businesses. In terms of Additive manufacturing, we acquired GeonX, integrated Concept Laser and secured nearly all of the outstanding shares of Arcam, expanding our materials catalog and our production capacity by 50%. We also significantly increased internal supply chain capability and are on track to significantly increase our part applications by 2020.
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The Compensation Committee assessed GE’s performance on its strategic goals at 35% because despite achieving several important goals, a number of goals were not achieved. In the view of the committee, the company continues to need to work on performance and execution, expanding growth and improving margins, improving capital allocation and other key goals.
HOW WE EVALUATED BUSINESS PERFORMANCE AND ALLOCATED THE BONUS POOL
CORPORATE.Each of our named executives other than Mr. Joyce was evaluated based upon the achievement of performance goals for the overall company and, as noted above, the Compensation Committee exercised its discretion and did not grant bonuses to these named executives for 2017 in light of the company’s performance.
AVIATION.Mr. Joyce’s performance was based upon the Aviation business, for which he is the CEO. The Aviation business performed very strongly in 2017. The Aviation business’s bonus pool was funded at 43% of target, reflecting the lower overall company bonus pool funding, and based on the following performance assessment:
– | Financial.Aviation exceeded its operating plan on free cash flow, operating profit, structural cost and working capital.
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– | Strategic.Aviation continued to perform at a high level in both the commercial and military engine markets. Additionally, the Aviation team made significant strides on additive manufacturing, positioning the business for future growth in line with strategic plans.
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GE 2018 PROXY STATEMENT
HOW THE BONUS PROGRAM WORKS.We pay cash bonuses to our named executives each February or March for the prior year under a program designed to closely align incentive compensation and annual company results. Here’s how the plan worked for 2017:
* | As part of the transition from the prior bonus program (in effect before 2015), any individual, including the named executives, whose 2014 bonus payment as a percentage of salary was higher than the target bonus percentage under the new program has a target bonus equal to their bonus under the prior program (until such time as their salaries increase to the point where their target bonus is consistent with their seniority level). |
** | The amount allocated to Corporate typically reflects the overall bonus pool funding percentage, but may be adjusted depending on the amounts allocated to the businesses. |
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GE 2018 PROXY STATEMENT
2015 PSU Grants
2015 PSUs CANCELLED.In February 2018, the Compensation Committee cancelled the PSUs that were granted to executives in 2015, including all of the named executives. The company met one of two goals under the PSUs, earning $88.7 billion in total cash during the 2015–2017 period, compared to a threshold of $87 billion. The second goal, which was based on operating margin for 2017, was not met, achieving only 12.1% margins compared to a threshold of 16.5%. Under the formula for the PSUs, after the 25% downward adjustment for being in the bottom 40% of the S&P 500 in terms of TSR, the PSUs would have paid out at 25%.
Despite achieving one of the goals, the committee nonetheless determined that a payout for the PSUs was not appropriate, and cancelled the awards. The value forfeited by the named executives was $7.2 million, based on the closing price of GE stock on February 26, 2018, the date the committee made its determination.
PERFORMANCE METRICS | | Weighting | | 2015 PSUs |
Total cash (2015–2017)*
| | 50%
| |  |
Operating margin (2017)*
| | 50%
| |  |
Relative TSR vs. S&P 500
(2015–2017)
| | +/- 25% adjustment
| |  |
Total cash= GE CFOA (Industrial CFOA + dividends from GE Capital) + proceeds from Industrial dispositions (after tax)
Operating margin= Industrial segment operating margin (excludes adjusted corporate operating costs)
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GE 2018 PROXY STATEMENT
Compensation Actions for 2017
Aligning CEO Pay with Investors
 | John Flannery
CHAIRMAN (SINCE OCTOBER 2, 2017) & CEO
(SINCE AUGUST 1, 2017)
AGE:56
EDUCATION:FAIRFIELD UNIVERSITY, MBA, WHARTON
GE TENURE:31 YEARS
| | March 2017 (see“2017 Annual Bonuses” on page 30). The Compensation Committee determined that despite the significant progress Mr. Flannery had made on setting out a strategic path for the company, and the strong performance of the Healthcare business during the first half of the year, he would not receive a bonus in light of the poor overall performance of the company.PAY.Upon his appointment as CEO, Mr. Flannery’s salary was set at $2,000,000. The Compensation Committee did not award Mr. Flannery a bonus (with his concurrence), despite the 24% funding for the company bonus pool. The committee granted Mr. Flannery an equity award of 600,000 stock options with a grant date fair value of $2.1 million in September 2017. The Compensation Committee did not award the PSU portion of Mr. Flannery’s planned 2017 award as it continued to assess the appropriate performance metrics and targets for the awards.
|
PERFORMANCE.As the Chairman & CEO, Mr. Flannery plays a critical role in shaping the company’s strategy and delivering on the performance framework for the company. As such, when Mr. Flannery was appointed as CEO, the Compensation Committee determined that his performance goals would be the same as the financial and strategic goals that were set for the overall company, including the additional targets that were set in
| |
Changes in Our CEO Compensation Structure
As part of the CEO transition in 2017, the Compensation Committee made the following changes to the CEO compensation structure to increase accountability and alignment with investors: (1) set a significantly lower base salary for Mr. Flannery compared to Mr. Immelt; (2) increased the target bonus from 100% to 150% of salary; and (3) increased the percentage of compensation delivered in the form of equity, including determining that Mr. Flannery’s 2016–2018 LTPA grant would be paid out (to the extent there is a payout) in stock rather than cash.
Equity Grants in 2017
Historically our Compensation Committee granted equity awards in the fall of each year. For the named executives, this generally consisted of PSUs and stock options (weighted 2/3 PSUs) for our CEO, and PSUs, RSUs and stock options (each weighted 1/3) for our other named executives. This past fall, the committee granted equity awards to our named executives (other than Mr. Immelt due to his pending retirement) in line with this framework, except that, in light of management and the Board’s re-look at the company, including the investor performance framework and strategy, as well as the committee’s expectation that in 2018 it would start to grant equity awards in the first quarter of the year, the committee deferred granting PSUs until February 2018 to allow the committee more time to consider the appropriate performance metrics and targets. As a result, the annual equity grants to our named executives in 2017 do not include PSUs and, therefore, have a lower total grant date fair value (2/3 lower for the CEO, 1/3 lower for the other named executives) than they otherwise would have had the PSU portion of the grant been included. In February 2018, the committee made PSU awards to our named executive officers, subject to the performance metrics described above under“Changes to Our Compensation Plans for 2018” on page 29. Mr. Flannery received 800,000 PSUs, Ms. Miller received 200,000 PSUs, and Mr. Joyce received 116,700 PSUs.
Compensation for Our Other Named Executives
 | | Jamie Miller
AGE:49
EDUCATION:
MIAMI UNIVERSITY
GE TENURE:
12 YEARS
| | CURRENT AND PRIOR ROLES
Senior Vice President & CFO (since November 1, 2017); former President & CEO, GE Transportation; former Chief Information Officer, GE; former Controller, GE
PERFORMANCE ASSESSMENT
The committee recognized Ms. Miller’s contribution toward the strong performance of the Transportation business under her leadership in a challenging market, in addition to the ongoing portfolio review, but did not grant a bonus in light of the company’s poor performance.
| | COMPENSATION DECISIONS FOR 2017
—Base salary —increased by 10% to $1.35 million effective April 2017, after an 18-month interval since her last salary increase that is standard for GE’s named executives; subsequently increased by 7% to $1.45 million upon her promotion to CFO
—Cash bonus —did not receive a bonus
—Equity grant —$1 million grant date fair value, divided evenly between stock options and RSUs
—Special retention grant —50,000 RSUs, with grant date fair value of $1.3 million for retention, awarded in July 2017
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GE 2018 PROXY STATEMENT
 | | David Joyce
AGE:61
EDUCATION:
MICHIGAN STATE;
M.A. FINANCE,
XAVIER
GE TENURE:
38 YEARS
| | CURRENT AND PRIOR ROLES
Vice Chair, GE and President & CEO, Aviation (since 2008), leader for GE Additive; previously vice president and general manager of commercial engines and held other GM positions within Aviation
PERFORMANCE ASSESSMENT
The committee recognized Mr. Joyce’s contribution toward the strong performance of the Aviation business in meeting nearly all of its financial and strategic goals, including exceeding goals for free cash flow, operating profit, structural cost and working capital.
|
| COMPENSATION DECISIONS FOR 2017
—Base salary —remained flat at $1.45 million, with his last salary increase effective September 2016
—Cash bonus —$1.39 million, consisting of $685,000, representing 43% of $1.6 million target (same as Aviation’s 43% funding), plus $700,000 for extraordinary performance at Aviation and GE Additive
—Equity grant —$1.39 million grant date fair value (same as the vice chairs), delivered equally between stock options and RSUs
|
| | | | | | |
 | | Jeff Immelt
AGE:62
EDUCATION:
DARTMOUTH;
MBA, HARVARD
GE TENURE:
36 YEARS
| | CURRENT AND PRIOR ROLES
Former Chairman (retired October 2, 2017)and CEO (retired July 31, 2017),GE (since 2001)
PERFORMANCE ASSESSMENT
The committee did not grant Mr. Immelt anyequity awards due to his pending retirementand did not grant him a bonus in light of thecompany’s poor performance.
| | COMPENSATION DECISIONS FOR 2017
—Base salary —remained flat at $3.8 million,with his last salary increase effective March 2014(paid through departure in early October 2017)
—Cash bonus —did not receive a bonus
—Equity grant —did not receive an equity grantdue to his pending retirement
|
| | | | | | |
 | | Jeff
Bornstein
AGE:52
EDUCATION:
NORTHEASTERN
GE TENURE:
29 YEARS
| | CURRENT AND PRIOR ROLES
Former Vice Chair & CFO, GE (since 2013,left the company on December 31, 2017);previously CFO of GE Capital, Aircraft EngineServices and Plastics
PERFORMANCE ASSESSMENT
The committee did not grant Mr. Bornsteina bonus in light of the company’spoor performance.
| | COMPENSATION DECISIONS FOR 2017
—Base salary —remained flat at $1.775 million,with his last salary increase effective July 2016
—Cash bonus —did not receive a bonus
—Equity grant —$1.39 million grant date fairvalue (same as the vice chairs), delivered equallybetween stock options and RSUs(subsequently cancelled)
—Special retention grant —250,000 RSUs, withgrant date fair value of $7.0 million for retention,awarded in June 2017; this grant was cancelledupon his departure
|
| | | | | | |
 | | Beth
Comstock
AGE:57
EDUCATION:
WILLIAM & MARY
GE TENURE:
25 YEARS
| | CURRENT AND PRIOR ROLES
Former Vice Chair, GE & CEO, Business Innovations (since 2015, retiredDecember 31, 2017); previously chiefmarketing and commercial officer; presidentof integrated media at NBC Universal
PERFORMANCE ASSESSMENT
The committee did not grant Ms. Comstocka bonus in light of the company’s poorperformance.
| | COMPENSATION DECISIONS FOR 2017
—Base salary —increased 8% to $1.625 million,effective March 2017, after an 18-month intervalsince her last salary increase that is standard forGE’s named executives
—Cash bonus —did not receive a bonus
—Equity grant —$1.39 million grant date fairvalue (same as the vice chairs), delivered equallybetween stock options and RSUs(subsequently cancelled)
|
| | | | | | |
 | | John Rice
AGE:61
EDUCATION:
HAMILTON
GE TENURE:
40 YEARS
| | CURRENT AND PRIOR ROLES
Vice Chair, Former President & CEO, GlobalGrowth Organization (since 2010, steppeddown December 31, 2017 from GlobalGrowth Organization; remaining as ViceChair through March 31, 2018); previouslyCEO of Technology Infrastructure, Industrial,Energy and Transport Systems
PERFORMANCE ASSESSMENT
The committee did not grant Mr. Ricea bonus in light of the company’spoor performance.
| | COMPENSATION DECISIONS FOR 2017
—Base salary —increased 7% to $2.8 million,effective January 2017, after an 18-month intervalsince his last salary increase that is standard forGE’s named executives
—Cash bonus —did not receive a bonus
—Equity grant —$1.39 million grant date fairvalue (same as the vice chairs), delivered equallybetween stock options and RSUs
|
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GE 2018 PROXY STATEMENT
Realized Compensation
The SEC’s calculation of total compensation, as shown in theSummary Compensation Table on page 37, includes several items for which the named executives do not actually receive the amounts during the year, such as equity grants that may not vest for several years (or at all), and others that are driven by accounting and actuarial assumptions. It also excludes items that may be paid during the year, but that are attributable to prior periods. As a result, total compensation as defined by the SEC differs substantially from the compensation actually realized by our named executives in a particular year. To supplement the SEC-required disclosure, the table below shows compensation actually realized by the named executives, as reported on their IRS W-2 forms. These amounts are not a substitute for the amounts reported as SEC total compensation. Information on how realized compensation is calculated can be found in the supplemental materials on GE’s proxy website (see“Helpful Resources” on page 73).
SIGNIFICANT ITEMS IN REALIZED COMPENSATION.For Mr. Flannery, 49% of his 2017 realized pay relates to tax equalization payments relating to global assignments that accrued in prior years but that were not paid until 2017; these payments were made to keep Mr. Flannery in the same tax-neutral position
in which he would have been, had he not moved overseas at the company’s request. His realized pay also reflects $3.6 million of income related to the vesting of RSUs granted in prior years, as well as relocation and tax benefits associated with two moves (to Chicago to lead Healthcare and to Boston upon becoming CEO). For Ms. Miller, 80% of her 2017 realized pay relates to equity awards from prior years, including $8.3 million from stock option exercises and another $1.5 million from the vesting of RSUs. For Mr. Joyce, 85% of his 2017 realized pay relates to equity awards from prior years, including $16.8 million from stock option exercises and another $0.9 million from the vesting of RSUs. For Mr. Immelt, approximately 62% of his 2017 realized pay relates to the vesting of RSU and PSU awards valued at $18.2 million, most of which relate to his PSU grants that vested in March 2017, and the residual relates to RSUs that vested on his retirement. Another $4.3 million relates to Mr. Immelt’s bonus for 2016, which was paid in 2017. For Mr. Bornstein, 63% of his 2017 realized pay relates to the vesting of RSUs valued at $7.1 million, some of which were accelerated under the terms of Mr. Bornstein’s separation agreement (see“Option Exercises and Stock Vested Table” on page 43 and“Separation Agreement with Mr. Bornstein” on page 48).
Realized Compensation Table
| Realized Compensation |
| Name | | 2015 | | 2016 | | 2017 |
| Flannery* | | – | | – | | $16,005,604 |
| Miller* | | – | | – | | $12,489,770 |
| Joyce* | | – | | $12,561,316 | | $20,928,993 |
| Immelt | | $10,028,885 | | $27,466,598 | | $29,283,346 |
| Bornstein | | $5,266,094 | | $13,638,042 | | $11,181,051 |
| Comstock* | | – | | $9,348,124 | | $7,225,080 |
| Rice | | $9,671,232 | | $19,154,417 | | $7,870,257 |
* | Under applicable SEC rules, we have excluded Mr. Flannery’s and Ms. Miller’s compensation for 2015 and 2016 and Ms. Comstock’s and Mr. Joyce’s compensation for 2015 as they were not named executives during those years. |
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Summary Compensation
Summary Compensation Table
Name &
Principal Position | | Year | | Salary | | Bonus | | PSUs &
RSUs | | | Stock
Options | | LTPAs | | Pension &
Deferred
Comp. | | All Other
Comp. | | SEC Total | | | Adjusted
SEC Total** | |
| John Flannery* | | 2017 | | $1,737,500 | | $0 | | N/A | | | $2,076,000 | | $0 | | $3,255,222 | | $1,931,881 | | $9,000,603 | | | $5,800,715 | |
| Chairman & CEO | | | | | | | | | | | | | | | | | | | | | | | |
| Jamie Miller* | | 2017 | | $1,335,417 | | $0 | | $1,810,930 | | | $519,000 | | $0 | | $1,154,778 | | $237,736 | | $5,057,861 | | | $3,903,083 | |
| SVP & CFO | | | | | | | | | | | | | | | | | | | | | | | |
| David Joyce* | | 2017 | | $1,450,000 | | $1,385,000 | | $695,240 | | | $692,000 | | $0 | | $673,996 | | $264,930 | | $5,161,166 | | | $4,487,170 | |
| Vice Chair & CEO, | | 2016 | | $1,333,333 | | $1,524,000 | | $6,212,431 | | | $750,000 | | $0 | | $2,523,853 | | $239,240 | | $12,582,857 | | | $10,059,004 | |
| Aviation | | | | | | | | | | | | | | | | | | | | | | | |
| Jeff Immelt | | 2017 | | $2,864,394 | | $0 | | N/A | | | N/A | | $0 | | $3,373,410 | | $1,873,463 | | $8,111,267 | | | $4,982,197 | |
| Former Chairman | | 2016 | | $3,800,000 | | $4,320,000 | | $4,673,098 | | | $2,142,000 | | $1,624,000 | | $3,580,288 | | $1,185,138 | | $21,324,524 | | | $17,962,122 | |
| & CEO | | 2015 | | $3,800,000 | | $5,400,000 | | $6,238,766 | | | $2,964,000 | | $7,614,000 | | $6,336,805 | | $620,376 | | $32,973,947 | | | $26,831,472 | |
| Jeff Bornstein | | 2017 | | $1,775,000 | | $0 | | $8,140,971 | *** | | $692,000 | | $0 | | $3,796,480 | | $163,272 | | $14,567,723 | *** | | $10,835,590 | *** |
| Former Vice Chair | | 2016 | | $1,687,500 | | $1,920,000 | | $1,532,431 | | | $750,000 | | $739,000 | | $2,882,201 | | $394,601 | | $9,905,733 | | | $7,081,503 | |
| & CFO | | 2015 | | $1,600,000 | | $2,500,000 | | $2,746,623 | | | $1,086,800 | | $3,351,200 | | $1,815,193 | | $161,000 | | $13,260,816 | | | $11,497,856 | |
| Beth Comstock* | | 2017 | | $1,604,167 | | $0 | | $695,240 | | | $692,000 | | $0 | | $5,850,496 | | $186,456 | | $9,028,359 | | | $3,206,630 | |
| Former Vice Chair, | | 2016 | | $1,500,000 | | $1,248,000 | | $6,210,931 | | | $750,000 | | $549,600 | | $2,045,801 | | $175,054 | | $12,479,386 | | | $10,459,690 | |
| Business Innovations | | | | | | | | | | | | | | | | | | | | | | | |
| John Rice | | 2017 | | $2,800,000 | | $0 | | $695,240 | | | $692,000 | | $0 | | $2,552,260 | | $1,137,866 | | $7,877,366 | | | $5,586,117 | |
| Vice Chair, | | 2016 | | $2,625,000 | | $3,278,000 | | $1,532,431 | | | $750,000 | | $1,180,600 | | $4,184,304 | | $1,611,666 | | $15,162,001 | | | $11,212,853 | |
Former CEO,
Global Growth | | 2015 | | $2,537,500 | | $4,088,000 | | $2,991,242 | | | $1,185,600 | | $5,844,600 | | $1,317,517 | | $1,695,689 | | $19,660,148 | | | $18,554,554 | |
| Organization | | | | | | | | | | | | | | | | | | | | | | | |
* | Under applicable SEC rules, we have excluded Mr. Flannery’s and Ms. Miller’s compensation for 2016 and 2015 and Ms. Comstock’s and Mr. Joyce’s compensation for 2015 as they were not named executives during those years. |
** | For a description of the amounts reported in the Adjusted SEC Total column, see“Adjusted SEC Total” on page 39. |
*** | Includes RSU awards with a grant date fair value of $7.7 million that were subsequently cancelled. Excluding these cancelled RSU awards, Mr. Bornstein’s SEC Total compensation was $6,917,483, and his Adjusted SEC Total was $3,185,350. |
SALARY.Base salaries for our named executives depend on the scope of their responsibilities, their leadership skills and values, and their performance and length of service. Historically, they generally have been eligible for salary increases at intervals of 18 months or longer. The amount of any increase is affected by current salary and amounts paid to peers within and outside the company. Each of the named executives contributed a portion of his or her salary to the GE Retirement Savings Plan (RSP), the company’s 401(k) savings plan. The salary amount for Mr. Immelt is through his retirement in October 2017.
BONUS.Amounts earned under our annual cash bonus program. None of our named executives received bonuses for 2017, other than Mr. Joyce. See“How the Bonus Program Works” on page 32 for additional information.
PSUs & RSUs.Aggregate grant date fair value of stock awards in the form of PSUs and RSUs granted in the years shown, other than for 2017, during which only RSUs (and no PSUs) were granted. Generally, the aggregate grant date fair value is the amount that the company expects to expense for accounting purposes over the award’s vesting schedule and does not correspond to the actual value that the named executives will realize from the award. In particular, the actual value of PSUs received is different from the accounting expense because it depends on performance. For example, as described under“2015 PSU Grants” on page 33, the 2015 PSU grants were cancelled by the Compensation Committee, and as a result, none of our named executives received a payout for these awards. Although the PSUs were cancelled, GE does not adjust the related amounts previously reported as compensation in the year of the PSU award to reflect the cancellation (in the case of Mr. Immelt, $6.2 million reported as compensation for him in 2015).
In accordance with SEC rules, the aggregate grant date fair value of the PSUs is calculated based on the most probable outcome of the performance conditions as of the grant date.
For Mr. Bornstein, the 2017 amounts reported under PSUs & RSUs represent a 250,000 RSU retention grant in June 2017 in connection with his promotion to Vice Chair with a grant date fair value of $7.0 million and another 28,000 RSUs granted to him in September 2017 with a grant date fair value of $0.7 million. Both awards were cancelled upon Mr. Bornstein’s departure from the company, although modifications of certain awards under the terms of his separation agreement were valued at $0.5 million.
Ms. Comstock’s September 2017 grant of 28,000 RSUs, which had a grant date fair value of $0.7 million, was similarly cancelled upon her retirement.
STOCK OPTIONS.Aggregate grant date fair value of option awards granted in the years shown. These amounts reflect the company’s accounting expense and do not correspond to the actual value that the named executives will realize. For information on the assumptions used in valuing a particular year’s grant, see the note on Other Stock-Related InformationLoss Contingencies in GE’s financial statements in our annual reportAnnual Report on Form 10-K for 2022.
Independent Oversight of
Political Spending
The Governance Committee, composed solely of independent directors, oversees the company’s political spending and lobbying. This includes political and campaign contributions as well as any contributions to trade associations and other tax-exempt and similar organizations that year. The stock options granted to Mr. Bornsteinmay engage in political activity. As part of its oversight role in public policy and Ms. Comstock in 2017 were subsequently cancelled upon their respective departurescorporate social responsibility, the Governance Committee is responsible for the following:
| ● | Policy oversight. A yearly review of GE’s political spending policies and lobbying practices. |
| ● | Budget oversight. Approval of GE’s annual budget for political activities. |
| ● | Reporting. Oversight of a report on the company’s political spending, which is updated twice each year and made available on our ESG website (see Helpful Resources on page 77). |
GE currently discloses the names of all trade associations receiving more than $50,000 from the company. Seecompany, including theLong-Term Incentive Compensation Table on page 40 for additional information on 2017 grants.
LTPAs.Amounts earned under our Long-Term Performance Awards (LTPAs), a non-equity incentive plan arrangement, which we historically granted only once every three or more years. The LTPA program will be terminated after the conclusion portion of the current performance cycle, which endscompany’s payment used for lobbying or political expenditures, as well as any contributions to 501(c)(4) organizations, beginning with contributions made in 2018. LTPA amounts reflect achievement of pre-established performance goals over the performance period. The amountsGE’s political spending has declined in recent years, and in 2022 GE did not contribute any corporate funds to political campaigns, committees or candidates for 2016 and 2017 reflect the first- and second-year installments of the 2016–2018 LTPAs and are based on salaries in effect as of the end of the year and bonuses paid for those years, even though no amounts were paid. The $0 values for 2017 forpublic office.
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Messrs. Immelt, Bornstein, Rice and Ms. Comstock reflect our current expectation that the performance goals for the 2016–2018 LTPA will not be met (in which case they would not receive the amounts reported for 2016 and 2017). See“Long-Term Performance Awards (LTPAs)” on page 44 for additional information. Because Mr. Flannery, Ms. Miller and Mr. Joyce were not named executives when the 2016–2018 LTPAs were granted, their awards do not include the annual installment provision that applies to other named executives, and the amount reported for them in 2017 is therefore also $0.
PENSION & DEFERRED COMP.Sum of the change in pension value and above-market earnings on nonqualified deferred compensation, which break down as shown in the following table.
| Name | | Change in
Pension Value | | Above-market
Earnings |
| Flannery | | $3,199,888 | | $55,334 |
| Miller | | $1,154,778 | | $0 |
| Joyce | | $673,996 | | $0 |
| Immelt | | $3,129,070 | | $244,340 |
| Bornstein | | $3,732,133 | | $64,347 |
| Comstock | | $5,821,729 | | $28,767 |
| Rice | | $2,291,249 | | $261,011 |
Year-over-year changes in pension valuegenerally are driven by changes in actuarial pension assumptions as well as increases in service, age and compensation. See“Pension Benefits” on page 46 for additional information, including the present value assumptions used in this calculation. For Ms. Comstock, the change in pension value includes early retirement allowance payments valued at $3.1 million (see“Early Retirement Agreement with Ms. Comstock” on page 48).
Above-market earnings represent the difference between market interest rates calculated under SEC rules and the 6% to 14% interest contingently credited by the company on salary that the named executives deferred under various executive deferred salary programs in effect between 1987 and 2017. See“Deferred Compensation” on page 44 for additional information.
ALL OTHER COMP.We provide our named executives with other benefits that we believe are reasonable, competitive and consistent with our overall executive compensation program. The costs of these benefits for 2017, minus any reimbursements by the named executives, are shown in the table below.
| Name | Life Insurance
Premiums | | Retirement
Savings Plan | | Personal
Use of Aircraft | | Leased Cars | | Financial &
Tax Planning | | Relocation
Benefits | | Relocation
Tax Benefits | | Other | | Total |
| Flannery | $136,456 | | $9,450 | | $21,398 | | $14,610 | | $0 | | $1,051,254 | | $689,059 | | $9,654 | | $1,931,881 |
| Miller | $62,120 | | $9,450 | | $9,177 | | $21,128 | | $5,300 | | $127,133 | | $2,694 | | $734 | | $237,736 |
| Joyce | $227,424 | | $9,450 | | $4,632 | | $22,074 | | $0 | | N/A | | N/A | | $1,350 | | $264,930 |
| Immelt | $226,600 | | $9,450 | | $133,565 | | $10,708 | | $0 | | $819,864 | | $662,711 | | $10,565 | | $1,873,463 |
| Bornstein | $107,712 | | $9,450 | | $10,181 | | $8,497 | | $24,205 | | N/A | | N/A | | $3,227 | | $163,272 |
| Comstock | $153,406 | | $9,450 | | $0 | | $0 | | $20,600 | | N/A | | N/A | | $3,000 | | $186,456 |
| Rice | $172,938 | | $9,450 | | $23,400 | | $24,360 | | $15,125 | | $350,600 | | $539,307 | | $2,686 | | $1,137,866 |
Life Insurance Premiums.Taxable payments to cover premiums for universal life insurance policies they own. These policies include: (1) Executive Life, which provides universal life insurance policies for the named executives totaling $3 million in coverage at the time of enrollment and increased 4% annually thereafter; and (2) Leadership Life, which provides universal life insurance policies for the named executives with coverage of 2X their annual pay (salary + most recent bonus).
Retirement Savings Plan.GE’s matching contributions to the named executives’ RSP accounts equaling 3.5% of pay up to the caps imposed under IRS rules.
Personal Use of Aircraft.For security purposes, prior to September 2017, the Compensation Committee required our CEO, as well as Mr. Flannery while he was CEO-elect, to use company aircraft for all air travel, including personal travel. This policy ended at the request of Mr. Flannery and with the agreement of the committee. Amounts reflect the incremental cost to GE for the named executives’ personal use of company aircraft, based on the following variable costs: a portion of ongoing maintenance and repairs, aircraft fuel, satellite communications and any travel expenses for the flight crew. These amounts exclude non-variable costs, such as exterior paint, interior refurbishment and regularly scheduled inspections, which would have been incurred regardless of whether there was any personal use. Aggregate incremental cost, if any, of travel by the executive’s family or guests is also included. Amounts reported for Mr. Flannery
reflect travel during the period between the announcement of his appointment as CEO and the revocation of the policy requiring him to use company aircraft. All named executives have repaid to the company the maximum amount for which reimbursement is permitted under Federal Aviation Administration rules.
Leased Cars.Expenses for the leased cars program, such as leasing and management fees, administrative costs and maintenance costs. This program will be discontinued at the end of 2018 for all GE officers.
Financial & Tax Planning.Expenses for the use of advisors for financial, estate and tax preparation and planning, and investment analysis and advice.
Relocation Benefits.Expenses for relocating the named executives and their families to GE’s headquarters in Boston, other than Mr. Flannery, for whom this column also includes the cost of relocation expenses to Chicago in connection with the relocation of the GE Healthcare headquarters to that city in 2016 and for Mr. Rice, for whom this column includes benefits provided to him in connection with his non-permanent relocation, at the company’s request, to Hong Kong. Mr. Rice returned from this assignment in April 2017. Benefits for the named executives, including the tax benefits described below, generally were consistent with those provided to all employees who were asked to relocate, except that the company’s officers received a higher potential home loss buyout benefit than other employees.See“Significant Items in Realized Compensation” on page 36 for
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a discussion of additional amounts not reported in this column that relate to tax equalization payments from Mr. Flannery’s global assignments in prior years.
With respect to Mr. Rice’s relocation to Hong Kong, benefits are consistent with those we provide to employees working on non-permanent assignments outside their home countries, and consisted of: (1) cost-of-living adjustment ($137,869); (2) housing and utilities ($149,712); and (3) other expatriate and relocation allowances and expenses ($63,019). Any benefits paid in Hong Kong dollars (HKD) were converted to USD at a rate of 7.76 HKD per USD for the period.
Relocation Tax Benefits.Tax benefits provided in connection with relocations.
Other.Total amount of other benefits provided, none of which individually exceeded the greater of $25,000 or 10% of the total
amount of benefits included in the Personal Use of Aircraft, Leased Cars, Financial & Tax Planning, Relocation Benefits and Other columns for the named executive (except as otherwise described in this section). These other benefits included items such as: (1) car service fees; (2) home alarm and generator installation, maintenance and monitoring; and (3) an annual physical examination.
SEC TOTAL.Total compensation, as determined under SEC rules.
ADJUSTED SEC TOTAL.We are presenting this supplemental column to show how the Compensation Committee views the named executives’ annual compensation. This column adjusts the amounts reported in the SEC Total column by subtracting the change in pension value reported in the Pension & Deferred Comp. column to show how year-over-year changes in pension value impact total compensation. The amounts reported in this column differ substantially from, and are not a substitute for, the amounts reported in the SEC Total column.
Long-Term Incentive Compensation
Overview of Long-Term Incentive Compensation
In recent years, GE provided the CEO and other senior leaders four different forms of long-term incentive compensation awards: Long-Term Performance Awards (LTPAs), Performance Share Units (PSUs), stock options and, for senior leaders other than the CEO, Restricted Stock Units (RSUs). In 2017, the Compensation Committee decided to terminate the LTPA program following the conclusion of the current performance cycle, which ends in 2018. In addition, the Compensation Committee did not award any PSUs to our senior leaders in 2017.
Annual Equity Incentive Awards
Historically, GE used a different equity compensation structure for the CEO than for other senior leaders:The CEO typically received equity compensation solely in the form of PSUs while other senior leaders received it largely in the form of stock options. In 2015, we began granting annual equity incentive awards to all named executives (other than the CEO) in the form of stock options, RSUs and PSUs to better align the equity compensation structure for the company’s most senior leaders and drive greater accountability.
How we determine award amounts.In recent years, our annual equity incentive awards were targeted to be equally weighted (by approximate accounting value) among stock options, RSUs and PSUs, except that the CEO’s award was targeted to be weighted 2/3 PSUs and 1/3 stock options (he did not typically receive RSUs). In 2017, the Compensation Committee did not award PSUs, and only RSU and option awards were made while the committee considered the appropriate performance metrics and targets for the PSUs. In determining award amounts, the committee evaluates executives’ achievement of specific performance goals — with strong emphasis on their contributions to overall company performance in addition to their individual business or function — as well as expected future contributions to GE’s long-term success, using past performance as a key indicator.
— | Why we use stock options and RSUs.We believe that stock options and RSUs are a means to effectively focus our named executives on delivering long-term value to our shareowners. Options have value only to the extent that the price of GE stock rises between the grant date and the exercise date, and RSUs reward and retain the named executives by offering them the opportunity to receive GE stock if they are still employed by us on the date the restrictions lapse. |
— | Why we use PSUs.We see PSUs as a means to focus our named executives on GE’s long-term operating goals. PSUs have formulaically determined payouts that convert into shares of GE stock only if the company achieves specified performance goals. See theOutstanding Equity Awards Table on page 41 for information regarding the performance conditions for outstanding PSUs. |
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Long-Term Incentive Compensation Table
The following table — also known as theGrants of Plan-Based Awards Table— shows RSUs and stock options granted to our named executives in 2017 under the 2007 Long-Term Incentive Plan, a plan that shareowners approved in 2007, 2012 and 2017. No grants were made of PSUs or LTPAs during 2017, and no grants were made to Mr. Immelt under the 2007 Long-Term Incentive Plan during 2017 in light of his retirement.
| | Grant
Date | | | | Estimated Future Payouts
Under Performance Share Units (#) | | Restricted
Stock Units
(#) | | Stock
Options
(#) | | Stock
Option
Exercise
Price | | Grant
Date
Fair Value of
Awards |
| Name | | | Award Type | | Threshold | | Target | | Maximum | | | | |
| Flannery | | 9/6/2017 | | Annual Equity | | | | | | | | | | 600,000 | | $24.92 | | $2,076,000 |
| Miller | | 7/27/2017 | | Retention | | | | | | | | 50,000 | | | | | | $1,289,500 |
| | 9/6/2017 | | Annual Equity | | | | | | | | 21,000 | | | | | | $521,430 |
| | 9/6/2017 | | Annual Equity | | | | | | | | | | 150,000 | | $24.92 | | $519,000 |
| Joyce | | 9/6/2017 | | Annual Equity | | | | | | | | 28,000 | | | | | | $695,240 |
| | 9/6/2017 | | Annual Equity | | | | | | | | | | 200,000 | | $24.92 | | $692,000 |
| Immelt | | N/A | | N/A | | | | | | | | | | | | | | N/A |
| Bornstein* | | 6/9/2017 | | Retention | | | | | | | | 250,000 | | | | | | $6,955,000 |
| | 9/6/2017 | | Annual Equity | | | | | | | | 28,000 | | | | | | $695,240 |
| | 9/6/2017 | | Annual Equity | | | | | | | | | | 200,000 | | $24.92 | | $692,000 |
| | 10/6/2017 | | Separation | | 15,000 | | 80,000 | | 100,000 | | | | | | | | $490,731 |
| | | | Modification* | | | | | | | | | | | | | | |
| Comstock* | | 9/6/2017 | | Annual Equity | | | | | | | | 28,000 | | | | | | $695,240 |
| | 9/6/2017 | | Annual Equity | | | | | | | | | | 200,000 | | $24.92 | | $692,000 |
| Rice | | 9/6/2017 | | Annual Equity | | | | | | | | 28,000 | | | | | | $695,240 |
| | 9/6/2017 | | Annual Equity | | | | | | | | | | 200,000 | | $24.92 | | $692,000 |
* Amounts reported as RSUs and stock options for Mr. Bornstein and Ms. Comstock reflect awards previously granted that were cancelled pursuant to their separation and early retirement agreements, respectively. For Mr. Bornstein, amounts reported for PSUs reflect his continued eligibility for his existing PSU awards, originally granted in 2015 and 2016, under the terms of his separation agreement (see“Separation Agreement with Mr. Bornstein” and“Early Retirement Agreement with Ms. Comstock” on page 48).
PERFORMANCE SHARE UNITS.The values above for estimated future payouts of PSUs for Mr. Bornstein reflect the potential threshold, target and maximum number of PSUs that could be granted under pre-existing PSU awards for which Mr. Bornstein continued to be eligible following his separation from the company. This represents his 2015 PSU award (target 53,000 PSUs) which was subsequently cancelled in February 2018, and his 2016 PSU award (target 27,000 PSUs), which remains outstanding.
RESTRICTED STOCK UNITS.The number of RSUs granted in 2017, which will vest in five equal annual installments, with the first installment (20%) vesting one year from the grant date, except Ms. Miller’s special retention grant in July 2017 will vest in equal installments in 2020 and 2022. Dividend equivalents are paid out only on shares actually received, except for Ms. Miller’s July 2017 special retention grant, which was awarded prior to her being designated an executive officer.
STOCK OPTIONS.The number of stock options granted in 2017, which will vest in five equal annual installments, with the first installment (20%) becoming exercisable one year from the grant date. See theOutstanding Equity Awards Table on page 41 and“Potential Termination Payments” on page 48 for information on accelerated vesting for retirement-eligible awards.
STOCK OPTION EXERCISE PRICE.Stock option exercise prices reflect the closing price of GE stock on the grant date.
GRANT DATE FAIR VALUE OF AWARDS.Generally, the aggregate grant date fair value is the amount that the company expects to expense in its financial statements over the award’s vesting schedule.
– | For stock options,fair value is calculated using the Black-Scholes value of each option on the grant date (resulting in a $3.46 per unit value for the September grants). |
– | For RSUs,fair value is calculated based on the closing price of the company’s stock on the grant date, reduced by the present value of dividends expected to be paid on GE common stock before the RSUs vest (resulting in a $27.82 per unit value for Mr. Bornstein’s June grant and a $24.83 per unit value for the September grants) because dividend equivalents on unvested RSUs (granted after 2013) are accrued and paid out only if and when the award vests. For Ms. Miller’s July grant, fair value was calculated based on the closing price of the company’s stock on the grant date (resulting in a $25.79 per unit value). |
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Outstanding Equity Awards Table
The following table — also known as theOutstanding Equity Awards at Fiscal Year-End Table – shows the named executives’ stock and option grants as of year-end. It includes unexercised stock options (vested and unvested) and RSUs and PSUs for which vesting conditions were not yet satisfied as of December 31, 2017.
Name of
Executive | | Grant
Date | | Award
Type | | Number
Outstanding | | Portion
Exercisable | | Exercise
Price | | Expiration
Date | | Market
Value | | Vesting Schedule |
| Flannery | | 7/23/2009 | | Options | | 100,000 | | 100,000 | | $11.95 | | 7/23/2019 | | $550,000 | | |
| | 6/10/2010 | | Options | | 350,000 | | 350,000 | | $15.68 | | 6/10/2020 | | $619,500 | | |
| | 6/9/2011 | | Options | | 450,000 | | 450,000 | | $18.58 | | 6/9/2021 | | $0 | | |
| | 9/7/2012 | | Options | | 500,000 | | 500,000 | | $21.59 | | 9/7/2022 | | $0 | | |
| | 7/25/2013 | | RSUs | | 10,000 | | | | | | | | $174,500 | | 100% on 7/25/2018 |
| | 9/13/2013 | | Options | | 400,000 | | 320,000 | | $23.78 | | 9/13/2023 | | $0 | | 100% on 9/13/2018 |
| | 7/24/2014 | | RSUs | | 40,000 | | | | | | | | $698,000 | | 50% in 2018 and 2019 |
| | 9/5/2014 | | Options | | 450,000 | | 270,000 | | $26.10 | | 9/5/2024 | | $0 | | 50% in 2018 and 2019 |
| | 9/11/2015 | | Options | | 150,000 | | 60,000 | | $24.95 | | 9/11/2025 | | $0 | | 33% in 2018, 2019 and 2020 |
| | 9/11/2015 | | RSUs | | 18,000 | | | | | | | | $314,100 | | 33% in 2018, 2019 and 2020 |
| | 9/11/2015 | | PSUs | | 44,000 | | | | | | | | $767,800 | | 100% in 2018, subject to performance |
| | 9/9/2016 | | Options | | 200,000 | | 40,000 | | $30.11 | | 9/9/2026 | | $0 | | 25% in 2018, 2019, 2020 and 2021 |
| | 9/9/2016 | | RSUs | | 21,600 | | | | | | | | $376,920 | | 25% in 2018, 2019, 2020 and 2021 |
| | 9/9/2016 | | PSUs | | 27,000 | | | | | | 9/6/2027 | | $471,150 | | 100% in 2019, subject to performance |
| | 9/6/2017 | | Options | | 600,000 | | | | $24.92 | | | | $0 | | 20% in 2018, 2019, 2020 and 40% in 2021 |
| Total | | | | | | 3,360,600 | | 2,090,000 | | | | | | $3,971,970 | | |
| Miller | | 9/7/2012 | | Options | | 325,000 | | 325,000 | | $21.59 | | 9/7/2022 | | $0 | | |
| | 7/25/2013 | | RSUs | | 15,000 | | | | | | | | $261,750 | | 100% on 7/25/2018 |
| | 9/13/2013 | | Options | | 350,000 | | 280,000 | | $23.78 | | 9/13/2023 | | $0 | | 100% on 9/13/2018 |
| | 7/24/2014 | | RSUs | | 30,000 | | | | | | | | $523,500 | | 50% in 2018 and 2019 |
| | 9/5/2014 | | Options | | 400,000 | | 240,000 | | $26.10 | | 9/5/2024 | | $0 | | 50% in 2018 and 2019 |
| | 9/11/2015 | | Options | | 150,000 | | 60,000 | | $24.95 | | 9/11/2025 | | $0 | | 33% in 2018, 2019 and 2020 |
| | 9/11/2015 | | RSUs | | 18,000 | | | | | | | | $314,100 | | 33% in 2018, 2019 and 2020 |
| | 9/11/2015 | | PSUs | | 44,000 | | | | | | | | $767,800 | | 100% in 2018, subject to performance |
| | 7/28/2016 | | RSUs | | 40,000 | | | | | | | | $698,000 | | 25% in 2018, 2019, 2020, 2021 |
| | 9/9/2016 | | Options | | 150,000 | | 30,000 | | $30.11 | | 9/9/2026 | | $0 | | 25% in 2018, 2019, 2020, 2021 |
| | 9/9/2016 | | RSUs | | 16,000 | | | | | | | | $279,200 | | 25% in 2018, 2019, 2020, 2021 |
| | 9/9/2016 | | PSUs | | 20,000 | | | | | | | | $349,000 | | 100% in 2019, subject to performance |
| | 7/27/2017 | | RSUs | | 50,000 | | | | | | | | $872,500 | | 50% in 2020 and 2022 |
| | 9/6/2017 | | Options | | 150,000 | | | | $24.92 | | 9/6/2027 | | $0 | | 20% in 2018, 2019, 2020, 2021, 2022 |
| | 9/6/2017 | | RSUs | | 21,000 | | | | | | | | $366,450 | | 100% on 9/6/2018 |
| Total | | | | | | 1,779,000 | | 935,000 | | | | | | $4,432,300 | | |
| Joyce | | 9/9/2008 | | Options | | 100,000 | | 100,000 | | $28.12 | | 9/9/2018 | | $0 | | |
| | 6/10/2010 | | Options | | 650,000 | | 650,000 | | $15.68 | | 6/10/2020 | | $1,150,500 | | |
| | 6/9/2011 | | Options | | 700,000 | | 700,000 | | $18.58 | | 6/9/2021 | | $0 | | |
| | 9/7/2012 | | Options | | 700,000 | | 700,000 | | $21.59 | | 9/7/2022 | | $0 | | |
| | 9/13/2013 | | Options | | 500,000 | | 500,000 | | $23.78 | | 9/13/2023 | | $0 | | |
| | 9/5/2014 | | Options | | 550,000 | | 550,000 | | $26.10 | | 9/5/2024 | | $0 | | |
| | 9/11/2015 | | Options | | 184,000 | | 184,000 | | $24.95 | | 9/11/2025 | | $0 | | |
| | 9/11/2015 | | RSUs | | 30,000 | | | | | | | | $523,500 | | 33% in 2018, 2019, 2020 |
| | 9/11/2015 | | PSUs | | 53,000 | | | | | | | | $924,850 | | 100% in 2018, subject to performance |
| | 7/28/2016 | | RSUs | | 150,000 | | | | | | | | $2,617,500 | | 100% on 12/31/19 |
| | 9/9/2016 | | Options | | 200,000 | | 200,000 | | $30.11 | | 9/9/2026 | | $0 | | |
| | 9/9/2016 | | PSUs | | 27,000 | | | | | | | | $471,150 | | 100% in 2019, subject to performance |
| | 9/6/2017 | | Options | | 200,000 | | | | $24.92 | | 9/6/2027 | | $0 | | 100% on 9/6/2018 |
| | 9/6/2017 | | RSUs | | 28,000 | | | | | | | | $488,600 | | 100% will vest on 9/6/2018 |
| Total | | | | | | 4,072,000 | | 3,584,000 | | | | | | $6,176,100 | | |
| Immelt | | 11/6/2014 | | Options | | 500,000 | | 500,000 | | $26.36 | | 11/6/2024 | | $0 | | |
| | 11/5/2015 | | Options | | 600,000 | | 600,000 | | $29.64 | | 11/5/2025 | | $0 | | |
| | 11/5/2015 | | PSUs | | 200,000 | | | | | | | | $3,490,000 | | 100% in 2018, subject to performance |
| Total | | | | | | 1,300,000 | | 1,100,000 | | | | | | $3,490,000 | | |
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GE 2018 PROXY STATEMENT
Name of
Executive | | Grant
Date | | Award
Type | | Number
Outstanding | | Portion
Exercisable | | Exercise
Price | | Expiration
Date | | Market
Value | | Vesting Schedule |
| Bornstein | | 9/9/2008 | | Options | | 137,500 | | 137,500 | | $28.12 | | 9/9/2018 | | $0 | | |
| | 3/12/2009 | | Options | | 95,000 | | 95,000 | | $9.57 | | 3/12/2019 | | $748,600 | | |
| | 7/23/2009 | | Options | | 440,000 | | 440,000 | | $11.95 | | 7/23/2019 | | $2,420,000 | | |
| | 6/10/2010 | | Options | | 650,000 | | 650,000 | | $15.68 | | 12/31/2019 | | $1,150,500 | | |
| | 6/9/2011 | | Options | | 700,000 | | 700,000 | | $18.58 | | 12/31/2019 | | $0 | | |
| | 9/7/2012 | | Options | | 725,000 | | 725,000 | | $21.59 | | 12/31/2019 | | $0 | | |
| | 9/13/2013 | | Options | | 550,000 | | 550,000 | | $23.78 | | 12/31/2019 | | $0 | | |
| | 9/5/2014 | | Options | | 550,000 | | 550,000 | | $26.10 | | 12/31/2019 | | $0 | | |
| | 11/5/2015 | | Options | | 176,000 | | 176,000 | | $29.64 | | 12/31/2019 | | $0 | | |
| | 11/5/2015 | | PSUs | | 53,000 | | | | | | | | $924,850 | | 100% in 2018, subject to performance |
| | 9/9/2016 | | Options | | 120,000 | | 120,000 | | $30.11 | | 12/31/2019 | | $0 | | |
| | 9/9/2016 | | PSUs | | 27,000 | | | | | | | | $471,150 | | 100% in 2019, subject to performance |
| Total | | | | | | 4,223,500 | | 4,143,500 | | | | | | $5,715,100 | | |
| Comstock | | 9/9/2008 | | Options | | 87,500 | | 87,500 | | $28.12 | | 9/9/2018 | | $0 | | |
| | 6/10/2010 | | Options | | 400,000 | | 400,000 | | $15.68 | | 6/10/2020 | | $708,000 | | |
| | 6/9/2011 | | Options | | 500,000 | | 500,000 | | $18.58 | | 12/31/2020 | | $0 | | |
| | 9/7/2012 | | Options | | 500,000 | | 500,000 | | $21.59 | | 12/31/2020 | | $0 | | |
| | 9/13/2013 | | Options | | 400,000 | | 400,000 | | $23.78 | | 12/31/2020 | | $0 | | |
| | 9/5/2014 | | Options | | 400,000 | | 400,000 | | $26.10 | | 12/31/2020 | | $0 | | |
| | 9/11/2015 | | Options | | 134,000 | | 134,000 | | $24.95 | | 12/31/2020 | | $0 | | |
| | 9/11/2015 | | PSUs | | 39,000 | | | | | | | | $680,550 | | 100% in 2018, subject to performance |
| | 9/9/2016 | | Options | | 200,000 | | 200,000 | | $30.11 | | 12/31/2020 | | $0 | | |
| | 9/9/2016 | | PSUs | | 27,000 | | | | | | | | $471,150 | | 100% in 2019, subject to performance |
| Total | | | | | | 2,687,500 | | 2,621,500 | | | | | | $1,859,700 | | |
| Rice | | 6/23/1995 | | RSUs | | 43,056 | | | | | | | | $751,327 | | 100% on 11/15/2021 |
| | 6/26/1998 | | RSUs | | 57,408 | | | | | | | | $1,001,770 | | 100% on 11/15/2021 |
| | 7/29/1999 | | RSUs | | 28,704 | | | | | | | | $500,885 | | 100% on 11/15/2021 |
| | 7/27/2000 | | RSUs | | 28,704 | | | | | | | | $500,885 | | 100% on 11/15/2021 |
| | 9/10/2001 | | RSUs | | 23,920 | | | | | | | | $417,404 | | 100% on 11/15/2021 |
| | 9/12/2003 | | RSUs | | 29,900 | | | | | | | | $521,755 | | 100% on 11/15/2021 |
| | 9/9/2008 | | Options | | 300,000 | | 300,000 | | $28.12 | | 9/9/2018 | | $0 | | |
| | 3/12/2009 | | Options | | 1,000,000 | | 1,000,000 | | $9.57 | | 3/12/2019 | | $7,880,000 | | |
| | 7/23/2009 | | Options | | 800,000 | | 800,000 | | $11.95 | | 7/23/2019 | | $4,400,000 | | |
| | 6/10/2010 | | Options | | 1,000,000 | | 1,000,000 | | $15.68 | | 6/10/2020 | | $1,770,000 | | |
| | 6/9/2011 | | Options | | 850,000 | | 850,000 | | $18.58 | | 6/9/2021 | | $0 | | |
| | 9/13/2013 | | Options | | 650,000 | | 650,000 | | $23.78 | | 9/13/2023 | | $0 | | |
| | 9/5/2014 | | Options | | 650,000 | | 650,000 | | $26.10 | | 9/5/2024 | | $0 | | |
| | 11/5/2015 | | Options | | 240,000 | | 240,000 | | $29.64 | | 11/5/2025 | | $0 | | |
| | 11/5/2015 | | PSUs | | 58,000 | | | | | | | | $1,012,100 | | 100% in 2018, subject to performance |
| | 9/9/2016 | | Options | | 200,000 | | 200,000 | | $30.11 | | 9/9/2026 | | $0 | | |
| | 9/9/2016 | | PSUs | | 27,000 | | | | | | | | $471,150 | | 100% in 2019, subject to performance |
| | 9/6/2017 | | Options | | 200,000 | | | | $24.92 | | 9/6/2027 | | $0 | | 100% on 9/6/2018 |
| | 9/6/2017 | | RSUs | | 28,000 | | | | | | | | $488,600 | | 100% on 9/6/2018 |
| Total | | | | | | 6,214,692 | | 5,690,000 | | | | | | $19,715,876 | | |
MARKET VALUE.The market value of RSUs and PSUs is calculated by multiplying the closing price of GE stock as of December 29, 2017 ($17.45) (the last trading day for the year) by the number of shares underlying each award and, with respect to the PSUs, assuming satisfaction of the target levels for the applicable performance conditions. For options, the market value is calculated by multiplying the number of shares underlying each award by the spread between the award’s exercise price and the closing price of GE stock as of December 29, 2017.
VESTING SCHEDULE
– | Optionsvest on the anniversary of the grant date in the years shown in the table. The table shows an accelerated stock option vesting schedule for Messrs. Joyce and Rice because their awards qualified for retirement-eligible vesting between 2017 and 2021 and for Mr. Flannery for his 2017 award, which is eligible for accelerated vesting in 2021. See“Potential Termination Payments” on page 48 for the requirements for an award to qualify for retirement-eligible accelerated vesting (the executive is age 60 or older and the award has been held for at least one year). |
– | RSUsvest on the anniversary of the grant date in the years shown in the table, except that certain awards vest on the named executive’s 65th birthday or upon the awards qualifying for retirement-eligible vesting (as discussed above for options). |
– | PSUsvest at the beginning of the year indicated when the Compensation Committee certifies that the performance conditions have been achieved. See“2015 PSU Grants” on page 33 for details on the performance conditions for the 2015 grants, which were cancelled by the committee. See the table on the next page for details on the performance conditions for the 2016 grants. No PSUs were granted in 2017.
|
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GE 2018 PROXY STATEMENT
2016 PSUs
| | | | (2016–2018) |
| Performance goal | How measured | Weighting | | Threshold | | Target |
| Total cash | Cumulative | 50% | | $70 billion | | $85 billion |
| Operating margin | Last year in period | 50% | | 15.0% | | 16.0% |
| Relative TSR | Cumulative vs. S&P 500 | +/- 25% adjustment | | | | |
HOW WE DEFINE THE PERFORMANCE GOALS*
Total cash= GE CFOA (Industrial CFOA + dividends from GE Capital) + proceeds from Industrial dispositions (after tax)
Operating margin= Industrial operating margin (includes adjusted corporate operating costs)
*The Compensation Committee has the authority to adjust these metrics for extraordinary items. For information on how we calculate performance metrics, see“Explanation of Non-GAAP Financial Performance Metrics” on page 52.
+/- 25% adjustment to # of PSUs earnedrefers to:
|
– | GE TSR performance ≥ 75th percentileé positive 25% adjustment |
– | GE TSR performance<40th percentileê negative 25% adjustment |
– | GE TSR performance=50th percentileè no adjustment (with proportional adjustment for performance between 40th and 75th percentiles) |
Option Exercises and Stock Vested Table
The table at right shows the number of shares the named executives acquired and the values they realized upon the exercise of options and the vesting of RSUs and PSUs during 2017. Values are shown before payment of any applicable withholding taxes or brokerage commissions. Executives that remain employed by GE are required to hold the stock that they receive following the exercise of stock options (less those shares that are withheld to satisfy the exercise and pay taxes) for a year following exercise. Similarly, continuing executives cannot sell stock they receive as the result of the vesting of RSUs or PSUs until they have satisfied their stock ownership requirement.See“Share Ownership and Equity Grant Policies” on page 51.
PSUS & RSUS.For Messrs. Immelt and Rice, includes partial vesting of certain awards for U.S. Federal Insurance Contributions Act (FICA) tax purposes. For Mr. Bornstein and Ms. Comstock, includes accelerated vesting of certain awards pursuant to their respective separation and retirement agreements. Receipt of a portion of these awards for Mr. Immelt ($6,834,153) is subject to a six-month delay under applicable U.S. federal income tax rules.
| | Options | | PSUs & RSUs |
| Name | | Number
of Shares
Acquired
on Exercise* | | Value
Realized
on Exercise* | | Number
of Shares
Acquired
on Vesting** | | Value
Realized
on Vesting** |
| Flannery | | 0 | | $0 | | 141,400 | | $3,604,364 |
| Miller | | 675,000 | | $8,328,499 | | 60,000 | | $1,517,710 |
| Joyce | | 900,000 | | $16,833,778 | | 37,000 | | $879,695 |
| Immelt | | 0 | | $0 | | 1,016,642 | | $25,036,253 |
| Bornstein | | 0 | | $0 | | 298,400 | | $7,062,368 |
| Comstock | | 0 | | $0 | | 203,200 | | $4,055,738 |
| Rice | | 0 | | $0 | | 27,000 | | $642,195 |
* | Subject to a one-year holding requirement post-exercise; dollar amount represents pre-tax value on exercise, not cash payment. |
** | Subject to stock ownership requirement; dollar amount represents pre-tax value on vesting, not cash payment. |
Equity Compensation Plan Information
The following table provides information regarding outstanding equity awards and shares available for future issuance under all of GE’s equity plans.
| (in millions, as of 12/31/2017) | | Shares to be Issued
Upon Exercise
or Settlement | | Weighted
Average
Exercise Price | | Shares
Available for
Future Issuance |
| Plans approved by shareowners | | | | | | |
| Options | | 398.4 | | $21.91 | | (a) |
| RSUs | | 17.2 | | (b) | | (a) |
| PSUs | | 1.1 | | (b) | | (a) |
| Plans not approved by shareowners | | | | | | |
| Options | | 0.1 | | $18.76 | | (c) |
| RSUs | | 0 | | (b) | | (c) |
| Other | | 0 | | (b) | | (d) |
| Total | | 416.9 | | $21.91 | | 365.4 |
(a) | Total shares available for future issuance under the 2007 Long-Term Incentive Plan (the 2007 LTIP) amounted to 358.7 million shares as of December 31, 2017. Of the 1,075 million shares approved under the 2007 LTIP, no more than 230 million may be available for awards granted in any form other than options or stock appreciation rights.
|
(b) | Not applicable.
|
(c) | Total shares available for future issuance under the GE Stock-Based Compensation and Incentive Plan for Consultants, Advisors and Independent Contractors (the Consultants’ Plan) amounted to 3.3 million shares at December 31, 2017.
|
(d) | The GE International Employee Stock Purchase Plan originally authorized 50 million shares for sale to eligible employees in 2002, and 3.4 million shares remained eligible for issuance under the plan as of December 31, 2017. Shareowners are being asked to approve an additional 50 million shares for issuance in Management Proposal No. 2.
|
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GE 2018 PROXY STATEMENT
Long-Term Performance Awards (LTPAs)We historically granted LTPAs once every three or more years. These awards had formulaically determined payouts, based on equally weighted performance metrics that the Compensation Committee sets at the beginning of each three-year performance period. Over the last five LTPA programs, the committee has largely used consistent performance metrics (earnings, cash generation and ROTC), modifying them only to realign them with changes in our strategic focus. LTPAs are paid in cash or, at the committee’s discretion, in stock, as they are for Mr. Flannery’s 2016–2018 LTPA award.
2016–2018 LTPAS.In March 2016, the Compensation Committee granted the named executives LTPAs for the 2016–2018 performance period. The awards are payable based on achievement of the performance metrics shown in the table below. Payout multiples for the 2016–2018 LTPAs were set at 0.50X, 1.00X, 2.00X at threshold, target and maximum performance. These payouts are based on final salary plus average bonus during the three years of the performance period. In 2017, the Compensation Committee decided to terminate the LTPA program following the conclusion of the current performance cycle, which ends in 2018.
| GE Goal | | Performance Metric1 | | Performance
Period | | Threshold | | Target5 | | Maximum | | Weight | |
| Attractive earnings profile | | Industrial Operating + Verticals EPS | | 2016–2018 | | $5.05 | | N.D. | | $5.55 | | 20% | |
| High cash flows | | Total cash generation2 | | 2016–2018 | | $70B | | N.D. | | $97B | | 20% | |
| Valuable portfolio | | Industrial Operating Profit Margin3 | | 2018 | | 15% | | N.D. | | 17% | | 20% | |
| Leading returns on capital compared to peers | | Industrial ROTC | | 2018 | | 16% | | N.D. | | 18% | | 20% | |
| Investor-focused capital allocation strategy | | Cash returned to investors4 | | 2016–2018 | | $55B | | N.D. | | $67B | | 20% | |
1 | Under the LTPA program, the Compensation Committee can adjust these metrics for extraordinary items. For information on how these metrics are calculated, see“Explanation of Non-GAAP Financial Measures and Performance Metrics” on page 52. |
2 | Includes GE CFOA (Industrial CFOA plus dividends from GE Capital) plus proceeds from Industrial dispositions (after taxes). |
3 | Includes Industrial segment profit plus adjusted Corporate operating costs (excludes non-operating pension costs, restructuring and other charges & gains). |
4 | Includes dividends plus share repurchases. |
5 | Target performance levels, which were pre-established by the Compensation Committee, are not disclosed (N.D.). Consistent with our historical practice, we will disclose them following completion of the 3-year performance period. |
HOW THE COMPENSATION COMMITTEE CALCULATES PAYOUTS.For each named executive, LTPA payouts are calculated as shown to the right (payout multiples for other participants start at significantly lower levels). There is no payout for performance below the threshold level, and amounts are prorated for performance between the established levels. An individual’s LTPA payment is made at the Compensation Committee’s discretion and the individual must generally remain employed at the end of the performance period to receive payment.
HOW THE PAYOUT STRUCTURE FOR OUR NAMED EXECUTIVES DIFFERS FROM THE STRUCTURE FOR OTHER EXECUTIVES.To enhance the transparency of the LTPA program and reinforce the impact of participants’ efforts over each year in the performance period, LTPAs are notionally credited to each named executive’s deferred compensation account in annual installments but not actually paid out until after the third year. (This installment structure does not apply to Mr. Flannery, Ms. Miller or Mr. Joyce for the 2016–2018 LTPAs, as none of them was a named executive when they were granted.)
The amount of each notional installment is calculated, following the end of each year in the performance period, by multiplying total cash compensation at the time by 30% of the projected total 3-year payout percentage (up to the target payout level for the first year). Following the third year, and subject to the Compensation Committee’s discretion, the named executives receive the amounts that were notionally credited, without interest, adjusted to reflect GE’s actual 3-year performance. The first- and second-year installments are reported as 2016 and 2017 compensation, respectively, in the LTPAs column in theSummary Compensation Table on page 37.
2016–2018 LTPA PAYOUT CALCULATION
Deferred Compensation
The company has offered both a deferred bonus program and, from time to time, a deferred salary program. These deferral programs are intended to promote retention by providing a long-term savings opportunity on a tax-efficient basis. Because the deferral programs are unfunded and deferred payments are satisfied from the company’s general assets, they provide an incentive for the company’s executives to minimize risks that could jeopardize the long-term financial health of the company.
Bonus Deferrals
ELIGIBILITY AND DEFERRAL OPTIONS.Employees in our executive band and above, including the named executives, can elect to defer all or a portion of their bonus payments into the deferral options shown below. Participants may change their election among these options four times per year.
TIME AND FORM OF PAYMENT.Participants can elect to receive their deferred compensation balance upon termination of employment either in a lump sum or in 10 to 20 annual installments.
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GE 2018 PROXY STATEMENT
Deferral Option | | Type of Earnings | | Account Balance for
Earnings Calculation | | Earnings Amount* | | When Earnings
Credited |
GE Stock Units
(based on GE stock value)
S&P 500 Index Units
(based on S&P 500)
| | Dividend-equivalent income | | Units in account on NYSE ex-dividend date | | Quarterly dividend declared for GE stock or the S&P 500, as applicable | | Quarterly |
Deferred Cash Units
(cash units) | | Interest income | | Daily outstanding account balance | | Prior calendar month’s average yield for U.S. Treasury Notes and Bonds issued with maturities of 10 years and 20 years | | Monthly |
* | None of the bonus deferral options provide for “above-market interest” as defined by the SEC. |
Salary Deferrals
ELIGIBILITY.We periodically offer eligible employees in our executive band and above the opportunity to defer their salary payments (the last such plan was offered in 2010 for 2011 salary). Individuals who are named executives at the time a deferred salary program is initiated are not eligible to participate.
INTEREST INCOME.These programs provide accrued interest on deferred amounts (including an above-market interest rate as defined by the SEC) ranging from 6% to 14% compounded annually.
TIME AND FORM OF PAYMENT.Our deferred salary programs have required participants to elect, before the salary was deferred, to receive deferred amounts either in a lump sum or in 10 to 20 annual installments.
The company makes all decisions regarding the measures for calculating interest or other earnings on deferred bonuses and salary. The named executives cannot withdraw any amounts from their deferred compensation balances until they either leave or retire from GE.
Deferred Compensation Table
The table below — also known as theNonqualified Deferred Compensation Table — shows amounts credited to the named executives’ accounts under nonqualified deferred compensation plans and plan balances as of December 31, 2017. For 2017, the company did not make any matching contributions into these plans. In addition, no withdrawals or distributions were made in 2017.
| | Executive
Contributions in
2017 | | Aggregate Earnings in 2017 | | Aggregate Balance at 12/31/17 |
| Name | | | Deferred Bonus Program | | Deferred Salary Program | | Deferred Bonus Program | | Deferred Salary Program |
| Flannery | | $0 | | $12,866 | | $179,037 | | $521,057 | | $1,643,161 |
| Miller | | $0 | | $0 | | $0 | | $0 | | $0 |
| Joyce | | $0 | | ($20,728) | | $0 | | $79,899 | | $0 |
| Immelt | | $0 | | ($1,304,289) | | $772,678 | | $2,216,191 | | $7,108,484 |
| Bornstein | | $0 | | ($75,950) | | $188,131 | | $101,807 | | $1,920,990 |
| Comstock | | $0 | | ($589,882) | | $79,770 | | $790,706 | | $881,851 |
| Rice | | $0 | | $2,702,916 | | $814,378 | | $23,140,124 | | $8,303,414 |
EXECUTIVE CONTRIBUTIONS IN 2017.Amounts represent compensation deferred during 2017. They do not include any amounts reported as part of 2017 compensation in theSummary Compensation Table on page 37, which were credited to the named executive’s deferred account, if any, in 2018.
AGGREGATE EARNINGS IN 2017.Reflects earnings on each type of deferred compensation listed in this section that were deposited into the named executive’s deferred compensation account during 2017. The earnings on deferred bonus payments may be positive or negative, depending on the named executive’s investment choice, and are calculated based on: (1) the total number of deferred units in the account multiplied by the GE stock or S&P 500 Index price as of December 29, 2017 (the last trading day of the year); minus (2) that amount as of December 30, 2016 (the last trading day of the year; minus (3) any named executive contributions during the year. The earnings on the deferred salary programs are calculated based on the total amount of interest earned. See theSummary Compensation
Table on page 37 for the above-market portion of those interest earnings in 2017.
AGGREGATE BALANCE AT 12/31/17.The fiscal year-end balances reported in the table above include the following amounts that were previously reported in the Summary Compensation Table as 2015 and 2016 compensation:
| Name | | Deferred
Bonus Program | | Deferred
Salary Program |
| Flannery | | $0 | | $0 |
| Miller | | $0 | | $0 |
| Joyce | | $0 | | $0 |
| Immelt | | $0 | | $412,216 |
| Bornstein | | $0 | | $110,204 |
| Comstock | | $0 | | $26,105 |
| Rice | | $0 | | $447,079 |
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GE 2018 PROXY STATEMENT
The company provides retirement benefits to the named executives under the same GE Pension Plan and GE Supplementary Pension Plan in which other eligible employees participate. The Pension Plan is a funded, tax-qualified plan. The Supplementary Pension Plan, which increases retirement benefits above amounts available under the Pension Plan, is an unfunded, unsecured obligation of the company and is not qualified for tax purposes. Because participants generally forfeit any benefits under this plan if they leave the company before age 60, we believe it is a strong retention tool that significantly reduces departures of high-performing executives and enhances the caliber of the company’s executive workforce. In addition, because the Supplementary Pension Plan is unfunded and benefit payments are satisfied from the company’s general assets, it provides an incentive for executives to minimize risks that could jeopardize the long-term financial health of GE.
GE Pension Plan
ELIGIBILITY AND VESTING. The GE Pension Plan is a broad-based retirement program that has been closed to new participants since 2012 (2011 for salaried new hires). Those employees who are eligible vest in the plan after five years of qualifying service. The plan also requires employee contributions, which vest immediately.
BENEFIT FORMULA.For the named executives, the plan provides benefits based primarily on a formula that takes into account their earnings for each fiscal year. Since 1989, this formula has provided an annual benefit accrual equal to 1.45% of a named executive’s earnings for the year up to covered compensation and 1.9% of his or her earnings for the year in excess of covered compensation. “Covered compensation” was $50,000 for 2017 and has varied over the years based in part on changes in the Social Security taxable wage base. For purposes of the formula, annual earnings include base salary and up to one-half of bonus payments, but may not exceed an IRS-prescribed limit applicable to tax-qualified plans ($270,000 for 2017). As a result, the maximum incremental annual benefit a named executive could have earned for service in 2017 was $4,905. Over the years, we have made special one-time adjustments to this plan that increased eligible participants’ pensions, but we did not make any such adjustment in 2017.
TIME AND FORM OF PAYMENT.The accumulated benefit an employee earns over his or her career is payable after retirement on a monthly basis for life with a guaranteed minimum benefit of five years. The normal retirement age as defined in this plan is 65; however, employees who began working at GE prior to 2005, including the named executives, may retire at age 60 without any reduction in benefits. In addition, the plan provides for Social Security supplements and spousal joint and survivor annuity options.
TAX CODE LIMITATIONS ON BENEFITS.The tax code limits the benefits payable under the GE Pension Plan. For 2017, the maximum single life annuity a named executive could have received under these limits was $215,000 per year. This ceiling is actuarially adjusted in accordance with IRS rules to reflect employee contributions, actual forms of distribution and actual retirement dates.
GE Supplementary Pension Plan
ELIGIBILITY.The GE Supplementary Pension Plan is an unfunded and non-tax-qualified retirement program that is offered to eligible employees in the executive band and above, including the named executives, to provide retirement benefits above amounts available under our other pension programs. The portion of the plan providing the benefits described below has been closed to new participants since 2011.
BENEFIT FORMULA.A named executive’s annual supplementary pension, when combined with certain amounts payable under the company’s other pension programs and Social Security, will equal 1.75% of his or her “earnings credited for retirement benefits” multiplied by the number of years of credited service, up to a maximum of 60% of such earnings credited for retirement benefits. The “earnings credited for retirement benefits” are the named executive’s average annual compensation (base salary and bonus) for the highest 36 consecutive months out of the last 120 months prior to retirement.
TIME AND FORM OF PAYMENT.Employees are generally not eligible for benefits under the Supplementary Pension Plan if they leave the company before age 60. The normal retirement age under this plan is 65; however, employees who began working at GE prior to 2005, including the named executives, may retire at age 60 without any reduction in benefits. The plan provides for spousal joint and survivor annuities for the named executives. Benefits under this plan would be available to the named executives only as monthly payments and could not be received in a lump sum.
GE Excess Benefits Plan
ELIGIBILITY.The GE Excess Benefits Plan is an unfunded and non-tax-qualified retirement program that is offered to employees whose benefits under the GE Pension Plan are limited by certain tax code provisions. There were no accruals for named executives under this plan in 2017, and the company expects only insignificant accruals, if any, under this plan in future years.
BENEFIT FORMULA.Benefits payable under this plan are equal to the amount that would be payable under the terms of the GE Pension Plan disregarding the limitations imposed by certain tax code provisions minus the amount actually payable under the GE Pension Plan taking those limitations into account.
TIME AND FORM OF PAYMENT.Benefits for the named executives are generally payable at the same time and in the same manner as their GE Pension Plan benefits.
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Pension Benefits Table
The table below shows the present value of the accumulated benefit at year-end for the named executives under each plan, as calculated based upon the assumptions described below. Although SEC rules require us to show this present value, the named executives are not entitled to receive these amounts in a lump sum. None of the named executives received a payment under these plans in 2017, except that Mr. Immelt began receiving payments under the GE Pension Plan in connection with his retirement from GE.
| | Number
of Years
Credited
Service | | Present Value of Accumulated Benefit | | |
| Name | | | Pension
Plan | | Supplementary
Pension
Plan | | Excess
Benefits
Plan | | Other
Payments | | Payments During
2017 |
| Flannery | | 31 | | $1,758,918 | | $21,887,926 | | $0 | | N/A | | $0 |
| Miller | | 12 | | $725,180 | | $4,929,776 | | $0 | | N/A | | $0 |
| Joyce | | 37 | | $2,209,926 | | $24,965,877 | | $481 | | N/A | | $0 |
| Immelt* | | 35 | | $1,919,930 | | $82,880,060 | | $1,896 | | N/A | | $270,611 |
| Bornstein** | | 28 | | $1,293,235 | | $22,541,919 | | $0 | | N/A | | $0 |
| Comstock*** | | 24 | | $1,540,815 | | $18,056,149 | | $0 | | $3,125,663 | | $0 |
| Rice | | 39 | | $2,355,604 | | $60,731,660 | | $0 | | N/A | | $0 |
* | Mr. Immelt took a one-time distribution of his employee contributions to the GE Pension Plan upon his retirement equal to $249,634, reflected in the table above in the column entitled “Payments During 2017.”
|
** | Pursuant to his separation agreement, Mr. Bornstein became vested in his accrued pension benefits and entitled to payment of pension benefits to begin as of December 1, 2025. The value of the payments is included in the above table in the column entitled “Supplementary Pension Plan” (see“Separation Agreement with Mr. Bornstein” on page 48).
|
*** | Pursuant to her retirement agreement, Ms. Comstock became vested in her accrued pension benefits and entitled to payment of pension benefits beginning January 1, 2018. The value of the post-age 60 payments is included in the above table in the column entitled “Supplementary Pension Plan.” The value of the pre-age 60 payments is reflected under “Other Payments” (see“Early Retirement Agreement with Ms. Comstock” on page 48).
|
PRESENT VALUE OF ACCUMULATED BENEFIT.The accumulated benefit is based on years of service and earnings (base salary and bonus, as described above) considered by the plans for the period through December 31, 2017. It also includes the value of contributions made by the named executives throughout their careers. For purposes of calculating the present value, we assume that all named executives who are not yet 60 (except for Ms. Comstock and Mr. Bornstein, who retired or left the company before age 60) will remain in service until age 60, the age at which they may retire without any reduction in benefits. We also assume that benefits are payable under the available
forms of annuity consistent with the assumptions described in the Postretirement Benefit Plans notes in GE’s financial statements in our 2017 annual report on Form 10-K, including the statutory discount rate assumption of 3.64%. The postretirement mortality assumption used for present value calculations is the RP-2014 mortality table, adjusted for GE’s experience and factoring in projected generational improvements. The present values for Messrs. Joyce, Immelt and Rice have been calculated based on their ages as of the end of 2017 (each of them was 61).
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Potential Termination Payments
In this section, we describe and quantify certain compensation that would have been payable under existing compensation plans and arrangements had a named executive’s employment terminated on December 31, 2017. For this hypothetical calculation, we have used each executive’s compensation and service levels as of this date (and, where applicable, GE’s closing stock price on December 29, 2017, the last trading day of the year). Since many factors (e.g., the time of year when the event occurs, GE’s stock price and the executive’s age) could affect the nature and amount of benefits a named executive could potentially receive, any amounts paid or distributed upon a future termination may be different from those shown in the tables below. The amounts shown are in addition to benefits generally available to salaried employees who joined the company before 2005, such as distributions under the Retirement Savings Plan, subsidized retiree medical benefits and disability benefits.
SEPARATION AGREEMENT WITH MR. BORNSTEIN.Mr. Bornstein left the company on December 31, 2017 after a 28-year career with GE. In connection with this, we entered into a separation agreement with Mr. Bornstein pursuant to which, subject to a 12-month non-compete: (1) he will receive up to 12 months of severance pay at his current salary rate (with payments during the first six months following his separation delayed in accordance with tax requirements); (2) he was eligible to receive his 2017 annual cash bonus (as reported in the Summary Compensation table) and a prorated 2016–2018 LTPA payment, in each case based upon GE’s actual performance in accordance with the company’s normal processes; (3) his 2017 grants of stock options and RSUs were cancelled, along with those stock options and RSUs granted prior to 2017 for which vesting was not accelerated (as described below); (4) his outstanding stock options granted prior to 2017 and that would have normally vested during the next two years vested (to the extent not already vested) in December 2017 and have up to a two-year post-separation exercise period; (5) his outstanding RSUs that were granted prior to 2017 and that would have normally vested during the next two years vested in December 2017; (6) his outstanding PSUs that were granted before 2017 remained eligible to vest based on actual GE performance; and (7) his accrued benefits under the Supplementary Pension Plan vested, with benefits beginning at age 60 and he may receive the equivalent of up to an additional year of service under the plan to the extent he does not begin other employment during the year following his separation.
EARLY RETIREMENT AGREEMENT WITH MS. COMSTOCK.Ms. Comstock retired on December 31, 2017 after a 24-year career with GE. In connection with this, we entered into an early retirement agreement with Ms. Comstock pursuant to which, subject to a 12-month non-compete: (1) she was eligible to receive a 2017 annual cash bonus and a prorated 2016–2018 LTPA payment based upon GE’s actual performance, each in accordance with GE’s normal processes; (2) her 2017 grants of stock options, RSUs and PSUs were cancelled, along with those RSUs granted prior to 2017 for which vesting was not accelerated (as described below); (3) her outstanding stock options granted prior to 2017 vested (to the extent not already vested) in December 2017 and have up to a three-year post-retirement exercise period; (4) her outstanding RSUs granted prior to 2017 and that would have normally vested during the next three years vested in December 2017; (5) her outstanding PSUs that were granted before 2017 will remain eligible to vest based on actual GE performance; (6) her accrued benefits under the Supplementary Pension Plan vested, with benefits beginning at age 60; and (7) she will receive an early retirement allowance, payable monthly, from her retirement through age 60 (and, for certain amounts through age 64).
Our Policies on Post-Termination Payments
GENERALLY NO EMPLOYMENT OR INDIVIDUAL SEVERANCE AGREEMENTS.Our current named executives serve at the will of the Board and do not have individual employment, severance or change-of-control agreements. This preserves the Compensation Committee’s flexibility to set the terms of any employment termination based on the particular facts and circumstances.
SHAREOWNER APPROVAL OF SEVERANCE AND DEATH BENEFITS.If the Board were to agree to pay certain severance benefits or unearned death benefits to a named executive, we would seek shareowner approval. For severance benefits, this policy applies only when the executive’s employment had been terminated before retirement for performance reasons and the value of the proposed severance benefits exceeded 2.99 times the sum of his or her base salary and bonus. See the Board’s Governance Principles (see“Helpful Resources” on page 73) for the full policies.
Equity Awards
The following table shows the intrinsic value of equity awards that would have vested or become exercisable if the named executive had died, become disabled, retired or separated from the company as of December 31, 2017. Intrinsic value is based upon the company’s stock price (minus the exercise price in the case of stock options). Amounts shown assume the achievement of all applicable performance objectives.
| POTENTIAL TERMINATION PAYMENTS TABLE (EQUITY BENEFITS) |
| | Upon Death | | Upon Disability | | Upon Retirement | | Upon Separation |
| Name | | Options | | RSUs/PSUs | | Options | | RSUs/PSUs | | Options | | RSUs/PSUs | | Options | | RSUs/PSUs |
| Flannery | | $0 | | $1,842,022 | | $0 | | $691,020 | | $0 | | $0 | | N/A | | N/A |
| Miller | | $0 | | $3,569,572 | | $0 | | $593,300 | | $0 | | $0 | | N/A | | N/A |
| Joyce | | $0 | | $3,945,794 | | $0 | | $0 | | $0 | | $316,194 | | N/A | | N/A |
| Immelt | | N/A | | N/A | | N/A | | N/A | | $0 | | $15,129,150 | | N/A | | N/A |
| Bornstein | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | $0 | | $1,460,914 |
| Comstock | | N/A | | N/A | | N/A | | N/A | | $0 | | $2,655,192 | | N/A | | N/A |
| Rice | | $0 | | $4,519,759 | | $0 | | $0 | | $0 | | $4,031,159 | | N/A | | N/A |
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DEATH/DISABILITY.Unvested options would vest and remain exercisable until their expiration date. In the case of disability, this applies only to options that have been held for at least one year.Unvested RSUs would become fully vested in some cases, depending on the award terms. PSUs would be earned, subject to the achievement of the performance objectives. For these purposes, “disability” generally means the executive being unable to perform his or her job. Messrs. Immelt and Bornstein and Ms. Comstock each were ineligible for equity benefits upon death or disability as of the last day of the year because they had each retired or left the company as of that date.
RETIREMENT.Unvested options or RSUs held for at least one year would become fully vested and would remain exercisable until their expiration date. This treatment applies to the named executives either becoming retirement-eligible (reaching the applicable retirement age) or retiring at age 60 or thereafter, depending on the award terms, and provided the award holder has at least five years of service with GE. Messrs. Immelt, Joyce and Rice had reached the applicable retirement age as of December 31, 2017, and Ms. Comstock qualified for early retirement benefits.
SEPARATION.The amounts shown above reflect the intrinsic value of Mr. Bornstein’s options, RSUs and PSUs that vested or became exercisable pursuant to the terms of his separation agreement (see“Separation Agreement with Mr. Bornstein” on page 48). None of the other named executive officers were entitled to any potential payments upon separation from the company.
Pension Benefits
“Pension Benefits” on page 46 describes the general terms of each pension plan in which the named executives participate, the years of credited service and the present value of their accumulated pension benefit (assuming payment begins at age 60 or, for those named executives age 60 or above, January 1, 2018). The table below shows the pension benefits that would have become payable if the named executives had died, become disabled, voluntarily terminated or retired as of December 31, 2017.
In the event of death before retirement,the named executive’s surviving spouse may receive the following pension benefits:
— | GE Pension Plan and GE Excess Benefits Plan. Either an annuity, as if the named executive had retired and elected the spousal 50% joint and survivor annuity option prior to death, or an immediate lump-sum payment based on five years of pension distributions, in each case based upon the accrued benefits under these plans.
|
— | GE Supplementary Pension Plan.A lump-sum payment based on whichever of the following has a higher value: (1) the 50% survivor annuity that the spouse would have received under this plan if the named executive had retired and elected the spousal 50% joint and survivor annuity option prior to death, or (2) five years of pension distributions under this plan.
|
The amounts payable depend on several factors, including employee contributions and the ages of the named executive and surviving spouse.
In the event a disability occurs before retirement,the named executive may receive an annuity payment of accrued pension benefits, payable immediately.
| POTENTIAL TERMINATION PAYMENTS TABLE (PENSION BENEFITS) |
| Name | | Lump Sum
upon Death | | Annual Annuity
upon Death | | Annual Annuity
upon Disability | | Annual Annuity upon
Voluntary Termination | | Annual Annuity
upon Retirement |
| Flannery | | $12,434,723 | | $60,262 | | $1,534,721 | | $111,718 | | N/A |
| Miller | | N/A | | $231,194 | | N/A | | $58,240 | | N/A |
| Joyce | | $11,739,684 | | $69,068 | | N/A | | N/A | | $1,577,800 |
| Immelt* | | N/A | | N/A | | N/A | | N/A | | N/A |
| Bornstein** | | N/A | | $887,399 | | N/A | | N/A | | N/A |
| Comstock | | N/A | | $608,341 | | N/A | | N/A | | $1,294,343 |
| Rice | | $33,673,426 | | $72,608 | | N/A | | N/A | | $3,920,240 |
* | Mr. Immelt retired from the company on October 2, 2017. As of December 31, 2017, his annual annuity payable as a 50% joint and survivor annuity would be $4,989,703.
|
** | Mr. Bornstein left the company on December 31, 2017. Pursuant to his separation agreement, the annual annuity payable as a 50% joint and survivor annuity following his 60th birthday would be $1,781,974.
|
LUMP SUM UPON DEATH.Lump sum payable to the surviving spouse. A lump sum is not available to the surviving spouse of Ms. Miller because she is not yet age 50. A lump sum is not available to the surviving spouses of Mr. Immelt, Mr. Bornstein or Ms. Comstock because they each retired or left the company (see “Annual Annuity Upon Death” below).
ANNUAL ANNUITY UPON DEATH.Annuity payable for the life of the surviving spouse. Because he has retired, Mr. Immelt’s surviving spouse would receive a benefit under the 50% joint and survivor annuity he has elected as part of his annual annuity upon retirement. In accordance with her early retirement agreement, in the event of Ms. Comstock’s death, her surviving spouse would receive payments based on the 50% joint and survivor annuity option under the pension plans. In accordance with his separation agreement, in the event of Mr. Bornstein’s death prior to age 60, his surviving spouse would receive payments following his 60th birthday based on the 50% joint and survivor annuity option under the pension plans.
ANNUAL ANNUITY UPON DISABILITY. 50% joint and survivor annuity payable to each executive. Because they either retired or were retirement-eligible as of December 31, 2017, Messrs. Joyce, Immelt and Rice and Ms. Comstock would receive retirement benefits instead of disability benefits. Because Mr. Bornstein left the company and entered into a separation agreement, he would not be eligible for disability pension payments. Ms. Miller would not be eligible for disability benefits because she does not yet have 15 years of service.
ANNUAL ANNUITY UPON VOLUNTARY TERMINATION.50% joint and survivor annuity payable to each executive at age 60; this does not include any payments under the GE Supplementary Pension Plan because they are forfeited upon voluntary termination before age 60. Because they have either retired or are retirement-eligible, the benefits for Messrs. Joyce, Immelt and Rice and Ms. Comstock are shown under Annual Annuity Upon Retirement (or in the table notes).
ANNUAL ANNUITY UPON RETIREMENT.50% joint and survivor annuity.
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Deferred Compensation
The named executives are entitled to receive the amount in their deferred compensation accounts if their employment terminates. Between the termination event and the date that distributions are made, these accounts would continue to increase or decrease in value based on changes in the value of GE Stock Units or S&P 500 Index Units, and to accrue interest income or dividend payments, as applicable. Therefore, amounts received by the named executives would differ from those shown in theDeferred Compensation Table on page 45. See“Deferred Compensation” on page 44 for information on the available distribution types under each deferral plan.
Life Insurance Benefits
For a description of the supplemental life insurance plans that provide coverage to the named executives, see“Life Insurance Premiums” on page 38. If the named executives had died on December 31, 2017, the survivors of the named executives would have received the following under these arrangements.
| | |
Name | | Death Benefit |
Flannery | | $10,871,292 |
Miller | | $8,205,119 |
Joyce | | $10,045,056 |
Immelt | | $22,027,246 |
Bornstein | | $12,109,588 |
Comstock | | $10,465,583 |
Rice | | $17,558,908 |
The company would continue to pay the premiums in the event of a disability until the policy is fully funded.
Other Executive Compensation Practices & Policies
Roles and Responsibilities
in Succession Planning
and Compensation
COMPENSATION COMMITTEE.The committee has primary responsibility for helping the Board develop and evaluate potential candidates for executive positions and for overseeing the development of executive succession plans. As part of this responsibility, the committee oversees the compensation program for the CEO and the other named executives.
MANAGEMENT.Our CEO and our chief human resources officer help the committee administer our executive compensation program. The chief human resources officer also advises the committee on matters such as past compensation, total annual compensation, potential accrued benefits, GE compensation practices and guidelines, company performance, industry compensation practices and competitive market information.
How We Establish Performance
Goals and Evaluate Performance
ESTABLISHING PERFORMANCE GOALS. At the beginning of each year, our CEO develops the objectives that he believes should be achieved for the company to be successful. He then reviews these objectives with the Compensation Committee for the corollary purpose of establishing how the committee will assess his and the other named executives’ performance, including forming the basis for the performance metrics and strategic goals included in the annual bonus plan. These objectives are derived largely from the company’s annual financial and strategic planning sessions, during which the Board and management conduct in-depth reviews of the company’s growth opportunities and establish goals for the upcoming year. The objectives include quantitative financial measurements as well as qualitative strategic, risk and operational considerations, and are focused on those factors that our CEO and the committee believe create long-term shareowner value.
EVALUATING PERFORMANCE.The CEO leads the assessment of each named executive’s individual performance against the objectives established for that executive, the company’s overall performance
and the performance of the executive’s business or function, and makes an initial compensation recommendation to the Compensation Committee for each executive. In doing so, he solicits the input of, and receives advice and data from, our chief human resources officer. The CEO also reviews and discusses preliminary considerations as to his own compensation with the committee, but does not participate in the final determination of his compensation. The named executives also play no role in their compensation determinations, other than discussing with the CEO their individual performance against predetermined objectives.
Our Policies on Compensation
Consultants and Peer Group
Comparisons
STRATEGIC USE OF COMPENSATION CONSULTANTS.From time to time, the Compensation Committee and the company’s human resources function have sought the views of Frederic W. Cook & Co., Inc. (Frederic Cook) about market intelligence on compensation trends and on particular compensation programs designed by our human resources function. For 2017, the Compensation Committee and the company’s human resources function consulted with Frederic Cook on market practices relating to senior executive compensation, and Frederic Cook provided advice with respect to the redesign of our executive compensation programs for 2018. All of these services were obtained under hourly fee arrangements rather than through a standing engagement.
COMPENSATION CONSULTANT INDEPENDENCE POLICY.Any compensation consultant that advises the Board on executive or director compensation will not at the same time advise the company on any other human resources matter, and the committee has determined that Frederic Cook’s work with the committee and the company’s human resources function does not raise any conflict of interest.
LIMITED USE OF PEER GROUP COMPARISONS.The Compensation Committee considers executive compensation at the other Dow 30 companies as just one among several factors in setting pay. It does not target a percentile within this group and instead uses the comparative data merely as a reference point in exercising its judgment about compensation types and amounts.
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Clawbacks and Other Remedies
for Potential Misconduct
CLAWBACKS.The Board may seek reimbursement from an executive officer if it determines that the officer engaged in conduct that was detrimental to the company and resulted in a material inaccuracy in either our financial statements or in performance metrics that affected the officer’s compensation. If the Board determines that the officer engaged in fraudulent misconduct, it must seek such reimbursement. For more information, see the Board’s Governance Principles (see“Helpful Resources” on page 73).
OTHER REMEDIES.In cases of detrimental misconduct by an executive officer, the Board may also take a range of other actions to remedy the misconduct, prevent its recurrence, and discipline the individual as appropriate, including terminating the individual’s employment. These remedies would be in addition to, and not in lieu of, any actions imposed by law enforcement agencies, regulators or other authorities.
Share Ownership and Equity
Grant Policies
SHARE OWNERSHIP REQUIREMENTS.We require our named executives to own significant amounts of GE stock as shown below. The required amounts are set at multiples of base salary. All named executives are in compliance with our stock ownership requirements. For details on these requirements, see the Governance Principles (see“Helpful Resources” on page 73). The named executives’ ownership is shown in theCommon Stock & Total Stock-Based Holdings Table on page 25.
STOCK OWNERSHIP REQUIREMENTS |
(multiples of base salary) |
10X
for CEO | 5X
for vice chairs | 4X
for senior vice presidents |
HOLDING PERIOD REQUIREMENTS.Our executive officers must also hold for at least one year any net shares of GE stock they receive through stock option exercises, and beginning with 2018 grants, shares received from any PSUs.
NO HEDGING.We believe our executive officers and directors should not speculate or hedge their interests in our stock. We therefore prohibit them from entering into any derivative transactions in GE stock, including any short sale, forward, equity swap, option or collar that is based on GE’s stock price.
NO PLEDGING.We prohibit executive officers and directors from pledging GE stock.
NO OPTION BACKDATING OR SPRING-LOADING.The exercise price of each stock option is the closing price of GE stock on the grant date (the date of the Compensation Committee meeting at which equity awards are determined). Board and committee meetings are generally scheduled at least a year in advance and without regard to major company announcements.
NO OPTION REPRICING. We prohibit the repricing of stock options. This includes amending outstanding options to lower their exercise price, substituting new awards with a lower exercise price or executing a cash buyout.
NO UNEARNED DIVIDEND EQUIVALENTS.PSUs, as well as RSUs granted to executive officers after 2013, do not pay dividend equivalents on shares that are not yet owned. Instead, dividend equivalents are accrued during the vesting or performance period and paid out only on shares actually received. For more information, see the Governance Principles (see“Helpful Resources” on page 73).
Tax Deductibility of Compensation
The Internal Revenue Code generally imposes a $1 million limit on the amount that a public company may deduct for compensation paid to the company’s applicable named executives. This limitation generally did not apply to compensation that met the tax code requirements for “qualifying performance-based” compensation. Historically, we designed annual cash bonus payments as well as long-term cash and equity incentives to satisfy the requirements for deductible compensation (but we reserved the right to pay compensation that does not qualify as deductible) by establishing a performance goal (positive net earnings, adjusted to remove the impact under GAAP of unusual events) and the maximum amounts that could be granted to the executive officers (expressed as a percentage of adjusted net earnings). On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was enacted, which, among other things, repealed the “qualifying performance-based” compensation exception described in this paragraph. Following enactment of the Tax Act, we generally expect that compensation paid to our applicable named executives in excess of $1 million will not be deductible, subject to an exception for compensation provided pursuant to a binding written contract in effect as of November 2, 2017.
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Explanation of Non-GAAP Financial
Measures and Performance Metrics
Information on how GE calculates the following metrics (presented on pages 5, 30, 33 and 43-44).
— | Industrial operating + Verticals EPS, |
— | Industrial operating margin, |
— | Industrial return on total capital (ROTC), |
— | Industrial segment organic revenue growth, |
— | Industrial operating profit, |
— | Industrial structural cost, |
— | Operating cash flow, and |
— | Total cash generation, |
is disclosed in the supplemental materials on GE’s proxy website (see“Helpful Resources” on page 73) and in the “Supplemental Information” section of GE’s annual report on Form 10-K for 2017. Information on how GE calculates the funding metrics for the annual bonus program as well as the performance metrics for the 2016–2018 LTPA program, 2015–2017 PSUs and 2016–2018 PSUs is also disclosed in the supplemental materials on GE’s proxy website.
Caution Concerning
Forward-Looking Statements
This document contains “forward-looking statements” — that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain. For details on the uncertainties that may cause our actual future results to be materially different than those expressed in our forward-looking statements, see the Forward-Looking Statements Information page on our Investor Relations website (see“Helpful Resources” on page 73) as well as our annual reports on Form 10-K and quarterly reports on Form 10-Q. We do not undertake to update our forward-looking statements. This document also includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.
Compensation Committee Report
The Compensation Committee has reviewed the compensation discussion and analysis (pages 27 through 52, which, pursuant to SEC rules, does not include the“CEO Pay Ratio” discussion below) and discussed that analysis with management. Based on its review and discussions with management, the committee recommended to the Board that the compensation discussion and analysis be included in the company’s annual report on Form 10-K for 2017 and this proxy statement. This report is provided by the following independent directors, who comprise the committee:
| |
John J. Brennan (Chairman) | Andrea Jung |
Marijn E. Dekkers | Rochelle B. Lazarus |
Edward P. Garden | James E. Rohr |
CEO Pay Ratio
RATIO OF CEO PAY TO MEDIAN EMPLOYEE PAY. Our median employee earned $57,211 in total compensation for 2017. Based upon the total 2017 compensation reported for Mr. Flannery of $9,000,603, as reported under “SEC Total” in theSummary Compensation Table on page 37, our ratio of CEO to median employee pay was 157 to 1. Our median employee is employed in Germany in our Healthcare business.
HOW WE IDENTIFIED THE MEDIAN EMPLOYEE.To identify the median GE employee, we identified our total employee population as of December 31, 2017, and, in accordance with SEC rules, excluded the CEO, employees from acquisitions during the year* and employees from certain countries representing in aggregate less than 5% of our employee base,** to arrive at the median employee consideration pool. We then used annualized salary data to narrow this pool to those employees between the 48th and 52nd percentiles. Once we identified this narrowed pool, we used actual salary and incentive compensation paid for the prior 12 months to determine the median employee. We then calculated the median employee’s total compensation in accordance with SEC rules to use as the basis for the pay ratio. Foreign exchange rates were translated to the U.S. dollar equivalent based on rates as of December 31, 2017. We compared the median employee’s compensation to Mr. Flannery as he was our CEO on the sample date.
* | We excluded employees from the following acquisitions: Baker Hughes (29,149), Doosan HRSG (306), Electric Insurance Company (453), GEONX S.A. (11), LM Wind Power (9,807), Monica Healthcare (15), Novia Strategies (25), Nurego, Inc. (23), Asymptote (11), ServiceMax (434), IQP (8), Critical Technologies (23), OC Robotics (18), Solano Labs, Inc (7), and Puridify Ltd (17) for a total of 40,307 employees. |
** | These countries and their headcounts as of the sample date were: Albania (9), Algeria (605), Angola (291), Azerbaijan (40), Bahrain (89), Bangladesh (57), Belgium (639), Bermuda (3), Brunei Darussalam (7), Bulgaria (20), Cambodia (5), Cameroon (6), Chad (38), Chile (311), Colombia (398), Congo (3), Costa Rica (3), Cote d’Ivoire (51), Croatia (737), Czech Republic (863), Denmark (124), Dominican Republic (4), Ecuador (60), Egypt (700), Equatorial Guinea (10), Estonia (339), Ethiopia (17), Georgia (2), Ghana (83), Greece (160), Guatemala (5), Hong Kong (154), Iraq (137), Israel (641), Jamaica (3), Jordan (31), Kazakhstan (232), Kenya (211), Kuwait (225), Lao People’s Democratic Republic (2), Latvia (10), Lebanon (48), Libya (31), Lithuania (67), Luxembourg (25), Malawi (2), Malta (4), Mauritius (4), Mongolia (2), Montenegro (7), Morocco (108), Mozambique (44), Myanmar (12), Nepal (3), Netherlands (839), New Zealand (86), Nigeria (459), Oman (206), Pakistan (172), Panama (36), Papua New Guinea (20), Peru (125), Philippines (98), Portugal (386), Qatar (377), Senegal (3), Serbia (22), Slovakia (152), Slovenia (3), South Africa (889), Sri Lanka (157), Tajikistan (12), Tanzania (5), Thailand (576), Trinidad and Tobago (22), Tunisia (86), Turkmenistan (11), Uganda (2), Ukraine (12), Uruguay (1), Uzbekistan (2), Venezuela (166), Vietnam (753), Yemen (3) and Zambia (15), for a total of 13,378 employees. As of December 31, 2017, using the methodology required by the rule governing this disclosure, GE had approximately 101,200 U.S. employees and approximately 187,800 employees in other countries, for a total of approximately 289,000 employees globally factored into the sample before the country exclusions listed above. |
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GE 2018 PROXY STATEMENT
The compensation program for independent directors is designed to achieve the following goals:
—● | Fairly pay directorsfor the work required at a company of GE’s size and scope; scope, as benchmarked against our peer group; |
—● | Align directors’ interestswith the long-term interests of GE shareowners;shareholders; and |
—● | Be simple, transparent and easyfor shareownersshareholders to understand. |
Annual Compensation
OVERVIEW.Our independent directors receive annual compensation as shown in the table below. There are no additional meeting fees. The lead director and members of our Board committees receive additional compensation due to the workload and broad responsibilities of these positions.
| All independent directors | $ | 275,000 |
| Lead director | $ | 50,000 |
| Audit Committee members | $ | 35,000 |
| Management Development & Compensation Committee members | $ | 25,000 |
| Governance & Public Affairs Committee members | $ | 10,000 |
All independent directors● | | $275,000 | | —Form of payment.40% in cash &and 60% in awards of deferred stock units (DSUs); directors can elect to defer some or all of the cash portion inand instead receive additional DSUs
—
|
| ● | Time of payment.Quarterly installments — in arrears
|
| ● | Multiple committees.If a director serves on more than one committee, the additional compensation applies separately for each committee —
|
| ● | Limit on director compensation.$1,500,0001,000,000 annually, including cash & equity but excluding amounts awarded under the Charitable Award Program (which has been closed to new directors) |
Lead director | | $50,000 | |
Audit Committee members | | $35,000 | |
Finance & Capital Allocation
Committee members* | | $30,000 | |
Management Development &
Compensation Committee members | | $25,000 | |
Governance & Public Affairs
Committee members | | $10,000 | |
Technology & Industrial Risk
Committee members** | | $10,000 | |
* This committee was established in December 2017.
** This committee will be eliminated after the 2018 annual meeting.
| | | | |
HOW DEFERRED STOCK UNITS WORKWORK. . Each DSU is equal in value to a share of GE stock and is fully vested upon grant but does not have voting rights. To calculate the number of DSUs to be granted, we divide the target value of the DSUs by the average closing price of GE stock for the 20 days preceding and including the grant date.
DSUs accumulate quarterly dividend-equivalent payments, which are reinvested into additional DSUs. The DSUs are paid out in cash beginning one year after the director leaves the Board. Directors may elect to take their DSU payments as a lump sum or in payments spread out for up to 10 years.
OUR PATH
FORWARD | | TREATMENT OF DEFERRED STOCK UNITS IN CONNECTION WITH THE GE HEALTHCARE SPIN-OFF. |
| In the GE HealthCare spin-off, each current or former director of GE (including individuals who are now serving as directors of GE HealthCare and no longer serving as directors of GE) that held outstanding DSUs denominated in GE stock as of the GE HealthCare spin-off retained his or her GE-denominated DSUs and received additional DSUs from GE denominated in shares of GE HealthCare common stock based on the shareholder distribution ratio utilized for the GE HealthCare spin-off. As this treatment is consistent with the manner in which GE shareholders received GE HealthCare shares in the spin-off, it promotes alignment with GE shareholders for directors through the execution of our planned business separations. |
OTHER COMPENSATION.Our independent directors may also receive the following benefits:
—● | Matching Gifts Program.Independent directors may participate in the GE Foundation’sFoundations Matching Gifts Program on the same terms as GE employees. Under this program, the GE Foundation matchedmatches for each participant up to $25,000$5,000 for 2017annual contributions to approved charitable organizations. Beginning in 2018, the Matching Gifts Program will be limited to $5,000. |
—● | Charitable Award Program.Each director who joined the Board before 2016 may, upon leaving the Board, designate up to five |
| charitable organizations to share in a $1 million GE contribution. Directors may not choose a private foundation with which they are affiliated. The Board terminated this program for new directors in 2015. |
—● | Lighting Program.Independent directors are eligible to receive GE light bulbs from the company.
|
— | Incidental Board Meeting Expenses.The company occasionally provides travel and sponsors activities for spouses or other guests of the directors in connection with Board meetings. No such expenses were incurred during 2022. |
No Additional Director Compensation
Independent directors do not receive any cash incentive compensation, hold deferred compensation balances (other than DSUs) or receive pension benefits. Since 2003, DSUs have been the only equity incentive compensation awarded to the independent
directors; we ceased granting stock options to directors in 2002, and no independent director had stock options outstanding as of the most recent fiscal year-end. Directors who are company employees do not receive any compensation for their services as directors.
Share Ownership Requirements for Independent Directors
STOCK OWNERSHIP REQUIREMENTS
(MULTIPLES OF ANNUAL CASH RETAINER) 5Xfor independent directors |
ChangesAll independent directors are required to Director Compensation
The Governance Committee reviewshold at least $550,000 (which is five times the cash portion of their annual retainer, or $110,000) worth of GE stock and/or DSUs while serving as GE directors. A director compensation annually, assisted periodically by an independent compensation consultant. In 2017, the Governance Committee reviewed its director compensation program and determined not to make any changes, other than to recommend the payment of an annual fee of $30,000 for members of the newly formed Finance Committee, whichhas five years from joining the Board approvedto meet this ownership threshold. All directors are in light of the committee’s anticipated responsibilities and workload.compliance with this requirement.
GE 2023 PROXY STATEMENT 5323
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GE 2018 PROXY STATEMENT
Director Compensation Table
This table shows the compensation that each independent director earned for his or her 20172022 Board and committee service. Amounts reflect partial-year Board service for Mr. Lane, who retired from the Board in October 2017, and for Dr. Lavizzo-Mourey and Mr. Garden, who joined the Board in April 2017 and October 2017, respectively. Mr. McAdam retired from the Board in December 2017 following the last scheduled Board meeting for the year and his compensation was not prorated. Mr. Garden has advised us that, pursuant to his arrangement with Trian, he transfers to Trian, or holds for the benefit of Trian and/or Trian Entities,entities, all director compensation paid to him.
| Name of Director | | Cash Fees | | Stock Awards | | Matching Gifts | | Other Benefits | | Total |
| Sébastien M. Bazin | | $0 | | $309,726 | | $0 | | $0 | | $309,726 |
| W. Geoffrey Beattie | | $0 | | $306,017 | | $22,811 | | $0 | | $328,828 |
| John J. Brennan | | $0 | | $355,374 | | $25,000 | | $0 | | $380,374 |
| Francisco D’Souza | | $0 | | $290,105 | | $0 | | $0 | | $290,105 |
| Marijn E. Dekkers | | $0 | | $306,017 | | $25,000 | | $0 | | $331,017 |
| Edward P. Garden | | $32,500 | | $48,219 | | $0 | | $0 | | $80,719 |
| Peter B. Henry | | $0 | | $299,755 | | $8,000 | | $0 | | $307,755 |
| Susan J. Hockfield | | $118,000 | | $174,726 | | $14,000 | | $0 | | $306,726 |
| Andrea Jung | | $124,000 | | $183,610 | | $25,000 | | $0 | | $332,610 |
| Robert W. Lane | | $90,000 | | $133,177 | | $0 | | $1,000,000 | | $1,223,177 |
| Risa Lavizzo-Mourey | | $35,625 | | $140,411 | | $0 | | $0 | | $176,036 |
| Rochelle B. Lazarus | | $0 | | $306,017 | | $25,000 | | $0 | | $331,017 |
| Lowell C. McAdam | | $0 | | $281,338 | | $0 | | $0 | | $281,338 |
| Steven M. Mollenkopf | | $0 | | $278,833 | | $0 | | $0 | | $278,833 |
| James J. Mulva | | $0 | | $319,598 | | $25,000 | | $0 | | $344,598 |
| James E. Rohr | | $135,500 | | $200,643 | | $25,000 | | $0 | | $361,143 |
| Mary L. Schapiro | | $24,800 | | $281,536 | | $4,500 | | $961 | | $311,797 |
| James S. Tisch | | $0 | | $285,047 | | $0 | | $0 | | $285,047 |
| NAME OF DIRECTOR | | CASH FEES | | | STOCK AWARDS | | | MATCHING GIFTS | | | TOTAL | |
| Stephen Angel | | $ | 7,639 | | | $ | 219,545 | | | $ | 0 | | | $ | 227,184 | |
| Sébastien Bazin | | $ | 0 | | | $ | 296,667 | | | $ | 0 | | | $ | 296,667 | |
| Ashton Carter* | | $ | 101,087 | | | $ | 143,055 | | | $ | 0 | | | $ | 244,142 | |
| Francisco D’Souza | | $ | 0 | | | $ | 320,591 | | | $ | 0 | | | $ | 320,591 | |
| Edward Garden | | $ | 120,000 | | | $ | 172,258 | | | $ | 0 | | | $ | 292,258 | |
| Isabella Goren | | $ | 97,716 | | | $ | 139,368 | | | $ | 5,000 | | | $ | 242,084 | |
| Thomas Horton | | $ | 141,500 | | | $ | 202,897 | | | $ | 0 | | | $ | 344,397 | |
| Risa Lavizzo-Mourey | | $ | 114,000 | | | $ | 163,645 | | | $ | 5,000 | | | $ | 282,645 | |
| Catherine Lesjak | | $ | 128,000 | | | $ | 183,742 | | | $ | 0 | | | $ | 311,742 | |
| Tomislav Mihaljevic | | $ | 81,643 | | | $ | 116,115 | | | $ | 0 | | | $ | 197,758 | |
| Paula Rosput Reynolds | | $ | 100,500 | | | $ | 224,414 | | | $ | 0 | | | $ | 324,914 | |
| Leslie Seidman | | $ | 124,000 | | | $ | 178,000 | | | $ | 5,000 | | | $ | 307,000 | |
| James Tisch* | | $ | 0 | | | $ | 94,046 | | | $ | 0 | | | $ | 94,046 | |
| |
| * | Mr. Carter passed away on October 24, 2022, and Mr. Tisch did not stand for re-election at our 2022 Annual Meeting. The amounts reported for these former directors represent compensation earned for their 2022 service as directors. |
CASH FEES.Amount of cash compensation earned in 20172022 for Board and committee service.
STOCK AWARDS.Aggregate grant date fair value of DSUs granted in 2017,2022, as calculated in accordance with SEC rules, including amounts that the directors deferred into DSUs in lieu of all or a part of their cash compensation. Grant date fair value is calculated by multiplying the number of DSUs granted by the closing price of GE stock on the grant date (or the last trading day prior to the grant date), which was $29.80$91.50 for March 31, 20172022 grants, $27.01$63.67 for June 30, 20172022 grants, $24.18$61.91 for September 30, 20172022 grants, and $17.45$83.79 for December 31, 20172022 grants. The table below shows the cash amounts that the directors deferred into DSUs in 20172022 and the number of DSUs accrued as of 20172022 fiscal year-end.
| Director | | Cash Deferred into
DSUs in 2017 | | # DSUs Outstanding
at 2017 Fiscal Year-End |
| Bazin | | $125,500 | | 19,619 |
| Beattie | | $124,000 | | 131,525 |
| Brennan | | $144,000 | | 76,797 |
| D’Souza | | $117,500 | | 54,306 |
| Dekkers | | $124,000 | | 46,418 |
| Garden | | $0 | | 2,763 |
| Henry | | $121,500 | | 17,590 |
| Hockfield | | $0 | | 92,446 |
| Jung | | $0 | | 153,313 |
| Lane | | $0 | | 147,934 |
| Lavizzo-Mourey | | $35,625 | | 6,598 |
| Lazarus | | $124,000 | | 223,950 |
| McAdam | | $114,000 | | 17,829 |
| Mollenkopf | | $113,000 | | 13,013 |
| Mulva | | $129,500 | | 151,839 |
| Rohr | | $0 | | 32,162 |
| Schapiro | | $99,200 | | 42,105 |
| Tisch | | $115,500 | | 90,773 |
| DIRECTOR | | CASH DEFERRED
INTO DSUs IN 2022 | | | # DSUs ACCRUED
AT 2022 FISCAL
YEAR-END* | |
| Stephen Angel | | $ | 87,912 | | | 3,138 | |
| Sébastien Bazin | | $ | 124,000 | | | 22,285 | |
| Ashton Carter | | $ | 0 | | | 5,658 | |
| Francisco D’Souza | | $ | 134,000 | | | 27,977 | |
| Edward Garden | | $ | 0 | | | 12,078 | |
| Isabella Goren | | $ | 0 | | | 1,976 | |
| Thomas Horton | | $ | 0 | | | 13,144 | |
| Risa Lavizzo-Mourey | | $ | 0 | | | 13,252 | |
| Catherine Lesjak | | $ | 0 | | | 9,575 | |
| Tomislav Mihaljevic | | $ | 0 | | | 1,678 | |
| Paula Rosput Reynolds | | $ | 33,500 | | | 11,665 | |
| Leslie Seidman | | $ | 0 | | | 15,573 | |
| James Tisch | | $ | 38,835 | | | 27,938 | |
| |
| * | Amounts do not take into account the treatment of outstanding DSUs in 2023 in connection with the GE HealthCare spin-off. See Treatment of Deferred Stock Units in Connection with the GE HealthCare Spin-Off on page 23 for additional details. |
MATCHING GIFTS.24Under the terms of the Matching Gifts Program, contributions made within a calendar year are eligible to be matched if they are reported to GE by April 15 of the following year. Amounts shown in this column reflect all contributions reported to the company in 2017, including 2016 contributions reported to GE by April 2017 and excluding any 2017 contributions that were not reported until 2018; $7,350 of the amounts reported for Dr. Hockfield relate to gifts made in 2016 that were reported after April 2017.
OTHER BENEFITS.This column includes: (1) the fair market value of products received under the Lighting Program; and (2) a $1,000,000 contribution under our legacy Charitable Award Program to a non-profit educational institution designated by Mr. Lane upon his retirement.
No Additional Director Compensation
Independent directors do not receive any cash incentive compensation, hold deferred compensation balances or receive pension benefits. Since 2003, DSUs have been the only equity incentive compensation awarded to the independent directors; we ceased granting stock options to directors in 2002, and no independent director had stock options outstanding at 2017 fiscal year-end. Directors who are company employees do not receive any compensation for their services as directors.
Share Ownership Requirements for Independent Directors
All independent directors are required to hold at least $550,000 (5 times the cash portion of their annual retainer) worth of GE stock and/or DSUs while serving as GE directors. They have five years to meet this ownership threshold. All directors are in compliance with this requirement.
Director and Officer (D&O) Insurance
GE provides liability insurance for its directors and officers. The annual cost of this coverage is approximately $7.5 million.
542023 PROXY STATEMENT
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Stock Ownership Information
Beneficial Ownership Table
The following table shows beneficial ownership of our common stock as calculated under SEC rules, as of December 31, 2022, for (i) our directors and nominees, (ii) our named executives, (iii) our current directors and executives as a group, and (iv) beneficial owners of more than 5% of our common stock. Except to the extent noted below, everyone included in the table has sole voting and investment power over the shares reported. None of the shares are pledged as security by the named person, although standard brokerage accounts may include non-negotiable provisions regarding set-offs or similar rights. This table does not take into account the treatment of outstanding equity in 2023 as a result of the GE 2018HealthCare spin-off. See Treatment of Outstanding Equity Awards with GE HealthCare Spin-Off on page 38 for additional details.
| DIRECTORS & NOMINEES | | | NUMBER OF
SHARES | | | | PERCENT OF
CLASS | |
| Stephen Angel | | | 11,098 | * | | | ** | |
| Sébastien Bazin | | | 0 | * | | | ** | |
| Francisco D’Souza | | | 18,937 | * | | | ** | |
| Edward Garden | | | 4,016,414 | * | | | ** | |
| Isabella Goren | | | 0 | * | | | ** | |
| Thomas Horton | | | 6,906 | * | | | ** | |
| Catherine Lesjak | | | 0 | * | | | ** | |
| Darren McDew | | | 0 | | | | ** | |
| Paula Rosput Reynolds | | | 6,100 | * | | | ** | |
| Leslie Seidman | | | 1,812 | * | | | ** | |
| Jessica Uhl | | | 0 | | | | ** | |
| Total | | | 4,061,267 | | | | ** | |
| | | | | | | | | |
| NAMED EXECUTIVES | | | | | | | | |
| H. Lawrence Culp, Jr. | | | 1,955,661 | | | | ** | |
| Carolina Dybeck Happe | | | 52,362 | | | | ** | |
| Peter Arduini | | | 0 | | | | ** | |
| John Slattery | | | 101,414 | | | | ** | |
| Russell Stokes | | | 292,185 | | | | ** | |
| Total | | | 2,401,622 | | | | ** | |
| | | | | | | | | |
| CURRENT DIRECTORS & EXECUTIVES | | | | | | | | |
| Current directors & executives as a group (18 people) | | | 7,263,141 | | | | ** | |
| | | | | | | | | |
| 5% BENEFICIAL OWNERS | | | | | | | | |
| Capital Research Group Global Investors, 333 S. Hope St., 55th Fl., Los Angeles, CA 90071 | | | 102,093,162 | | | | 9.4 | % |
| The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355 | | | 86,785,547 | | | | 8.0 | % |
| BlackRock, Inc., 55 East 52nd Street, New York, NY 10055 | | | 67,872,032 | | | | 6.2 | % |
| Fidelity Management & Research, 245 Summer Street, Boston, MA 02210 | | | 60,332,310 | | | | 5.5 | % |
| Total | | | 317,083,051 | | | | 29.1 | % |
| * | Our independent directors receive quarterly installments of deferred stock units (DSUs), which are not paid out until one year after the director leaves the Board, and therefore are not included in this table. See Director Compensation Table on page 24 for the number of DSUs each director has accrued. |
| ** | Less than 1%. No director or named executive owns more than one-tenth of 1% of the total outstanding shares of GE common stock, other than Mr. Garden, who may be deemed to indirectly beneficially own 0.4% of our outstanding shares as a result of his affiliation with Trian and Mr. Culp, who has sole voting but not investment power over 0.2% of our outstanding shares. |
For the directors, nominees & named executives, the table includes (1) shares that may be acquired under stock options that are or will become exercisable within 60 days: Dybeck Happe (43,678), Slattery (88,193) and Stokes (242,072), (2) RSUs that will vest in 60 days: Dybeck Happe (5,257), Slattery (6,308) and Stokes (3,680), and (3) shares over which the named individual has shared voting and investment power through family trusts or other accounts: Angel (5,960), Culp (212,783), Garden (4,016,414)(1), Horton (6,903), Reynolds (537). For Mr. Culp, this column also includes 1,742,878 performance shares over which he has sole voting but no investment power.
For our current directors & executives as a group, the table includes (1) 1,033,579 shares that may be acquired under stock options that are or will become exercisable within 60 days, (2) 28,914 RSUs that will vest in 60 days, (3) 4,272,040 shares over which there is shared voting and investment power, and (4) 1,742,878 shares over which there is sole voting power but no investment power.
| (1) | For Mr. Garden, the table includes 4,016,414 shares owned Trian SPV (Sub) X, L.P (Trian SPV X). Trian, an institutional investment manager, serves as the management company for Trian SPV X and as such determines the investment and voting decisions of Trian SPV X with respect to the shares of the company held by Trian SPV X. None of such shares are held directly by Mr. Garden. Mr. Garden is a member of Trian Fund Management GP, LLC, which is the general partner of Trian, and therefore is in a position to determine the investment and voting decisions made by Trian on behalf of Trian SPV X. Accordingly, Mr. Garden may be deemed to indirectly beneficially own (as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act)) the shares owned by Trian SPV X. Mr. Garden disclaims beneficial ownership of such shares for all other purposes. |
For our 5% beneficial owners, the table includes:
| (# OF SHARES) | | CAPITAL
RESEARCH | | VANGUARD | | BLACKROCK | | FIDELITY |
Sole voting
power | | 102,084,780 | | 0 | | 60,539,451 | | 51,806,970 |
Shared voting
power | | 0 | | 1,460,923 | | 0 | | 0 |
Sole investment
power | | 102,093,162 | | 82,472,260 | | 67,872,032 | | 60,332,310 |
Shared
investment
power | | 0 | | 4,313,287 | | 0 | | 0 |
The foregoing information is based solely on Schedule 13G filed by Capital Research Global Investors on February 13, 2023, and Schedules 13G/A filed by Vanguard, BlackRock and Fidelity on February 9, 2023, February 7, 2023, and February 9, 2023, respectively.
GE 2023 PROXY STATEMENT25
Table of Contents
MANAGEMENT
PROPOSAL NO. 2 Advisory Approval of Our Named Executives’ Compensation What are you voting on? Pursuant to Section 14A of the Exchange Act, we are asking shareholders to approve on a non-binding basis the compensation paid to our named executives, as described in this proxy statement. We currently hold say-on-pay votes annually, and we expect to hold the next such vote at our 2024 Annual Meeting. See Management Proposal No. 23. 
Your Board recommends a vote FOR the say-on-pay proposal
APPROVAL OF THE GE INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
|
We are asking shareowners to approve the Amended Plan, which permits employees located outside the US to purchase a limited amount of GE stock through payroll deductions and receive a 15% match by GE, further aligning them with our shareowners.
Why the Board recommends a vote FOR the Amended Plan.say-on-pay proposal. The purposesBoard believes that our compensation policies and practices are effective in achieving the goals of the plan are to:compensation program, and that our actions have been responsive to shareholder feedback related to last year’s say-on-pay vote. –
| | Compensation EncourageTo Our Shareholders,eligible salaried employees outside
This period of GE’s historic transformation into three industry-leading, independent public companies has been a particularly exciting and dynamic time for us as members of the US to acquire an ownership interest in GE and participateManagement Development & Compensation Committee. It has placed us in the growthmidst of the recruitment, development and placement of key talent for the planned future companies, while we also seek, as always, to properly incentivize and reward execution and performance aligned with the company’s strategic and business plans. We thank the many shareholders who have taken the time to meet and provide feedback on compensation matters over the past year. In addition to successfully separating GE HealthCare with a spin-off in January 2023, GE managed through a challenging external environment to finish 2022 strong. The Aerospace, Power and HealthCare businesses performed well, and the company delivered revenue growth, margin expansion and better cash generation. However, challenges at the Renewable Energy business in particular, alongside macroeconomic headwinds, contributed to results for Renewable Energy that fell well below our targets and adversely affected total company performance for the year as well. We have heard the support from shareholders for a formulaic approach to annual bonuses, and for 2022 the committee again applied no discretion in approving the results for our named executives under our annual bonus plan. We also certified zero payout for the 2020 and 2022 grants of GE; –Generateperformance stock units (PSUs) because they did not meet the minimum threshold performance targets.We have made a number of enhancements to our compensation program design during the past year to continue driving accountability and performance aligned with shareholders’ interests. In particular, during our engagements about say-on-pay and executive compensation matters during the past year, we discussed long-term incentive design with nearly all shareholders that we met with. While not an increased incentivearea of significant concern for many shareholders, the feedback centered on two areas of our prior PSU design: (i) the use of one-year financial targets with a three-year relative TSR modifier for the performance period; and (ii) the use of free cash flow as a metric for both PSUs and annual bonuses. As described more fully on page 27 and throughout the CD&A, we have adopted a new design for the PSUs granted in March 2023, averaging together three one-year performance periods to contributeprovide a longer time horizon for the specific financial targets. Most shareholders we met with agreed this would be an appropriate response to their concerns, particularly given GE’s business separations and the challenges with setting multi-year financial targets during this ongoing transitional period. Similarly, we heard a range of feedback about metrics that might be considered for our compensation programs, with many investors acknowledging the importance of free cash flow as a measure of GE performance that excludes non-cash items and supporting the continued use of that metric across our compensation program design. Most shareholders also appreciated that the planned separations into three independent companies will enable further tailoring and refinement of performance metrics in the future success and prosperity, thus enhancing the valuefor each of the company; and –Enhancethree companies at the abilitydirection of their compensation committees.With the benefit of the insightful shareholder questions and feedback about these and other executive compensation topics, we have also enhanced this year’s proxy disclosure to provide additional explanation about our compensation design choices, and also to provide a look toward the future state following the planned separations. We hope shareholders will find the disclosure enhancements about our spin-off related actions and plans helpful for analyzing 2022 compensation decisions, as well as showing the path ahead. We appreciate the feedback from shareholders on all of these topics, and we hope to have your support on this year’s say-on-pay vote. We thank you for your support of GE. |
| | | | | | | | | | |
| | Management Development & Compensation Committee | | |
| |  | |  | |  | |  | | |
| | STEPHEN ANGEL
(Chair) | | SÉBASTIEN
BAZIN | | FRANCISCO
D’SOUZA | | EDWARD
GARDEN | | |
| | | | | | | | | | |
| | | | | | | | | | |
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Shareholder Engagement on Executive Compensation
We value the ongoing feedback that we receive from our shareholders on executive compensation matters, including the feedback reflected in our annual say-on-pay votes. With support for say-on-pay of 66% in 2022, the committee has continued to prioritize seeking shareholders’ perspectives about specific areas of concern and potential improvements.
During the past year, we met with shareholders representing approximately 53% of our outstanding common stock and approximately 74% of our common stock held by institutional investors. We offered many of our large institutional investors the opportunity to meet with independent directors as part of these meetings, and directors led and participated in meetings as guided by shareholders’ preferences. Our engagements also included representatives from our Legal, Human Resources and Investor Relations teams.
The shareholder feedback we received and reviewed with the committee represents a range of views from different shareholders. It was clear that a majority of investors were supportive of our actions and commitments in response to the 2021 say-on-pay vote that did not receive majority support, and that many shareholders were supportive of our compensation program and actions as reflected in the improvement in voting results from 2021 to 2022. We strive to continuously improve our compensation program to drive strong alignment with company performance and with our shareholders’ expectations. The following table provides an overview of three main themes related to executive compensation that shareholders raised following the 2022 say-on-pay vote, and actions the committee is taking in response.
| | | | | | | | | |
| What We Heard | | | | | How We are Responding | |
| TOPIC | FEEDBACK | | | | | ACTIONS | | |
| No changes to predetermined performance targets | Shareholders were supportive of the formulaic approach to 2021 annual bonuses for our named executives, and of the absence of changes to performance targets for previously issued equity awards. Shareholders expressed a desire for the company to continue keeping named executives’ compensation aligned with predetermined performance targets, and to clearly explain any future use of discretion to depart from those targets. | |  | Again for 2022, annual bonuses for our named executives were formulaic and based only on the predetermined performance targets for our businesses. The committee also certified zero payout for the 2020 and 2022 PSU awards; for four of the past five years, annual PSU awards have received zero payout because they did not meet the minimum threshold performance targets. See How we Performed Against Annual Bonus Targets for 2022 on page 33 and How Our PSU Awards Performed Against Targets on page 37 for more information. | |
| PSU design | We discussed long-term incentive design with nearly all shareholders that we met with. While not an area of significant concern for many investors, the feedback centered on two areas of the 2021 PSU design: ● For some investors, the use of a one-year financial targets with a three-year relative TSR modifier for the performance period. While many investors expressed a general preference for multi-year financial targets in long-term incentive design, most also acknowledged the practical difficulties of GE using such targets during the transitional period in advance of the planned spin-offs. ● To a lesser extent, concern about the use of free cash flow as a metric for both PSUs and annual bonuses. However, most investors stated that the committee is best suited to choose the proper metrics for incentive programs. Many investors acknowledged the importance of free cash flow as a measure of GE performance. | | | We modified the design of our PSUs to address the primary area of concern in this feedback. Grants of PSUs in 2023 will measure performance based on the average of three consecutive one-year periods with predetermined financial targets set each year, and modified based on three-year relative TSR.* The committee believes this approach is responsive to shareholder feedback and appropriate during the transitional period for the company today. After completion of the planned business separations, GE (which will be GE Aerospace at that time) plans to develop long-term incentive awards that include multi-year financial targets. See Shareholder Feedback on Our PSU Design and Plans to Use Longer Performance Periods Following Spin-Off on page 36 for more information. To provide greater clarity on the committee’s choices about specific performance metrics and targets, we added additional disclosure in the Compensation Discussion & Analysis section. See How We Selected Metrics for the 2022 AEIP, How We Selected Targets for the 2022 AEIP, and How We Selected Metrics and Targets for the 2022 PSUs on pages 32-36. | |
| Disclosure | With the scope of GE’s operations across diverse industries, and with the company in a significant period of transition working toward the planned separation into three independent companies, we sought shareholders’ feedback on how our proxy disclosure could be improved. We received many helpful suggestions, and one overarching area of shareholder interest was to hear about how executive compensation is evolving through the planned separation into three independent companies. | | | We have included a variety of proxy disclosure enhancements informed by the various shareholder feedback. Those include highlighted sections detailing key progress, actions and expectations related to the spin-offs (see the “Our Path Forward” call-out boxes), as well as a redesigned Compensation Discussion & Analysis section and new disclosure about the choice of metrics and targets in the compensation program. | |
| |
| * | Grants of PSUs in 2022 had already been made at the time of last year’s proxy filing, and the 2022 PSUs have the same design as the 2021 PSUs; however, the 2022 PSUs have been cancelled and will have no payout. |
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Compensation Discussion & Analysis
This Compensation Discussion & Analysis section provides a description of actions taken by the Management Development & Compensation Committee (the committee) with respect to GE’s executive compensation philosophy, and programs and more specifically, discusses the process in determining the 2022 compensation for our named executive officers (named executives or NEOs) who were determined in accordance with SEC rules.
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| Section | | | | | Begins on Page... | | |
| Overview of Our Executive Compensation Program ● Compensation philosophy ● Key compensation program elements ● Peer group | | |  | 29 | | |
| Key Elements of Compensation for Our Named Executives ● Target compensation structure ● Base salaries ● Annual Executive Incentive Plan ● Long-term incentive compensation ● Plans to use longer performance periods following spin-off | | | | 30 | | |
| Compensation Actions for 2022 ● Compensation decisions for our CEO ● Compensation decisions for our other named executives | | | | 39 | | |
| Summary Compensation ● Summary Compensation Table | | | | 42 | | |
| Incentive Compensation ● Grants of Plan-Based Awards Table ● Outstanding Equity Awards Table ● Options Exercised and Stock Vested Table ● Equity Compensation Plan Information Table | | | | 44 | | |
| Deferred Compensation ● Description of nonqualified deferred compensation plans ● Nonqualified Deferred Compensation Table | | | | 47 | | |
| Pension Benefits ● Description of pension plans ● Pension Benefits Table | | | | 49 | | |
| Potential Termination Payments ● Description of employment agreements, offer letters & severance plan ● Policy on shareholder approval of severance & death benefits ● Potential Benefits Upon Termination or Change of Control Tables | | | | 51 | | |
| Other Executive Compensation Policies & Practices ● Roles and responsibilities ● Use of compensation consultants ● Clawback policy ● Compensation risk assessment ● Stock ownership & equity grant policies | | | | 56 | | |
| Management Development & Compensation Committee Report ● Report by the committee | | | | 57 | | |
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Overview of Our Executive Compensation Program
Compensation Philosophy
The table below describes the key factors the committee considers when designing pay programs and making compensation decisions.
| OBJECTIVE | HOW OUR COMPENSATION PROGRAM SUPPORTS THIS PHILOSOPHY |
Drive
Accountability
and Performance | ● Our incentive programs are designed to drive accountability for executing our strategy. ● Annual bonuses are tied to business unit performance for business unit executives or to total company performance for corporate executives; annual equity awards for all executives are based on overall company performance. ● We set target performance levels that are challenging and aligned to the goals we communicate to investors. ● We set commensurately more challenging goals in association with above-target payout levels. |
Incentivize
Short- and
Long-Term
Performance | ● Our program provides an appropriate mix of compensation elements balancing short-term and long-term considerations. ● Cash payments reward achievement of short-term goals while equity awards encourage our named executives to deliver sustained strong results over multi-year performance periods. ● The committee continues to increase the portion of our executive compensation delivered in the form of long-term equity incentive compensation, rather than cash, to further align our executives with investors’ interests. |
Attract and
Retain Top Talent | ● We provide competitive compensation programs that attract and retain talented executives with a strong track record of success, assuring a high performing and stable leadership team to lead our businesses. ● We continue to monitor market trends and align compensation programs with market where relevant. |
No Excessive
Risk Taking | ● Our equity awards have specific holding and retention requirements for senior executives, which discourage excessive risk taking by keeping long-term compensation aligned with our share price performance even after it is earned. ● The committee retains discretion to adjust compensation for quality of performance and lack of adherence to company values, and in cases of detrimental misconduct pursuant to our clawback policy. |
Key Compensation Program Elements
The table below sets forth the key components of our executive compensation program framework.
| Fixed | Performance-Based / At-Risk |
| Short-Term Incentive | Long-Term Equity-Based Incentive (generally 3-year vesting) |
| Component | SALARY | ANNUAL BONUS | PERFORMANCE STOCK UNITS (PSUs) | OPTIONS | RESTRICTED STOCK UNITS (RSUs) |
| Link to Shareholder Value | Provide base pay level aligned with roles, responsibilities and individual performance to attract and retain qualified individuals upon whomtop talent | Deliver on annual investor framework Serves as key compensation vehicle for differentiating performance each year | Focus executives on the sustained progress, growthachievement of specific financial performance goals directly aligned with our operating and profitabilitystrategic plans, and with a TSR modifier based on three-year return from stock price appreciation and dividends PSU awards provide a significant stake in the long-term financial success of GE depend. Failure to obtain shareowner approval of the Amended Plan may limit GE’s ability to achieve these important objectives.that is aligned with shareholder interests and promote employee retention
| Reward stock price performance over time | Provide for long-term employee retention |
 | YOUR BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE GE INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN | | | | |
Overview of the GE International Employee Stock Purchase Plan
The Board of Directors has approved, subject to approval by GE shareowners, the GE International Employee Stock Purchase Plan, as amended and restated (the Amended Plan). The Amended Plan amends and restates the GE International Employee Stock Purchase Plan, which was initially approved by the Board in 2002 (the Existing Plan) to offer 50 million shares. The Amended Plan increases the share authorization by an additional 50 million shares.
2023 PROXY STATEMENT Background and Rationale29
The Amended Plan is a broad-based plan for our employees located outside the United States to purchase GE common stock through payroll deductions and to receive a matching contribution from GE equal to 15% of the shares purchased. Within the United States, employees are generally eligible to participate in the GE Retirement Savings Plan (a 401(k) plan), which provides a company matching contribution and offers the ability to invest in a GE stock fund if a participant chooses to do so.
WHY AMEND THE PLAN NOW.The Existing Plan authorized the issuance of 50 million shares. As of December 31, 2017, 3.4 million GE shares remained available for purchase out of this share authorization. Based upon historical levels of participation and GE’s stock price, we expect to run out of shares under the Existing Plan in late 2018, which is why we are seeking shareowner approval of the Amended Plan at the 2018 annual meeting. This is the first time we are seeking shareowner approval for our employee stock purchase plan as the Existing Plan was adopted prior to the NYSE’s shareowner approval rules becoming effective in 2003, and this is the first time the plan is being materially amended.
HOW LONG WE EXPECT THE NEW SHARE AUTHORIZATION TO LAST.Based upon historical levels of participation in the Existing Plan and assumptions about GE’s stock price, we expect the additional 50 million shares will be sufficient to cover purchases under the Amended Plan for at least the next ten years.
DILUTION UNDER THE PLAN.The proposed additional 50 million shares that we are seeking shareowner approval for represents potential dilution of approximately 0.57%, based on GE’s 8.7 billion shares outstanding as of December 31, 2017. Together with the 3.4 million shares remaining available for purchase under the Existing Plan as of that date, the potential dilution is approximately 0.61%. In 2017, the dilution attributable to the Existing Plan (based on shares purchased under the plan during the year) was 0.03%. The Board of Directors believes that these dilution levels are reasonable, particularly in light of the proceeds the company receives under the program from participant contributions (for example, GE received proceeds of $44.4 million in 2017).
THE PLAN IS BROAD-BASED.In 2017, approximately 21,400 employees globally participated in the plan, purchasing 2.9 million shares. This included 68 employees at the senior executive band level or above, who purchased 38,270 shares. Directors and executive officers are not eligible to participate in the plan.
Summary of the Amended Plan
The following summary describes the material terms of the Amended Plan. This summary is qualified in its entirety by reference to the terms of the Amended Plan, a copy of which is attached as Appendix A to this proxy statement.
PURPOSE.The purpose of the Amended Plan is to provide employees with an opportunity to purchase GE common stock. The Amended Plan is not intended to qualify as an “employee stock purchase plan” under the Internal Revenue Code of 1986.
ADMINISTRATION.The Amended Plan is administered by a committee composed of senior management (the Plan Committee) designated by the Board of Directors. The Amended Plan provides the Plan Committee with the authority to promulgate any rules or regulations that it deems necessary for the proper administration of the plan; interpret plan provisions, adjudicate claims, resolve ambiguities and supervise the day-to-day administration of the plan; make factual determinations relevant to plan administration; adopt sub-plans or rules or procedures applicable to specified participating companies or locations; and take all action in connection with administering the plan as it deems necessary or advisable consistent with the delegation from the Board of Directors.
SHARES.If this proposal is approved by shareowners, an additional 50 million shares of authorized common stock will be reserved for issuance under the Amended Plan. Shares available for issuance pursuant to the Amended Plan may be sourced from shares purchased in the open market, treasury shares or authorized and unissued shares. The closing price for GE’s common stock, $0.06 par value, on March 9, 2018, was $14.94 per share, as reported on the NYSE.
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Peer Group and Benchmarking DETERMINING OUR PEER GROUP. Since 2019, the committee has used a peer group for compensation benchmarking purposes. Based on the criteria set forth below, the committee reviews the peer group each year. In determining the peer group, the committee considered the following factors: ●Industry – companies operating in similar or comparable industry spaces and with comparable operational scope ●Size – companies that are comparable to GE in terms of revenues, market capitalization and number of employees ●Investment Peers – U.S. public companies whose performance is monitored regularly by the same market analysts who monitor GE | | 2022 PEER COMPANIES |
| 3M | Honeywell |
| Abbott Laboratories | HP |
| Boeing | IBM |
| Caterpillar | Intel |
| Chevron | Johnson Controls |
| Cisco | Johnson & Johnson |
| Deere | Lockheed Martin |
| DuPont | Medtronic |
| Exxon Mobil | Northrup Grumman |
| Ford | Raytheon |
| General Dynamics | Technologies |
| General Motors | United Parcel Service |
| | | |
HOW WE USE THE PEER GROUP. The committee uses the peer group to assess the pay level of our executives, pay mix, compensation program design and pay practices. The peer group is also used as a reference point when assessing individual pay, although compensation decisions are also supplemented by input from the company’s independent compensation consultant and are impacted by principles of internal equity, retention considerations, succession planning and other internal GE dynamics.
| OUR PATH FORWARD | | CHANGES TO THE 2023 PEER GROUP. In 2022, Exxon and Chevron were removed from the peer group for 2023 because their size and market capitalization are no longer comparable to GE. The committee also approved the removal of healthcare industry peers Abbott Laboratories, Johnson & Johnson and Medtronic from the peer group for 2023 to reflect the spin-off of GE HealthCare. |
Key Elements of Compensation for Our Named Executives
This section provides an overview of the elements of GE’s executive compensation program for our 2022 named executives, who were determined in accordance with SEC rules: Mr. Culp, Ms. Dybeck Happe, Mr. Arduini, Mr. Slattery and Mr. Stokes. See Compensation Actions for 2022 on page 39 for specific details about the compensation for each of these named executives.
Target Compensation Structure for Our CEO and Other Named Executives
GE’s executive compensation program is designed to strengthen the link between pay and performance by having a significant portion of total executive compensation tied to the achievement of predetermined performance targets directly related to our business goals and strategies. Our pay mix is as follows:
 | | |
| CEO TARGET COMPENSATION | | AVERAGE 2022 TARGET COMPENSATION FOR OTHER NEOs |
 | |  |
Mr. Culp’s target compensation as depicted above includes an annual equity grant of performance stock units with a grant date fair value of $15 million, in accordance with his employment agreement. As previously reported, in 2022 Mr. Culp received a PSU award with a grant date fair value of $5 million. The average target compensation for other NEOs depicted above is based on year-end salary and target short- and long-term incentive awards for 2022.
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ELIGIBILITY.Base SalariesEmployees located outside
The table below shows the United States (approximately 200,000annual base salaries as of December 31, 2017), including seniorJanuary 1, 2022, for our named executives set by the committee, which were determined based on the scope of GEtheir responsibilities, their leadership skills and certainvalues, and their performance and length of its foreign subsidiaries,service. There were no changes to the annual base salaries of any of our named executives from their 2021 levels.
| 2022 NAMED EXECUTIVES | 2022 BASE SALARY |
| H. Lawrence Culp, Jr., Chairman and Chief Executive Officer, GE and Chief Executive Officer, GE Aerospace | | $ | 2,500,000 |
| Carolina Dybeck Happe, Senior Vice President and Chief Financial Officer, GE | | $ | 1,500,000 |
| Peter Arduini, President and Chief Executive Officer, GE HealthCare* | | $ | 1,250,000 |
| John Slattery, Executive Vice President and Chief Commercial Officer, GE Aerospace | | $ | 1,250,000 |
| Russell Stokes, President and Chief Executive Officer, Commercial Engines and Services, GE Aerospace | | $ | 1,400,000 |
| * | Following the spin-off of GE HealthCare on January 3, 2023 that separated GE HealthCare Technologies Inc. from GE, Mr. Arduini is no longer employed by GE. |
Annual Executive Incentive Plan
We provide annual cash incentive opportunities to our named executives under GE’s Annual Executive Incentive Plan (AEIP). The financial performance metrics and targets for awards under the AEIP are designed to drive company and business unit performance, based on our financial and operational priorities.
How We Determined 2022 AEIP Bonuses for Our Named Executives
All employees at the executive-band level and above within GE are eligible to participate in the AmendedAEIP. Individual bonuses are based on an employee’s employment within Corporate or a business unit. For our named executives, individual target award percentages are typically set between 100-150% of base salary, based on their respective position and alignment with peer compensation practices.
Each year, the committee evaluates and sets AEIP performance metrics and targets for Corporate (based on total company performance) and business units during the first quarter of the performance year. Following the conclusion of the performance year, the committee assesses total company and business unit performance against applicable performance metrics for the performance year to determine the AEIP bonus payouts. The CEO may also provide perspective to the committee about business or individual performance for the year, although the CEO has no role in the committee’s determination of his own compensation.
For 2022, bonuses under the AEIP paid to our named executives were determined quantitively based on the named executive’s base salary, target award percentage, achievement of applicable total company or business unit financial performance targets and a safety modifier. While the committee has the ability under the AEIP to apply discretion at the business or individual levels when appropriate, no discretion was used in determining the 2022 bonuses for our named executives.
| | | NAMED EXECUTIVE 2022 BONUS DETERMINATIONS | | | |
| | | | | |
| | | | | | | | | | |
| BASE SALARY |  | TARGET AWARD PERCENTAGE | | FINANCIAL PERFORMANCE |  | SAFETY
MODIFIER (+/-10%) | |
| | | | | | | | | | |
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How We Selected Metrics for the 2022 AEIP
The committee selects performance metrics for the AEIP that are aligned with furthering the company’s and business units’ goals for the year. For 2022, as in recent years, the selected financial metrics were based upon total company results for our Corporate named executives, and upon business unit results for named executives who lead individual businesses. The metrics for the 2022 AEIP and their respective weightings for Corporate and business unit named executives, are listed below.
2022 AEIP PERFORMANCE METRICS AND WEIGHTING
| | | ORGANIC REVENUE
GROWTH* | | PROFIT | | ORGANIC MARGIN
EXPANSION* | | FREE CASH
FLOW* | | SAFETY MODIFIER |
| Corporate | | 25% | | 25%** | | 25% | | 25% | | +/- 10% |
| Aerospace | | 25% | | 25% | | 25% | | 25% | | +/- 10% |
| HealthCare | | 50% | | 12.5% | | 12.5% | | 25% | | +/- 10% |
| Renewable Energy | | | | 50% | | | | 50% | | +/- 10% |
| Power | | | | 50% | | | | 50% | | +/- 10% |
| * | Non-GAAP Financial Measure. For information on how these metrics are calculated, see Explanation of Non-GAAP Financial Measures and Performance Metrics on page 75. |
| ** | For Corporate, we used total company adjusted profit, a non-GAAP Financial Measure. |
The committee selected these metrics to incentivize strong performance across key drivers of long-term value creation, and also to reflect how the business units are managed. In 2022, the committee introduced profit as an AEIP metric for business-unit employees and adjusted profit as an AEIP metric for Corporate employees to incentivize profitable growth as we transition to three independent companies. The selection of metrics, the determination of the business units to which they applied, and the relative weighting of each, were a function of the unique context for the company and each business unit.
The committee selected these metrics to incentivize performance in a manner consistent with how management measures and reports the company’s operating results. Accordingly, the AEIP uses the same non-GAAP financial measures that management uses to report the company’s financial results each quarter and when providing an annual financial outlook for the year. The committee believes the use of these measures in compensation program design is appropriate and promotes consistency with metrics that many investors use to evaluate the company’s financial performance. See page 75 for additional discussion on the reasons we use these non-GAAP financial measures and how these measures are calculated.
In addition, to further align the AEIP with GE’s overarching operational priority of safety, the committee selected a performance modifier that can increase or decrease awards by up to 10% based on achievement of defined safety metrics. Safety performance is determined based on an assessment of Corporate (based on total company) and business unit performance against the following safety metrics relative to targets set at the beginning of the performance year: injury and illness rates; serious incidents; fatalities; and overall safety culture and progress since the prior year. Targets for each business are established to achieve year-over-year improvements across the aforementioned safety metrics, recognizing the differences in the nature of the working environments and safety risk profiles across our businesses.
For the 2023 AEIP the committee selected the following financial performance metrics: free cash flow (40% weighting), organic revenue growth (20% weighting), and profit or adjusted profit (as applicable) (40% weighting) for each of Corporate (based on total company) and the business units. The committee believes this further simplified set of financial metrics will focus management on driving performance aligned with shareholders’ interests and will better align with peers. The committee also maintained the safety modifier to increase or decrease the award by up to 10%.
How We Selected Targets for the 2022 AEIP
The committee establishes targets and performance levels which are designed to be rigorous but realistic and informed by our annual financial performance goals and external guidance.
The target, threshold and maximum performance levels for each performance measure are set with reference to annual budgets for the total company and business units that our CEO, CFO and business unit CEOs establish, and the committee approves the performance levels for compensation purposes. Failure to achieve threshold on any one metric would result in no payout for that metric; and failure to achieve threshold on all metrics would result in no payout for the AEIP bonus. Awards are also subject to a 10% safety modifier. For the 2022 AEIP, named executives could receive between 0% and 150% of their target award.
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How We Performed Against Annual Bonus Targets for 2022
The following charts set forth the results for named executives relative to their respective targets under the AEIP for 2022. These results are formulaic and based only on the predetermined targets for Corporate and the businesses listed.
| * | Non-GAAP Financial Measure. For information on how these metrics are calculated, see Explanation of Non-GAAP Financial Measures and Performance Metrics on page 75. |
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| * | Non-GAAP Financial Measure. For information on how these metrics are calculated, see Explanation of Non-GAAP Financial Measures and Performance Metrics on page 75. |
| ** | The company does not report at the sub-segment level for Commercial Engine Operations and Aviation Services. |
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| * | Non-GAAP Financial Measure. For information on how these metrics are calculated, see Explanation of Non-GAAP Financial Measures and Performance Metrics on page 75. |
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Long-Term Incentive Compensation
As part of our annual compensation program, we use a mix of long-term incentive compensation awards: PSUs, RSUs and stock options.
HOW WE DETERMINE AWARD MIX AND AMOUNTS. In determining award mix and amounts, the committee evaluates each executive’s overall compensation relative to the market for similar talent, the mix of cash versus equity as a percentage of the executive’s overall compensation, the executive’s expected future contribution to the success of the company and the retentive value of such awards. In 2022, our annual equity incentive awards for named executives other than Mr. Culp (who only received PSUs) were weighted approximately 50% as PSUs, 30% as stock options and 20% as RSUs.
OUR CEO’S LONG-TERM INCENTIVE AWARDS ARE ENTIRELY PERFORMANCE-BASED. Since he was hired in 2018, all of Mr. Culp’s equity awards have been in the form of performance-based equity. By granting Mr. Culp solely performance-based equity, the committee has tied Mr. Culp’s compensation to long-term shareholder value creation.
Performance Stock Units
HOW OUR ANNUAL PSUs WORK.
PSU awards are designed to focus our named executives on long-term financial and operating goals for the company overall. Our PSU awards have formulaically determined payouts that are earned only if the company achieves specified performance levels over the relevant performance period. In the first quarter of each year, the committee selects the performance metrics for our PSU awards to be granted that year. The committee chooses performance metrics that it believes align with the company’s long-term strategic objectives and contribute to the creation of long-term shareholder value. The committee then monitors company performance against the performance metrics over the applicable performance period, and the committee certifies the final levels of achievement. The certified achievement levels determine the percentage of the target number of PSUs under the award that a named executive will earn.
HOW WE SELECTED METRICS AND TARGETS FOR THE 2022 PSUs.
The performance metrics and targets our 2022 PSUs were approved by the committee in February 2022, prior to the publication of last year’s proxy statement. See Shareholder Feedback on PSU Design on page 36 for a description of the changes we made to our 2023 PSUs is response to subsequent feedback from our shareholders.
The annual PSU awards granted to the named executives in 2022 had a three-year period, based on 2022 adjusted earnings per share (50% weighting) and free cash flow (50% weighting) performance against target levels and subject to modification of +/- 20% based on three-year relative TSR performance versus the S&P 500 Industrials Index, with results interpolated for performance between threshold, target and maximum levels. The committee chose adjusted earnings per share and free cash flow as metrics to incentivize and focus management on both profitability and cash generation, which continue to be important financial priorities for GE. These are total company financial metrics that help align all company leaders that receive the PSUs with the same performance target, in contrast to the metrics used in our AEIP that for business unit employees are based on business-level performance.
The committee establishes targets and performance levels that are designed to be rigorous but realistic and informed by our annual financial performance goals and external guidance. The target, threshold and maximum performance levels for each performance measure are set with reference to annual budgets for the total company that our CEO and CFO establish. In 2022, company performance was below the threshold level for adjusted earnings per share and free cash flow in the 2022 PSU awards, resulting in no PSUs being earned. Accordingly, the 2022 PSU awards were cancelled in February 2023 with no payout.
SHAREHOLDER FEEDBACK ON OUR PSU DESIGN.
In response to shareholder feedback, we adopted a new design for the PSU awards granted to named executives in 2023. These awards will vest over a three-year performance period with performance measured as the average of three consecutive one-year performance periods (2023, 2024 and 2025) against adjusted earnings per share (50% weighting) and free cash flow (50% weighting) targets, subject to modification of +/- 20% based on three-year relative TSR versus the S&P 500 Industrials Index, with results interpolated for performance between threshold, target and maximum. The committee believes this approach to average three consecutive performance years is responsive to shareholder feedback about the length of the PSU performance period and appropriate during the transitional period for the company today. The PSUs continue to use the total company performance metrics of adjusted earnings per share and free cash flow, which continue to be important measures for the company’s performance and, as total company metrics, are differentiated from the metrics applicable to business-level employees under the AEIP.
| OUR PATH FORWARD | | PLANS TO USE LONGER PERFORMANCE PERIODS FOLLOWING SPIN-OFF. It has been a challenge to set long-term financial targets while we have been in the midst of significant transformation into three independent public companies. After completion of the planned business separations, GE (which will be GE Aerospace at that time) plans to develop long-term incentive awards that include multi-year financial targets. We also anticipate that GE HealthCare and GE Vernova as standalone companies will do so as well, as ultimately will be determined by the compensation committees for those companies |
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How Our PSU Awards Performed Against Targets
2020. The annual PSU awards granted to the named executives in 2020 used a three-year performance period based on GE’s relative TSR performance versus the S&P 500 Industrials Index, with results interpolated for performance between threshold, target and maximum.
| PERFORMANCE GOAL | | THRESHOLD
EARN 25% | | TARGET
EARN 100% | | MAXIMUM
EARN 175% | | WEIGHTING | | STATUS |
| Relative TSR | |  | |  | | 2020 PSUs HAD NO PAYOUT. The company did not achieve the threshold level of performance for the payout of these awards, and accordingly, in February 2023 the committee cancelled all 2020 PSUs with no payout. |
| | | | | | | |
2021. The annual PSU awards granted to the named executives in 2021 used a three-year performance period based on GE’s 2021 adjusted earnings per share and total company free cash flow performance against target levels and subject to modification of +/- 20% based on three-year relative TSR versus the S&P 500 Industrials Index, with results interpolated for performance between threshold, target and maximum.
| PERFORMANCE GOAL | | THRESHOLD
EARN 25% | | TARGET
EARN 100% | | MAXIMUM
EARN 175% | | WEIGHTING | | STATUS |
| Adjusted Earnings per Share* | |  | |  | | 2021 PSUs REMAIN SUBJECT TO THREE-YEAR RELATIVE TSR. |
| Total Company Free Cash Flow ($M)* | |  | |  | | The 2021 PSUs performed above the maximum level for the adjusted earnings per share and free cash flow performance metrics. The awards remain subject to the three-year relative TSR modifier, which will determine the number of shares earned. |
| Relative TSR | |  | | +/- 20%
modifier | | Results will be certified by the committee in February 2024. |
| | | | | | | |
PSU metrics for 2021 were set and reported here using our prior three-column financial statement metrics of GE Industrial earnings per share and GE Industrial free cash flow.
2022. The annual PSU awards granted to the named executives in 2022 used a three-year performance period based on GE’s 2022 adjusted earnings per share and total company free cash flow performance against target levels and subject to modification of +/- 20% based on three-year relative TSR versus the S&P 500 Industrials Index, with results interpolated for performance between threshold, target and maximum.
| * | Non-GAAP Financial Measure. For information on how these metrics are calculated, see Explanation of Non-GAAP Financial Measures and Performance Metrics on page 75. |
GE 2023 PROXY STATEMENT 37
Table of Contents
OTHER PERFORMANCE STOCK UNIT AWARD.
On January 3, 2022, Mr. Arduini became President and Chief Executive Officer of GE HealthCare, after joining GE as an employee in December 2021. In connection with becoming Chief Executive Officer of GE HealthCare, in February 2022, he received a PSU award (New Hire PSU Award). Mr. Arduini’s New Hire PSU Award is eligible to vest on March 1, 2025, in an amount between 0% and 150% of the target number of PSUs, based on the final average achievement of annual performance objectives set for each of 2022, 2023 and 2024. For 2022, the committee chose annual performance metrics, which consisted of HealthCare free cash flow (25% weighting), organic margin expansion (12.5% weighting), organic revenue growth (50% weighting) and profit (12.5% weighting), in each case with respect to the HealthCare business, subject to modification of +/- 10% for safety performance. The performance metrics and targets established for the 2022 performance year reflected GE HealthCare's status as a business within GE, rather than a standalone public company, and therefore aligned with GE's established metrics and targets for that business. GE HealthCare, as a standalone company, will determine performance metrics and targets for the remaining performance years. In January 2023, Mr. Arduini’s New Hire PSU Award was converted into GE HealthCare PSUs and remains subject to the performance conditions.
RESTRICTED STOCK UNITS AND STOCK OPTIONS.
WE USE STOCK OPTIONS AND RSUs TO FOCUS ON LONG-TERM VALUE CREATION. We believe that awards of stock options and RSUs effectively focus our named executives on delivering long-term value to our shareholders. Stock options have value only to the extent that the price of GE stock rises between an award’s grant date and its exercise date. RSU awards reward and retain the named executives by offering them the opportunity to receive GE stock if they remain employed by the company on the date that an award’s restrictions lapse.
2022 RSUs AND STOCK OPTIONS. The annual awards of RSUs and stock options granted in 2022 will vest in two equal installments on the second and third anniversary of the grant date.
OUR POLICY ON DIVIDEND EQUIVALENTS.
Our awards of PSUs, performance shares and RSUs are entitled to receive dividend equivalents or dividends, as applicable, and such dividend equivalents or dividends are only paid out on the shares actually received by our named executives under the terms of such awards. Stock options are not entitled to receive any dividend equivalents or dividends.
| OUR PATH FORWARD | |
| |
| | | |
| TREATMENT OF OUTSTANDING EQUITY AWARDS WITH GE HEALTHCARE SPIN-OFF. In the GE HealthCare (GEHC) spin-off in January 2023, GE shareholders received a distribution of one share of GE HealthCare common stock for every three shares of GE common stock held. Because unvested equity awards held by GE employees were not eligible to receive a distribution of GEHC shares, the company made equitable adjustments designed to preserve the pre-spin-off value of those awards following the reduction in parent company stock price that occurs when a significant business is distributed to shareholders in a spin-off. In advance of the spin-off, the committee established conversion ratios to govern the adjustments that, depending on the type of award, either were based on a comparison of the pre-spin-off GE stock price to the post-spin-off GE and GEHC stock prices or were the same as the ratio used to establish the number of GEHC shares distributed to GE shareholders in the spin-off. The approach for these equitable adjustments was to align employees with their business assignments and roles relative to the spin-off: GEHC employees’ awards converted into GEHC awards; business-level GE employees continued to hold GE awards; and Corporate employees at GE received a combination of GE and GEHC awards, aligned with how GE shareholders received GEHC shares as a distribution on their existing GE shares in the spin-off. In each case, the approach was designed to preserve the pre-spin-off value of the relevant employee equity awards. The post-spin-off equity awards reflecting these equitable adjustments are generally subject to the same vesting conditions and other terms prior to the spin-off, except that (i) the annual 2021 PSU awards now held by GE employees will measure GE’s relative TSR for the remainder of the performance period by adding together the pre-spin-off and post-spin-off GE relative TSR as two discrete periods, and (ii) the annual 2021 PSU awards that converted to GEHC awards following the spin-off will vest at the end of the performance period based on the GE relative TSR performance up to the time of the spin-off. There were no changes to the terms of Mr. Culp’s Leadership Performance Shares granted on August 18, 2020, and Ms. Dybeck Happe’s Leadership PSUs granted on September 3, 2020, in connection with the spin-off, and pursuant to the terms of those awards the performance level achieved will be based on a weighted average of the GE and GEHC stock prices. |
38 GE 2023 PROXY STATEMENT
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Compensation Actions for 2022
| | | | |
| CURRENT AND PRIOR ROLES Chairman & CEO, GE (since September 2018) and CEO, GE Aerospace (since June 2022); former senior lecturer, Harvard Business School (2015-2018); former Senior Advisor, Bain Capital Private Equity (2017-2018); former CEO & President, Danaher (2001-2014) 2022 Performance Highlights As Chairman & CEO, Mr. Culp plays a central role in shaping the company’s strategy, establishing the framework against which performance is measured and delivering on that performance. Performance highlights during 2022 included: ● Leading the execution of GE’s strategy to form three independent, investment-grade companies, including the successful spin-off of GE HealthCare and the recruitment of new directors to the boards of GE and GE HealthCare ● Continuing to lead GE’s enterprise-wide focus on operational improvement and execution by more deeply embedding lean and decentralization across the company ● Assuming an expanded leadership role beginning in June 2022 as the CEO of our Aerospace business, which delivered strong financial results amidst the demand ramp for engines and services with the industry’s ongoing recovery from the peak of the COVID-19 pandemic 
| | H. Lawrence Culp, Jr. CHAIRMAN & CEO
CEO, GE AEROSPACE 
Age: 59 Education: Washington College; MBA, Harvard Business School GE Tenure: 4 Years | |
| | | | |
| Response to Shareholder Feedback In response to prior shareholder feedback, the committee and Mr. Culp agreed to reduce his annual equity incentive grant for 2022 from a grant date fair value of $15 million to $5 million. | |
| | |
Annual CEO Pay Structure
| ● | Salary. Upon his appointment as CEO, Mr. Culp’s salary was set at $2,500,000 under his 2018 employment agreement and (other than certain forfeitures of his salary in 2020 in connection with the COVID-19 pandemic) has not changed. |
| |
| ● | Bonus. Mr. Culp’s bonus target is set at 150% of salary and has not changed since his appointment as CEO. |
| |
| ● | Annual equity awards. Since becoming CEO in 2018, Mr. Culp’s employment agreement has provided for an annual equity grant with a grant date fair value of $15 million. For 2022, in response to prior shareholder feedback, the committee and Mr. Culp agreed to reduce his annual PSU award in March 2022 to a grant date fair value of $5 million. |
GE 2023 PROXY STATEMENT 39
Table of Contents
Compensation for Our Other Named Executives
| | | | |
| CURRENT AND PRIOR ROLES Senior Vice President & CFO, GE (since March 2020); former CFO and Executive committee member, A.P. Moller-Maersk A/S (2019-2020); former Executive Vice-President and CFO, Assa Abloy AB (2012-2018) 2022 Performance Highlights As CFO, Ms. Dybeck Happe leads the company’s Finance organization and has responsibility for treasury activities and GE Capital. Performance highlights during 2022 included: ● Developing the annual budget and delivering on the company’s financial goals, including solid revenue growth, margin expansion and free cash flow in 2022 ● Surpassing $100 billion of gross debt reduction since 2018, evidencing the company’s significant progress in recent years to strengthen the balance sheet and reduce leverage ● Leading the finance, treasury and digital technology functions through separation activities in connection with the planned spin-offs, and advising on the execution of the GE HealthCare spin-off and ongoing capital allocation matters 
| | Carolina Dybeck
Happe 
Age: 50 Education: Uppsala University, Sweden GE Tenure: 3 Years | |
| | | | |
| | | | |
| CURRENT AND PRIOR ROLES President and CEO, GE HealthCare (since January 2022); President and Chief Executive Officer, Integra LifeSciences (2012-2021). Following the GE HealthCare spin-off in January 2023, Mr. Arduini is no longer a GE employee. 2022 Performance Highlights As CEO of the HealthCare business, Mr. Arduini led the successful spin-off of GE HealthCare. Performance highlights during 2022 included: ● Successfully leading the HealthCare business in its preparations to separate from the company, including recruitment and selection of GE HealthCare’s senior leadership team with balance of prior public company experience and legacy customer, market, and product knowledge ● Driving strong operational and financial performance in 2022 for the HealthCare business, including increased annual revenues and cash flow conversion ● Delivering new products and technology to healthcare customers globally, and partnering with industry peers to develop products and services that advance precision care 
| | Peter Arduini 
Age: 58 Education: Northwestern University’s
Kellogg School of Management,
MA; Susquehanna University GE Tenure: 1 Years | |
| | | | |
40 GE 2023 PROXY STATEMENT
Table of Contents
| | | | |
| CURRENT AND PRIOR ROLES Executive Vice President and Chief Commercial Officer, GE Aerospace (since June 2022); former President & CEO, GE Aviation (2020-2022); former President & CEO of Commercial Aviation, Embraer S.A. (2016-2020); former Chief Commercial Officer, Embraer S.A. (2012-2016) 2022 Performance Highlights Mr. Slattery served as CEO of GE Aerospace until June 2022, when he transitioned to Executive Vice President and Chief Commercial Officer to focus on leading the commercial growth of the future standalone business. Performance highlights during 2022 included: ● Leading the Aerospace business during the first half of 2022 amidst the demand ramp for engines and services with the industry’s ongoing recovery from the peak of the COVID-19 pandemic ● Developing and strengthening relationships with customers and industry partners to foster future technological progress and embed lean principles ● Delivering strong orders and focusing on customer support in the ongoing growth across engines and services, and across our existing fleet in services 
| | John Slattery 
Age: 54 Education: University of Glamorgan;
MBA, University of Limerick GE Tenure: 3 Years | |
| | | | |
| Changes for 2023 Compensation: Consistent with the change in his job responsibilities during 2022, the committee approved an annual equity grant in 2023 for Mr. Slattery of $3.0 million. | |
| | |
| | | | |
| CURRENT AND PRIOR ROLES President and CEO, GE Commercial Engines & Services, GE Aerospace (since July 2022); former President and CEO, GE Aviation Services (2020-2022); former President and CEO, GE Power Portfolio (2018-2020); former President and CEO, GE Power (2017-2018); former President & CEO, GE Energy Connections (2015-2017); former President & CEO, GE Transportation (2013-2015) 2022 Performance Highlights As CEO of the Commercial Engines & Services business, a sub-business within our Aerospace business, Mr. Stokes leads an organization that manufactures jet engines for commercial aircrafts and provides maintenance, component repair and overhaul services, including sales of replacement parts. Performance highlights during 2022 included: ● Realigning Commercial Engines & Services as an integrated P&L to better serve customer priorities, and driving operational improvements that resulted in improved orders, revenues, and profit margins in 2022 for the largest business unit within the Aerospace business ● Implementing lean processes globally to improve turnaround time, contract selectivity, and estimates of future contract performance, driving increased profitability ● Expanding our global maintenance, repair and overhaul network to provide full flexibility to meet customers’ needs 
| | Russell Stokes 
Age: 51 Education: Cleveland State University GE Tenure: 26 Years | |
| | | | |
| Changes for 2023 Compensation: Consistent with his expanded operational responsibilities during 2022, the committee approved an annual equity grant in 2023 for Mr. Stokes of $5.0 million. | |
| | |
GE 2023 PROXY STATEMENT 41
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Summary Compensation
Summary Compensation Table
NAME &
PRINCIPAL POSITION | | YEAR | | | SALARY | | | BONUS* | | STOCK
AWARDS | | | STOCK
OPTION | | | NON-EQUITY
INCENTIVE
PLAN COMP. | | | CHANGE IN
PENSION
VALUE &
DEFERRED
COMP. | | | ALL OTHER
COMP | | | SEC TOTAL | |
H. Lawrence Culp, Jr.
Chairman & CEO, GE and CEO, GE Aerospace | | | 2022 | | | $ | 2,500,000 | | | $ | 0 | | | $ | 5,000,021 | | | $ | 0 | | | $ | 525,000 | | | $ | 151,653 | | | $ | 21,350 | | | $ | 8,198,024 | |
| | | 2021 | | | $ | 2,500,000 | | | $ | 4,200,000 | | | $ | 14,999,996 | | | $ | 0 | | | $ | 0 | | | $ | 943,153 | | | $ | 20,300 | | | $ | 22,663,449 | |
| | | 2020 | | | $ | 653,409 | | | | 0 | | | $ | 72,054,874 | | | $ | 0 | | | $ | 0 | | | $ | 463,799 | | | $ | 19,950 | | | $ | 73,192,032 | |
Carolina Dybeck Happe
SVP & CFO | | | 2022 | | | $ | 1,500,000 | | | $ | 0 | | | $ | 3,354,008 | | | $ | 1,500,016 | | | $ | 262,500 | | | $ | 0 | | | $ | 3,124,668 | | | $ | 9,741,192 | |
| | | 2021 | | | $ | 1,500,000 | | | $ | 2,100,000 | | | $ | 3,602,609 | | | $ | 1,499,998 | | | $ | 0 | | | $ | 351,465 | | | $ | 1,415,986 | | | $ | 10,470,058 | |
| | | 2020 | | | $ | 1,250,000 | | | $ | 1,325,000 | | | $ | 10,415,106 | | | $ | 9,500,003 | | | $ | 0 | | | $ | 246,010 | | | $ | 1,032,906 | | | $ | 23,769,025 | |
Peter Arduini
SVP, GE and CEO, HealthCare | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2022 | | | $ | 1,250,000 | | | $ | 0 | | | $ | 6,135,961 | | | $ | 2,099,996 | | | $ | 890,625 | | | $ | 0 | | | $ | 120,520 | | | $ | 10,497,102 | |
John Slattery
EVP & CCO Aerospace | | | 2022 | | | $ | 1,250,000 | | | $ | 0 | | | $ | 4,024,812 | | | $ | 1,800,006 | | | $ | 1,462,500 | | | $ | 105,114 | | | $ | 138,843 | | | $ | 8,781,275 | |
| | | 2021 | | | $ | 1,250,000 | | | $ | 1,337,500 | | | $ | 4,323,123 | | | $ | 1,799,998 | | | $ | 0 | | | $ | 292,217 | | | $ | 451,616 | | | $ | 9,454,454 | |
| | | 2020 | | | $ | 588,768 | | | $ | 1,375,000 | ** | | $ | 2,097,221 | | | $ | 2,399,998 | | | $ | 0 | | | $ | 87,815 | | | $ | 4,685,336 | | | $ | 11,234,138 | |
Russell Stokes
SVP, GE & CEO Commercial Engines & Services | | | 2022 | | | $ | 1,400,000 | | | $ | 0 | | | $ | 2,549,063 | | | $ | 1,140,001 | | | $ | 1,652,000 | | | $ | 3,217 | | | $ | 113,422 | | | $ | 6,857,703 | |
| | | 2021 | | | $ | 1,400,000 | | | $ | 1,456,000 | | | $ | 2,521,819 | | | $ | 1,050,001 | | | $ | 0 | | | $ | 2,733 | | | $ | 89,211 | | | $ | 6,519,764 | |
| | | 2020 | | | $ | 1,400,000 | | | $ | 1,300,000 | | | $ | 7,267,127 | | | $ | 1,050,002 | | | $ | 0 | | | $ | 5,919,977 | | | $ | 89,573 | | | $ | 17,026,679 | |
| * | For 2022, we reported AEIP bonuses paid to our named executives under “Non-Equity Incentive Plan Compensation”, as they were based on predetermined performance measures without the use of discretion. AEIP bonuses paid to our named executives in 2020 and 2021 are under this “Bonus” column. |
| ** | Includes $1.0 million signing bonus for Mr. Slattery, pursuant to his offer letter agreement. |
SALARY. Base salaries for our named executives. Each of the named executives contributed a portion of his or her salary to the GE Retirement Savings Plan (GE RSP), the company’s 401(k) savings plan. Mr. Culp voluntarily forfeited 74% of his salary for 2020, in light of the business challenges resulting from the COVID-19 pandemic. See Base Salaries on page 31 for more information.
BONUS. Amounts earned under the AEIP in 2020 and 2021. For amounts earned under the AEIP in 2022, see Non-Equity Incentive Plan Compensation. See Annual Executive Incentive Plan on page 31 for additional information on the AEIP program.
STOCK AWARDS. Aggregate grant date fair value of stock awards in the form of PSUs and RSUs, and in the case of Mr. Culp, performance shares, granted in the years shown. Generally, the aggregate grant date fair value is the amount that the company expects to expense for accounting purposes over the award’s vesting schedule and does not correspond to the actual value that the named executives will realize from the award. In particular, the actual value of PSUs and performance shares received are different from the accounting expense because it depends on performance. For example, as described on page 37, the 2020 and 2022 PSU grants were cancelled by the committee and as a result, none of our named executives received a payout for these awards. When PSUs awards are cancelled, GE does not adjust the related amounts previously reported as compensation in the year of the PSU award to reflect the cancellation. In accordance with SEC rules, the aggregate grant date fair value of the 2022 PSUs and the 2022 portion of Mr. Arduini’s New Hire PSU Award is calculated based on the most probable outcome of the performance conditions as of the grant date, which was less than maximum performance. If the most probable outcome of the performance conditions on the grant date had been maximum performance, then the grant date fair value of the 2022 PSUs would have been as follows: Culp ($7,818,428), Dybeck Happe ($3,887,734), Arduini ($7,603,440), Slattery ($4,665,328), and Stokes ($2,954,684) and the grant date fair value of the New Hire PSU Award would have been $2,160,517. Portions of Mr. Arduini’s New Hire PSU Award are tied to performance goals for 2023 and 2024 that were not set at the time of the grant, and in accordance with SEC rules, no value was estimable for those portions at the plan termstime of the grant. A fair value for those portions will be disclosed in future years once the targets are known and the value is estimable. See the 2022 Grants of Plan-Based Awards Table on page 44 for additional information for PSUs and RSUs granted in 2022.
STOCK OPTIONS. Aggregate grant date fair value of option awards granted in the years shown. These amounts reflect the company’s accounting expense and do not correspond to the actual value that the named executives will realize. For information on the assumptions used in valuing a particular year’s grant, see the note on Share-Based Compensation in GE’s financial statements in our annual report on Form 10-K for 2022. See the 2022 Grants of Plan-Based Awards Table on page 44 for additional information on 2022 grants.
NON-EQUITY INCENTIVE PLAN COMPENSATION. Amounts earned under the AEIP for 2022. See the 2022 Grants of Plan-Based Awards Table on page 44 and Annual Executive Incentive Plan on page 31 for additional information.
CHANGE IN PENSION VALUE & DEFERRED COMP. Sum of the change in pension value and above-market earnings on nonqualified deferred compensation, which break down as shown in the following table.
| NAME | | CHANGE IN
PENSION VALUE | | | ABOVE MARKET
EARNINGS | |
| Culp | | $ | 151,653 | | | $ | 0 | |
| Dybeck Happe | | $ | 0 | | | $ | 0 | |
| Arduini | | $ | 0 | | | $ | 0 | |
| Slattery | | $ | 105,114 | | | $ | 0 | |
| Stokes | | $ | 0 | | | $ | 3,217 | |
Year-over-year changes in pension value generally are driven by changes in actuarial pension assumptions as well as increases in age, and any additional service and compensation (as applicable by plan). See Pension Benefits on page 49 for additional information, including the present value assumptions used in this calculation. Above-market earnings represent the difference between market interest rates calculated under SEC rules prescribedand the 6% to 14% interest contingently credited by the company on salary that the named executives deferred under various executive deferred salary programs in effect between 1991 and 2022. See Deferred Compensation on page 47 for additional information.
42 GE 2023 PROXY STATEMENT
Table of Contents
ALL OTHER COMP. We provide our named executives with other benefits that we believe are reasonable, competitive and consistent with our overall executive compensation program. The costs of these benefits for 2022, minus any reimbursements by the named executives, are shown in the table below.
| NAME | | LIFE
INSURANCE
PREMIUMS | | | COMPANY
CONTRIBUTIONS
TO SAVINGS
PLANS | | | COMPANY
CREDITS TO
RESTORATION
PLAN | | | RELOCATION
AND
EXPATRIATE
BENEFITS | | | RELOCATION
AND
EXPATRIATE
TAX BENEFITS | | | OTHER | | | TOTAL | |
| Culp | | $ | 0 | | | $ | 21,350 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 21,350 | |
| Dybeck Happe | | $ | 0 | | | $ | 9,150 | | | $ | 0 | | | $ | 429,913 | | | $ | 2,664,677 | | | $ | 20,928 | | | $ | 3,124,668 | |
| Arduini | | $ | 0 | | | $ | 21,350 | | | $ | 74,970 | | | $ | 0 | | | $ | 0 | | | $ | 24,200 | | | $ | 120,520 | |
| Slattery | | $ | 0 | | | $ | 21,350 | | | $ | 0 | | | $ | 69,164 | | | $ | 44,651 | | | $ | 3,678 | | | $ | 138,843 | |
| Stokes | | $ | 83,521 | | | $ | 19,825 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 10,076 | | | $ | 113,422 | |
Life Insurance Premiums. Taxable payments to cover premiums for universal life insurance policies the named executives own. These policies include: (1) Executive Life, which provides universal life insurance policies for the indicated named executives totaling up to $3 million in coverage at the time of enrollment and increased 4% annually thereafter; and (2) Leadership Life, which provides universal life insurance policies for the indicated named executives with coverage of 2X their annual pay (salary plus most recent bonus). As of January 1, 2018, these plans were closed to new employees and employees who were not already employed at the relevant band level, including Messrs. Culp, Slattery, Arduini and Ms. Dybeck Happe.
Company Contributions to Savings Plans. Represents GE’s matching contributions to the named executives’ RSP accounts equaling up to 4% of eligible pay, and automatic contributions equaling 3% of eligible pay, up to the caps imposed under IRS rules. The GE RSP was split into two plans effective January 1, 2023 – one maintained by GE HealthCare, and one maintained by GE. Mr. Arduini’s RSP benefits were allocated to the GE HealthCare Retirement Savings Plan Committee. Seniorand the other named executives locatedremained in the GE RSP. We anticipate splitting the GE RSP again in anticipation of the planned spin-off of GE Vernova.
Company Credits to Restoration Plan. Represents GE’s accrued credits to the named executives’ Restoration Plan accounts equaling 7% of their annual earnings, which include base salary and up to one-half of eligible bonus payments, that exceed the IRS-prescribed limit.
Relocation and Expatriate Benefits. Expenses for relocating the named executives and their families in connection with their hiring from outside GE. With respect to Ms. Dybeck Happe, this amount includes expenses for relocating her and her family from Sweden to GE’s headquarters in Boston in 2020 and continued residence outside her home country, which includes the following: (1) housing and utilities ($275,000), (2) educational support for her children ($142,430), (3) tax preparation services and (4) other relocation benefits. With respect to Mr. Slattery, this amount includes the benefits provided to him in connection with his relocation from Ireland to GE Aerospace’s headquarters in Cincinnati, which consists of: educational support for his children ($69,164). Relocation and international assignment benefits, such as those provided to Ms. Dybeck Happe and Mr. Slattery, allow us to recruit the best executives from all over the world, regardless of where they are based.
Relocation and Expatriate Tax Benefits. Tax benefits provided in connection with new hire relocations and international assignments. For Ms. Dybeck Happe, these benefits are pursuant to her employment agreement, and in 2022, include the following: (1) tax equalization payments ($1,525,298 ) intended to ensure that Ms. Dybeck Happe is not put in a disadvantaged tax position as a result of her position with GE in the United States, are eligible to participate(2) taxes paid in the Amended Plan on the same basis as all other eligible employees, subjectconnection with relocation benefits ($334,185), and (3) tax gross-up payments related to the abilitytax benefits ($805,194). Tax benefits were higher in 2022 for Ms. Dybeck Happe partially because they related to multiple tax years. Benefits for Mr. Slattery included taxes paid in connection with relocation benefits ($44,651).
Other. Total amount of other benefits provided, none of which individually exceeded the greater of $25,000 or 10% of the Plan Committeetotal amount of personal benefits for the named executive. These other benefits included items such as: (1) car service fees; (2) certain expenses associated with the named executives’ and their invited guests’ attendance at sporting events; (3) transition credits related to restrict participation in the Amended PlanGE Pension Plan; (4) annual physical examinations; (5) legal and professional fees and (6) incremental costs associated with personal use of aircraft and travel by guests accompanying the executive on business travel on a company-leased aircraft, such as for catering. Our named executives are permitted to complyuse an aircraft that is leased by the company for personal use, but, to the extent the named executives engaged in such use during 2022, all such use was reimbursed to the company at rates sufficient to cover the variable costs associated with U.S.those flights, other than certain incremental costs as noted above and reported under this item. In addition, the company engages in certain sponsorships and purchases tickets to sporting events in advance for the purposes of customer entertainment. Occasionally, tickets from sponsorship agreements or foreign laws, stock exchange rulesunused tickets purchased for customer entertainment are made available for personal use by the named executives or U.S. accountingother employees. These tickets typically result in no incremental cost to the company.
SEC Total. Total compensation, as determined under SEC rules. However, the company’s executive officers, including named executive officers, and non-employee directors are not eligible to participate.
GE 2023 PROXY STATEMENT OFFERING PERIOD AND PRICE OF SHARES.43Unless the Plan Committee determines otherwise, there are quarterly offering periods
Table of Contents
Incentive Compensation
In recent years, we have used a mix of short-term incentive compensation under the AmendedAEIP and long-term incentive compensation awards: PSUs, performance shares, RSUs, and stock options. In 2022, we granted annual equity awards in March.
2022 Grants of Plan-Based Awards Table
The following table shows bonuses under our AEIP, and awards of RSUs, PSUs and stock options granted to our named executives in 2022. These awards were approved under the GE 2007 Long-Term Incentive Plan, duringa plan that shareholders approved in 2007, 2012 and 2017 (the 2007 LTIP). In 2022, our shareholders approved the GE 2022 Long-Term Incentive Plan (the 2022 LTIP), which participants may electreplaced the 2007 LTIP. For more information on each of the award types, see Long-Term Incentive Compensation on page 36. This table includes PSU awards granted in 2022, which were cancelled without payout as a result of below-threshold performance. This table does not take into account the treatment of outstanding equity awards in 2023 in connection with the GE HealthCare spin-off. See Treatment of Outstanding Equity Awards with GE HealthCare Spin-Off on page 38 for additional details.
| | | | | | | | | ESTIMATED FUTURE
PAYOUTS UNDER
NON-EQUITY INCENTIVE
PLAN AWARDS | | | ESTIMATED FUTURE
PAYOUTS UNDER
PSUs | | | RESTRICTED
STOCK UNITS
(#) | | | STOCK
OPTIONS
(#) | | | OPTION
EXERCISE
PRICE | | | GRANT DATE
FAIR VALUE OF
AWARDS | |
| NAME | | GRANT
DATE | | APPROVAL
DATE | | AWARD
TYPE | | THRESHOLD
($) | | | TARGET ($) | | | MAXIMUM
($) | | | THRESHOLD
(#) | | | TARGET
(#) | | | MAXIMUM
(#) | | | | | | | | | |
| Culp | | | | | | AEIP | | $ | 93,750 | | | $ | 3,750,000 | | | $ | 5,625,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/21/2022 | | 3/6/2022 | | Annual Equity | | | | | | | | | | | | | | | 5,542 | | | | 55,424 | | | | 96,992 | | | | | | | | | | | | | | | $ | 5,000,021 | |
| Dybeck Happe | | | | | | AEIP | | $ | 46,875 | | | $ | 1,875,000 | | | $ | 2,812,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2022 | | 2/23/2022 | | Annual Equity | | | | | | | | | | | | | | | 2,824 | | | | 28,238 | | | | 49,417 | | | | | | | | | | | | | | | $ | 2,499,967 | |
| | 3/1/2022 | | 2/11/2022 | | Annual Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,317 | | | | | | | | | | | $ | 854,041 | |
| | 3/1/2022 | | 2/11/2022 | | Annual Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 45,032 | | | $ | 92.33 | | | $ | 1,500,016 | |
| Arduini | | | | | | AEIP | | $ | 0 | | | $ | 1,562,500 | | | $ | 2,343,750 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2/23/2022 | | 2/23/2022 | | New Hire | | | | | | | | | | | | | | | 0 | | | | 17,316 | | | | 25,974 | | | | | | | | | | | | | | | $ | 1,440,345 | |
| | 3/1/2022 | | 2/23/2022 | | Annual Equity | | | | | | | | | | | | | | | 3,953 | | | | 39,534 | | | | 69,185 | | | | | | | | | | | | | | | $ | 3,500,024 | |
| | 3/1/2022 | | 2/11/2022 | | Annual Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | 14,443 | | | | | | | | | | | $ | 1,195,592 | |
| | 3/1/2022 | | 2/11/2022 | | Annual Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 63,044 | | | $ | 92.33 | | | $ | 2,099,996 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Slattery | | | | | | AEIP | | $ | 31,250 | | | $ | 1,250,000 | | | $ | 1,875,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2022 | | 2/23/2022 | | Annual Equity | | | | | | | | | | | | | | | 3,389 | | | | 33,886 | | | | 59,301 | | | | | | | | | | | | | | | $ | 2,999,995 | |
| | 3/1/2022 | | 2/11/2022 | | Annual Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | 12,380 | | | | | | | | | | | $ | 1,024,816 | |
| | 3/1/2022 | | 2/11/2022 | | Annual Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 54,038 | | | $ | 92.33 | | | $ | 1,800,006 | |
| Stokes | | | | | | AEIP | | $ | 35,000 | | | $ | 1,400,000 | | | $ | 2,100,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2022 | | 2/23/2022 | | Annual Equity | | | | | | | | | | | | | | | 2,146 | | | | 21,461 | | | | 37,557 | | | | | | | | | | | | | | | $ | 1,899,985 | |
| | 3/1/2022 | | 2/11/2022 | | Annual Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,841 | | | | | | | | | | | $ | 649,078 | |
| | 3/1/2022 | | 2/11/2022 | | Annual Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 34,224 | | | $ | 92.33 | | | $ | 1,140,001 | |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
Amounts shown are the threshold, target and maximum potential payouts under the AEIP for 2022. The payout under the 2022 AEIP can range from zero for below threshold performance against all financial performance measures to purchase sharesa maximum of GE stock through payroll deductions up to150% of target, based on the limits set forthmaximum level of achievement of all financial performance measures. The actual 2022 AEIP payouts for our named executives are reported in the plan. Once enrolledSummary Compensation Table in the AmendedNon-Equity Incentive Plan participants receive a purchase right for each month withinCompensation column. For more information on the offering period. This meansAEIP, see Annual Executive Incentive Plan on page 31.
Estimated Future Payouts Under PSUs
Amounts shown are the threshold, target and maximum number of PSUs that amounts credited to each participating participant’s account (including both participant contributions and GE matching contributions, which are described below) ascould be earned under awards granted in 2022. The payout of the last trading day2022 PSU awards can range from zero for below threshold performance against both performance measures to a maximum of 175% of target, based on the month are appliedmaximum level of achievement of both performance measures. The payout of Mr. Arduini’s New Hire PSU Award can range from zero for below threshold performance against all performance measures to purchase fulla maximum of 150% of target, based on the maximum level of achievement of all performance measures. For more information on 2022 PSU awards and fractional shares of GE stock at a price equal toMr. Arduini’s New Hire PSU Award, see pages 36 and 38, respectively.
Option Exercise Price
Stock option exercise prices reflect the closing price of GE stock on the NYSEgrant date.
Grant Date Fair Value of Awards
Generally, the aggregate grant date fair value of an award is the amount that the company expects to expense in its financial statements over the award’s vesting schedule.
| ● | For stock option awards, fair value is calculated using the Black-Scholes value of each option on the grant date (resulting in a $33.31 per unit value for the March 2022 stock option grants). |
| |
| ● | For RSU awards, fair value is generally calculated based on the closing stock price on the date of grant, reduced by the present value of dividends expected to be paid on GE common stock before the RSUs vest (resulting in a $82.78 per unit value for the March 2022 grants) because dividend equivalents on unvested RSUs are accrued and paid out only if and when the award vests. |
| |
| ● | For PSU awards, the actual value of units received will depend on the company’s performance, as described above. Fair value is calculated by multiplying the per unit value of the award ($83.18 for Mr. Arduini’s February New Hire PSU Award, and $88.53 for the March 2022 grants, except for awards granted to Mr. Culp which were $90.21) by the number of units at target. The per unit value is based on the closing price of the company’s stock price on the grant date, adjusted to reflect a projected impact of the TSR modifier using a Monte Carlo simulation. |
44 GE 2023 PROXY STATEMENT
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2022 Outstanding Equity Awards at Fiscal Year-End Table
The following table shows the named executives’ stock and option grants as of year-end. It includes unexercised stock options awards (vested and unvested), RSUs, performance shares and PSUs for which vesting conditions were not yet satisfied as of December 31, 2022. The table does not include PSU awards granted in 2020 and 2022, which were cancelled without payout as a result of below-threshold performance.
This table does not take into account the treatment of outstanding equity awards in 2023 in connection with the GE HealthCare spin-off. See Treatment of Outstanding Equity Awards with GE HealthCare Spin-Off on page 38 for additional details.
NAME OF
EXECUTIVE | | GRANT
DATE | | AWARD
TYPE | | NUMBER
OUTSTANDING | | | PORTION
EXERCISABLE | | | EXERCISE
PRICE | | EXPIRATION
DATE | | MARKET
VALUE | | VESTING
SCHEDULE |
| Culp | | 8/18/2020 | | Performance Shares | | | 1,742,879 | | | | | | | | | | | | | $ | 146,035,831 | | | 100% in 2024, subject to performance |
| | 3/1/2021 | | PSUs | | | 256,429 | | | | | | | | | | | | | $ | 21,486,186 | | | 100% in 2024, subject to performance |
| Dybeck Happe | | 3/2/2020 | | Options | | | 51,090 | | | | 25,545 | | | $ | 89.68 | | | 3/2/2030 | | $ | 0 | | | 100% in 2023 |
| | 3/2/2020 | | Options | | | 257,732 | | | | 0 | | | $ | 89.68 | | | 3/2/2030 | | $ | 0 | | | 100% in 2024 |
| | 3/2/2020 | | RSUs | | | 5,102 | | | | | | | | | | | | | $ | 427,497 | | | 100% in 2023 |
| | 9/3/2020 | | PSUs | | | 205,110 | | | | | | | | | | | | | $ | 17,186,167 | | | 100% in 2025, subject to performance |
| | 3/1/2021 | | Options | | | 36,266 | | | | 0 | | | $ | 104.88 | | | 3/1/2031 | | $ | 0 | | | 50% in 2023 and 2024 |
| | 3/1/2021 | | PSUs | | | 42,739 | | | | | | | | | | | | | $ | 3,581,101 | | | 100% in 2024, subject to performance |
| | 3/1/2021 | | RSUs | | | 10,513 | | | | | | | | | | | | | $ | 880,884 | | | 50% in 2023 and 2024 |
| | 3/1/2022 | | Options | | | 45,032 | | | | 0 | | | $ | 92.33 | | | 3/1/2032 | | $ | 0 | | | 50% in 2024 and 2025 |
| | 3/1/2022 | | RSUs | | | 10,317 | | | | | | | | | | | | | $ | 864,461 | | | 50% in 2024 and 2025 |
| Arduini | | 2/23/2022 | | PSUs | | | 17,316 | | | | | | | | | | | | | $ | 1,450,908 | | | 100% in 2025, subject to performance |
| | 3/1/2022 | | Options | | | 63,044 | | | | 0 | | | $ | 92.33 | | | 3/1/2032 | | $ | 0 | | | 50% in 2024 and 2025 |
| | 3/1/2022 | | RSUs | | | 14,443 | | | | | | | | | | | | | $ | 1,210,179 | | | 50% in 2024 and 2025 |
| Slattery | | 7/13/2020 | | Options | | | 67,446 | | | | 44,964 | | | $ | 53.60 | | | 7/13/2030 | | $ | 2,036,195 | | | 100% in 2023 |
| | 9/2/2020 | | Options | | | 42,938 | | | | 21,469 | | | $ | 51.52 | | | 9/2/2030 | | $ | 1,385,609 | | | 100% in 2023 |
| | 9/2/2020 | | RSUs | | | 5,796 | | | | | | | | | | | | | $ | 485,647 | | | 100% in 2023 |
| | 3/1/2021 | | Options | | | 43,520 | | | | 0 | | | $ | 104.88 | | | 3/1/2031 | | $ | 0 | | | 50% in 2023 and 2024 |
| | 3/1/2021 | | PSUs | | | 51,286 | | | | | | | | | | | | | $ | 4,297,254 | | | 100% in 2024, subject to performance |
| | 3/1/2021 | | RSUs | | | 12,616 | | | | | | | | | | | | | $ | 1,057,095 | | | 50% in 2023 and 2024 |
| | 3/1/2022 | | Options | | | 54,038 | | | | 0 | | | $ | 92.33 | | | 3/1/2032 | | $ | 0 | | | 50% in 2024 and 2025 |
| | 3/1/2022 | | RSUs | | | 12,380 | | | | | | | | | | | | | $ | 1,037,320 | | | 50% in 2024 and 2025 |
| Stokes | | 9/13/2013 | | Options | | | 16,256 | | | | 16,256 | | | $ | 182.88 | | | 9/13/2023 | | $ | 0 | | | Fully Vested |
| | 9/05/2014 | | Options | | | 32,512 | | | | 32,512 | | | $ | 200.72 | | | 9/5/2024 | | $ | 0 | | | Fully Vested |
| | 9/11/2015 | | Options | | | 15,216 | | | | 15,216 | | | $ | 191.92 | | | 9/11/2025 | | $ | 0 | | | Fully Vested |
| | 9/9/2016 | | Options | | | 19,508 | | | | 19,508 | | | $ | 231.60 | | | 9/9/2026 | | $ | 0 | | | Fully Vested |
| | 9/6/2017 | | Options | | | 26,010 | | | | 26,010 | | | $ | 191.68 | | | 9/6/2027 | | $ | 0 | | | Fully Vested |
| | 1/29/2018 | | Options | | | 65,024 | | | | 65,024 | | | $ | 125.20 | | | 1/29/2028 | | $ | 0 | | | Fully Vested |
| | 3/19/2019 | | Options | | | 36,972 | | | | 36,972 | | | $ | 81.52 | | | 3/19/2029 | | $ | 83,926 | | | Fully Vested |
| | 3/2/2020 | | Options | | | 35,763 | | | | 17,881 | | | $ | 89.68 | | | 3/2/2030 | | $ | 0 | | | 100% in 2023 |
| | 3/2/2020 | | RSUs | | | 3,571 | | | | | | | | | | | | | $ | 299,214 | | | 100% in 2023 |
| | 9/3/2020 | | RSUs | | | 96,451 | | | | | | | | | | | | | $ | 8,081,629 | | | 50% in 2023 and 2024 |
| | 3/1/2021 | | Options | | | 25,386 | | | | 0 | | | $ | 104.88 | | | 3/1/2031 | | $ | 0 | | | 50% in 2023 and 2024 |
| | 3/1/2021 | | PSUs | | | 29,918 | | | | | | | | | | | | | $ | 2,506,829 | | | 100% in 2024, subject to performance |
| | 3/1/2021 | | RSUs | | | 7,360 | | | | | | | | | | | | | $ | 616,694 | | | 50% in 2023 and 2024 |
| | 3/1/2022 | | Options | | | 34,224 | | | | 0 | | | $ | 92.33 | | | 3/1/2032 | | $ | 0 | | | 50% in 2024 and 2025 |
| | 3/1/2022 | | RSUs | | | 7,841 | | | | | | | | | | | | | $ | 656,997 | | | 50% in 2024 and 2025 |
GE 2023 PROXY STATEMENT 45
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MARKET VALUE. The market value of awards of RSUs, performance shares and PSUs is calculated by multiplying the closing price of GE stock as of December 31, 2022 ($83.79) (the last trading day for the year) by the number of shares underlying each award. With respect to the Leadership Performance Shares granted to Mr. Culp on August 18, 2020, and the Leadership PSUs granted to Ms. Dybeck Happe on September 3, 2020, this value assumes satisfaction of the maximum-level payout for the awards. With respect to the 2021 PSU awards, this value assumes satisfaction of the maximum-level payout for the awards. With respect to Mr. Arduini’s New Hire PSU Award, this value reflects target-level payout for the awards. For options, the market value is calculated by multiplying the number of shares underlying each award by the spread between the awards exercise price and the closing price of GE stock as of December 31, 2022.
VESTING SCHEDULE.
Options vest on the anniversary of the grant date in the years shown in the table. See Potential Termination Payments on page 51 regarding events which may result in acceleration of unvested options.
RSUs vest on the anniversary of the grant date in the years shown in the table. See Potential Termination Payments on page 51 regarding events which may result in acceleration of unvested RSUs.
Leadership Performance Shares and Leadership PSUs vest on the anniversary of the grant date in the years shown in the table, solely to the extent that date.the performance conditions have been achieved at a level to be paid out, as certified by the committee. See Potential Termination Payments on page 51 for additional details regarding events which may result in acceleration of the Leadership Performance Shares and Leadership PSUs.
LIMIT ON PARTICIPANT CONTRIBUTIONS.Other PSUs Each offering period, participantsvest at the beginning of the year indicated when the committee certifies the level at which the performance metrics have been achieved, unless otherwise stated. For further detail on the terms and conditions of the PSU awards, see Long-Term Incentive Compensation on page 36. See Potential Termination Payments on page 51 regarding events which may result in earlier service-based vesting for the 2021 PSU awards and Mr. Arduini’s New Hire PSU Award, subject to satisfaction of performance conditions.
Option Exercises and Stock Vested Table
The following table shows the number of shares the named executives acquired and the values they realized upon the vesting of RSU awards during 2022. During the year, none of the named executives exercised stock options and none had PSU or performance share awards that were earned, and all of the named executives, other than Messrs. Culp and Arduini, had RSU awards that vested. Values are shown before payment of any applicable withholding taxes or brokerage commissions.
Executives that remain employed by GE are required to hold the stock that they receive following the exercise of stock options (less those shares that are withheld to satisfy the exercise price and pay taxes) for at least a year following exercise, regardless of whether their stock ownership requirements have been met. Continuing executives also cannot sell any stock they receive as the result of the vesting of awards of RSUs or PSUs (less those shares that are withheld to pay taxes) until they have satisfied their stock ownership requirement. See Stock Ownership and Equity Grant Policies on page 57. The 2021 PSU grants and the 2022 RSU grants are also subject to a one-year holding requirement following settlement, regardless of whether the executive has met his or her stock ownership requirements.
| | | OPTION AWARDS | | | PSUs & RSUs* | |
| NAME | | NUMBER OF SHARES
ACQUIRED ON
EXERCISE | | | VALUE REALIZED
ON EXERCISE | | | NUMBER OF SHARES
ACQUIRED ON
VESTING | | | VALUE REALIZED
ON VESTING | |
| Culp | | | 0 | | | $ | 0 | | | | 0 | | | $ | 0 | |
| Dybeck Happe | | | 0 | | | $ | 0 | | | | 5,103 | | | $ | 479,784 | |
| Arduini | | | 0 | | | $ | 0 | | | | 0 | | | $ | 0 | |
| Slattery | | | 0 | | | $ | 0 | | | | 5,796 | | | $ | 424,441 | |
| Stokes | | | 0 | | | $ | 0 | | | | 9,717 | | | $ | 908,389 | |
| * | Subject to stock ownership requirement for continuing executives; dollar amount represents pre-tax value realized on vesting. |
46 GE 2023 PROXY STATEMENT
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Equity Compensation Plan Information
The following table provides information regarding outstanding equity awards and shares available for future issuance under all of GE’s equity plans. The number of shares available for future issuance increased compared to the prior year, primarily due to the expiration of unexercised stock options that had an exercise price above our stock price in recent years, and the forfeiture of unvested equity awards upon employee departures, each of which were returned to the pool. This table does not take into account the treatment of outstanding equity awards or GE’s equity plans in 2023 in connection with the GE HealthCare spin-off. See Treatment of Outstanding Equity Awards with GE HealthCare Spin-Off on page 38 for additional details.
(IN THOUSANDS EXCEPT PER SHARE
$ AMOUNTS, AS OF 12/31/2022) | | SHARES TO
BE ISSUED
UPON
EXERCISE OR
SETTLEMENT | | WEIGHTED
AVERAGE
EXERCISE
PRICE | | SHARES
AVAILABLE
FOR
FUTURE
ISSUANCE |
| Plans approved by shareholders (2007 LTIP and 2022 LTIP) | | | | | | | | | |
| Options | | 31,016 | | | $ | 142.68 | | | | | (a) |
| RSUs | | 9,687 | | | | | (b) | | | | (a) |
| PSUs | | 2,505 | | | | | (b) | | | | (a) |
| Performance Shares | | 1,162 | | | | | | | | | |
| Plans not approved by shareholders (Consultants Plan) | | | | | | | | | | | |
| Options | | 7 | | | $ | 182.16 | | | | | (c) |
| RSUs | | — | | | | | (b) | | | | (c) |
| PSUs | | — | | | | | (b) | | | | (c) |
| Total | | 44,377 | | | $ | 142.68 | | | | 74,106 | |
| (a) | Total shares available for future issuance under the 2022 LTIP amounted to 74.1 million shares as of December 31, 2022. Following approval of the 2022 LTIP, no shares remained available for future issuance under the 2007 LTIP. |
| (b) | Not applicable. |
| (c) | Following approval of the 2022 LTIP, no shares remain available for future issuance under the GE Stock-Based Compensation and Incentive Plan for Consultants, Advisors and Independent Contractors (the Consultants Plan). |
Deferred Compensation
We offer certain deferred compensation programs and arrangements for executives.
Bonus Deferrals
ELIGIBILITY AND DEFERRAL OPTIONS. For 2022 and prior performance years, U.S. employees in our executive band and above, including the named executives, could elect to defer all or a portion of their annual bonus payment and be credited with earnings (or losses) on those deferrals under the options shown below. Participants may change their earnings option up to four times per year. The company makes all decisions regarding the earnings options that are offered and the measures for calculating earnings under those options.
TIME AND FORM OF PAYMENT. Participants can elect to contributereceive their deferred amounts upon separation from service either in a lump sum or in 10 to 20 annual installments. Participants may not withdraw any deferred amounts prior to separating from service.
| EARNINGS OPTION | | TYPE OF EARNINGS | | ACCOUNT BALANCE FOR
EARNINGS CALCULATION | | EARNINGS AMOUNT* | | WHEN EARNINGS
CREDITED |
GE Stock Units
(based on GE stock value) S&P 500 Index Units
(based on S&P 500) | | Dividend-equivalent income | | Units in account on NYSE ex-dividend date | | Quarterly dividend declared for GE stock or the S&P 500, as applicable | | Quarterly |
Deferred Cash Units
(cash units) | | Interest income | | Daily outstanding account
balance | | Prior calendar months average yield for U.S. Treasury Notes and Bonds issued with maturities of 10 years and 20 years | | Monthly |
| * | None of the bonus deferral options provide for above-market interest as defined by the SEC. |
Salary Deferrals
ELIGIBILITY. In prior years, we periodically offered eligible employees in our executive band and above the opportunity to defer their salary payments (the last such plan was offered in 2010 for 2011 salary). Individuals who were named executives at the time a deferred salary program was offered were not eligible to participate. Among our named executives, only Mr. Stokes has participated in our salary deferral programs.
INTEREST INCOME. These programs provide accrued interest on deferred amounts (including an above-market interest rate as defined by the SEC) ranging from 6% to 14% compounded annually.
TIME AND FORM OF PAYMENT. Our deferred salary programs have required participants to elect to receive deferred amounts either in a lump sum or in 10 to 20 annual installments. Participants may not withdraw any deferred amount prior to separating from service.
GE 2023 PROXY STATEMENT 47
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GE Restoration Plan
ELIGIBILITY. U.S. employees who become U.S. executives on or after January 1, 2021, accrue benefits under the GE Restoration Plan, instead of any benefits under the GE Supplementary Pension Plan (including the Executive Retirement Benefit) (see Pension Benefits on page 49 for information regarding the GE Supplementary Pension Plan). As of December 31, 2022, only Mr. Arduini accrued benefits under the GE Restoration Plan. (See Impact of GE HealthCare Spin-Off on Deferred Compensation Programs, below, for information regarding the impact of the GE HealthCare Spin-Off on Mr. Arduini’s benefit under the GE Restoration Plan.)
BENEFIT FORMULA. GE Restoration Plan participants are credited with 7% of their annual earnings, which include base salary and up to 10%one-half of eligible bonus payments, which exceed the IRS-prescribed limit applicable to tax-qualified plans ($305,000 for 2022).
EARNINGS OPTIONS AND VESTING. The annual credits are notionally invested as elected by the participant in earnings options that generally mirror the investment options available under the broad-based tax qualified GE RSP. Participants may change their election up to 12 times per quarter. The company makes all decisions regarding the earnings options that are offered and the measures for calculating earnings under those options. Earnings are currently credited daily. Participants generally vest in their GE Restoration Plan accounts after three years of service.
TIME AND FORM OF PAYMENT. Vested amounts under the GE Restoration Plan are paid in a lump sum, generally in July of the year following the year of a participant’s separation from service.
Nonqualified Deferred Compensation Table
The table below shows amounts credited to the named executives’ accounts under nonqualified deferred compensation plans and plan balances as of December 31, 2022. No withdrawals or distributions from these plans were made in 2022.
| | | | | | | | AGGREGATE EARNINGS
IN LAST FISCAL YEAR | | AGGREGATE BALANCE
AT LAST FISCAL YEAR-END |
| NAME | | EXECUTIVE
CONTRIBUTIONS
IN 2022 | | COMPANY
CREDITS
IN 2022 | | DEFERRED
BONUS
PROGRAM | | DEFERRED
SALARY
PROGRAM | | GE
RESTORATION
PLAN | | DEFERRED
BONUS
PROGRAM | | DEFERRED
SALARY
PROGRAM | | GE
RESTORATION
PLAN |
| Culp | | | | $0 | | | N/A | | | –$ | 376,275 | | | N/A | | | | N/A | | | $ | 1,693,625 | | | | N/A | | | | N/A |
| Dybeck Happe | | | | $0 | | | N/A | | | $ | 0 | | | N/A | | | | N/A | | | $ | 0 | | | | N/A | | | | N/A |
| Arduini | | | | $0 | | $ | 74,970 | | | $ | 0 | | | N/A | | | $ | 0 | | | $ | 0 | | | | N/A | | | $ | 74,970 |
| Slattery | | | | $0 | | | N/A | | | $ | 0 | | | N/A | | | | N/A | | | $ | 0 | | | | N/A | | | | N/A |
| Stokes | | | | $0 | | | N/A | | | $ | 107 | | $ | 8,210 | | | | N/A | | | $ | 3,716 | | | $ | 104,799 | | | | N/A |
EXECUTIVE CONTRIBUTIONS IN 2022. Amounts represent compensation deferred during 2022.
COMPANY CREDITS IN 2022. Amounts represent accrued company credits in the GE Restoration Plan in 2022.
AGGREGATE EARNINGS IN 2022. Reflects earnings on each type of deferred compensation listed in this section that were credited to the named executives’ deferred compensation account during 2022. The earnings may be positive or negative, depending on the named executive’s investment choice, and are calculated based on the account balance attributable to each earnings option as of December 31, 2022; minus that amount as of December 31, 2021; minus any contributions during the year. See the Summary Compensation Table on page 42 for the above-market portion of these earnings in 2022.
AGGREGATE BALANCE AT DECEMBER 31, 2022. The fiscal year-end balance reported in the table above includes $2.1 million for deferred bonus for Mr. Culp that was previously reported in the Summary Compensation Table and $3,610 for deferred bonus and $96,589 for deferred salary for Mr. Stokes that were previously reported in the Summary Compensation Table.
Impact of GE HealthCare Spin-Off on Deferred Compensation Programs
In anticipation of the spin-off of GE HealthCare, each of the deferred bonus and salary plans were split into three continuing mirror plans, effective January 1, 2023, to be maintained by GE Aerospace, GE Vernova, and GE HealthCare, respectively. Mr. Culp and Mr. Stokes’ deferred salary and bonus plan benefits, as applicable, were allocated to plans to be maintained by GE Aerospace after the planned GE Vernova spin-off.
Similarly, the Restoration Plan was split into two plans effective January 1, 2023 – one maintained by GE HealthCare, and one maintained by GE. Mr. Arduini’s Restoration Plan benefits were allocated to the GE HealthCare Restoration Plan. We anticipate splitting the GE Restoration Plan again in anticipation of the planned spin-off of GE Vernova.
48 GE 2023 PROXY STATEMENT
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Pension Benefits
The company provides retirement benefits to certain named executives based in the United States under the same GE Pension Plan and GE Supplementary Pension Plan in which other eligible U.S. employees participate. The GE Pension Plan is a funded, tax-qualified plan. The Supplementary Pension Plan is an unfunded, unsecured obligation of the company and is not qualified for tax purposes.
GE Pension Plan
ELIGIBILITY AND VESTING. The GE Pension Plan is a broad-based retirement program for U.S.-based employees that has been closed to new participants since 2012 (2011 for salaried new hires). Effective January 1, 2023, the plan has been renamed the GE Aerospace Pension Plan. Employees who began working at GE after the plan was closed, including Messrs. Culp and Slattery and Ms. Dybeck Happe, are not eligible for this plan. Those employees who are eligible generally vest in the plan after five years of qualifying service. The plan also requires employee contributions, which vest immediately. Effective January 1, 2021, participants with salaried benefits stopped accruing benefits (and making contributions) under this plan and became eligible for the automatic contributions available to new hires under the GE RSP equalling 3% of eligible pay (up to the caps imposed under IRS rules), plus two years of transition credits equalling 2% of eligible pay per year. Mr. Arduini was previously employed by GE from 1990 to 2005, and accrued benefits under the GE Pension Plan during that time.
BENEFIT FORMULA. For Messrs. Stokes and Arduini, the plan provides benefits based primarily on a formula that takes into account their earnings for each fiscal year (through 2020) during which they were employed by GE. Since 1989, this formula has provided an annual benefit accrual equal to 1.45% of a named executive’s earnings for the year up to covered compensation and 1.9% of his or her earnings for the year in excess of covered compensation. Covered compensation was $60,000 for 2020 and has varied over the years based in part on changes in the Social Security taxable wage base. For purposes of the formula, annual earnings include base salary and up to one-half of bonus payments, but may not exceed an IRS-prescribed limit applicable to tax-qualified plans ($285,000 for 2020). As a result, the maximum incremental annual benefit a named executive could have earned for service in 2020 was $5,145, and in 2021 and subsequent years is $0 due to the stoppage of accruals. Over the years, we have made special one-time adjustments to this plan that increased eligible participants pensions, but no adjustment was made in 2022.
TIME AND FORM OF PAYMENT. The accumulated benefit an employee earns is payable after retirement on a monthly basis for life with a guaranteed minimum benefit of five years. The normal retirement age as defined in this plan is 65; however, employees who began working at GE prior to 2005, including Messrs. Stokes and Arduini, may retire at age 60 without any reduction in benefits. In addition, the plan provides for Social Security supplements and spousal joint and survivor annuity options.
TAX CODE LIMITATIONS ON BENEFITS. The tax code limits the benefits payable under the Pension Plan. For 2022, the maximum single life annuity a named executive could have received under these limits was $245,000 per year. This ceiling is actuarially adjusted in accordance with IRS rules to reflect employee contributions, actual forms of distribution and actual retirement dates.
GE Supplementary Pension Plan
ELIGIBILITY AND VESTING. The GE Supplementary Pension Plan is an unfunded and non-tax-qualified retirement program that provides retirement benefits to eligible U.S.-based employees in the executive
band and above, including the named executives. Effective January 1, 2023, the plan has been renamed the GE Aerospace Supplementary Pension Plan. Employees generally must remain continuously employed until age 60 in order to vest in a benefit under the plan. For those who became U.S. executives prior to January 1, 2011, including Mr. Stokes, the plan provides an annuity benefit above amounts available under the GE Pension Plan (a Supplementary Pension benefit). For those who became U.S. executives on or after January 1, 2011 (and before January 1, 2021), including Messrs. Culp and Slattery and Ms. Dybeck Happe, the plan provides a retirement benefit paid in 10 annual installments (an Executive Retirement Benefit). Effective January 1, 2021, participants eligible for the Supplementary Pension benefit, including Mr. Stokes, stopped accruing that benefit and began accruing an Executive Retirement Benefit for their future credited service. The Executive Retirement Benefit was also closed to new participants and, effective January 1, 2021, new and rehired U.S. executives, including Mr. Arduini, are instead participating in the GE Restoration Plan (described above). Mr. Arduini forfeited the Supplementary Pension he previously accrued when he left GE in 2005, prior to satisfying the vesting conditions.
Supplementary Pension Benefit
BENEFIT FORMULA. A named executive’s annual Supplementary Pension benefit, when combined with certain amounts payable under the company’s other pension programs and Social Security, will equal 1.75% of his or her earnings credited for retirement benefits multiplied by the number of years of credited service (through 2020), up to a maximum of 60% of such earnings credited for retirement benefits. The earnings credited for retirement benefits are the named executive’s average annual compensation (base salary and bonus) for the highest 36 consecutive months out of the last 120 months prior to retirement (or December 31, 2020, if earlier).
TIME AND FORM OF PAYMENT. The Supplementary Pension benefit would be provided to eligible employees, including Mr. Stokes, after retirement as monthly payments for life (with a guaranteed minimum benefit of five years), and could not be received in a lump sum. The plan also provides for spousal joint and survivor annuity options. The normal retirement age under the plan is 65; however, executives eligible for this benefit who began working at GE prior to 2005, including Mr. Stokes, may retire at age 60 without any reduction in benefits.
Executive Retirement Benefit
BENEFIT FORMULA. A named executive’s Executive Retirement Benefit will equal 18% of his or her earnings credited for retirement benefits for each year of credited service as a GE Officer (as defined in the AmendedGE Supplementary Pension Plan)., plus 14% of such earnings for each year of credited service as an Executive Director or Senior Executive Director and 10% of such earnings for each year of credited service as an Executive. The earnings credited for retirement benefits are the named executive’s average annual compensation (base salary and bonus) for the highest 36 consecutive months out of the last 120 months prior to retirement.
MATCHING CONTRIBUTIONS.TIME AND FORM OF PAYMENT. The Executive Retirement Benefit would be provided to Messrs. Culp and Slattery and Ms. Dybeck Happe after retirement as 10 equal annual installment payments and could not be received in a lump sum. Mr. Stokes also began accruing an Executive Retirement Benefit beginning January 1, 2021, when he stopped accruing additional Supplementary Pension benefits. Executives eligible for this benefit may retire at age 60 but are subject to a reduction in benefits of up to 25% for retirement prior to age 65.
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GE Excess Benefits Plan
ELIGIBILITY. The GE Excess Benefits Plan is an unfunded and non-tax-qualified retirement program that is offered to participants’ accounts (inemployees whose benefits under the GE stock)Pension Plan are limited by certain tax code provisions. Beginning January 1, 2021, no further benefit accruals are permitted for any participants under this plan. Effective January 1, 2023, the plan has been renamed the GE Aerospace Excess Benefits Plan.
BENEFIT FORMULA. Benefits payable under this plan are equal to 15%the amount that would be payable under the terms of the GE Pension Plan disregarding the limitations imposed by certain tax code provisions minus the amount actually payable under the GE Pension Plan taking those limitations into account.
TIME AND FORM OF PAYMENT. Benefits are generally payable at the same time and in the same manner as permitted under the Pension Plan.
Pension Benefits Table
The table below shows the present value of the accumulated benefit as of December 31, 2022, for the named executives under each plan, as calculated based upon the assumptions described below. Although SEC rules require us to show this present value, the named executives are not entitled to receive these amounts in a lump sum. None of the named executives received a payment under these plans in 2022.
| | | | | | PRESENT VALUE OF ACCUMULATED BENEFIT | | |
| NAME | | NUMBER OF YEARS
CREDITED SERVICE | | | PENSION
PLAN | | | SUPPLEMENTARY
PENSION PLAN | | | EXECUTIVE
RETIREMENT
BENEFIT | | | EXCESS
BENEFITS
PLAN | | | PAYMENT
DURING LAST
FISCAL YEAR |
| Culp | | | 4 | | | | N/A | | | | N/A | | | $ | 2,614,456 | | | | N/A | | | | $0 |
| Dybeck Happe | | | 3 | | | | N/A | | | | N/A | | | $ | 499,591 | | | | N/A | | | | $0 |
| Arduini* | | | 15 | | | $ | 488,539 | | | | N/A | | | | N/A | | | | $0 | | | | $0 |
| Slattery | | | 2 | | | | N/A | | | | N/A | | | $ | 485,146 | | | | N/A | | | | $0 |
| Stokes** | | | 24 | | | $ | 846,376 | | | $ | 8,150,048 | | | $ | 409,652 | | | | $0 | | | | $0 |
| * | Mr. Arduini’s pension benefits reflect his accrued benefits from his prior employment with GE. Mr. Arduini’s credited service is limited to 15 years under the Pension Plan, from his prior employment with GE before future accruals stopped effective January 1, 2021. Mr. Arduini forfeited the Supplementary Pension he previously accrued when he left GE in 2005, prior to satisfying the vesting conditions. |
| ** | Mr. Stokes’s credited service is limited to 24 years under the Pension Plan and the Supplementary Pension benefit, as no future accruals of those benefits are permitted effective January 1, 2021. For purposes of the Executive Retirement Benefit, Mr. Stokes’s credited service is limited to his service on and after January 1, 2021 (two years as of December 31, 2022). |
PRESENT VALUE OF ACCUMULATED BENEFIT. The accumulated benefit is based on years of service and earnings (base salary and bonus) considered by the plans for the period through December 31, 2022. It also includes the value of contributions made by the named executives throughout their careers. For purposes of calculating the present value, we assume that the named executives will remain in service until the age at which they may retire without any reduction in benefits. For Messrs. Culp and Slattery and Ms. Dybeck Happe this is age 65, for Mr. Stokes, this is age 60 for the Pension Plan and the Supplementary Pension benefit and age 65 for the Executive Retirement Benefit, and for Mr. Arduini, this is age 60 for the Pension Plan. The present value calculation for Mr. Arduini’s Supplementary Pension does not include the amount he previously accrued and forfeited when he left GE in 2005, prior to satisfying the vesting conditions. We also assume that benefits are payable under the available forms of annuity consistent with the assumptions described in the Postretirement Benefit Plans notes in GE’s financial statements in our Annual Report on Form 10-K 2022, including the statutory discount rate assumption of 5.53% for the GE Pension Plan and 5.50% for the GE Supplementary Pension Plan and GE Excess Benefits Plan. The postretirement mortality assumption used for present value calculations for U.S. beneficiaries is the Pri-2012 Healthy Retiree mortality table projected to 2016, adjusted for GE’s experience and factoring in projected generational improvements.
Impact of GE HealthCare Spin-Off on Pension Plans
In anticipation of the spin-off of GE HealthCare, the GE Pension Plan, the GE Supplementary Pension Plan and the GE Excess Benefits plans were each split into three continuing plans, effective January 1, 2023, to be maintained by GE Aerospace, GE Vernova, and GE HealthCare, respectively. Mr. Arduini’s pension was allocated to the Pension Plan maintained by GE HealthCare. Benefits for Mr. Culp, Ms. Dybeck Happe and Mr. Slattery remained in the Executive Retirement Benefit portion of the Supplementary Pension Plan to be maintained by GE Aerospace after the GE Vernova spin-off. Mr. Stokes’s benefits remained in the Pension Plan and Supplementary Pension Plan to be maintained by GE Aerospace after the planned GE Vernova spin-off.
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Potential Termination Payments
In this section, we describe and quantify certain compensation that would have been payable under existing compensation plans and arrangements had a named executive’s employment terminated on December 31, 2022. For this hypothetical calculation, we have used each named executive’s compensation and service levels as of this date (and, where applicable, GE’s closing stock price on December 31, 2022). Since many factors (e.g., the time of year when the event occurs, GE’s stock price and the named executive’s age) could affect the nature and amount of benefits a named executive could potentially receive, any amounts paid or distributed upon a future termination may be different from those shown in the tables below. The amounts described below are in addition to benefits generally available to salaried employees, such as distributions under the GE RSP.
EMPLOYMENT AGREEMENTS FOR EMPLOYEES. As we have hired new executive talent from outside the company, we have entered into certain employment agreements with those individuals, generally at their request. Mr. Culp and Ms. Dybeck Happe each entered into employment agreements and Mr. Slattery and Mr. Arduini each entered into an offer letter agreement upon joining GE. Mr. Culp’s employment agreement and Mr. Arduini’s offer letter have subsequently been amended, as described below. The agreements for Messrs. Culp, Slattery, and Arduini and Ms. Dybeck Happe entitle them to certain post-termination benefits, in each case as further described below. Messrs. Arduini, Slattery and Stokes are also entitled to certain post-termination benefits as provided in the GE US Executive Severance Plan below.
EMPLOYMENT AGREEMENT WITH MR. CULP. We entered into an employment agreement with Mr. Culp upon his employment with GE in 2018, which was amended in August 2020 to extend the term to August 17, 2024, or such later date as mutually agreed by the parties up to and through August 17, 2025 (such date is referred to as the Expiration Date). His agreement provides for an annual base salary of $2.5 million, an annual bonus target at 150% of his salary, and an annual PSU award with a grant date fair value of $15 million, and was further amended on March 15, 2022, to reduce the 2022 annual grant of PSUs from $15 million to $5 million. His original employment agreement provided for a PSU inducement award, which he voluntarily relinquished in August 2020. In connection with the amendment in August 2020, he received a one-time Leadership Performance Share Award, with a target of 1,161,919 shares purchased(as adjusted for the reverse stock split). Under his employment agreement, Mr. Culp receives other benefits given to senior executives of the company. Mr. Culp is also subject to a non-compete agreement, which terminates 24 months after his termination if his employment is terminated on or before the Expiration Date, and which terminates 12 months after termination of his employment if his employment terminates between the Expiration Date and 12 months thereafter. Mr. Culp is not subject to a non-compete agreement if his employment terminates after the date that is 18 months following the Expiration Date. He is also subject to a non-solicitation clause covering the same periods as his non-compete agreement.
Under the terms of this agreement, if Mr. Culp is terminated for any reason other than cause or due to a resignation without good reason, he would be entitled to the balance of his prior year’s annual bonus (to the extent earned, but not paid). Assuming a termination date of December 31, 2022, Mr. Culp would not have been entitled to any amount with respect to these benefits. Additionally, if Mr. Culp is terminated without cause or voluntarily leaves for good reason, he would be entitled to cash severance equal to two times his annual salary plus target bonus, payable in bi-weekly installments over a two-year period, subject to any delay required by tax regulations. Assuming a termination date of December 31, 2022, Mr. Culp would have been entitled to a severance payment in the amount of $12,500,000. This severance would be subject to his providing a release to the company and his ongoing compliance with perpetual confidentiality and non-disparagement provisions and 24-month non-compete and non-solicitation provisions under his employment agreement.
Under the award agreement for Mr. Culp’s one-time Leadership Performance Share Award, Mr. Culp is entitled to accelerated vesting of the performance shares as described below for such events that occur prior to the end of the performance period:
| ● | Retirement on August 17, 2024 (coinciding with the end of his employment agreement): the performance shares for which performance was actually achieved during the portion of the performance period that has already elapsed as of August 17, 2024. |
| |
| ● | Death or Disability: Prior to the end of the performance period, the greater of (i) the performance shares for which performance was actually achieved during the portion of the performance period that has already elapsed as of the date of such termination or (ii) the performance shares for which performance was actually achieved during the entire performance period, prorated based on length of service during the performance period. |
| |
| ● | Termination without Cause or Resignation for Good Reason: the greater of (i) the performance shares for which performance was actually achieved during the portion of the performance period that has already elapsed as of the date of such termination or (ii) the threshold number of performance shares, prorated based on length of service during the performance period. |
| |
| ● | Change in Control: the greatest of (i) the performance shares for which performance was actually achieved during the portion of the performance period that has elapsed prior to the date of such change in control; (ii) the performance shares for which performance was actually achieved during the portion of the performance period that has elapsed prior to the date of such change in control, with the relevant stock price based on the per-share consideration received by shareholders in connection with the change in control; or (iii) the threshold number of performance shares. The spin-off of GE HealthCare did not, and the planned spin-off of GE Vernova will not, constitute a “change in control” for purposes of Mr. Culp’s Leadership Performance Share Award. |
See Equity Awards on page 54 regarding the value of the equity treatment.
GE 2023 PROXY STATEMENT 51
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Under Mr. Culp’s employment agreement and Leadership Performance Share Award agreement, the following terms have the meanings set forth below:
| ● | Cause generally means (i) the willful and continued failure of Mr. Culp to substantially perform his assigned duties for more than 30 days after the company notifies Mr. Culp of such failure, (ii) willfully engaging in conduct that is materially injurious to the company, including violating company policies, or (iii) the commission of a felony or crime involving dishonesty related to the company. |
| |
| ● | Change in control generally means (i) the acquisition of more than 30% of the company’s stock or voting power by any person, or (ii) the reorganization, merger, consolidation, sale or disposition of all or substantially all of the assets of the company, unless more than 50% of the surviving entity is controlled by the shareholders immediately prior to such event, in substantially the same proportions as their ownership immediately prior to the event. The spin-off of GE HealthCare did not, and the planned spin-off of GE Vernova will not, constitute a “change in control” for purposes of Mr. Culp’s agreements. |
| |
| ● | Disability generally means that, as a result of Mr. Culp’s incapacity due to physical or mental illness, he is absent from his duties on a full-time basis for six consecutive months and does not return to the performance of his duties within 30 days after written notice is provided. |
| |
| ● | Good reason generally means (i) a reduction in Mr. Culp’s compensation rights, other than the agreed reduction in base salary, commencing April 2020, (ii) failure to renominate Mr. Culp to the Board or removing him from the position of CEO, (iii) materially reducing Mr. Culp’s duties and responsibilities, (iv) assigning Mr. Culp duties that are materially inconsistent with his position or duties that materially impair his ability to function as CEO, (v) relocation of the company’s headquarters by more than 50 miles, or (vi) a material breach of Mr. Culp’s employment agreement by the company. |
EMPLOYMENT AGREEMENT WITH MS. DYBECK HAPPE. We entered into an employment agreement with Ms. Dybeck Happe upon her employment with GE. The agreement provides for an annual salary of $1.5 million, an annual bonus target at 125% of her salary, and long-term equity incentive awards with a grant date fair value of $4.9 million for 2020 and with a target grant date fair value of not less than $5.0 million for subsequent years. Upon commencement of her employment, she also received an award of stock options with a grant date fair value of $8.0 million (257,732 options, as adjusted for the reverse stock split) to compensate Ms. Dybeck Happe for value forfeited by her for leaving her prior employer. Ms. Dybeck Happe is subject to a non-compete and non-solicitation agreement, which terminates 12 months after her termination (for whatever reason).
Under the terms of her employment agreement, if Ms. Dybeck Happe is terminated without cause or voluntarily leaves for good reason at any time, subject to her providing a release to the company, she would be entitled to accelerated vesting of her new hire stock options which would remain exercisable through participant contributions. the end of the second calendar year following the year in which termination occurs. In addition, if such termination or departure occurs on or before December 31, 2023, she would be entitled to: (i) accelerated vesting of all then-outstanding long-term incentive awards, with the options remaining exercisable through the end of the second calendar year following the year in which termination or departure occurs, (ii) a lump sum cash payment equal to 12 months of base salary and target bonus and (iii) if she relocates back to Sweden within six months, reimbursement for certain relocation expenses. If such termination or departure occurs after December 31, 2023, Ms. Dybeck Happe will be eligible to receive the standard severance package provided to similarly situated officers of the company (which as of the signing date consisted of 12 months of base salary, but now consists of 18 months of base salary, as described below). Assuming a termination of employment as of December 31, 2022, the cash portion of this severance amount, excluding any relocation reimbursements, would be $3,375,000. See Equity Awards on page 54 regarding the value of the equity treatment.
Under the award agreement for Ms. Dybeck Happe’s one-time award of Leadership PSUs, Ms. Dybeck Happe is entitled to accelerated vesting of the PSUs on the same terms as described above with respect to Mr. Culp’s Leadership Performance Shares.
Under Ms. Dybeck Happe’s employment agreement and Leadership PSU award agreement, the following terms have the meanings set forth below:
| ● | Cause generally means (i) the willful failure of Ms. Dybeck Happe to perform her duties or to comply with a valid and legal directive of the company or the Board, (ii) engaging in dishonesty, illegal conduct or misconduct that materially harms or is reasonably likely to materially harm the company, (iii) conviction of, or nolo contendere plea to, a felony or of a misdemeanor involving moral turpitude, (iv) willful or grossly negligent unauthorized disclosure of confidential information, (v) material breach of any material obligation under the employment agreement or other agreement with the company, which harms or is reasonably likely to materially harm the company, or (vi) willful material failure to comply with company policies (and in the case of (i), (iv), (v) and (vi), the failure to cure such circumstances within 30 days of receiving notice). |
| |
| ● | Change in control generally has the same meaning described above with respect to Mr. Culp’s employment agreement and Leadership Performance Share Award agreement. The spin-off of GE HealthCare did not, and the planned spin-off of GE Vernova will not, constitute a “change in control” for purposes of Ms. Dybeck Happe’s agreements. |
| |
| ● | Good reason generally means (i) a material reduction in Ms. Dybeck Happe’s compensation, (ii) a material breach by the company of any material provision of the employment agreement or other agreement with the company, or (iii) a material, adverse change in Ms. Dybeck Happe’s title, authority, duties, responsibilities or reporting relationship, provided Ms. Dybeck Happe provides notice to the company and Board of the circumstances giving rise to the good reason and the circumstances are not cured within 30 days. |
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OFFER LETTER AGREEMENT WITH MR. SLATTERY. We entered into an offer letter agreement with Mr. Slattery upon the commencement of his employment with GE. The agreement provides for an annual salary of $1.25 million, an annual bonus target at 100% of his salary, long-term equity incentive awards with a grant date fair value of $3.0 million for 2020 and with a target grant date fair value of not less than $6.0 million for subsequent years. Upon commencement of his employment, he also received a new hire cash bonus of $1.0 million, and an award of stock options with a grant date fair value of $1.5 million (67,446 options, as adjusted for the reverse stock split) to compensate Mr. Slattery for value forfeited by him for leaving his prior employer. He is subject to a non-compete and non-solicitation agreement, which terminates 12 months after his termination (for whatever reason). Upon Mr. Slattery’s termination of employment, he will be eligible to receive the standard severance package provided to similarly situated officers of the company (which as of the signing date consisted of 12 months of base salary, but now consists of 18 months of base salary, as described below).
OFFER LETTER AGREEMENT WITH MR. ARDUINI. We entered into an offer letter agreement with Mr. Arduini upon the commencement of his employment with GE. The agreement provides for an annual salary of $1.25 million, an annual bonus target at 125% of his salary, and long-term equity incentive awards with a target grant date fair value of $7.0 million beginning with the annual 2022 grant (of which 50% was in PSUs, 30% was in stock options, and 20% was in RSUs). Upon the initial commencement of his employment, he also received an award of PSUs with a grant date fair value of $5.0 million to further incentivize, and align his compensation with, the performance of GE HealthCare. He is subject to a non-compete and non-solicitation agreement, which terminates 12 months after his termination (for whatever reason). Upon Mr. Arduini’s termination of employment (i) by GE HealthCare without cause or by Mr. Arduini for good reason, (ii) due to death or disability, or (iii) in connection with a change in control that does not result in him receiving a comparable offer, he would be eligible to receive the standard severance package provided to similarly situated officers of the company (which as of the signing date consisted of 18 months of his base salary).
Under Mr. Arduini’s offer letter agreement, the following terms have the meanings set forth below:
| ● | Cause generally has the same meaning as described above with respect to Ms. Dybeck Happe’s employment agreement and Leadership Performance Share Award agreement, except the 30-day cure period described for Ms. Dybeck Happe does not apply for Mr. Arduini. |
| |
| ● | Good reason generally means (i) a reduction in Mr. Arduini’s target compensation or any failure to pay compensation when due, (ii) a material breach by the company of any material provision of the offer letter agreement or other agreement with the company, or (iii) a material, adverse change in Mr. Arduini’s title, authority, duties, responsibilities or reporting relationship. |
| |
| ● | Change in control generally means (i) the acquisition of at least 50% of the company’s or GE HealthCare’s stock or voting power by any person, or (ii) the sale of substantially all of the assets of the company or GE HealthCare. The spin-off of GE HealthCare did not constitute a “change in control” for purposes of Mr. Arduini’s offer letter. |
In connection with the GE HealthCare spin-off, Mr. Arduini’s offer letter was subsequently amended, effective as of January 3, 2023, this amendment did not impact his compensation from GE during 2022.
US EXECUTIVE SEVERANCE PLAN. In order to standardize the severance payments available to U.S. executives who are not otherwise subject to an employment agreement providing a different amount, we adopted the GE US Executive Severance Plan effective January 1, 2021. Eligible executives who experience an employer-initiated termination of employment that is not for cause, and who are not offered a suitable position, receive between 6 to 18 months of base salary (based on their career band), which is paid in a lump sum. Outplacement services are also provided for the same period. To receive a benefit under the plan, the executive must enter into a separation agreement and release in a form acceptable to GE, which may also include cooperation, confidential information, non-disparagement, non-competition, non-solicitation and other covenants. With respect to our named executives, Messrs. Slattery and Stokes are eligible to participate under the plan at the 18-month level. Mr. Arduini was also eligible to participate in this plan at the 18-month level, prior to the spin-off of GE HealthCare. Assuming a termination date of December 31, 2022, the amount each eligible named executive would be entitled to receive under the US Executive Severance Plan is: Arduini ($1,875,000), Slattery ($1,875,000) and Stokes ($2,100,000).
Under the plan, the following terms have the meanings set forth below:
| ● | Cause generally means: (i) breach of any confidentiality, non-solicitation, non-competition or other material provision of an agreement with the company, (ii) conduct that has the potential to cause material harm to the company, (iii) an act of dishonesty, fraud, embezzlement or theft, (iv) conviction of, or plea of guilty or no contest to, a felony or crime involving moral turpitude, or (v) failure to comply with the company’s policies and procedures. |
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| ● | Suitable position generally means a position providing at least 80% of the executive’s base salary and annual incentive award opportunity. If the position is with the company, rather than a successor employer in a business disposition or other third-party in an outsourcing arrangement, the position must also be within 50 miles of the executive’s job location and in the same career band. |
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SHAREHOLDER APPROVAL OF SEVERANCE AND DEATH BENEFITS. If the Board were to agree to pay certain severance benefits or unearned death benefits to a named executive, we would seek shareholder approval. For severance benefits, this policy applies only when the executive’s employment had been terminated before retirement for performance reasons and the value of the proposed severance benefits exceeded 2.99 times the sum of his or her base salary and bonus. For this purpose, severance benefits would not include: (1) any payments based on accrued pension benefits; (2) any payments of salary or bonus amounts that had accrued at the time of termination; (3) any RSUs paid to a named executive who was terminated within two years prior to age 60; (4) any stock-based incentive awards that had vested or would otherwise have vested within two years following the named executive’s termination; and (5) any retiree health, life or other welfare benefits. See the Boards Governance Principles (see Helpful Resources on page 77) for the full policies.
Equity Awards
The following table shows the intrinsic value of equity awards that would have vested or become exercisable if the named executive had died, become disabled, retired or separated from the company as of December 31, 2022. Intrinsic value is based upon the company’s stock price (minus the exercise price in the case of stock options). Amounts shown assume the achievement of all applicable performance objectives at the target level. Our named executives generally are not entitled to benefits if they leave voluntarily (without good reason) or are terminated for cause (other than benefits already accrued) unless they satisfy the conditions for retirement eligibility.
POTENTIAL TERMINATION PAYMENTS TABLE (EQUITY BENEFITS)
| | | UPON DEATH | | | UPON DISABILITY | | | UPON RETIREMENT | | UPON INVOLUNTARY
TERMINATION* | | | UPON CHANGE OF
CONTROL** | |
| NAME | | STOCK
OPTIONS | | | RSUs/PSUs/
PERFORMANCE
AWARDS | | | STOCK
OPTIONS | | | RSUs/PSUs/
PERFORMANCE
AWARDS | | | STOCK
OPTIONS | | RSUs/PSUs/
PERFORMANCE
AWARDS | | STOCK
OPTIONS | | | RSUs/PSUs/
PERFORMANCE
AWARDS | | | STOCK
OPTIONS | | | RSUs/PSUs/
PERFORMANCE
AWARDS | |
| Culp | | | N/A | | | $ | 88,475,369 | | | | N/A | | | $ | 88,475,369 | | | N/A | | N/A | | | N/A | | | $ | 57,680,785 | | | | N/A | | | $ | 97,357,193 | |
| Dybeck Happe | | $ | 0 | | | $ | 14,227,458 | | | $ | 0 | | | $ | 14,227,458 | | | N/A | | N/A | | $ | 0 | | | $ | 5,330,049 | | | $ | 0 | | | $ | 11,457,445 | |
| Arduini | | $ | 0 | | | $ | 8,251,555 | | | $ | 0 | | | $ | 8,251,555 | | | N/A | | N/A | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| Slattery | | $ | 1,371,536 | | | $ | 14,689,979 | | | $ | 1,371,536 | | | $ | 14,689,979 | | | N/A | | N/A | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| Stokes | | $ | 0 | | | $ | 14,503,798 | | | $ | 0 | | | $ | 14,503,798 | | | N/A | | N/A | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| * | Addresses separation without cause or where the executive leaves for good reason, as defined under the applicable employment agreement. Benefits are not otherwise payable in the event of voluntary separation. |
| ** | In each case as defined under Mr. Culp’s employment agreement and Ms. Dybeck Happe’s Leadership PSU award agreement, as detailed above. |
DEATH/DISABILITY. Unvested options, RSUs and PSUs/performance shares would generally vest, depending on the award terms. Vested options would generally remain exercisable until their expiration date, and PSUs (other than Mr. Arduini’s New Hire PSU Award) and performance shares would remain subject to the achievement of the performance objectives. Mr. Arduini’s New Hire PSU Award would vest based on the average of target performance for uncompleted years of the performance period and actual performance for any completed years of the performance period. For these purposes, disability generally means the executive being unable to perform his or her job.
RETIREMENT. Unvested options, RSUs and PSUs/performance shares (other than Mr. Arduini’s New Hire PSU Award) held for at least one year would generally vest, depending on the award terms. Vested options would generally remain exercisable until their expiration date, and PSUs and performance shares would remain subject to the achievement of the performance objectives. For these purposes, retirement generally means reaching the applicable retirement age, typically age 60, and completing 5 years of service.
INVOLUNTARY TERMINATION. Under the terms of the Leadership Performance Share and Leadership PSU Award Agreements with Mr. Culp and Ms. Dybeck Happe, respectively, and Ms. Dybeck Happe’s
employment agreement, amounts shown reflect the value of their Leadership Awards if they had been terminated without cause or left for good reason. Under the terms of Mr. Arduini’s New Hire PSU Award, if a termination without cause or resignation for good reason occurs following December 31, 2023 but prior to the vesting date, the New Hire PSU Award would vest based on the average of target performance for the uncompleted years for the performance period and actual performance for any completed years of the performance period. None of the other named executives were entitled to any potential payments upon separation from the company, except for vesting of certain equity awards in the event that the executive transfers to a successor employer in a business disposition.
CHANGE OF CONTROL. Under the terms of the Leadership Performance Share and Leadership PSU Award Agreements with each of Mr. Culp and Ms. Dybeck Happe, they would have been eligible for the accelerated vesting of their Leadership Awards in the event of a change of control. The spin-off of GE HealthCare did not constitute a change in control. For additional detail, see Employment Agreement with Mr. Culp on page 51 and Employment Agreement with Ms. Dybeck Happe on page 52. None of our other named executives are entitled to the acceleration or payment of benefits in the event of a change of control.
54 GE 2023 PROXY STATEMENT
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Pension Benefits
Pension Benefits on page 49 describes the general terms of each pension plan in which the named executives participate, the years of credited service and the present value of their accumulated pension benefit (assuming payment begins at age 60 or 65, as noted above). The table below shows the pension benefits that would have become payable if the named executives had died, become disabled, voluntarily terminated or retired as of December 31, 2022.
In the event of death before retirement, for Messrs. Culp, Slattery and Stokes and Ms. Dybeck Happe, each of their respective beneficiaries may receive the following benefit:
| ● | Executive Retirement Benefit. 10 equal annual installments of his or her accrued benefit, reduced by up to 25% for commencement before attaining age 65. |
For Messrs. Stokes and Arduini, their surviving spouse may receive the following pension benefits:
| ● | Pension Plan. Because Messrs. Stokes and Arduini (accounting for Mr. Arduini’s prior service) have more than 15 years of service, either an annuity, as if they had retired and elected the spousal 50% joint and survivor annuity option prior to death, or an immediate lump-sum payment based on five years of pension distributions, in each case based upon the accrued benefit. (See Impact of GE HealthCare Spin-Off on Pension Plans for information regarding the impact of the GE HealthCare Spin-Off on Mr. Arduini’s benefit under the Pension Plan.) |
For Mr. Stokes, his surviving spouse may receive the following pension benefits:
| ● | Supplementary Pension Benefit. Because Mr. Stokes has more than 15 years of service, a lump-sum payment based on whichever of the following has a higher value: (1) the 50% survivor annuity that the spouse would have received under this plan if Mr. Stokes had retired and elected the spousal 50% joint and survivor annuity option prior to death, or (2) five years of pension distributions under this plan. |
The amounts payable depend on several factors, including employee contributions and the ages of the named executive and surviving spouse.
In the event a disability occurs before retirement:
For Messrs. Culp and Slattery and Ms. Dybeck Happe, they may receive 10 equal annual installments of their accrued Executive Retirement Benefit, reduced by up to 25% for commencement before attaining age 65, but only once they have attained 15 years of service.
For Mr. Arduini, having more than 15 years of service (accounting for his prior service), he could have received an annuity payment of accrued GE Pension benefits.
Mr. Stokes, having more than 15 years of service, may receive an annuity payment of accrued GE Pension and Supplementary Pension benefits, and 10 equal annual installments of his Executive Retirement Benefit.
POTENTIAL TERMINATION PAYMENTS TABLE (PENSION BENEFITS)
| NAME | | LUMP SUM
UPON DEATH | | | ANNUAL
BENEFIT*
UPON
DEATH | | | ANNUAL
BENEFIT*
UPON
DISABILITY | | | ANNUAL
BENEFIT*
UPON
VOLUNTARY
TERMINATION | | | ANNUAL
BENEFIT*
UPON
RETIREMENT |
| Culp | | | N/A | | | $ | 331,018 | | | | N/A | | | $ | 0 | | | N/A |
| Dybeck Happe | | | N/A | | | $ | 104,273 | | | | N/A | | | $ | 0 | | | N/A |
| Arduini | | | N/A | | | $ | 17,938 | | | | 38,709 | | | $ | 35,610 | | | N/A |
| Slattery | | | N/A | | | $ | 82,471 | | | | N/A | | | $ | 0 | | | N/A |
| Stokes | | $ | 6,501,541 | | | $ | 130,432 | | | $ | 1,116,170 | | | $ | 90,676 | | | N/A |
| * | Annual amounts shown for Messrs. Culp and Slattery and Ms. Dybeck Happe are payable in 10 installments as the Executive Retirement Benefit. Annual amounts shown upon death or disability for Mr. Stokes are annuity payments applicable to GE Pension Plan and Supplementary Pension participants, except that $81,047 of such amount is payable in 10 installments as the Executive Retirement Benefit. Annual amounts shown upon death or disability for Mr. Arduini are annuity payments applicable to GE Pension Plan participants. Annual amounts shown upon voluntary termination for Messrs. Stokes and Arduini are annuity payments applicable to GE Pension Plan participants. |
LUMP SUM UPON DEATH. Lump sum payable to the surviving spouse after death. A lump sum is not available to the surviving spouse of Messrs. Culp and Slattery and Ms. Dybeck Happe under the terms of the Executive Retirement Benefit. For Mr. Stokes, the lump sum represents the Supplementary Pension benefit payable in the event of death. There is no lump sum for Mr. Arduini since he is not eligible for the Supplementary Pension.
ANNUAL BENEFITS UPON DEATH. For Messrs. Culp and Slattery and Ms. Dybeck Happe, 10 annual installment payments as the Executive Retirement Benefit. For Mr. Arduini, the annual amount is payable for the life of the surviving spouse as the GE Pension Plan benefit. For Mr. Stokes, the annual amount is payable for the life of the surviving spouse as the GE Pension Plan benefit, except that $81,047 of such amount is payable in 10 annual installments as the Executive Retirement Benefit.
ANNUAL BENEFITS UPON DISABILITY. Messrs. Culp and Slattery, and Ms. Dybeck Happe would not be eligible for disability benefits because they do not yet have 15 years of service. For Mr. Arduini, the annual amount includes the 50% joint and survivor annuity as the GE Pension Plan benefits. For Mr. Stokes, the annual amount includes the 50% joint and survivor annuity as the GE Pension Plan and Supplementary Pension benefits, except that $81,047 of such amount is payable in 10 annual installment payments as the Executive Retirement Benefit, in each case commencing after disability.
ANNUAL BENEFITS UPON VOLUNTARY TERMINATION. For Messrs. Stokes and Arduini, the annual amount includes the 50% joint and survivor annuity payable at age 60 under the GE Pension Plan; this does not include any payments under the GE Supplementary Pension Plan (either the Supplementary Pension benefit or the Executive Retirement Benefit) because they are forfeited upon voluntary termination before age 60.
ANNUAL BENEFITS UPON RETIREMENT. None of the named executives are eligible to retire.
GE 2023 PROXY STATEMENT 55
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Deferred Compensation
The named executives are entitled to receive the vested amount in their deferred compensation accounts if their employment terminates. Between the termination event and the date that distributions are made, these accounts would continue to increase or decrease in value based on changes in the value of the named executive’s earnings option. Therefore, amounts received by the named executives would differ from those shown in the Nonqualified Deferred Compensation Table on page 48. See Deferred Compensation on page 47 for information on the available distribution types under each plan.
Life Insurance Benefits
For a description of the supplemental life insurance plans that provide coverage to the named executives, see Life Insurance Premiums on page 43. Messrs. Culp, Slattery, and Arduini, and Ms. Dybeck Happe do not qualify for these supplemental life insurance plans, as they were discontinued for executives joining the company (or being promoted to the relevant band of seniority) on or after January 1, 2018. If the named executives had died on December 31, 2022, the survivors of the named executives would have received the following under these arrangements.
| NAME | | DEATH
BENEFIT | |
| Culp | | $ | 0 | |
| Dybeck Happe | | $ | 0 | |
| Arduini | | $ | 0 | |
| Slattery | | $ | 0 | |
| Stokes | | $ | 9,883,378 | |
The company would continue to pay the premiums in the event of a disability for Executive Life, until the maturity date, and under Leadership Life, until the later of age 65 or 10 years in the plan.
Other Executive Compensation Policies & Practices
Roles and Responsibilities in Succession Planning and Compensation
MANAGEMENT DEVELOPMENT & COMPENSATION COMMITTEE.
The committee has primary responsibility for helping the sole rightBoard develop and evaluate potential candidates for executive positions and for overseeing the development of executive succession plans. As part of this responsibility, the committee oversees the compensation program for the CEO and the other named executives.
MANAGEMENT. Our CEO and our Chief Human Resources Officer help the committee administer our executive compensation program. The Chief Human Resources Officer also advises the committee on matters such as past compensation, total annual compensation, potential accrued benefits, GE compensation practices and guidelines, company performance, industry compensation practices and competitive market information.
Our Policies on Compensation Consultants
STRATEGIC USE OF COMPENSATION CONSULTANTS. From time to determine how foreign exchange ratestime, the committee and the company’s human resources function have sought the views of Semler Brossy Consulting Group, LLC (Semler Brossy) about market intelligence on compensation trends and on particular compensation programs designed by our human resources function. For 2022, the Management Development & Compensation Committee and the company’s human resources function consulted with Semler Brossy on market practices relating to senior executive compensation. In addition, the Governance Committee and the company’s legal function consulted with Semler Brossy on market practices relating to compensation and benefits for non-employee directors.
COMPENSATION CONSULTANT INDEPENDENCE POLICY. Any compensation consultant that advises the Board on executive or director compensation will not at the same time advise the company on any other human resources matter, and the committee has determined that Semler Brossy’s work with the committee, the Governance Committee and the company’s human resources and legal functions does not raise any conflict of interest.
Clawbacks and Other Remedies for Potential Misconduct
CLAWBACKS. The Board may seek reimbursement of any portion of incentive compensation in connection with an executive officer’s fraudulent or illegal misconduct, or if an executive officer’s conduct resulted in a material inaccuracy in the company’s financial statements or in performance metrics affecting the executive officer’s compensation. If the Board determines that an executive officer engaged in fraudulent or illegal misconduct that resulted in a material inaccuracy in the company’s financial statements or in performance metrics affecting the executive officer’s compensation, the Board will seek reimbursement of any portion of incentive compensation paid or awarded to the executive that is greater than would have been paid or awarded if calculated based on the accurate financial statements or performance metric. We intend to amend our clawback policy or adopt a new clawback policy that is consistent with the NYSE listing standards adopted under Exchange Act Rule 10D-1. For more information, see our Governance Principles (see Helpful Resources on page 77).
OTHER REMEDIES. In cases of detrimental misconduct by an executive officer, the Board may also take a range of other actions to remedy the misconduct, prevent its recurrence, and discipline the individual as appropriate, including terminating the individual’s employment. These remedies would be in addition to, and not in lieu of, any actions imposed by law enforcement agencies, regulators or other authorities.
Compensation Risk Assessment
The committee oversees an annual risk assessment of the company’s executive compensation policies and practices. For 2022, the assessment was led by management, with review and input from the company’s independent compensation consultant. Based on results of the assessment, the committee concluded that the company’s executive compensation design does not encourage excessive risk taking.
56 GE 2023 PROXY STATEMENT
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Stock Ownership and Equity Grant Policies
STOCK OWNERSHIP REQUIREMENTS. We require our named executives to own significant amounts of GE stock as shown below. The required amounts are set at multiples of base salary. Executives have five years from the time they are first hired or promoted into a position at the senior vice president level or above to meet the requirement. All named executives are in compliance with our stock ownership requirements. For details on these requirements, see our Governance Principles (see Helpful Resources on page 77). The named executive’s ownership is shown in the Beneficial Ownership Table on page 25.
|
STOCK OWNERSHIP REQUIREMENTS
(MULTIPLES OF BASE SALARY) |
|
| 10X forCEO | | 4X forsenior vice presidents |
| | |
HOLDING PERIOD REQUIREMENTS. Our executive officers must hold the net shares of GE stock they received from PSUs and RSUs until satisfaction of the stock ownership requirements. In addition, the net shares of GE stock received through all stock option exercises must be held for one year, and the net shares of GE stock received upon settlement of PSUs granted in 2020 and thereafter, and of RSUs granted in 2022 and thereafter, must also be held for one year.
NO HEDGING. We believe our executive officers and directors should not speculate or hedge their interests in our stock. We therefore prohibit them from entering into any derivative transactions in GE stock, including any short sale, forward, equity swap, option or collar that is based on GE’s stock price. These restrictions are contained in our Governance Principles (see Helpful Resources on page 77). These restrictions are not applicable to other GE employees.
NO PLEDGING. We prohibit executive officers and directors from pledging GE stock. These restrictions are contained in our Governance Principles (see Helpful Resources on page 77).
NO OPTION BACKDATING OR SPRING-LOADING. The exercise price of each stock option is based on the closing price of GE stock on the grant date.
NO OPTION REPRICING. We prohibit the repricing of stock options. This includes amending outstanding options to lower their exercise price, substituting new awards with a lower exercise price or executing a cash buyout.
NO UNEARNED DIVIDEND EQUIVALENTS. Performance shares, PSUs and RSUs granted to our named executives do not pay dividends or dividend equivalents on shares that are not yet owned. Instead, dividends and dividend equivalents are accrued during the vesting or performance period and paid out only on shares actually received. For more information, see our Governance Principles (see Helpful Resources on page 77).
Tax Deductibility of Compensation
The Internal Revenue Code generally imposes a $1 million limit on the amount that a public company may deduct for compensation paid to the company’s applicable named executives, subject to an exception for qualifying performance-based compensation provided pursuant to a binding written contract in effect as of November 2, 2017. We generally expect that compensation paid to our applicable named executives in excess of $1 million will not be deductible.
Compensation Committee Interlocks and Insider Participation
During 2022, no member of the Management Development & Compensation Committee had a relationship that requires disclosure as a compensation committee interlock.
Management Development & Compensation Committee Report
The Management Development & Compensation Committee has reviewed the Compensation Discussion & Analysis (pages 26 through 57, which, pursuant to SEC rules, does not include the CEO Pay Ratio and Pay Versus Performance discussions) and discussed that analysis with management. Based on its review and discussions with management, the committee recommended to the Board that the Compensation Discussion & Analysis be included in the company’s annual report on Form 10-K for 2022 and this proxy statement. This report is provided by the following independent directors, who comprise the committee:
| Stephen Angel (Chair) | Francisco D’Souza |
| Sébastien Bazin | Edward Garden |
GE 2023 PROXY STATEMENT 57
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CEO Pay Ratio
HOW WE IDENTIFIED THE MEDIAN EMPLOYEE. After determining that, as of December 31, 2022, there had been no changes to our employee population or employee compensation arrangements that we believe would reasonably be expected to result in a significant change to our pay ratio disclosure, we determined to use the same median employee identified for purposes of our 2021 pay ratio disclosure. To identify the median employee, we identified our total employee population as of December 31, 2021, and, in accordance with SEC rules, excluded the CEO and employees from certain countries representing in aggregate less than 5% of our employee base*, to arrive at the initial median employee. We then used annualized salary data converted to U.S. dollars, including target bonus award payments to identify the 20 employees with salaries directly above and below the initial median employee. Once we identified this narrowed pool, we re-ranked the consideration pool of employees to find the median employee. We then calculated the median employee’s total compensation in accordance with SEC rules to use as the basis for purposesthe pay ratio. Foreign exchange rates were translated to the U.S. dollar equivalent based on rates as of December 31, 2021.
RATIO OF CEO PAY TO MEDIAN EMPLOYEE PAY. Our median employee earned $49,947 in total compensation for 2022. The total 2022 compensation reported for Mr. Culp as reported under SEC Total in the Summary Compensation Table on page 42 was $8,198,024. Based upon total compensation for 2022, we calculated that our ratio of CEO to median employee pay was 164 to 1. Our median employee is employed in France in our Power business.
| * | These 76 countries and their headcounts as of the calculation date were: Algeria (321), Angola (23), Argentina (310), Austria (444), Azerbaijan (4), Bahrain (45), Bangladesh (56), Belgium (215), Benin (8), Bermuda (2), Bulgaria (17), Cambodia (3), Cameroon (7), Chad (1), Chile (190), Colombia (274), Côte d’Ivoire (49), Croatia (515), Czechia (536), Denmark (647), Ecuador (2), Egypt (420), Estonia (12), Ethiopia (9), Georgia (2), Ghana (33), Greece (179), Hong Kong (123), Iraq (101), Jordan (28), Kazakhstan (56), Kenya (96), Kosovo (7), Kuwait (70), Kyrgyzstan (3), Latvia (7), Lebanon (39), Libya (12), Lithuania (10), Luxembourg (4), Mali (1), Mauritius (3), Mongolia (3), Montenegro (5), Morocco (94), Mozambique (3), Myanmar (10), Nepal (5), Netherlands (625), New Zealand (53), Nigeria (159), Oman (16), Pakistan (152), Panama (19), Peru (95), Philippines (105), Portugal (127), Qatar (112), Romania (619), Senegal (4), Serbia (36), Slovakia (38), South Africa (473), Sri Lanka (10), Sweden (583), Tajikistan (8), Tanzania (1), Thailand (275), Trinidad and Tobago (3), Tunisia (77), Turkmenistan (10), Ukraine (41), Uruguay (1), Uzbekistan (3), Venezuela (1), and Zambia (1), for a total of 8,651 employees. As of December 31, 2021, using the methodology required by the rule governing this disclosure, GE had approximately 58,000 U.S. employees and approximately 123,000 employees in other countries, for a total of approximately 181,000 employees globally factored into the sample before the country exclusions listed above. |
Pay Versus Performance
In accordance with Section 953(a) of the Amended Plan.
PROCEEDS.The proceeds fromDodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the sale of stockfollowing information about the relationships between compensation actually paid to named executives and administrative fees received undercompany performance. In this section, we refer to “compensation actually paid” and other terms used in the Amended Plan will constitute general funds of GEapplicable SEC rules. For information concerning the company’s compensation philosophy and may be used by us for any purpose.
ANTI-DILUTION ADJUSTMENTS.The Amended Plan provideshow the Plan Committee the right to make proportionate adjustmentscompany aligns executive compensation with its financial and operational performance, refer to the number and typeOverview of shares reflect stock splits, stock dividends, and other changes in the capital stock, mergers, consolidations, split-ups, split-offs and other corporate transactions, as it deems equitable in order to prevent the dilution or enlargement of benefits or potential benefits intended to be made available under the plan.
CORPORATE TRANSACTIONS.In the event of a proposed liquidation or dissolution of the company, any offering period then in progress will terminate and any unapplied payroll deductions will be refunded without matching contributions or interest, unless the Plan Committee determines otherwise. In the event of a proposed sale of all or substantially all of the company’s assets, or a merger or consolidation of the company, the Plan Committee will determine whether to convert purchase rights to purchase rights for the successor company, treat all purchase rights as exercisable as of a certain date, or terminate the Amended Plan and refund all unused payroll deductions to participating employees.
AMENDMENT AND TERMINATION.Subject to the limitations set forth below, the Plan Committee may amend the Amended Plan at any time and for any reason. Pursuant to NYSE rules, GE is required to seek shareowner approval for any amendment that would increase the number of shares authorized for issuance under the Amended Plan (except pursuant to the anti-dilution provisions discussed above), increase the percentage at which GE matches participants’ contributions to the Amended Plan, expand the classes of individuals eligible to participate in the Amended Plan, or any other amendment that is considered a “material revision” under the NYSE rules. The Amended Plan will terminate when no more shares remain available for issuance under the plan, unless earlier terminated at the discretion of the Board of Directors.
TAX TREATMENT.For U.S. federal income tax purposes, a participant does not realize income at the time of enrollment in the Amended Plan or purchase of a share upon exercise of a purchase right. A participant recognizes ordinary income, however, with respect to GE’s matching contributions, equal to the fair market value of the GE stock received on the date the stock is transferred to the participant. The ordinary income recognized by the participant will be subject to tax withholding by GE. GE is entitled to a deduction in the same amount as and at the time the employee recognizes ordinary income.The foregoing is only a summary of the effect of U.S. federal income taxation upon participants subject to U.S. taxation and GE with respect to participation under the Amended Plan and based on U.S. federal income tax laws in effect as of the dateOur Incentive Compensation Program section of this proxy statement. It does not intendWe refer collectively to be exhaustiveawards of RSUs, PSUs, performance shares and does not discuss the tax consequences arisingstock options as equity awards in the context of the participant’s death or the income tax laws of any municipality, state or foreign country in which the participant’s income or gain may be taxable or the gift, estate, excise, or any tax law other than U.S. federal income tax law. Because individual circumstances may vary, this Pay versus Performance section.
| | | | | | | | | AVERAGE SUMMARY | | | AVERAGE | | | VALUE OF INITIAL FIXED $100
INVESTMENT BASED ON: | | | | | | |
| YEAR (a)(1) | | SUMMARY
COMPENSATION
TABLE FOR PEO
(b)(1) | | | COMPENSATION
ACTUALLY PAID
TO PEO (c)(1)(2) | | | COMPENSATION
TABLE TOTAL FOR
NON-PEO NAMED
EXECUTIVES (d)(1) | | | COMPENSATION
ACTUALLY PAID TO
NON-PEO NAMED
EXECUTIVES (e)(1)(2) | | | TOTAL
SHAREHOLDER
RETURN (f) | | | PEER GROUP
TOTAL
SHAREHOLDER
RETURN (g)(6) | | | NET
INCOME
($M) (h) | | | COMPANY-SELECTED
PERFORMANCE
MEASURE: FREE
CASH FLOW* ($M) (i)(7) | |
| 2022 | | | $8,198,024 | | | | $(23,798,500 | ) | | | $8,969,318 | | | | $3,579,820 | (3) | | | $95 | | | | $127 | | | | $292 | | | | $4,758 | |
| 2021 | | | $22,663,449 | | | | $21,302,944 | (4) | | | $8,584,656 | | | | $7,655,599 | (4) | | | $107 | | | | $134 | | | | $(6,591 | ) | | | $1,889 | |
| 2020 | | | $73,192,032 | | | | $115,891,919 | (5) | | | $14,595,432 | | | | $15,948,471 | (5) | | | $97 | | | | $111 | | | | $5,546 | | | | $635 | |
| (1) | The named executives included in the above table were: |
| YEAR | | PRINCIPAL EXECUTIVE OFFICER (PEO) | | NON-PEO NAMED EXECUTIVES |
| 2022 | | H. Lawrence Culp, Jr. | | Carolina Dybeck Happe, John Slattery, Peter Arduini and Russell Stokes |
| 2021 | | H. Lawrence Culp, Jr. | | Carolina Dybeck Happe, John Slattery, Russell Stokes and Kieran Murphy |
| 2020 | | H. Lawrence Culp, Jr. | | Carolina Dybeck Happe, Jamie Miller, Kieran Murphy, John Slattery, Scott Strazik |
| (2) | The assumptions we used to calculate the values for RSU awards, PSU awards and performance share awards included in the calculation of compensation actually paid did not differ materially from those used to calculate grant date fair value for such awards. The assumptions we used to calculate the value for stock options did not differ materially from those used to calculate grant date fair value for such awards; we used a Black-Scholes value as of the applicable year-end or vesting date(s), determined using the same methodology we use to determine grant date fair value, except that we used (a) the closing stock price on the applicable revaluation date as the current market price and (b) a reduced expected life, given applicable time lapsed since grant date. |
58 GE advises all participants to consult their own tax advisor concerning the tax implications of awards granted under the Amended Plan.
NEW PLAN BENEFITS.The future benefits or amounts that would be received under the Amended Plan are not determinable at this time as both participation in the plan and the amounts that participants elect to contribute are voluntary.
562023 PROXY STATEMENT
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| (3) | The 2022 compensation actually paid to our PEO and the average compensation actually paid of our non-PEO named executives reflects the following adjustments required by the applicable SEC rules from Total compensation reported in the Summary Compensation Table: |
| | | | PEO | | AVERAGE OF NON-PEOs | |
| | TOTAL REPORTED IN 2022 SUMMARY COMPENSATION TABLE | | $8,198,024 | | $8,969,318 | |
| | Less, value of equity awards reported in the Summary Compensation Table | | 5,000,021 | | 5,650,966 | |
| | Add, year-end value of equity awards granted in 2022 that are unvested and outstanding | | 0 | | 2,477,808 | |
| | Add, change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | | (27,432,952 | ) | (2,103,904 | ) |
| | Add, fair market value of equity awards granted in 2022 and that vested in 2022 | | 0 | | 0 | |
| | Add, change in fair value (from prior year-end) of prior year equity awards that vested in 2022 | | 0 | | (245,204 | ) |
| | Less, prior year-end fair value of prior year equity awards that failed to vest in 2022 | | 0 | | 0 | |
| | Add, dividends and dividend equivalent payments paid during 2022 on unvested equity awards | | 0 | | 21 | |
| | Less, change in present value of accumulated pension plan benefits reported in the Summary Compensation Table | | 151,653 | | 26,279 | |
| | Add, service cost for defined benefit and pension plans | | 588,102 | | 159,026 | |
| | Add, prior service cost for defined benefit and pension plans | | 0 | | 0 | |
| | Compensation Actually Paid for Fiscal Year 2022 | | $(23,798,500 | ) | $3,579,820 | |
| (4) | The 2021 compensation actually paid to our PEO and the average compensation actually paid of our non-PEO named executives reflects the following adjustments required by the applicable SEC rules from Total compensation reported in the Summary Compensation Table: |
| | | | PEO | | AVERAGE OF NON-PEOs | |
| | TOTAL REPORTED IN 2021 SUMMARY COMPENSATION TABLE | | $22,663,449 | | $8,584,656 | |
| | Less, value of equity awards reported in the Summary Compensation Table | | 14,999,996 | | 4,975,039 | |
| | Add, year-end value of equity awards granted in 2021 that are unvested and outstanding | | 19,784,448 | | 5,208,170 | |
| | Add, change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | | (5,540,473 | ) | (1,419,958 | ) |
| | Add, fair market value of equity awards granted in 2021 and that vested in 2021 | | 0 | | 0 | |
| | Add, change in fair value (from prior year-end) of prior year equity awards that vested in 2021 | | 0 | | 277,481 | |
| | Less, prior year-end fair value of prior year equity awards that failed to vest in 2021 | | 0 | | 0 | |
| | Add, dividends and dividend equivalent payments paid during 2021 on unvested equity awards | | 0 | | 247 | |
| | Less, change in present value of accumulated pension plan benefits reported in the Summary Compensation Table | | 943,153 | | 202,512 | |
| | Add, service cost for defined benefit and pension plans | | 338,669 | | 182,553 | |
| | Add, prior service cost for defined benefit and pension plans | | 0 | | 0 | |
| | Compensation Actually Paid for Fiscal Year 2021 | | $21,302,944 | | $7,655,599 | |
| (5) | The 2020 compensation actually paid to our PEO and the average compensation actually paid of our non-PEO named executives reflects the following adjustments required by the applicable SEC rules from Total compensation reported in the Summary Compensation Table: |
| | | | PEO | | AVERAGE OF NON-PEOs | |
| | TOTAL REPORTED IN 2020 SUMMARY COMPENSATION TABLE | | $73,192,032 | | $14,595,432 | |
| | Less, value of equity awards reported in the Summary Compensation Table | | 72,054,874 | | 9,713,809 | |
| | Add, year-end value of equity awards granted in 2020 that are unvested and outstanding | | 144,077,163 | | 12,576,780 | |
| | Add, change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | | (4,688,606 | ) | (388,190 | ) |
| | Add, fair market value of equity awards granted in 2020 and that vested in 2020 | | 0 | | 0 | |
| | Add, change in fair value (from prior year-end) of prior year equity awards that vested in 2020 | | 0 | | (407,968 | ) |
| | Less, prior year-end fair value of prior year equity awards that failed to vest in 2020 | | 24,537,500 | | 0 | |
| | Add, dividends and dividend equivalent payments paid during 2020 on unvested equity awards | | 0 | | 1,051 | |
| | Less, change in present value of accumulated pension plan benefits reported in the Summary Compensation Table | | 463,799 | | 765,112 | |
| | Add, service cost for defined benefit and pension plans | | 367,503 | | 50,287 | |
| | Add, prior service cost for defined benefit and pension plans | | 0 | | 0 | |
| | Compensation Actually Paid for Fiscal Year 2020 | | $115,891,919 | | $15,948,471 | |
| (6) | As permitted by SEC rules, the peer group referenced for purposes of “Peer group total shareholder return” is that of the S&P 500 Industrials Index, which is the industry index reported in our annual report on Form 10-K for 2022 in accordance with Regulation S-K Item 201(e). For GE and our peer group, the TSR for each year reflects what the cumulative value of $100 would be, including reinvestment of dividends, if such amount were invested on December 31, 2019. |
| (7) | Free cash flow is the financial measure from the tabular list of Most Important Financial Measures below, which represents the most important performance measure used to link compensation actually paid to our named executives in 2022 to the company’s performance. Free cash flow is a non-GAAP financial measure. For information on why GE reports free cash flow and how it is calculated, refer to the Explanation of Non-GAAP Financial Measures and Performance Metrics section of this proxy statement. |
GE 20182023 PROXY STATEMENT59
Independent Auditor Engagement
We Engaged KPMG After a Rigorous Review ProcessRELATIONSHIPS BETWEEN COMPENSATION ACTUALLY PAID AND FINANCIAL PERFORMANCE MEASURES
In accordance with Item 402(v) of Regulation S-K, the company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table. The Audit Committee is directly responsiblecalculation of compensation actually paid in each of the years shown reflects required adjustments to equity award valuations under SEC rules, which were in turn impacted by our stock price performance and cancellation of performance-based awards that did not meet their established thresholds. When the committee selected performance measures in support of the design of our 2022 executive compensation programs, it focused on factors that it believes will further the company’s and business units’ goals for the appointment, compensation (including advance approvalyear, align with GE’s long-term strategic objectives and contribute to the creation of the audit fee), retentionlong-term shareholder value, including our ability to generate free cash flow, organic revenue growth, profit or adjusted profit (as applicable) and oversight of the independent registered public accounting firm that audits our financial statements and our internal control over financial reporting. The committee has selected KPMGorganic margin expansion, as well as our independent auditor for 2018. KPMG has servedadjusted earnings per share and operational measures such as safety performance. For more information about these factors and decisions that informed the 2022 compensation of our independent auditor since 1909.named executive officers, see the Compensation Discussion & Analysis section of this proxy statement.
The Audit Committee annually reviews KPMG’s independencechart below depicts compensation actually paid and performance in deciding whether to retain KPMG or engage a different independent auditor. In the course of these reviews, the committee considers, among other things:
— | KPMG’s historical and recent performance on the GE audit,including the results of an internal, worldwide survey of KPMG’s service and quality;
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— | KPMG’s capability and expertisein handling the breadth and complexity of our worldwide operations;
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— | An analysis of KPMG’s known legal risks and any significant legal or regulatory proceedingsin which it is involved (including an interview with KPMG’s chairman and CEO and General Counsel and a review of the number of audit clients reporting restatements as compared to other major accounting firms);
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— | External data on audit quality and performance,including recent Public Company Accounting Oversight Board (PCAOB) reports on KPMG and its peer firms;
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— | Appropriateness of KPMG’s feesfor audit and non-audit services, on both an absolute basis and as compared to its peer firms; and
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— | KPMG’s independence and tenure as our auditor,including the benefits and independence risks of having a long-tenured auditor and controls and processes that help ensure KPMG’s independence (as described below).
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Based on this evaluation, the Audit Committee believes that KPMG is independent and that it is in the best interestscumulative TSR of GE and the S&P 500 Industrials Index for the three years shown. A significant portion of our shareownersexecutive compensation program is comprised of equity awards, and compensation actually paid for such years was most strongly affected by our stock price performance, as reflected in the equity award valuations required by SEC rules. In addition, our TSR performance being below that of the peer group, the S&P 500 Industrials Index, adversely affected our named executives’ equity award compensation in two of the years shown. Under those awards’ respective terms, our TSR performance resulted in the cancellation of the 2020 PSU awards, which had no payout due to retain KPMGthree-year TSR performance, and a downward adjustment to the value of the 2021 PSU awards, for which three-year TSR performance is a modifier.
COMPENSATION ACTUALLY PAID VS. TOTAL SHAREHOLDER RETURN (TSR)
Net income is not a financial performance measure that we use in the compensation program design for our named executives. Accordingly, there is not a direct relationship between the compensation actually paid to our named executives and net income. In addition, a meaningful portion of incentive compensation for our named executives who are leaders of business units is tied to the financial performance of their respective individual business units, rather than enterprise-wide performance measures such as net income.
A significant portion of our independent auditorcompensation program is linked to our free cash flow performance for 2018.the total company and the business units, as described in the Compensation Discussion & Analysis section of this proxy statement. While our free cash flow performance improved sequentially in each of the three years shown, there is not a direct relationship with compensation actually paid because compensation actually paid more strongly reflects the required adjustments for equity award valuations under SEC rules.
MOST IMPORTANT FINANCIAL
PERFORMANCE MEASURES
Benefits of a Long-Tenured Auditor
HIGHER AUDIT QUALITY.Through more than 100 years of experience with GE and over 1,400 statutory GE audits annuallyThe financial performance measures to the right represent the most important financial performance measures that were used to determine the compensation actually paid to our named executives in more than 90 countries, KPMG has gained institutional knowledge of and deep expertise regarding GE’s global operations and businesses, accounting policies and practices, and internal control over financial reporting.
EFFICIENT FEE STRUCTURE.KPMG’s aggregate fees are competitive with peer companies because of KPMG’s familiarity with our business.
NO ONBOARDING OR EDUCATING NEW AUDITOR.Bringing on a new auditor requires a significant time commitment that could distract from management’s focus on financial reporting and internal controls.2022.
Management Proposal No.3Most Important Financial Performance Measures
RATIFICATION OF KPMG AS INDEPENDENT AUDITOR FOR 2018
|
| Free Cash Flow* |
| Organic Revenue Growth* |
| Profit or Adjusted Profit* (as applicable) |
| Organic Margin Expansion* |
| Adjusted Earnings per Share* |
| * | Non-GAAP Financial Measure |
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MANAGEMENT
PROPOSAL NO. 3 Advisory Vote on the Frequency of Future Advisory Votes to Approve Our Named Executives’ Compensation What are you voting on? We are asking shareownersshareholders to vote, on a non-binding basis, to indicate their preference on the frequency of future say-on-pay votes. 
Your Board recommends holding future say-on-pay votes every ONE YEAR Why the Board recommends a vote for holding future say-on-pay votes annually. We have engaged shareholders on this issue and, based on their feedback, we believe that a significant portion of our investors would prefer an annual opportunity to vote to approve our named executives’ compensation. | | Say-On-Frequency Vote Pursuant to Section 14A of the Exchange Act, we are asking shareholders to recommend, in an advisory vote, whether future shareholder advisory approval of our named executives’ compensation should occur every one, two or three years. At our 2017 Annual Meeting, our shareholders voted to hold say-on-pay votes annually and our Board adopted this practice. Under SEC rules, we are required to conduct this advisory vote again in 2023 (and the next such vote will occur in 2029). After careful consideration, the Board recommends that future say-on-pay votes continue to be held annually. Our Board believes that holding a vote every year is the most appropriate option because it would continue to enable our shareholders to provide us with timely input regarding the compensation of named executives. Shareholders are not voting to approve or disapprove the Board’s recommendation. Instead, shareholders may indicate their preference regarding the frequency of future say-on-pay votes by selecting one year, two years, or three years or abstaining. Although the vote is non-binding, the Management Development & Compensation Committee and the Board value your opinion and will consider the outcome of the vote in establishing the frequency with which future say-on-pay votes will be held. |
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MANAGEMENT
PROPOSAL NO. 4 Ratification of Deloitte as Independent Auditor for 2023 We are asking shareholders to ratify the selection of KPMG LLP (KPMG)Deloitte as theour independent auditor of our consolidated financial statements and our internal controls over financial reporting for 2018.2023. Why are we asking you to vote? Although ratification is not required by our by-laws or otherwise, the Board is submitting this proposal as a matter of good corporate practice. If
Your Board recommends a vote for ratification of the Audit Committee’s selection is not ratified, the committee will consider whether it is appropriate to select another independent auditor. Even if the selection is ratified, the committee may select a differentof Deloitte as our independent auditor at any time duringfor 2023 | | Independent Auditor Review and Engagement The Audit Committee is directly responsible for the appointment, compensation (including advance approval of the audit fee), retention and oversight of the independent registered public accounting firm that audits our financial statements and our internal control over financial reporting. In accordance with its charter, the Audit Committee has selected the firm of Deloitte & Touche LLP (Deloitte), an independent registered public accounting firm, to be our auditor for the year if it determines2023. The Audit Committee believes that this would beselection is in the best interests of GE and its shareholders and, therefore, recommends to shareholders that they ratify that appointment. Deloitte has served as our shareowners.independent auditor since 2021. A representative of Deloitte will be present at the annual meeting, will have the opportunity to make a statement if they desire to do so and will be available to respond to shareholder questions. Audit Committee Report ROLES AND RESPONSIBILITIES. The Audit Committee reviews GE’s financial reporting process on behalf of the Board. Management has the primary responsibility for establishing and maintaining adequate internal financial controls, for preparing the financial statements and for the public reporting process. Our company’s independent auditor, Deloitte, is responsible for expressing opinions on the conformity of the company’s audited financial statements, in all material respects, with generally accepted accounting principles and on the company’s internal control over financial reporting. REQUIRED DISCLOSURES AND DISCUSSIONS. The Audit Committee has reviewed and discussed with management and Deloitte the audited financial statements for the year ended December 31, 2022, and Deloitte’s evaluation of the company’s internal control over financial reporting. The Audit Committee has also discussed with Deloitte the matters that are required to be discussed under applicable PCAOB and SEC requirements. Deloitte has provided to the Audit Committee the written disclosures and the PCAOB-required letter regarding its communications with the Audit Committee concerning independence, and the committee has discussed with Deloitte that firm’s independence. The Audit Committee has concluded that Deloitte’s provision of audit and non-audit services to GE and its affiliates during 2022 was compatible with Deloitte’s independence. AUDIT COMMITTEE RECOMMENDS INCLUDING THE FINANCIAL STATEMENTS IN THE ANNUAL REPORT. Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements for the year ended December 31, 2022, be included in our annual report on Form 10-K for 2022 for filing with the SEC. This report is provided by the following independent directors, who comprise the committee: | |
 | | | | |
| | | | |
| | |  | |  | |  | |  | |  | |
| | | YOUR BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE AUDIT COMMITTEE’S SELECTION OF KPMG AS OUR INDEPENDENT AUDITOR FOR 2018LESLIE
SEIDMAN | | FRANCISCO
D’SOUZA | | ISABELLA
GOREN | | CATHERINE
LESJAK | | PAULA ROSPUT
REYNOLDS | |
| | | (Chair) | | | | | | | | | |
| | | | |
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GE 2018 PROXY STATEMENTFees Paid to Independent Registered
Public Accounting Firm
Auditor Independence Controls
THOROUGH AUDIT COMMITTEE OVERSIGHT.The committee’s oversight includes private meetings with KPMG (the committee meets with KPMG at every regular meeting, which is at least eight times per year), a comprehensive annual evaluation by the committee in determining whether to engage KPMG, and a committee-directed process for selecting the lead partner.
RIGOROUS LIMITS ON NON-AUDIT SERVICES.GE requires Audit Committee preapproval of non-audit services, prohibits certain types of non-audit services that otherwise would be permissible under SEC rules, and requires that KPMG is engaged only when it is best-suited for the job.
STRONG INTERNAL KPMG INDEPENDENCE PROCESS.KPMG conducts periodic internal quality reviews of its audit work, staffs GE’s global audit (including statutory audits) with a large number of partners (approximately 400), and rotates lead partners every five years.
ROBUST REGULATORY FRAMEWORK.KPMG, as an independent registered public accounting firm, is subject to PCAOB inspections, “Big 4” peer reviews, and PCAOB and SEC oversight.
8X+
| | 8X+
| | ~400
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meetings per year between committee chair & KPMG
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| meetings per year between committee & KPMG
| | KPMG partners work on the GE audit
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KPMG Will Attend the Annual Meeting
KPMG representatives are expected to attend the annual meeting. They will have an opportunity to make a statement if they wish and be available to respond to appropriate shareowner questions.
Independent Auditor Information
KPMG’s Fees for 2016 and 2017
The committee oversees the audit and non-audit services provided by KPMGthe independent auditor, participates in the pre-approval of fees with the independent auditor, reviews and approves the audit plan and associated fees, and receives periodic reports on the fees paid.
The aggregate fees billed by KPMGAudit Committee in 2016some cases authorizes Deloitte (along with other accounting firms) to provide non-audit services. We understand the need for Deloitte to maintain objectivity and 2017independence as the auditor of our financial statements and our internal control over financial reporting. Accordingly, the Audit Committee has established the following policies and processes related to non-audit services.
WE LIMIT THE NON-AUDIT SERVICES THAT DELOITTE CAN PROVIDE. To minimize relationships that could appear to impair Deloitte’s objectivity, the Audit Committee will only pre-approve permissible, selected types of non-audit services that Deloitte may provide to us (and that otherwise would be permissible under SEC rules) and requires that the company engage Deloitte only when it is best suited for itsthe job. For more detail, see the Audit Committee Charter (see Helpful Resources on page 77).
WE HAVE A PRE-APPROVAL PROCESS FOR NON-AUDIT SERVICES. The Audit Committee has adopted policies and procedures for pre-approving all non-audit work that Deloitte performs for us. Specifically, the Audit Committee has pre-approved the use of Deloitte for specific types of services were:
Types of Fees
(in millions) | Audit | | Audit-
Related | | Tax | | All Other | | Total |
| 2017 | $95.8 | | $45.4 | | $1.7 | | $0.0 | | $142.9 |
| 2016 | $81.5 | | $6.9 | | $1.5 | | $0.0 | | $89.9 |
TOTAL.Total fees paidrelated to KPMG increased between 2017tax compliance, planning and 2016 primarily dueconsultations; acquisition/disposition services; consultations regarding accounting and reporting matters; and reviews and consultations on internal control and other related services. The Audit Committee has set a specific annual limit on the amount of non-audit services (audit-related and tax services) that the company can obtain from Deloitte. It has also required management to obtain specific pre-approval from the Audit Committee for any single engagement over $2 million or any types of services that have not been pre-approved. The Audit Committee chair is authorized to pre-approve any audit or non-audit service on behalf of the Audit Committee, provided these decisions are presented to the expense associated with carve-out auditsfull committee at its next regularly scheduled meeting. In 2022, the Audit Committee pre-approved all services provided to the company pursuant to the policies and procedures described above.
WE HAVE HIRING RESTRICTIONS FOR DELOITTE EMPLOYEES.
To avoid potential conflicts of interest, the Audit Committee has adopted restrictions on our hiring of any Deloitte partner, director, manager, staff member, advising member of the department of professional practice, reviewing actuary, reviewing tax professional and any other individuals responsible for certain businesses (as described below)providing audit assurance on any aspect of Deloitte’s audit and expense associated withreview of our financial statements. These restrictions are contained in our Governance Principles (see Helpful Resources on page 77).
The following table summarizes the 2017fees for professional audit of BHGE.services provided by Deloitte for audit services provided for, and other services provided in, the years shown:
TYPES OF FEES
(IN MILLIONS) | | AUDIT | | AUDIT-
RELATED | | TAX | | ALL
OTHER | | TOTAL |
| 2022 | | $57.6 | | $ | 40.3 | | $0.6 | | $0.1 | | $98.6 |
| 2021 | | $51.6 | | $ | 2.1 | | $0.5 | | $0.3 | | $54.5 |
AUDIT.AUDIT FEES. Fees for the audit of GE’s annual financial statements included in our annual report on Form 10-K;10-K for 2022; the review of financial statements included in our quarterly reports on Form 10-Q; the audit of our internal control over financial reporting, with the objective of obtaining reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects; and services routinely provided by the auditor in connection with statutory and regulatory filings or engagements, as well as performing the same services for BHGE (subsequent to July 2017). For GE, these audit expenses were $63.5 million and for BHGE, audit expenses were $32.3 million. Approximately 54% of these audit fees related to KPMG’s conduct of over 1,400 statutory audits in more than 90 countries. Lower recurring costs associated with the GE audit were offset by increased costs for the BHGE audit.engagements.
AUDIT-RELATED.AUDIT-RELATED FEES. Fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and internal control over financial reporting. The year-over-year fee increase wasFor 2022, our audit-related fees primarily attributableconsisted of fees for financial statement carve-out procedures associated with GE’s separation strategy, including the spin-off of GE HealthCare.
TAX FEES. Fees related to the carve-out audits for GE Oil & Gas in anticipation of the Baker Hughes transaction ($30.0 million), the Water business ($4.3 million), and Industrial Solutions ($8.1 million).
TAX.Fees for tax compliance and tax advice and tax planning.
ALL OTHER.GE did not engage KPMG Tax compliance involves preparation of original and amended tax returns and claims for anyrefund. Tax planning and tax advice encompass a diverse range of services, other than those described above.
How We Controlincluding assistance with tax audits and Monitor the Non-Audit Services Provided by KPMG
The Audit Committee has retained KPMG (along with other accounting firms) to provide non-audit services in 2018. We understand the need for KPMG to maintain objectivity and independence as the auditor of our financial statements and our internal control over financial reporting. Accordingly, the committee has established the following policies and processesappeals, tax advice related to non-audit services.mergers and acquisitions and employee benefit plans, and requests for rulings or technical advice from taxing authorities.
WE RESTRICT THE NON-AUDIT SERVICES THAT KPMG CAN PROVIDE.ALL OTHER FEES. To minimize relationships that could appear to impair KPMG’s objectivity, the Audit Committee has restricted the types of non-auditIncludes fees for services that KPMG may provide to us (and that otherwise would beare not contained in the above categories and includes permissible under SEC rules) and requires that the company engage KPMG only when it is best-suited for the job. For more detail, see the Audit Committee Charter (see“Helpful Resources” on page 73).advisory services.
GE 2023 PROXY STATEMENT WE HAVE A PRE-APPROVAL PROCESS FOR NON-AUDIT SERVICES.63The Audit Committee has adopted policies and procedures for pre-approving all non-audit work that KPMG performs for us. Specifically, the committee has pre-approved the use of KPMG for specific types of services related to: tax compliance, planning and consultations; acquisition/disposition services, including due diligence; consultations regarding accounting and reporting matters; and reviews and consultations on internal control and other related services. The committee has set a specific annual limit on the amount of non-audit services (audit-related and tax services) that the company can obtain from KPMG. It has also required management to obtain specific pre-approval from the committee for any single engagement over $1 million or any types of services that have not been pre-approved. The committee chair is authorized to pre-approve any audit or non-audit service on behalf of the committee, provided these decisions are presented to the full committee at its next regularly scheduled meeting.
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GE 2018 PROXY STATEMENT
We Have Hiring Restrictions for KPMG Employees
To avoid potential conflicts of interest, the Audit Committee has adopted restrictions on our hiring of any KPMG partner, director, manager, staff member, advising member of the department of professional practice, reviewing actuary, reviewing tax professional and any other individuals responsible for providing audit assurance on any aspect of KPMG’s audit and review of our financial statements. These restrictions are contained in our Governance Principles (see“Helpful Resources” on page 73).Rotation of Key Audit Partners and Audit Firms
AUDIT COMMITTEE OVERSEES SELECTION OF NEW LEAD AUDIT ENGAGEMENT PARTNER EVERY FIVE YEARS.The Audit Committee requires key KPMG partners assigned to our audit to be rotated at least every five years. The committee and its chair oversee the selection process for each new lead engagement partner. Throughout this process, the committee and management provide input to KPMG about GE priorities, discuss candidate qualifications and interview potential candidates put forth by the firm. The committee also reviews the performance of the lead audit partner annually.
CONSIDERATION OF AUDIT FIRM ROTATION.To help ensure continuing auditor independence, the committee also periodically considers whether there should be a regular rotation of the independent auditor.
ROLES AND RESPONSIBILITIES.The Audit Committee reviews GE’s financial reporting process on behalf of the Board. Management has the primary responsibility for establishing and maintaining adequate internal financial controls, for preparing the financial statements and for the public reporting process. KPMG, our company’s independent auditor for 2017, is responsible for expressing opinions on the conformity of the company’s audited financial statements with U.S. generally accepted accounting principles and on the company’s internal control over financial reporting.
REQUIRED DISCLOSURES AND DISCUSSIONS.The committee has reviewed and discussed with management and KPMG the audited financial statements for the year ended December 31, 2017 and KPMG’s evaluation of the company’s internal control over financial reporting. The committee has also discussed with KPMG the matters that are required to be discussed under PCAOB standards. KPMG has provided to the committee the written disclosures and the PCAOB-required letter regarding its communications with the Audit Committee concerning independence, and the committee has discussed with KPMG that firm’s independence. The committee has concluded that KPMG’s provision of audit and non-audit services to GE and its affiliates is compatible with KPMG’s independence.
COMMITTEE RECOMMENDS INCLUDING THE FINANCIAL STATEMENTS IN THE ANNUAL REPORT.Based on the review and discussions referred to above, the committee recommended to the Board that the audited financial statements for the year ended December 31, 2017 be included in our annual report on Form 10-K for 2017 for filing with the SEC. This report is provided by the following independent directors, who comprised the committee at the time the Board approved our annual report on Form 10-K for 2017:
Mary L. Schapiro (Chairman)
W. Geoffrey Beattie
Peter B. Henry | James J. Mulva
James E. Rohr |
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Shareowner Proposal No. 1 — Independent ChairKenneth Steiner has notified us that he intends to submit the following proposal at this year’s meeting:
Proposal 1 — Independent Board Chairman
Shareholders request our Board of Directors to adopt as policy, and amend our governing documents as necessary, to require henceforth that the Chair of the Board of Directors, whenever possible, to be an independent member of the Board. The Board would have the discretion to phase in this policy for the next CEO transition, implemented so it does not violate any existing agreement.
If the Board determines that a Chair who was independent when selected is no longer independent, the Board shall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as Chairman. This proposal requests that all the necessary steps be taken to accomplish the above.
Caterpillar is an example of a company recently naming an independent board chairman. Caterpillar had strongly opposed a shareholder proposal for an independent board chairman as recently as its June 2016 annual meeting. Wells Fargo also reversed itself and named an independent board chairman in October 2016.
According to Institutional Shareholder Services 53% of the Standard & Poors 1,500 firms separate these 2 positions — “2015 Board Practices,” April 12, 2015. This proposal topic won 50%-plus support at 5 major U.S. companies in 2013 including 73%-support at Netflix.
John Flannery was our new CEO in 2017. But Jeffrey Immelt remained as Chairman. However Mr. Flannery could be given both roles soon. If our company needs the advice of Mr. Immelt it would be better to pay him as a consultant.
Another reason to vote for this proposal is that we do not have a strong Lead Director role. Our lead director cannot call a special shareholder meeting on his own but Mr. Immelt still can.
Please vote to enhance shareholder value:
Independent Board Chairman — Proposal 1
SHAREOWNER PROPOSALSShareholder Proposals
|
The following shareownershareholder proposals will be voted on at the annual meetingAnnual Meeting only if properly presented by or on behalf of the shareownershareholder proponent. Some of these proposals contain assertions about GE that we believe are incorrect, and we have not attempted to refute allIn accordance with the applicable proxy regulations, the text of the inaccuracies. shareholder proposals and supporting statements, for which we accept no responsibility, are set forth below.How to find more information about the proponents To obtain the addresses of any of the shareownershareholder proponents, or their GE stock holdings, email shareowner.proposals@ge.comshareholder.proposals@ge.com or write to Corporate Secretary, GE, at the address listed on the inside front cover of this proxy statement, and you will receive this information promptly. |
 | YOUR BOARD RECOMMENDS A VOTE AGAINST THESE PROPOSALS FOR THE REASONS THAT WE EXPLAIN FOLLOWING EACH PROPOSAL |
 | 
Your Board recommends a vote AGAINST this proposal. |
THE BOARD CONDUCTED A THOROUGH REVIEW OF ITS LEADERSHIP STRUCTURE IN CONNECTION WITH THE RECENT CEO TRANSITION.The Board regularly reviews its leadership structure,shareholder proposals 1, 2, 3, and 4 for the Board conducted a deep dive to evaluate whether to continue to combine or to split the chair and CEO roles in the months leading up to the company’s recent CEO transition. After considering the perspectives of the independent directors, the views of our significant shareowners, voting results of recent independent chair proposals at GE, academic research, practical experience at peer companies, and benchmarking and performance data, the Board determinedreasons that appointing Mr. Flannery as chair and CEO (following a brief transition period in which Mr. Immelt
we provide following each proposal | | Shareholder Proposals Shareholder Proposal No. 1 — Independent Board Chairman 
continuedKenneth Steiner has notified us that he intends to submit the following proposal at this year’s meeting: Shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in order that 2 separate people hold the office of the Chairman and the office of the CEO. Whenever possible, the Chairman of the Board shall be an Independent Director. The Board has the discretion to select a Temporary Chairman of the Board, who is not an Independent Director, to serve while the Board is seeking an Independent Chairman of the Board on an expedited basis. This policy could be phased in when there is a contract renewal for our current CEO or for the next CEO transition. This proposal topic won 52% support at Boeing and 54% support at Baxter International in 2020. Boeing then adopted this proposal topic. The so-called lead director role does not seem to be working at GE. Lead director Thomas Horton received 153 million against vote in 2022 compared to 5 million against votes each for certain other GE directors. Plus management pay was rejected by an alarming 34% of shares in 2022 when a 5% rejection is often the norm at well performing companies. Perhaps there should be a rule against a person who has been a CEO and a Chairman at the same time being named as the chair after retiring as CEO) wasLead Director. Mr. Horton had years in the best interestsdual jobs of CEO and Chairman at American Airlines. Past and present holders of both jobs at the company and its shareowners. Insame time would seem to have a special affinity with the Board’s view, this structure allows our CEO to speakGE person who now has both GE jobs. Affinity is inconsistent with the oversight role of a Lead Director. A lead director is no substitute for and lead the company and Board while also providing for effective oversight and governance by an independent board through the independent lead director. INDEPENDENT LEADERSHIP IS PROVIDED BY OUR LEAD DIRECTOR, JACK BRENNAN.Ourchairman. A lead director the former chairmancannot call a special shareholder meeting and cannot even call a special meeting of the boardboard. A lead director can delegate most of his lead director duties to others and chief executive officerthen simply rubber-stamp it. There is no way shareholders can be sure of The Vanguard Group, leads meetingswhat goes on.A lead director can be given a list of duties but there is no rule that prevents the Chairman from overriding the lead director in any of the independent directorsso-called lead director duties and regularly meets withignore the chairman for discussion of matters arising from these meetings, calls additional meetingsadvice of the independent directors orlead director. It is time for an Independent Board Chairman since the entirebottom has fallen out of GE stock since it was at $242 in 2016 Please vote yes: Independent Board as deemed appropriate, serves as Chairman – Proposal 1Continued on next page
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Your Board recommends a vote AGAINST this proposal.
WE BELIEVE DETERMINING BOARD LEADERSHIP ON A CASE-BY-CASE BASIS IS IN THE BEST INTERESTS OF GE AND ITS SHAREHOLDERS. Our Board believes that providing strong and independent oversight of the company is central to its role and to good governance. By dictating a rigid policy on the structure of Board leadership, regardless of the circumstances or the individuals involved, this proposal could limit the Board’s ability to establish the leadership structure that is in the best interests of the company and its shareholders at a particular point in time. Because circumstances change over time, we believe it is important for our directors to maintain flexibility to select the most appropriate Board leadership structure. This is especially important as the company executes on its plan to form three independent public companies, each of which will have its own board and board leadership structure. Additionally, according to the 2022 Spencer Stuart Board Index, only 36% of companies in the S&P 500 currently have an independent board chair. The Board will continue to evaluate the suitability of its leadership structure and make changes when those will best serve the interests of GE and its shareholders.
THE BOARD HAS DETERMINED THAT ITS CURRENT LEADERSHIP STRUCTURE, WHICH INCLUDES A STRONG LEAD DIRECTOR, BEST SERVES GE AT THIS TIME. The Board believes that its current leadership structure, which has a combined role of Chairman and CEO, counterbalanced by a strong independent Board led by a lead director and independent directors chairing each of the Board committees, is in the best interests of GE and its shareholders. At the time of GE’s most recent CEO transition in September 2018, the independent directors determined that appointing Mr. Culp, one of our existing directors, to serve as CEO and simultaneously appointing him as Chairman was in the best interests of the company and its shareholders. After deliberation which included whether to appoint an independent Board chair in connection with the CEO transition, the independent directors determined that Mr. Culp was the best candidate to drive the strategy for the company as CEO and lead the Board’s agenda as Chairman. The independent directors concluded that combining these roles was important to provide clarity on decision-making and accountability, particularly at a time of considerable change for the company, and that appointing a strong lead director, as described below, would provide for continuing independent leadership and oversight of the Board. We believe that the company’s successful performance and execution of its strategic transformation has been, and will continue to be, assisted considerably by Mr. Culp’s fulfilling the roles of both CEO and Chairman and that this most recent leadership transition is a good example of the case-by-case Board evaluation that the proposal would restrict. We remain open to the possibility of appointing separate individuals to each of the roles in the future, in light of the needs of the Board and the company at any given time. For instance, when the Board in 2020 agreed to extend the term of Mr. Culp’s employment as CEO through at least 2024, the Board provided for the possibility that Mr. Culp may transition from CEO to executive chairman in August 2023, and that he may serve as a non-employee director or consultant from August 2024 to 2025. This reflects the Board’s openness to different leadership structures, and demonstrates that the Board will evaluate the best leadership structure for GE in the future, as it has done and will continue to do as it executes on GE’s planned separation into three independent public companies. For example, with the spin-off of GE HealthCare in January 2023, the Board determined the best leadership structure for GE HealthCare was to have a separate CEO and board chairman. As we work toward the planned spin-off of GE Vernova, the Board will similarly evaluate and determine the leadership structures that work best for GE Vernova and GE Aerospace, considering each planned company’s specific circumstances.
OUR LEAD DIRECTOR WORKS WITH THE OTHER INDEPENDENT DIRECTORS TO PROVIDE MEANINGFUL INDEPENDENT OVERSIGHT OF MANAGEMENT. Our Board recognizes the importance of independent board oversight of management and believes that it is an essential component of strong corporate performance. The lead director role at GE is designed to empower the independent directors to serve as an independent check on management. Our lead director is selected solely by independent directors, taking into account a variety of factors, including the director’s qualifications and attributes, leadership experience, understanding of our businesses and industries, and willingness to commit the time necessary to fulfill the role. Our current lead director, Mr. Horton brings a valuable perspective through his experience as both a former CEO and an independent director on other boards. The lead director leads regular meetings of the independent directors and meets with the Chair for discussion of matters arising from these meetings. He also is empowered to call additional meetings of the independent directors or the entire Board, serves as a liaison on Board-related issues between the Chair and the independent directors, and performs other functions as the Board may direct. As described in the Board’s Governance Principles, these other functions include (1) advising the Governance & Public Affairs Committee on the selection of committee chairs, (2) approving the agenda, schedule and information sent to the directors for Board meetings, (3) working with the Chair to propose an annual schedule of major discussion items for the Board’s approval, (4) guiding the Board’s governance processes, including the annual Board self-evaluation, succession planning and other governance-related matters, and (5) providing leadership to the Board if circumstances arise in which the role of the Chair may be, or may be perceived to be, in conflict, and otherwise act as chair of Board meetings when the Chair is not in attendance. The lead director oversees the Board’s periodic review of its leadership structure to evaluate whether it remains appropriate for the company. The lead director also frequently meets with our largest shareholders. Through these actions and responsibilities, the lead director serves as a powerful mechanism for the Board overall to exercise its independent oversight.
For the foregoing reasons, the Board recommends a vote AGAINST this proposal.
GE 2023 PROXY STATEMENT65
a liaison on Board-related issues between the chairman and the independent directors, and performs such other functions as the Board may direct. As described in the Board’s Governance Principles, these other functions include (1) advising the Governance Committee on the selection of committee chairs, (2) approving the agenda, schedule and information sent to the directors for Board meetings, (3) working with the chairman to propose an annual schedule of major discussion items for the Board’s approval, (4) guiding the Board’s governance processes, including the annual Board self-evaluation, succession planning and other governance-related matters, (5) leading the annual chairman evaluation, and (6) providing leadership to the Board if circumstances arise in which the role of the chairman may be, or may be perceived to be, in conflict, and otherwise act as chairman of Board meetings when the chairman is not in attendance. The lead director oversees the Board’s periodic review of its leadership structure to evaluate whether it remains appropriate for the company. The lead director also frequently meets with our largest shareowners.
THE CURRENT LEADERSHIP STRUCTURE IS THE MOST EFFECTIVE FOR GE AT THIS TIME.The Board believes that GE’s corporate governance policies and practices combined with the
| | strength of our independent directors serve to minimize any potential conflicts that may result from combining the roles of CEO and chairman. The Board continues to believe that the existing structure is the best way to efficiently and effectively protect and enhance our long-term success and shareowner value, and it will continue to monitor the appropriateness of this structure as it does with all governance issues. In the view of the Board, instituting a requirement that the roles of chair and CEO must be split at a future date could have the consequence of making our management and governance processes less effective than they are today through undesirable duplication of work and, in the worst case, lead to a blurring of the clear lines of accountability and responsibility, without any proven offsetting benefits. 67% of the companies in the Dow 30 currently maintain combined chair and CEO positions. According to the 2017 Spencer Stuart Board Index, 72% of companies in the S&P 500 do not have an independent board chairman.
For the foregoing reasons, the Board recommends a vote AGAINST this proposal.
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ShareownerShareholder Proposal No. 2 — Cumulative Voting
Sale of the Company
Martin Harangozo has notified us that he intends to submit the following proposal at this year’s meeting:
The shareholders recommend General Electric hire an investment bank to explore the sale of the company.
Whereas: General Electric had lost nearly all its valuation in the last two decades, during a time when the stock market popular Standard and Poor’s 500 performance about tripled in valuation. The dividend is all but gone and less than when Mr. Jack Welch became CEO in 1981. Promised benefits to retirees have been broken. Rolling heads around as Mr. John Flannery replacing Mr. Jeffrey Immelt, or Mr. Lawrence Culp Jr. replacing Flannery has had no substantial positive effect in restoring the company valuation, or growing it to the broader market. In fact, all three of these leaders reduced company valuation. It is clear that a new approach is needed to drive the General Electric Company so that it performs for the shareholders consistent with general stock market performance.
This proposal has been on previous proxy statements. General Electric argued:
“General Electric is one of the most valuable and respected companies in the world. Our businesses are bound together by common operating systems, technologies and initiatives and a common culture with strong values. Throughout the company, we focus on infrastructure markets, because they utilize General Electric capabilities in technology, globalization, financing and customer relationships. General Electric is the only company listed
RESOLVED: “Thatin the stockholdersDow Jones Industrial Index today that was also included in the original index in 1896, and since 1899, General Electric has paid a quarterly dividend without interruption. In addition, contrary to the assertions in the proposal’s supporting statement, General Electric is committed to product safety and consumer protection, takes a number of precautions to ensure the safety of our products, and has made the Ethisphere Institute’s list of the world’s most ethical companies for the last eight years. Our management approach emphasizes stable growth through diversification across several business segments. To maximize long-term shareowner value, we continually reevaluate our businesses and make adjustments when warranted. This review process led to recent significant decisions like the sale of General Electric, assembledElectric’s remaining stake in Annual MeetingNBC Universal and certain of our machining and fabrication businesses. General Electric’s strong management allowed the company to weather the recent economic downturn and has led to a rebound in personstock price, an increase in dividend paid per share and by proxy, hereby requesta market capitalization of over $280 billion. General Electric’s new resurgence over the past few years has placed it back on Fortune’s most admired companies list. We believe it is in the best long- term interests of our shareowners to continue this course. Therefore, the Board recommends a vote AGAINST this proposal”.
Clearly, the arguments General Electric has made above pertaining to “the best long-term interests of Directorsour shareowners to take the necessary steps to provide for cumulative voting in the election of directors, which means each stockholder shall be entitled to as many votes as shall equal the number of shares he or she owns multiplied by the number of directorscontinue this course”, proved to be elected, and he or she may cast all of such votes for a single candidate, orflat wrong. History proves General Electric cannot be trusted with any two or more of them as he or she may see fit.”
REASONS: “Many states have mandatory cumulative voting, so do National Banks.” “In addition, many corporations have adopted cumulative voting.” The increase in shareholder voice as represented by cumulative voting, may serve to better align shareholder performance to CEO performance. “If you AGREE, please mark your proxy FORargument against this resolution.”proposal.
| Your Board recommends a vote AGAINST this proposal. |
GE’S EXISTING VOTING POLICY ENSURES THE BROADESTBOARD BELIEVES OUR PLAN TO FORM THREE INDEPENDENT PUBLIC COMPANIES REMAINS THE BEST STRATEGY TO DRIVE LONG-TERM GROWTH AND FAIREST SHAREOWNER REPRESENTATION.INCREASE SHAREHOLDER VALUE. WeThe Board has led a significant transformation of GE since 2014, when this proposal was last voted on by shareholders, including by selling or spinning off a number of businesses. When evaluating the next steps forward, the Board conducted a rigorous portfolio and business strategy review that culminated with the November 2021 announcement of our strategic plan to form three industry-leading, global, investment-grade public companies from (i) our Aerospace business, (ii) our Renewable Energy, Power, Digital and Energy Financial Services businesses, which we plan to combine and refer to as GE Vernova, and (iii) our former HealthCare business. As independently run companies, we believe these business will be better positioned to deliver long-term growth and create value for customers, investors, and employees. Our strategic transformation has also been well received by the market and many shareholders. Consistent with its fiduciary duties, the Board continues to provide oversight and guidance on the overall strategy for the company and its portfolio of businesses, including with respect to our ongoing strategic transformation. The Board continues to believe that our plan to form three independent public companies is in the best interest of the company and its shareholders, and that the alternative plan suggested by this shareholder proposal is contrary tonot.
For the goals of broader shareowner representation reflected in our existing director election standard. Moreover, implementation of this shareowner proposal could allow one or a few shareowners who acquire a small percentage of GE common stock to have a disproportionate effect on the election of directors, possibly leading to the election of directors who are beholden to the special interests of the shareowners responsible for their election, even if shareowners holding a majority of GE’s common stock opposed their election. The Board believes that directors should be accountable toallshareowners and elected by shareowners holding a majority of GE’s common stock, not solely accountable to a faction of shareowners who are only able to elect directors by cumulating their votes. Fewer than 3% of S&P 500 companies currently provide for cumulative voting. The Board believes that GE’s current election process protects the best interests of all shareowners. | | GE ALREADY HAS STRONG BOARD ACCOUNTABILITY TOOLS, BEING AN EARLY ADOPTER OF PROXY ACCESS AND IMPLEMENTING MAJORITY VOTING FOR DIRECTOR ELECTIONS.Each share of GE common stock is entitled to one vote for each director nominee. In uncontested director elections, like the one covered by this proxy statement, GE directors are elected by an affirmative majority of the votes cast, and in contested elections, where there is more than one nominee competing for a director seat, directors are elected by an affirmative plurality of the votes cast. We also provide our shareowners with a right to submit director nominees for inclusion in our proxy statement if the shareowners and the nominees satisfy the requirements specified in our by-laws, commonly known as proxy access. The Board believes that our voting system is fair and most likely to produce an effective board of directors that will represent the interests of all GE shareowners by providing for the election of director nominees who have received broad support from shareowners.
Accordingly,foregoing reasons, the Board recommends a vote AGAINST this proposal.
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6166 GE 2023 PROXY STATEMENT
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GE 2018 PROXY STATEMENT
ShareownerShareholder Proposal No. 3 — Deduct Impact of Stock Buybacks from Executive Pay
Fiduciary Carbon-Emission Relevance Report
Myra YoungThe National Center for Public Policy Research has notified us that sheit intends to submit the following proposal at this year’s meeting:
Proposal 3 — Deduct ImpactRESOLVED: Shareholders request General Electric’s Board of Stock Buybacks from Executive Pay
RESOLVED: The shareholdersDirectors provide an audited report evaluating the material factors relevant to decisions about whether a 2050 net-zero carbon goal, or other similar decarbonization goals, is appropriate, including factors that mitigate against the adoptions of such goals. These factors might reasonably include technological feasibility (or its absence), the economic consequences of adoption, the possibility that the climate models that underlie such goals are incorrect, the possibility that failure to adopt such goals in other countries will render adoption by General Electric Company (GE ormeaningless, the “Company”) ask the board of directors to adopt a policypossibility that the boardU.S. governments will not utilize “earnings per share” (“EPS”) or its variations (e.g., diluted or operating EPS) or financial ratios (return on assets or net assets or equity) in determining a senior executive’s incentive compensation or eligibilitymandate such decarbonization, unending adoption-favoring “stranded asset” assumptions, and relevant considerations. The report should be produced at reasonable cost and omitting proprietary information.
Claims about the need for such compensation, unless the Board utilizes the number of outstanding shares on the beginningdecarbonization at all, but especially by some activist-generated date of the performance period and excludes the effect of stock buybacks that may have occurred between that date and the end of the performance period. This policy shall be implemented without violating existing contractual obligations in existence on the date this proposal is adopted.
SUPPORTING STATEMENT: According to last year’s proxy statement, a substantial proportion of compensation for 2016 to executives wascertain, are based on performance targets, including earnings per share (EPS). https://www.sec.gov/Archives/edgar/data/40545/000120677417000738/ge3179831-def14a.htm#Compensation_30a long series of assumptions that are either counterfactual or insufficiently examined. For decades, for instance, claims have been made that action must be taken before some date, or it will be too late.2 If those claims were right, it’s too late for decarbonization to matter now, so we should be building up economic resources to deal with climate change. If they were wrong, then the odds are high that current claims are also wrong.
AsGeneral Electric’s decarbonization will be meaningless if other countries do not follow the same decarbonization schedules, and there is abundant evidence that they will not.3 The United States government has never mandated net-zero by statute or authorized regulatory action4, and is unlikely ever to do so; this contravenes the assumptions of “stranded asset” analysis. If decarbonization is neither required nor technologically feasible, General Electric will lose significant markets and revenues to private equity firms and (less clean-producing) state actors, thus harming shareholders we supportwhile also harming the use of performance metrics that align senior executive pay with long-term sustainable growth. We are concerned this alignment may not exist, however, if a company is using earnings per share or certain financial return ratios to calculate incentive pay awards at a time that the company is aggressively repurchasing its shares.environment. These and all relevant considerations should be fully and objectively examined.
ResearchSupporting Statement
General Electric has touted its commitment to achieving net-zero carbon emissions by Robert Ayres and Michael Olenick of INSEAD found “the more capital a business invests in buying its own stock, expressed as a ratio of capital invested in buybacks to current market capitalization,2050.1 It does not appear from publicly available information, however, that General Electric has fully considered the less likelyrisk that company is to experience long-term growth in overall market value. “GE has repurchased $114.6 billion of its own stock and has, at the end of Q1, 2016, a market capitalization of $253.25 billion, a ratio of 45%.” [Secular Stagnation (Or Corporate Suicide?) https://ruayres.wordpress.com/2017/07/11/secular-stagnation-or-corporate-suicide]
EPS and financial return ratios can be directly affected by changes in the number of outstanding shares. Thus, a stock buyback means that EPS is calculated by dividing earning or net earnings by a reduced number of outstanding shares, a process that can artificially boost EPS. A higher EPS may not reflect an actual improvement in performance.
This proposal should be read in the context of the 7/13/2014 comment letter from the SEC (https://www.sec.gov/Archives/edgar/data/40545/000000000017024592/filename1.pdf), in which 16 items in GE’s 10-K filing were listed as being potentially misleading to investors, with half the items mentioning the reporting of numbers that were inconsistent with Generally Accepted Accounting Principles (GAAP).
This proposal would not affect the board’s discretion about the appropriate method of returning value to shareholders. The proposal would, however, address the distorting effect that stock buybacks can havedecarbonization on calculating what is supposed to be incentive pay for senior executives that is based on genuine improvements in performance.
We urge you to vote For:
Proposal 3 — Deduct Impact of Stock Buybacks from Executive Payactivist schedules might entail.
 | https://www.ge.com/about-us/energy-transition |
| 2 | https://nypost.com/2021/11/12/50-years-of-predictions-that-the-climate-apocalypse-is-nigh/ |
| 3 | https://www.theepochtimes.com/across-the-world-coal-power-is-back_4671888.html; https://www.realclearenergy.org/articles/2022/06/03/india_and_china_ coal_production_surging_by_700m_tons_per_year_thats_greater_than_all_us_coal_output_835483.html; https://www.realclearenergy.org/articles/2022/06/03/ india_and_china_coal_production_surging_by_700m_tons_per_year_thats_greater_than_all_us_coal_output_835483.html; https://www.breitbart.com/ environment/2022/04/21/worlds-worst-polluter-china-increases-coal-production-by-three-hundred-million-tons/; https://mishtalk.com/economics/global-net-zero-climate-change-targets-are-pie-in-the- sky |
| 4 | https://www.npr.org/2022/06/30/1103595898/supreme-court-epa-climate-change |
Your Board recommends a vote AGAINST this proposal. INNOVATING TECHNOLOGY TO ADDRESS THE PRESSING CHALLENGES OF DECARBONIZATION AND CLIMATE CHANGE IS CENTRAL TO OUR BUSINESSES’ STRATEGIES; GE’S SENIOR MANAGEMENT AND BOARD OF DIRECTORS HAVE TAKEN CONSIDERABLE CARE IN ANALYZING AND ARTICULATING GE’S AMBITIONS FOR GREENHOUSE GAS EMISSION REDUCTIONS, AND THE REPORT REQUESTED BY THIS PROPOSAL IS THEREFORE UNNECESSARY. GE recognizes the challenges and risks posed by climate change, and we support the Paris Agreement and other ambitious targets to reduce emissions. As a company whose equipment helps provide one-third of the world’s electricity across 170 countries, GE aims to play a unique role in providing our customers with power generation equipment and services to make electricity more sustainable, affordable, and reliable, in a context where global electricity demand and risks are expected to grow considerably in the decades to come. Our Aerospace business, whose engines together with our partners power three-quarters of commercial flights worldwide, will also play a key role in creating a smarter and more efficient future of flight. These are central strategic considerations for our businesses, especially as our customers and investors are increasingly adopting their own greenhouse gas reduction goals, and are looking to GE to innovate and help develop the technologies needed to achieve these goals. Because these dynamics are so central to our business strategies and to addressing the needs of our customers, GE’s role in helping to decarbonize power generation and commercial aviation has been a key area of focus at the company’s most senior management levels and with the GE Board of Directors. That focus extends to decisions about our asset and business portfolios and the types of opportunities that we pursue, as well as the technology and innovation that we provide today and invest in for the future. For example, in recent years GE has chosen to exit its new coal business while (i) innovating renewable energy and other emissions reduction technology, (ii) providing highly efficient gas turbines that can be a force multiplier for reducing power sector emissions and (iii) investing in breakthrough technologies such as small modular nuclear reactors and technologies to reduce gas turbine emissions, including hydrogen as a fuel and carbon capture and sequestration. This focus also extends to decisions about the company’s greenhouse gas emission reduction strategy. Senior management and the GE Board of Directors have invested substantial time assessing and articulating GE’s own ambitions to reduce greenhouse gas emissions across our operations and from customers’ use of our products. We have articulated a goal of carbon neutrality by 2030 for our operations (Scope 1 and 2 emissions) and an ambition to be a net zero company by 2050, including the Scope 3 emissions from the use of sold products. These long-range decarbonization objectives have been the product of significant analysis and deliberative processes, and we continue to refine our interim targets and report on our progress over time, as we have described more fully in our annual Sustainability Report. The assertion in Shareholder Proposal #3 that GE has not adequately considered its decarbonization objectives before establishing them is incorrect. Contrary to this shareholder proposal’s premise, we believe these goals are appropriate for the company and well-aligned with the expectations of the majority of our customers, shareholders and other stakeholders, and that the report requested by Shareholder Proposal #3 is therefore unnecessary. For the foregoing reasons, the Board recommends a vote AGAINST this proposal. |
THE POLICY REQUESTED BY THE PROPOSAL WOULD UNDULY RESTRICT THE COMPENSATION COMMITTEE.We believe that it is important for our executive compensation programs to be aligned with the long-term interests of our shareowners. As such, the Compensation Committee needs to have the flexibility to fine-tune (and, when warranted, make more significant enhancements) to our compensation programs to ensure that they continue to appropriately incentivize management with strong alignment to the company’s strategy. Following the GE Capital exit, dedicating the proceeds from the disposition of our financial services businesses to share repurchases as a means of reducing our shares outstanding, with the objective of maintaining post-Capital neutrality in terms of earnings per share (EPS) was a tenet of our investor framework and overall strategy. As a result, EPS targets were included in our 2017 annual cash bonus plan and in the Long-Term Performance Awards
(LTPAs) for 2016–2018, and these targets assumed a certain level of share repurchases. These EPS targets were not met, however, and no bonus was paid for this aspect of the bonus plan in 2017, and we also expect that the EPS target will not be met for the LTPAs. While share repurchases are not a part of our current investor framework, our strategy may change over time and, in the future, we may conclude that reducing our shares outstanding through repurchases or setting EPS targets that reflect a repurchasing strategy represents the best capital allocation choice for the company. Imposing arbitrary limitations on the Compensation Committee’s ability to structure executive compensation arrangements to reflect such a strategy would unduly restrict the Committee’s ability to ensure this alignment with shareowners.
Accordingly, the Board recommends a vote AGAINST this proposal.
2023 PROXY STATEMENT 6267
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GE 2018 PROXY STATEMENT
ShareownerShareholder Proposal No. 4 — Political Lobbying
Assess Energy-Related Asset Resilience
Henry H. Barrett and Contributions
The National Center for Public Policy Research has informed us that it intends to present the following proposal at this year’s meeting:
Political Lobbying and Contributions
Whereas,we believe in full disclosure of our company’s direct and indirect lobbying activities and expenditures to assess whether General Electric’s lobbying is consistent with General Electric’s expressed goals and in the best interest of shareowners.
Resolved,the shareowners of General Electric Company (“GE”) request the preparation of a report, updated annually, disclosing:
1. | Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications. |
2. | Payments by GE used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient. |
3. | Description of management’s and the Board’s decision-making process and oversight for making payments described in section 2 above. |
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which GE is a member.
Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.
The report shall be presented to the Audit Committee or other relevant oversight committees and posted on GE’s website.
Supporting Statement
As shareowners, we encourage transparency and accountability in our company’s use of corporate funds to influence legislation and regulation.
The company lobbies on a broad array of issues and works with groups that do the same. As such, the company has become a target for anti-free speech activists. These activists are working to defund pro-business organizations by attacking their corporate members.
The company should take an active role in combating this narrative and attacks on its right to freedom of association.
The company should be proud of its memberships in trade associations and non-profit groups that promote pro-business, pro-growth initiatives.
For example, the company’s membership in groups such as the U.S. Chamber of Commerce should be applauded and endorsed by shareholders. The Chamber of Commerce advances initiatives designed to unburden corporations such as General Electric, allowing them the freedom to create jobs and economic prosperity in the United States.
Rather than letting outside agitators set the message that these relationships are somehow nefarious, the company should explain the benefits of its involvement with groups that advocate for smaller government, lower taxes and free-market reforms. The company should show how these relationships benefit shareholders, increase jobs and wages, help local communities and generally advance the company’s interests.
The proponent supports the company’s free speech rights and freedom to associate with groups that advance economic liberty. The company should stand up for those rights.
| Your Board recommends a vote AGAINST this proposal.
|
GE ALREADY PROVIDES COMPREHENSIVE LOBBYING DISCLOSURE.GE believes in promoting transparency around its political spending, and in 2017 was ranked in the First Tier of S&P 500 companies for its political disclosure and transparency by the CPA-Zicklin Index, a third-party watchdog organization. GE already discloses its process and oversight for political contributions and lobbying activities on its website, available atwww.ge.com/sustainability/reports-hub(see “Lobbying Disclosure Policy” and “GE Political Contribution Policy”). Additionally, GE files quarterly reports pursuant to the federal Lobbying Disclosure Act with the U.S. House of Representatives and the U.S. Senate on its communications with any member or employee of a legislative body or covered executive branch official. These reports disclose the company’s lobbying expenditures, describe legislation and general issues that were the topic of communication and identify the individuals who lobbied on behalf of the company. Links to these reports are provided on GE’s website listed above. GE files similar periodic reports in a number of states, which are also publicly available.
WE EXERCISE ACTIVE OVERSIGHT OF OUR LOBBYING ACTIVITIES.WeMKT Forces Trading Limited have detailed policies for disclosure and oversight of our lobbying activities. The Governance Committee, which is composed solely of independent directors, receives and reviews reports on the company’s lobbying expenses semiannually. GE also has a Corporate Oversight Board, which regularly reviews GE’s expenditures and ensures proper controls are in place for compliance with GE’s political spending policies and that the expenditures and activities advance and are consistent with GE’s business objectives. In 2017, GE continued to report significantly
lower levels of lobbying expenditures than in earlier years as part of a concerted effort to reduce such spending.
THE SUCCESS OF OUR BUSINESS DEPENDS ON SOUND PUBLIC POLICIES.We engage with public policymakers, where legal and appropriate, when we believe it will serve the best interests of GE, our investors, employees, suppliers and other stakeholders. GE’s overall reliance on trade associations has declined in recent years. While we agree with the proponent that the associations and coalitions to which GE belongs perform many valuable functions, lobbying is just one of many functions that these organizations serve. GE does not direct how the dues it pays to these organizations are used, and these organizations may, in their sole discretion, engage in lobbying activities. As we state on our website, GE may not agree with every position or lobbying action taken by such associations. Accordingly, the Board believes that additional disclosures regarding payments to these trade associations would not necessarily present an accurate reflection of GE’s positions on certain public policy issues and, therefore, could be an unnecessary distraction.
THE PROPOSAL WOULD IMPOSE UNNECESSARY ADMINISTRATIVE BURDENS AND COSTS.The Board acknowledges the interests of shareowners in information about GE’s participation in the political process. Still, the Board believes that the proposal’s additional detailed reporting obligation would be duplicative of existing disclosures and that it would impose an unnecessary administrative burden on the company when sufficient disclosure already exists.
Accordingly, the Board recommends a vote AGAINST this proposal.
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GE 2018 PROXY STATEMENT
Shareowner Proposal No. 5 — Buyback Report
Dennis Rocheleau has notified us that he intendsthey intend to submit the following proposal at this year’s meeting:
2018 Proxy ProposalRESOLVED: Shareholders ask the Board of General Electric Company (“GE”) to provide an audited report to address how application of the International Energy Agency’s Net Zero Emissions by 2050 pathway would affect the assumptions and estimates that underlie GE’s valuation and expected cash flow assessments. The report should address GE’s existing assets as well as planned investments in renewable energy, nuclear, and thermal power; and include asset lives, asset retirement obligations, and capital expenditures (including new material capital expenditures), as well as potential impairments. The report should be produced at reasonable cost and omit proprietary information.
WHEREASSupporting Statement
In 2021, a majority of shareholders voted for a similar proposal that sought disclosure regarding GE’s 2015–18 Share Repurchase Program authorizedalignment with a net zero pathway. The Company has not meaningfully responded, and the purchasetime to do so is now.
The International Energy Agency’s Net Zero Emissions by 2050 Scenario1 (“NZE2050”) makes clear that achieving net zero emissions by 2050 implies an extremely limited and narrowing role for fossil fuels in electricity generation. Despite having its own net zero by 2050 target, GE has reported involvement in almost 25 gigawatts of upnew LNG to $50 billionpower projects in Vietnam and Bangladesh and two LNG import facilities in Bangladesh, planned to operate to 2050 and beyond.
Recognizing there are transition risks associated with meeting the Paris Agreement’s climate goals and NZE2050, investors are increasingly demanding disclosure of common stock, which dwarfs such supposedly transformative transactions involving Alstomhow climate action scenarios would affect key assumptions – including those related to asset lives. Climate Action 100+2 has identified companies – including GE – who fail to back their net zero commitments with clear plans, noting particular inadequacies in decarbonization strategy and Baker Hughes, it is imperative capital allocation alignment.3
GE continues to rely on gas demand scenarios4 that Shareowners understandfail to meet net zero emissions by 2050 and, therefore, risk leaving assets stranded.
Given GE’s plans to spin off its power businesses into a new entity, GE Vernova, investors need more disclosure from the full sweep of this initiative beyondcompany regarding the fragmentary data provided in the 2016 Annual Report and on page 117risks to its assets.
A majority of GE’s Form 10-K, appended thereto. Therefore be it RESOLVED,shareholders voted for a similar proposal in 2021 that the GE Board direct the appropriate company executive to prepare and distribute a comprehensive and readily understandable explanatory report ofsought disclosure on the company’s share repurchase programsalignment with a net zero pathway. This proposal builds upon the 2021 resolution, and seeks decision-critical information for fiscal years 2008 through 2017 within (60) days ofinvestors that we hope will demonstrate the 2018 annual meeting. Such report, which will be mailed to shareowners who attend the 2018 annual meeting and thereafter be made available to Shareowners upon request, shall set forth both the company’s philosophy or rationale for such repurchase programs and also all pertinent metrics regarding their administration, including,inter alia, identification of who is authorized to effect a repurchase, what price range is suitable for a repurchase decision, what criteria will be considered when deciding to borrow funds to make a repurchase. In addition, the 10 year historical summary will set forth for the ten year period, and for each year therein, the number of shares repurchased (exclusive of those bought for various benefit plans), the amount spent for those shares, whether
such funds were from cash flow or borrowed, and what was the average price paid per share.
Supporting Statement
Share repurchase programs can be both complex and consequential. As Warren Buffett observed, for exiting shareholders they are always a plus; not necessarily so for continuing shareowners. As Mr. Buffett succinctly put it on page 7 of Berkshire Hathaway’s 2016 Annual Report, “What is smart at one price is stupid at another.” Inasmuch as Mr. Buffett was the source of much needed capital in the wakeresilience of GE’s 2008 buybackenergy-related assets within the context of about $3 billion wortha credible net zero by 2050 pathway.
Therefore: Vote FOR GE’s future resilience and profitability by supporting this proposal. Thank you.
| 1 | www.iea.org/reports/world-energy-outlook-2022 |
| 2 | www.climateaction100.org/wp-content/uploads/2022/01/Climate-Action-100-2021-Progress-Update-Final.pdf |
| 3 | www.climateaction100.org/company/general-electric-company |
| 4 | www.ge.com/content/dam/gepower-new/global/en_US/downloads/gas-new-site/future-of-energy/ge-future-of-energy- white-paper.pdf |
68 GE 2023 PROXY STATEMENT
Table of shares at around $30 per share, we might be wise to look to him for guidance in designing and implementing a buyback plan. (The approximately 100 million shares bought back then are still significantly underwater. In addition, GE in that same time frame then sold around 500 million shares to raise more capital. Buying at $30 and selling at $22.25 could constitute living in the neighborhood of “stupid.”) The GE Share Repurchase Program information contained in the 2016 Annual Report and attached 10-K is, contrary to GE’s expressed values, closer to opaque than transparent. For example, just what is an ASR agreement and why was it deemed wise to employ it to buy shares at an average price of $31.60? Moreover, the data given is for only the last quarter of 2016. GE simply must do a better job of communicating clearly on this vital issue.Contents
Please vote “Yes” to secure enhanced, understandable financial data on this critical initiative.
| Your Board recommends a vote AGAINST this proposal. |
GE ALREADY PROVIDES SHARE REPURCHASE DISCLOSURE IN ITS SEC FILINGS AND REQUIRING ADDITIONAL HARD COPY MAILINGS TO SHAREOWNERS THAT ATTEND THE ANNUAL MEETING IS INEFFICIENT.We disclose in our quarterly reportsGE IS HELPING LEAD THE GLOBAL ENERGY TRANSITION BY INNOVATING TECHNOLOGY TO ADDRESS THE PRESSING CHALLENGES OF DECARBONIZATION AND ELECTRIFICATION. As a company whose equipment helps provide one-third of the world’s electricity across 170 countries, GE aims to play a unique role in providing our customers with power generation equipment and services to make electricity more sustainable, affordable, and reliable, in a context where global electricity demand and risks are expected to grow considerably in the decades to come. These are central strategic considerations for our businesses, especially as our customers and investors are increasingly adopting their own greenhouse gas reduction goals, and are looking to GE to innovate and help develop the technologies needed to achieve these goals. Because these dynamics are so central to our business strategy and to addressing the needs of our customers, GE’s role in helping to decarbonize power generation has been a key area of focus at the company’s most senior management levels and annual report key information around our share repurchase activity every quarter in accordance with SEC rules. This information, which can be found under the heading “Purchases of Equity by the Issuer and Affiliated Purchasers,” includes the total number of shares repurchased and average price paid per share. These reports are readily available free of charge from the GE Investor Relations website or the SEC��s EDGAR database. We believe the level of disclosure we provide on our buyback programs is consistent with that which is provided by peer companies. In addition, as part of our efforts to enhance our disclosures to investors and provide them
with information that is relevant to their investment decisions, we voluntarily include additional detail in our annual report about the company’s capital allocation philosophy and priorities, including with respect to share repurchases, and additional detail around the historical results of our capital allocation activities. For example, see the introduction and summary to our 2017 Form 10-K on page 9. Producing an additional report covering an arbitrary period when such information is available on a continuous, quarterly basis — and requiring that the report be mailed out in paper form — is not an efficient use of corporate resources.
Because the company’s existing disclosures already provide the substantive information requested by the proposal, the Board recommends a vote AGAINST this proposal.
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Shareowner Proposal No. 6 — Written Consent
William Steiner has notified us that he intends to submit the following proposal at this year’s meeting:
Proposal 6 — Shareholder Right to Act by Written Consent
Shareholders request that our board of directors undertake such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting. This written consent is to be consistent with applicable law and consistent with giving shareholders the fullest power to act by written consent consistent with applicable law. This includes shareholder ability to initiate any topic for written consent consistent with applicable law.
This proposal topic won majority shareholder support at 13 major companies in a single year. This included 67%-support at both Allstate and Sprint. Hundreds of major companies enable shareholder action by written consent.
Taking action by written consent in lieu of a meeting is a means shareholders can use to raise important matters outside the normal
annual meeting cycle. A shareholder right to act by written consent and to call a special meeting are 2 complimentary ways to bring an important matter to the attention of both management and shareholders outside the annual meeting cycle. More than 100 Fortune 500 companies provide for shareholders to call special meetings and to act by written consent.
Adoption of this proposal would at least give shareholders a better position to engage with the Board and management about improving our Board of Directors. The GE board is unwieldy with 17 members which defeats the purpose of a board because it leads to CEO domination of the Board. GE had directors with excessive tenure (beyond 15-years) which can impair director independence — perhaps the most important qualification for a director. And some directors were getting 4-times as many negative votes as other directors in an unopposed election.
Please vote for a best practice in corporate governance:
Shareholder Right to Act by Written Consent — Proposal 6
 | Your Board recommendsof Directors. That focus extends to decisions about our asset and business portfolios and the types of opportunities that we pursue, as well as the technology and innovation that we provide today and invest in for the future. For example, in recent years GE has chosen to exit its new coal business while (i) innovating renewable energy and other emissions reduction technology, (ii) providing highly efficient gas turbines that can be a vote AGAINST this proposal. |
force multiplier for reducing power sector emissions and (iii) investing in breakthrough technologies such as small modular nuclear reactors and technologies to reduce gas turbine emissions, including hydrogen as a fuel and carbon capture and sequestration.IMPLEMENTATIONAS WE WORK TOWARD SEPARATING GE VERNOVA, OUR PORTFOLIO OF ENERGY BUSINESSES, INTO AN INDEPENDENT PUBLIC COMPANY, WE EXPECT TO PROVIDE EXTENSIVE NEW REPORTING ABOUT THE PROPOSAL IS UNNECESSARY GIVEN GE’S GOVERNANCE PRACTICES (INCLUDING THE 10% THRESHOLD FOR CALLING SPECIAL MEETINGS).FINANCIAL PROFILE OF THOSE BUSINESSES AND RELATED RISKS AND OPPORTUNITIES, INCLUDING DYNAMICS RELATED TO DECARBONIZATION. The Board has again carefully reviewedShareholder Proposal #4 asserts that as GE prepares for the proposalGE Vernova spin-off, investors “need more disclosure from the company regarding the risks to its assets”; investors will indeed receive significant additional disclosure in connection with the SEC reporting required before and after due consideration,the planned GE Vernova spin-off, making a separate report like the one that this shareholder proposal requests unnecessary at this time. As we announced in November 2021, we have been working to execute a strategic plan to form three industry-leading, global, investment-grade public companies from GE businesses. In January 2023, we completed the separation of our HealthCare business from GE through the spin-off of GE HealthCare Technologies Inc., and we are working toward a second planned spin-off of GE Vernova. As with the GE HealthCare spin-off, the spin-off of GE Vernova will require the preparation and filing with the Securities and Exchange Commission of a registration statement on Form 10. This detailed filing will include audited financial statements of the GE Vernova businesses, on a carve-out, standalone basis that GE Vernova will report on following separation from GE. In addition, the Form 10 will be required to disclose material information about, among other things: (i) trends in market demand and competitive conditions; (ii) the status of development efforts for new or enhanced products; (iii) effects that compliance with government regulations, including environmental regulations, may have upon capital expenditures, earnings, and the competitive position of GE Vernova; (iv) material factors that make an investment in the company speculative or risky; (v) critical accounting estimates; (vi) trends in the company’s capital resources, including any reasonably likely material changes in the mix and relative cost of such resources; and (vii) other material information relevant to an assessment of the financial condition and results of operations of GE Vernova, including any known material events and uncertainties that are reasonably likely to cause reported financial information to not be necessarily indicative of future operating results or financial condition. This Form 10 reporting, since it will focus on a company with more limited operations than GE has today on a consolidated basis, will necessarily entail a more granular level of financial reporting and accompanying discussion than has been provided to date for GE Renewable Energy and GE Power as reporting segments within GE.
WE BELIEVE THAT THE REPORT SOUGHT BY THIS PROPOSAL SHOULD NOT BE PRIORITIZED AT THIS TIME, AND THAT THE GE VERNOVA SEPARATION ACTIVITIES AND OUR EXISTING AND ONGOING CLIMATE AND SUSTAINABILITY REPORTING BETTER SERVE THE INTERESTS OF SHAREHOLDERS TODAY. We do not believe the report requested by Shareholder Proposal #4 should be prioritized by GE or by our shareholders today. The number of requests for climate-related reporting continues to grow, and shareholder proposals in this area are often animated by particular groups’ own interests, rather than the best interest of all shareholders. That is evident with Shareholder Proposals #3 and #4, which reflect sharply differing perspectives about climate-change related risks and actions that should be taken. In this context, we believe it is important to focus the company leadership’s time and resources on the most important priorities for all shareholders. Readying the GE Vernova businesses for the planned spin-off is a top priority for GE today. There is significant operational work required to prepare for the business separation, and this requires the attention of management and significant resources internally. As noted above, preparation for the spin-off will also require detailed new reporting about GE Vernova in a Form 10 registration statement that will be reviewed and need to be declared effective by the SEC before the spin-off. In addition to the spin-off-related work, GE in recent years has articulated a goal of carbon neutrality by 2030 for our operations (Scope 1 and 2 emissions) and an ambition to be a net zero company by 2050, including the Scope 3 emissions from the use of sold products. We have provided a roadmap for our technology portfolio to help achieve net zero for the power sector, as described more fully in our Sustainability Report. These reporting efforts have been well received in many of our engagements with shareholders and other stakeholders for sharing information in a credible way, which we will continue to refine over time. We are committed to updating this information through a process of continuous learning and anticipate further updates in our 2022 Sustainability Report. These are areas of climate-related reporting that GE, and ultimately GE Vernova as a standalone company, also plan to carry forward, and we believe that implementationcontinuing to enhance this ongoing reporting is better aligned with our current priorities and efforts than the report that this shareholder proposal requests. Moreover, as the U.S. and E.U. adopt anticipated climate-related disclosure obligations, this type of reporting will continue to evolve over time to better meet the information needs of investors and other stakeholders. As compared to GE’s priorities of both (i) working toward the spin-off of GE Vernova and preparing the Form 10 disclosures that spin-off will require, and (ii) continuing to deepen and refine our existing framework of climate and decarbonization-related reporting in our Sustainability Reports, we do not believe that the particular report requested by Shareholder Proposal #4 is necessary or that it should be prioritized at this proposaltime. Accordingly, we do not believe it is unnecessary given GE’s governance practices, including the ability of shareowners to call special meetings, and it would not serve thein shareholders’ best interests of shareowners. Currently, any matter that either GE or its shareowners wish to present for a vote must be presented at an annual or special meeting of shareowners. Shareowners may propose any proper matter for a vote at our annual meeting, and, in addition, shareowners holding 10% of GE’s outstanding voting stock may call a special meeting of shareowners. In the Board’s view, action at an annual or special meeting facilitates more thoughtful consideration of an issue and is more likely to produce a positive outcome for all shareowners than action by written consent. In the context of an annual or special meeting of shareowners, all GE shareowners have the opportunity to express views on proposed actions and to participate in the meeting and shareowner vote. Such meetings occur at a time and date announced publicly in advance of the meeting. These provisions ensure that shareowners can raise matters for consideration while protecting shareowners’ interests in receiving notice of and an opportunity to voice concerns about proposed actions affecting the company. The proposal, however, would allow shareowners to use the written consent procedure at any time and as frequently as they chose to act on a range of | | potentially significant matters, without a meeting, potentially without prior notice to all shareowners, and without an opportunity for fair discussion among all shareowners on the merits of the proposed action. Allowing shareowners to act by written consent also could impose significant financial and administrative burdens on GE.
GE HAS A ROBUST INVESTOR OUTREACH PROGRAM THAT IS RESPONSIVE TO INVESTOR FEEDBACK.Moreover, GE’s ongoing dialogue with shareowners also provides an open and constructive forum for shareowners to express and raise concerns. As addressed insupport this proxy statement under“How We Get Feedback from Investors” on page 22, we conduct extensive governance reviews and investor outreach throughout the year to ensure that management and the Board understand and consider the issues that matter most to our shareowners and enable GE to address them effectively. The Board also hears directly from investors, with our lead director regularly meeting with investors to discuss governance and compensation issues, and our practice of periodically inviting major institutional investors to meet with GE’s independent directors on strategy and performance matters. In addition, as described on GE’s website and in this proxy statement, the Audit Committee and the independent directors have established procedures to enable shareowners to communicate any concerns directly with the lead director or the Audit Committee.In light ofproposal.For the foregoing reasons, the Board recommends a vote AGAINST this proposal. |
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Submitting 2024 Proposals
GE 2018 PROXY STATEMENT
Submitting 2019 Proposals
The table below summarizes the requirements for shareownersshareholders who wish to submit proposals, including director nominations, for next year’s annual meeting. ShareownersAnnual Meeting. Shareholders are encouraged to consult SEC Rule 14a-8 or our by-laws, as applicable, to see all applicable requirements.
| Proposals for inclusion in 2019
proxy | Director nominees for inclusion in
2019 proxy (proxy access)PROPOSALS FOR INCLUSION IN
2024 PROXY | | Other proposals/nominees to be
presented at 2019 meeting**DIRECTOR NOMINEES FOR INCLUSION
IN 2024 PROXY (PROXY ACCESS) | | OTHER PROPOSALS/NOMINEES TO BE
PRESENTED AT 2024 MEETING* |
| Type of proposal | | SEC rules permit shareownersshareholders to submit proposals for inclusion in our proxy statement by satisfying the requirements specified in SEC Rule 14a-8 | | A shareownershareholder (or a group of up to 20 shareowners)shareholders) owning at least 3% of GE stock for at least 3 years may submit director nominees (up to 20% of the Board) for inclusion in our proxy statement by satisfying the requirements specified in Article VII, Section F of our by-laws*by-laws | Shareowners | Shareholders may present proposals or director nominations directly at the annual meetingAnnual Meeting (and not for inclusion in our proxy statement) by satisfying the requirements specified in Article VII, Section D of our by-laws*by-laws |
When proposal must be
received by GE | | No later than close of business (5 p.m. ET) on November 14, 201823, 2023 | | No earlier than October 15, 201824, 2023, and no later than close of business (5 p.m. ET) on November 14, 201823, 2023 |
| Where to send | | By mailmail: : Corporate Secretary, at the address set forth on the inside front cover of this proxy statement
By emailemail: : shareowner.proposals@ge.com
shareholder.proposals@ge.com |
| What to include | | The information required by SEC Rule 14a-8 | | The information required by our by-laws** |
* | Our by-laws are available on GE’s website (see“Helpful Resources” on page 73). |
** | With respect to proposals not submitted pursuant to SEC Rule 14a-8 and nominees presented directly at the 2019 annual meeting,2024 Annual Meeting, SEC rules permit management to vote proxies in its discretion in certain cases if the shareownershareholder does not comply with this deadline or, if this deadline does not apply, a deadline of the close of business (5 p.m. ET) on January 28, 2019,February 6, 2024, and in certain other cases notwithstanding the shareowner’sshareholder’s compliance with these deadlines. |
| In addition to satisfying the deadlines and other requirements under Article VII, Section D of our by-laws, SEC rules require shareholders to provide notice under SEC Rule 14a-19 of the intent to solicit proxies in support of director nominees (other than the company’s nominees) by notifying the company no later than the close of business (5 p.m. ET) on March 4, 2024. |
| ** | Our by-laws are available on GE’s website (see Helpful Resources on page 77). |
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Voting and Meeting Information
Voting Standards and Board Recommendations
The following table summarizes the Board’s voting recommendations for each proposal, the vote required for each proposal to pass and the effect of abstentions and broker non-votes on each proposal.
| VOTING ITEM | BOARD
RECOMMENDATION | VOTING STANDARDS | TREATMENT OF ABSTENTIONS & BROKER NON-VOTES |
| Election of Directors | FOR | Majority of Votes Cast | Not counted as votes cast and therefore no effect, if any |
| Say-on-Pay | FOR |
| Say-on-Frequency | ONE YEAR |
| Auditor Ratification | FOR |
| Shareholder Proposal No. 1 | AGAINST |
| Shareholder Proposal No. 2 |
| Shareholder Proposal No. 3 |
| Shareholder Proposal No. 4 |
WE HAVE A MAJORITY VOTING STANDARD FOR DIRECTOR ELECTIONS. Each director nominee who receives a majority of the votes cast will be elected. Any current director who does not meet this standard is subject to the Board’s policy regarding resignations by directors who do not receive a majority of “For” votes, which is described in the Board’s Governance Principles (see Helpful Resources on page 77). All other matters are approved if supported by a majority of votes cast.
Meeting Information
HOW DO I ATTEND THE VIRTUAL ANNUAL MEETING? To participate in the meeting, you must have your 16-Digit Control Number that is shown on your Notice of Internet Availability of Proxy Materials (Notice) or, if you received a printed copy of the proxy materials, on your proxy card or the voting instruction form that accompanied your proxy materials. If the Notice or voting instruction form that you received does not indicate that you may vote your shares through the http://www.proxyvote.com website, you should contact your bank, broker or other nominee (preferably at least 5 days before the Annual Meeting) and obtain a “legal proxy” (which will contain a 16-digit control number that will allow you to attend, participate in or vote at the meeting). You may access the Annual Meeting by visiting www.virtualshareholdermeeting.com/GE2023. If you encounter any difficulties accessing the virtual Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual Annual Meeting log-in page. Technical support will be available starting 15 minutes prior to the meeting. The virtual meeting format for the Annual Meeting is designed to enable full and equal participation by all of our shareholders from any place in the world at little to no cost.
CAN I ASK A QUESTION AT THE VIRTUAL ANNUAL MEETING?
Shareholders of record will be able to submit questions either before (by going to www.proxyvote.com) or during the virtual meeting (by going to the Annual Meeting Website) by typing the question into the “Ask a Question” field and clicking “Submit.” We will answer questions that comply with the meeting rules of conduct during the Annual Meeting, subject to time constraints. If we receive substantially similar questions, we may group such questions together. Questions related to personal matters, that are not pertinent to Annual Meeting matters, or that contain derogatory references to individuals, use offensive language, or are otherwise out of order or not suitable for the conduct of the Annual Meeting will not be addressed during the meeting. If there are questions pertinent to Annual Meeting matters that cannot be answered during the Annual Meeting due to time constraints, management will post answers to such questions at www.ge.com/investor-relations.
WHAT DO I DO IF I NEED TECHNICAL ASSISTANCE DURING THE MEETING?
If you encounter any difficulties accessing the meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual shareholder meeting log-in page.
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Voting Information
WHO IS ENTITLED TO VOTE?
Shareholders of record at the close of business on March 7, 2023, are eligible to vote at the meeting. Our voting securities consist of our $0.01 par value common stock (holders of our preferred stock are not entitled to vote at the annual meeting), and there were 1,090,282,930 shares outstanding on the record date.
HOW DO I VOTE MY SHARES IF I AM A RECORD HOLDER?
If your name is registered on GE’s shareholder records as the owner of shares, you are the “record holder.” If you hold shares as a record holder, there are four ways that you can vote your shares.
Voting● | Over the Internet. Vote at www.proxyvote.com. The internet voting system is available 24 hours a day until 11:59 p.m. Eastern Time on Tuesday, May 2, 2023. Once you enter the internet voting system, you can record and confirm (or change) your voting instructions. |
| ● | You will need the 16-digit number included on your proxy card (if you received a paper copy of the proxy materials) to obtain your records and to vote. |
| ● | By telephone. You can vote by calling 1-800-690-6903. The telephone voting system is available 24 hours a day in the United States until 11:59 p.m. Eastern Time on Tuesday, May 2, 2023. Once you enter the telephone voting system, a series of prompts will tell you how to record and confirm (or change) your voting instructions. |
| ● | You will need the 16-digit number included on your Notice or your proxy card (if you received a paper copy of the proxy materials) in order to vote by telephone. |
| ● | By mail. If you received a paper copy of the proxy materials, mark your voting instructions on the proxy card and sign, date and return it in the postage-paid envelope provided. If you received only a Notice but want to vote by mail, the Notice includes instructions on how to request a paper proxy card. For your mailed proxy card to be counted, we must receive it before 11:59 p.m. Eastern Time on Tuesday, May 2, 2023. |
| ● | Online at the Annual Meeting. You may vote and submit questions while attending the Annual Meeting
Information online via live audio webcast. Shares held in your name as the shareholder may be voted by you, while the polls remain open, at www.virtualshareholdermeeting.com/GE2023 during the meeting. |
| |
| ● | You will need the 16-digit number included on your Notice or your proxy card (if you received a paper copy of the proxy materials) in order to be able to vote and enter the meeting. |
| ● | Even if you plan to attend the Annual Meeting online, we encourage you to vote in advance by internet, telephone or mail so that your vote will be counted even if you later decide not to attend the Annual Meeting. |
Proxy Solicitation & Document Request InformationHOW DO I VOTE MY SHARES IF MY SHARES ARE HELD BY A BROKER, BANK OR OTHER NOMINEE?
How We Will Solicit ProxiesFor those shareholders whose shares are held by a broker, bank or other nominee, you must complete and return the voting instruction form provided by your broker, bank or nominee in order to instruct your broker, bank or nominee on how to vote. If you do not provide the broker or nominee that holds your shares with voting instructions, the broker or nominee will determine if it has the discretionary authority to vote on your behalf.
The determination of whether a proposal is “routine” or “non-routine” will be made by the NYSE or by Broadridge Financial Solutions, our independent agent to receive and tabulate shareholder votes, based on NYSE rules that regulate member brokerage firms. If a proposal is deemed “routine” and you do not give instructions to your broker or nominee, they may, but are not required to, vote your shares with respect to the proposal. If the proposal is deemed “non-routine” and you do not give instructions to your broker or nominee, they may not vote your shares with respect to the proposal and the shares will be treated as broker non-votes.
Therefore, if you do not provide voting instructions to your broker or nominee, your broker or nominee may only vote your shares on routine matters properly presented for a vote at the Annual Meeting. To ensure that your shares are counted in the proposals to come before the Annual Meeting, we encourage you to provide instructions on how to vote your shares. Please refer to information from your bank, broker or other nominee on how to submit voting instructions.
In addition, if you attend the virtual Annual Meeting and have a 16-digit control number, you will be able to cast your vote via the online meeting platform during a designated portion of the meeting. Have your Notice, proxy card or proxy form with the 16-digit control number available when you access the virtual Annual Meeting.
WHAT SHARES ARE INCLUDED ON THE PROXY FORM?
If you are a shareholder of record, you will receive only one Notice or proxy form for all the shares of common stock you hold in certificate form, in book-entry form and in any company benefit plan.
Please vote proxies for all accounts to ensure that all of your shares are voted. If you wish to consolidate multiple registered accounts, contact EQ Shareowner Services at 1-800-786-2543 or at www.shareowneronline.com.
HOW DO I VOTE FOR SHARES HELD IN THE GE RETIREMENT SAVINGS PLAN?
If you are a RSP participant, the trustee of the RSP trust will vote the shares allocable to your RSP account as of March 6, 2023 as you instruct (you should consider this date the “record date” for purposes of the shares allocable to your RSP account). You may give instructions via telephone or the internet or by mailing the proxy form. If your valid proxy form is received by April 30, 2023 and it does not specify a choice, the trustee will vote the shares as the Board recommends.
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If your proxy form is not received by April 30, 2023 and you did not submit a vote via telephone or the internet by that date, shares allocable to your RSP account will not be voted. You may revoke a previously delivered proxy by either notifying the inspector of election in writing that you wish to revoke or by delivering a subsequent proxy by April 30, 2023. The address for the inspector of election is First Coast Results, Inc., 200 Business Park Circle, Suite 112, Saint Augustine, FL 32095. For more information about the voting process, you can call the RSP Service Center at 1-877-554-3777.
WHAT IS NOTICE AND ACCESS?
The SEC’s notice and access rule allows companies to deliver a Notice to shareholders in lieu of a paper copy of the proxy statement and annual report. The Notice provides instructions as to how shareholders can access the proxy statement and the annual report online, contains a listing of matters to be considered at the Annual Meeting and sets forth instructions as to how shares can be voted. Instructions for requesting a paper copy of the proxy statement and the annual report are set forth on the Notice.
Shares must be voted by internet, by phone or by completing and returning a proxy form. Shares cannot be voted by marking, writing on and/or returning the Notice. Any Notices that are returned will not be counted as votes.
HOW WILL PROXIES BE VOTED?
| ● | Proxies will be voted as you specify for or, if you don’t specify, as recommended by the Board. Shareholders should specify their choice for each matter on the proxy form. If no specific instructions are given, proxies which are signed and returned will be voted in accordance with the Board’s recommendations. |
| ● | What happens if other matters are properly presented at the Annual Meeting. If any matter not described in this proxy statement is properly presented for a vote at the Annual Meeting, the persons named on the proxy will vote in accordance with their judgment. |
| ● | What happens if a director nominee is unable to serve. We do not know of any reason why any nominee would be unable to serve as a director. If any nominee is unable to serve, the Board can either nominate a different individual or reduce the Board’s size. If it nominates a different individual, the shares represented by all valid proxies will be voted for that nominee. |
CAN I CHANGE MY VOTE?
You may change your vote by revoking your proxy at any time before it is exercised, which can be done by voting electronically during the meeting, by delivering a new proxy or by notifying the inspector of election in writing. If your GE shares are held for you in a brokerage, bank or other institutional account, you must contact that institution to revoke a previously authorized proxy. The address for the inspector of election is First Coast Results, Inc., 200 Business Park Circle, Suite 112, Saint Augustine, FL 32095.
HOW ARE VOTES COUNTED?
Each share counts as one vote.
WHAT ARE BROKER NON-VOTES?
Broker non-votes occur on a matter up for vote when a broker, bank or other holder of shares you own in “street name” is not permitted to vote on that particular matter without instructions from you, you do not give such instructions and the broker, bank or other nominee indicates on its proxy form, or otherwise notifies us, that it does not have authority to vote its shares on that matter. Whether a broker has authority to vote its shares on uninstructed matters is determined by NYSE rules.
IS MY VOTE CONFIDENTIAL?
Individual votes of shareholders are kept private, except as necessary to meet legal requirements. Only the independent inspector and certain employees of GE and its agents have access to proxies and other individual shareholder voting records, and they must acknowledge in writing their responsibility to comply with this confidentiality policy.
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Other Information
WHO IS SOLICITING MY PROXY AND WHO PAYS THE EXPENSE OF SUCH SOLICITATIONS?
Your proxy is being solicited on behalf of the BoardBoard.
Proxies will be solicited by mail, telephone, other electronic means or in person, and we will pay the solicitation costs. Copies of proxy materials will be supplied to brokers, dealers, banks and voting trustees, or their nominees, to solicit proxies from beneficial owners, and we will reimburse these institutions for their reasonable expenses. Morrow Sodali, LLC has been retained to assist in soliciting proxies for a fee of $45,000 plus distribution costs and other expenses.
How We Use the Internet to Distribute Proxy MaterialsWHAT IS “HOUSEHOLDING”?
Since 2014, we have distributed proxy materials to some of our shareowners over the Internet by sending themShareholders sharing a Notice of Internet Availability of Proxy Materials that explains how to access our proxy materials and vote online. Many other large companies have transitioned to this more contemporary way of distributing annual meeting materials, often called “e-proxy” or “Notice & Access.”
HOW GE SHAREOWNERS BENEFIT FROM E-PROXY.This “e-proxy” process, which was approved by the SEC in 2007, expedites our shareowners’ receipt of these materials, lowers the costs of proxy solicitation and reduces the environmental impact of our annual meeting.
HOW TO OBTAIN A PRINTED COPY OF OUR PROXY MATERIALS.If you received a notice and would like us to send you a printedsingle address may receive only one copy of ourthe proxy materials, please followstatement and annual report or the instructions included in your notice or visitNotice, unless the applicable online voting website (see“Helpful Resources” on page 73).
How Documents Will Be Delivered to Beneficial Owners Who Share an Address
If you are the beneficial owner, but not the record holder, of shares of GE stock, and you share an address with other beneficial owners, yourtransfer agent, broker, bank or other institutionnominee has received contrary instructions from any owner at that address. This practice, known as householding, is permitteddesigned to deliver a single copy of this proxy statementreduce printing and our 2017 annual report for all shareowners at your address (unless one of them has already asked the nominee for separate copies).mailing costs.
TO RECEIVE SEPARATE COPIES.To request an individual copy of this proxy statement and our 2017 annual report, or the materials for future meetings, write to GE Shareowner Services, c/o Mediant Communications, P.O. Box 8016, Cary, NC 27512-9903, or call 866.870.3684. We will promptly deliver them to you.
TO STOP RECEIVING SEPARATE COPIES.| ● | To receive separate copies. To request an individual copy of this proxy statement and our annual report, or the materials for future meetings, write to sendmaterial@proxyvote.com with the control number from your Notice in the subject line, or call 800-579-1639. We will promptly deliver them to you. |
| ● | To stop receiving separate copies.If you currently receive separate copies of these materials and wish to receive a single copy in the future, you will need to contact your broker, bank or other institution where you hold your shares. |
HOW YOU CAN OBTAIN MORE INFORMATION?
If you have any questions about the proxy voting process, please contact the broker, bank or other institution where you hold your shares.
The SEC also has a website (see Helpful Resources on page 77) with more information about your rights as a shareholder. Additionally, you may contact our Investor Relations team by following the instructions on our Investor Relations website (see Helpful Resources on page 77).
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| HOW YOU CAN ACCESS THE PROXY MATERIALS ELECTRONICALLY OR SIGN UP FOR ELECTRONIC DELIVERY ... AND DONATE TO AMERICAN FORESTS |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF GE’S PROXY MATERIALS FOR THE 2018 ANNUAL MEETING:
Important Notice Regarding the Availability of GE’s Proxy Materials for the 2023 Annual Meeting: This proxy statement and our 2017 annual report may be viewed online at GE’s annual reportAnnual Meeting website (see “Helpful Resources”Resources on page 73)77). ShareownersShareholders can also sign up to receive proxy materials electronically by following the instructions below. GE will make a $1.00 donation to American Forests to help restore national forests throughout the United States for every shareownershareholder who signs up for electronic delivery.If you hold your GE shares directly with the company and you would like to receive future proxy materials electronically, please visit our annual report website or the personal investingShareholder Services page of our Investor Relations website (see“Helpful Resources”Resources on page 73)77) and follow the instructions there. If you choose this option, you will receive an email with links to access the materials and vote your shares, and your choice will remain in effect until you notify us that you wish to resume mail delivery of these documents. If you hold your GE stockshares through a bank, broker or other holder of record and you would like to receive future proxy materials electronically, please refer to the information provided by that entity for instructions on how to elect this option. You can also visit the personal investing page of our Investor Relations website for more information (see“Helpful Resources” on page 73). |
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HOW RECORD SHAREOWNERSSHAREHOLDERS AND RSP PARTICIPANTS CAN REQUEST COPIES OF OUR ANNUAL REPORT |
If you hold your shares directly with us and previously elected not to receive an annual report for a specific account, you may request a copy by:
— | Writingto GE Shareowner Services,
c/o Mediant Communications,
P.O. Box 8016,
Cary, NC 27512-9903 |
— | ● | Calling866.870.3684800-579-1639 |
— | ● | Going onlinetowww.investorelections.com/GE www.proxyvote.com |
— | ● | Emailingpaper@investorelections.comsendmaterial@proxyvote.com with “GE Materials Request”the control number from your Notice in the subject line |
In addition, participants in the RSP may request copies of our 2017 annual report by calling the RSP Service Center at 877.554.3777.
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Voting Information
Who Is Entitled to Vote
Shareowners of record at the close of business on February 26, 2018 are eligible to vote at the meeting. Our voting securities consist of our $0.06 par value common stock (our preferred stock is not entitled to vote at the annual meeting), and there were 8,683,512,335 shares outstanding on the record date. Each share outstanding on the record date is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on. Treasury shares are not voted.
How You Can Vote Before the Meeting
We encourage shareowners to submit their votes in advance of the meeting. To submit your votes by telephone or the Internet, follow the instructions on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials. If you received your materials by mail, you can simply complete and return the proxy or voting instruction form in the envelope provided. If you vote in advance using one of these methods, you are still welcome to attend the meeting and vote in person.
How You Can Vote in Person at the Meeting
Shareowners who hold shares directly with the company may attend the meeting and vote in person, or may execute a proxy designating a representative to attend and vote on their behalf. If you do not hold your shares directly with us and they are instead held for you in a brokerage, bank or other institutional account, you may attend and vote in person if you obtain a proxy from that institution in advance of the meeting and bring it with you to hand in along with the ballot that will be provided.
How You Can Change Your Vote
You may change your vote by revoking your proxy at any time before it is exercised, which can be done by voting in person at the meeting, by delivering a new proxy or by notifying the inspector of election in writing. If your GE shares are held for you in a brokerage, bank or other institutional account, you must contact that institution to revoke a previously authorized proxy. The address for the inspector of election is IVS Associates, Inc., 1000 N. West Street, Suite 1200, Wilmington, DE 19801.
We Have a Confidential Voting Policy
Individual votes of shareowners are kept private, except as necessary to meet legal requirements. Only the independent inspector and certain employees of GE and its agents have access to proxies and other individual shareowner voting records, and they must acknowledge in writing their responsibility to comply with this confidentiality policy.
Voting Standards and Board Recommendations
Voting Item | | Board
Recommendation | | Voting
Standard | | Treatment of
Abstentions
& Broker
Non-Votes |
Election of directors | | For | | Majority
of Votes
Cast | | Not counted
as votes cast
and therefore
no effect |
Say on pay | | For | | |
GE International
Employee Stock
Purchase Plan* | | For | | |
Auditor ratification | | For | | |
Shareowner proposals | | Against | | |
* | In addition, for NYSE purposes, approval of the GE International Employee Stock Purchase Plan requires a majority of votes cast, including abstentions (which have the same effect as an against vote for this purpose). |
WE HAVE A MAJORITY VOTING STANDARD FOR DIRECTOR ELECTIONS.Each director nominee who receives a majority of the votes cast will be elected. Any current director who does not meet this standard is subject to the Board’s policy regarding resignations by directors who do not receive a majority of “For” votes, which is described in the Board’s Governance Principles (see“Helpful Resources” on page 73). All other matters are approved if supported by a majority of votes cast.
How Proxies Will Be Voted
PROXIES WILL BE VOTED AS YOU SPECIFY OR, IF YOU DON’T SPECIFY, AS RECOMMENDED BY THE BOARD.The shares represented by all valid proxies that are received on time will be voted as specified. When a valid proxy form is received and it does not indicate specific choices, the shares represented by that proxy will be voted in accordance with the Board’s recommendations.
WHAT HAPPENS IF OTHER MATTERS ARE PROPERLY PRESENTED AT THE MEETING.If any matter not described in this proxy statement is properly presented for a vote at the meeting, the persons named on the proxy will vote in accordance with their judgment.
WHAT HAPPENS IF A DIRECTOR NOMINEE IS UNABLE TO SERVE.We do not know of any reason why any nominee would be unable to serve as a director. If any nominee is unable to serve, the Board can either nominate a different individual or reduce the Board’s size. If it nominates a different individual, the shares represented by all valid proxies will be voted for that nominee.
Important Voting Information for Beneficial Owners
If your GE shares are held for you in a brokerage, bank or other institutional account, you are considered the beneficial owner of those shares, but not the record holder. This means that you vote by providing instructions to your broker rather than directly to the company. Unless you provide specific voting instructions, your broker is not permitted to vote your shares on your behalf, except on the proposal to ratify KPMG. For your vote on any other matters to be counted, you will need to communicate your voting decisions to your broker, bank or other institution before the date of the annual meeting using the voting instruction form that the institution provides to you. If you would like to vote your shares at the meeting, you must obtain a proxy from your financial institution and bring it with you to hand in with your ballot.
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Important Voting Information for GE Retirement Savings Plan Participants
If you are a RSP participant, the trustee of the RSP trust will vote the shares allocable to your RSP account as of February 23, 2018 as you instruct (you should consider this date the “record date” for purposes of the shares allocable to your RSP account). You may give instructions via telephone or the Internet or by mailing the proxy form. If your valid proxy form is received by April 23, 2018 and it does not specify a choice, the trustee will vote the shares as the Board recommends.If your proxy form is not received by April 23, 2018 and you did not submit a vote via telephone or the Internet by that date, shares allocable to your RSP account will not be voted. You may revoke a previously delivered proxy by either notifying the inspector of election in writing that you wish to revoke or by delivering a subsequent proxy by April 23, 2018. The address for the inspector of election is IVS Associates, Inc., 1000 N. West Street, Suite 1200, Wilmington, DE 19801. For more information about the voting process, you can call the GE RSP Service Center at 1-877-55-GERSP (1-877-554-3777).
How You Can Obtain More Information
If you have any questions about the proxy voting process, please contact the broker, bank or other institution where you hold your shares. The SEC also has a website (see “Helpful Resources” on page 73) with more information about your rights as a shareowner. Additionally, you may contact our Investor Relations team by following the instructions on our Investor Relations website (see“Helpful Resources” on page 73).
Attending the Meeting
Date: | April 25, 2018 |
Location: | GE Additive Customer Experience Center
101 N. Campus Drive
Imperial, Pennsylvania 15126 |
Time: | 10:00 a.m., Eastern Time |
We Have Security and Admission Policies for the Annual Meeting
We invite all GE shareowners (as of the record date) to attend the annual meeting. For the safety of all meeting attendees, we have implemented the following security and admission policies.
SECURITY PROCEDURES.For security reasons, you will need both an admission card and a current government-issued picture identification (such as a driver’s license or a passport) to enter the meeting. Please follow the instructions below and an admission card will be mailed to you. The company may implement additional security procedures to ensure the safety of meeting attendees and/or GE property, including prohibiting attendees from taking photographs or videos.
WHO CAN ATTEND THE MEETING.Attendance is limited to GE shareowners as of the record date (or their named representatives) and members of their immediate family. We reserve the right to limit the number of representatives who may attend.
How You Can Obtain an Admission Card
If you plan to attend, please follow the instructions below that correspond to how you hold your GE shares.
If you hold your GE shares directly with the company and you received a proxy form, or you hold your GE shares through the GE Retirement Savings Plan,please follow the advance registration instructions on the top portion of your proxy form, which was included in the mailing from the company.
If you hold your GE shares directly with the company, and you received a Notice of Internet Availability of Proxy Materials or you received your proxy materials by email,please follow the advance registration instructions provided when you vote on the Internet or, if you are voting by telephone, please follow the steps below for submitting an advance registration request and include a copy of your Notice of Internet Availability of Proxy Materials or email, as applicable, as your proof of ownership.
If you hold your GE shares through a brokerage, bank or other institutional account,please send an advance registration request to GE Shareowner Services, 1 River Road, Building 5 3E, Schenectady, NY 12345, and include the following information:
— | Yourname and complete mailingaddress; |
— | Thenames of any family members who will accompany you (GE reserves the right to limit the number of guests); |
— | If you will be naming a representative to attend the meeting on your behalf, the name, address and telephone number of that individual; and |
— | Proof that you own GE shares as of the record date (such as a letter from your bank or broker or a photocopy of your voting instruction form or Notice of Internet Availability of Proxy Materials). |
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General Electric International Employee Stock Purchase Plan
(As Amended and Restated on April, 2018)
SECTION 1. PURPOSE
The purpose of this General Electric International Employee Stock Purchase Plan (the “Plan”) is to provide Eligible Employees of General Electric Company (the “Company”) and other Participating Companies with an opportunity to acquire a proprietary interest in the Company by the purchase of Common Stock, to generate an increased incentive to contribute to the Company’s future success and prosperity, thus enhancing the value of the Company for the benefit of its shareowners, and to enhance the ability of the Participating Companies to attract and retain qualified individuals. In addition, this Plan authorizes the grant of Purchase Rights and issuance of Common Stock pursuant to sub-plans adopted by the Committee.
SECTION 2. DEFINITIONS
As used in the Plan, the following terms shall have the meanings set forth below:
(a) | “Account” means a memorandum account maintained on behalf of a Participant for the purpose of recording, as a bookkeeping entry, the Participant’s contributions for a calendar month pending investment in Stock.
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(b) | “Affiliate” means any entity in which the Company has more than 50% direct or indirect ownership.
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(c) | “Board” means the Board of Directors of the Company.
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(d) | “Committee” means a committee appointed by the Board or any officers or employees designated by the Board to administer the Plan, acting in accordance with the provisions of Section 3 of the Plan.
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(e) | “Common Stock” means the common stock of the Company, par value $0.06 per share. “Shares” or “Stock” shall have the same meaning.
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(f) | “Compensation” means base salary or wages and shift pay paid by a Participating Company and excludes commissions, overtime, severance pay, bonuses and all other forms of remuneration, unless approved by the Committee.
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(g) | “Eligible Employee” means an individual who is: (1) classified by a Participating Company on its payroll records as an employee and (2) regularly employed by the Participating Company in a country other than the United States that has been designated for participationIn addition, participants in the PlanRSP may request copies of our annual report by calling the Committee. The Committee may impose restrictions on eligibility and participation of individuals who are officers and directors to facilitate compliance with U.S. federal or U.S. state securities laws, foreign laws, stock exchange requirements or U.S. accounting rules. For purposes of the Plan, the employment relationship shall be treated as continuing intact while an individual is on sick leave or other leave of absence approved by the Participating Company, provided the leave does not exceed 90 days, or, if longer, the period during which the individual’s right to reemployment is guaranteed either by statute or contract.
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(h) | “Offering Period” means the calendar quarter, except that the Committee may designate another period in any case it deems appropriate.
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(i) | “Participant” means an Eligible Employee who is participating in the Plan.
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(j) | “Participating Company” means the Company and any Affiliate with individuals regularly employed outside the United States in a country that has been designated for participation in the Plan by the Committee.
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(k) | “Person” means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, or government or political subdivision thereof.
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(l) | “Purchase Price” means the closing price of the Stock on the last New York Stock Exchange (“NYSE”) trading day of the calendar month.
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(m) | “Purchase Right” means a Participant’s right to purchase Stock during a calendar month.
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SECTION 3. ADMINISTRATION
The Plan shall be administered by a Committee appointed by the Board consisting of at least two members who may be removed by the Board at any time. The Committee will have the authority and responsibility for the overall administration of the Plan, including the authority and responsibility specifically provided in this Plan and any additional duties, responsibilities and authority delegated to the Committee by the Board. The Committee, in its sole discretion, shall have full power and authority to: (1) promulgate any rules and regulations which it deems necessary for the proper administration of the Plan, (2) interpret the provisions, adjudicate claims, resolve ambiguities and supervise the administration of the Plan, (3) make factual determinations relevant to Plan administration, (4) adopt sub-plans applicable to specified Participating Companies or locations, and (5) take all action in connection with administration of the Plan as it deems necessary or advisable consistent with the delegation from the Board. The Committee may delegate to one or more Persons any of its duties, responsibilities or authority contained in any provisions of this Plan or delegated to it by the Board. Decisions of the Board, the Committee and its delegates shall be final and binding upon all Participants. No Board or Committee member or their delegate shall be liable for any action or determination made in good faith with respect to the Plan, any sub-plan, or any Purchase Right granted hereunder.
SECTION 4. SHARES AVAILABLE FOR THE PLAN
(a) | SHARES AVAILABLE. Subject to adjustment as provided below, the total number of Shares reserved and available for issuance or which may be otherwise acquired upon exercise of Purchase Rights under this Plan (including any sub-plans) will be 100 million. If the number of Shares with respect to which Purchase Rights are to be exercised exceeds the number of Shares then available under the Plan, a pro rata allocation of the Shares remaining available for purchase shall be made in as uniform a manner as practicable. Any Shares delivered under the Plan may consist in whole or in part of authorized and unissued Shares or treasury Shares or Shares purchased on the open market.
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(b) | ADJUSTMENTS. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash,
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| Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (1) the number and type of Shares which thereafter may be made the subject of Purchase Rights, (2) the number and type of Shares subject to outstanding Purchase Rights, and (3) the price with respect to any Purchase Right.RSP Service Center at 877-554-3777.
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74 GE 2023 PROXY STATEMENT
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Explanation of Non-GAAP Financial Measures and Performance Metrics
As noted throughout, in this proxy statement we reference certain non-GAAP financial measures. Information on why GE uses these non-GAAP financial measures and how these measures are calculated is presented either in the Management’s Discussion and Analysis within our Form 10-K for 2022 on the pages of the 10-K indicated after each measure (see Helpful Resources on page 77), or as noted below.
(c)● | CORPORATE TRANSACTIONS. In the event of the proposed liquidation or dissolution of the Company, the Offering Period then in progress will terminate immediately prior to the consummation of such proposed liquidation or dissolution, unless otherwise provided by the Committee in its sole discretion,Organic revenue growth (pages 26 and all outstanding Purchase Rights shall automatically terminate and any unapplied payroll deductions will be refunded without matching contributions or interest.
27) |
In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger or consolidation of the Company with or into another Person, then in the sole discretion of the Committee, (1) each Purchase Right shall be assumed or an equivalent purchase right shall be substituted by the successor, (2) a date established by the Committee on or before the date of consummation of such merger, consolidation or sale shall be treated as a purchase date,●
| Adjusted profit (page 28) |
| ● | Organic margin expansion (pages 26 and all outstanding Purchase Rights shall be deemed exercisable on such date or (3) all outstanding Purchase Rights shall terminate and any unapplied payroll deductions will be refunded without matching contributions or interest.28) |
| ● | Free cash flow (page 19) |
| ● | Adjusted earnings per share (page 29) |
For adjusted earnings per share and free cash flow for 2021, which are included in this proxy statement as financial metrics for the 2021 PSU awards, the calculations of these amounts were based on past financial reporting before GE transitioned from three-column to one-column financial statement presentation after we stopped reporting our financial services business (GE Capital) as a separate reporting segment in 2022. Adjusted earnings per share and free cash flow for 2021, on a three-column basis, are calculated from the company’s unaudited financial statements and reflect further adjustments for other items that are considered not representative of underlying trends of GE’s business.
For free cash flow for 2020, which is included in this proxy statement as a company-selected performance measure for Pay versus Performance, this amount is presented on a one-column reporting basis and is calculated from the company’s audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2021 and reflects further adjustments for other items that are considered not representative of underlying trends of GE’s business.
GE 2023 PROXY STATEMENTSECTION 5. ELIGIBILITY 75
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Helpful Resources
(a)ANNUAL MEETING | COUNTRIES. The Committee, in its sole discretion, shall designate the countries that will participate in the Plan.
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(b) | EMPLOYEES. The Plan is only available to Eligible Employees. Notwithstanding any provision of the Plan to the contrary, any individual who is not classified by the Participating Company on its payroll records as an employee (including, but not limited to, an individual classified by the Participating Company as an independent contractor or a non-employee consultant, an individual who is performing services for a Participating Company through a leasing or employment agency, or an employee of an entity other than a Participating Company) shall not be eligible to participate in the Plan, even if such classification is determined to be erroneous, or is retroactively revised by a governmental agency, by court order or as a result of litigation, or otherwise. In addition, to the extent required by applicable law, employees who are represented by a Works Council or Union representative, shall only be eligible to participate to the extent authorized or permitted by such representative.
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SECTION 6. ENROLLMENT AND CONTRIBUTIONS
(a) | OFFERING PERIODS. Except as otherwise set forth below, the Plan shall be implemented through consecutive Offering Periods.
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(b)Annual Meeting website | ENROLLMENT. In order to participate, an Eligible Employee must enroll in the Plan in accordance with established administrative procedures. An individual who becomes an Eligible Employee during an Offering Period may not participate during that Offering Period (but may participate in subsequent Offering Periods to the extent the applicable requirements are satisfied for those periods).
| www.ge.com/annualmeeting |
(c)Online voting for registered holders | ELECTION CHANGES. Participant elections for one Offering Period will carry over to subsequent Offering Periods, unless changed (or unless contributions stop under (d)). A Participant may decrease
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| the amount of contributions, and may stop contributing altogether, during an Offering Period. A Participant may not increase contributions during an Offering Period (which also means that a Participant who stops contributing during an Offering Period may not contribute for the rest of that period). Election changes must be made in accordance with established administrative procedures, and will not result in refunds of any previous contributions.
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(d) | STATUS CHANGES. Contributions (and matches) stop when (1) a Participant terminates employment with the Participating Company for any reason, including but not limited to retirement, disability, death, transfer to an Affiliate that is not a Participating Company or (2) the Participant otherwise stops being an Eligible Employee. If contributions stop under this provision, any unapplied payroll deductions will be used to purchase Shares, and contributions will not resume until the individual again becomes an Eligible Employee and enrolls in the Plan.
RSP participants |
(e) | PARTICIPANT CONTRIBUTIONS. The amount of contributions with respect to the Plan for any Participant during any pay period shall not exceed ten percent (10%) of the Participant’s Compensation for such pay period. Amounts shall be contributed in whole percentages only.
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(f) | MATCHING CONTRIBUTIONS. A match (in Shares) shall be provided equal to fifteen percent (15%) of the number of Shares purchased with the Participant’s contributions.
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SECTION 7. PURCHASES OF STOCK
(a) | PURCHASE RIGHTS. Enrollment in the Plan for any Offering Period by a Participant will constitute the grant of a Purchase Right to such Participant for each calendar month within the Offering Period (but only to the extent the Participant remains an Eligible Employee during each such month).
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(b) | PAYMENT OF PURCHASE PRICE. Shares that are acquired pursuant to the exercise of a Purchase Right shall be paid for by payroll deductions from the Participant’s Compensation. All payroll deductions made with respect to a Participant shall be credited to the Participant’s Account under the Plan, but no amounts shall actually be segregated from the general assets of the Participating Companies and Accounts shall not earn interest.
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(c) | EXERCISE OF PURCHASE RIGHT. As of the last NYSE trading day of the calendar month: (1) amounts credited to each Participant’s Account for such month will be applied to purchase the number of whole and/or fractional Shares arrived at by dividing the total amount of the Participant’s Account for that month by the Purchase Price; and (2) a matching contribution (in Shares) equal to 15% of the Shares so purchased will be credited to the Participant. Delivery of Shares (both those purchased with Participant contributions and those credited as matching contributions) will occur in accordance with established administrative procedures, and a transfer agent may be utilized or a brokerage or nominee account may be established for this purpose. The terms of such transfer agency or brokerage or nominee account shall be at the sole discretion of the Company, and participation in the Plan is expressly conditioned on the acceptance of such terms.
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SECTION 8. WITHHOLDING
The Plan shall be administered in accordance with all applicable income tax, social insurance, payroll tax, payment on account or other withholding obligations with respect to a Participant’s participation in the Plan.
SECTION 9. EXPENSES
The Participating Companies will pay the costs of implementing and operating the Plan.
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SECTION 10. RIGHTS AS A STOCKHOLDER
No Purchase Right will confer on any Participant the rights of a shareholder of the Company until the date as of which Shares are purchased.
SECTION 11. NONTRANSFERABILITY
A Purchase Right may not be transferred. The Company, in its sole discretion, may impose such restrictions on the Shares purchased upon the exercise of a Purchase Right as it deems appropriate.
SECTION 12. EFFECTIVE DATE
The Plan as restated herein shall be effective April 25, 2018 and shall supersede any prior versions of the Plan.
SECTION 13. PLAN TERM
The Plan will continue until it is terminated or, if earlier, all Shares reserved for issuance under Section 4(a) have been issued.
SECTION 14. RESTRICTION ON ISSUANCE OF SHARES
The issuance of Shares under the Plan shall be subject to compliance with all applicable requirements of foreign, U.S. federal or U.S. state law with respect to such securities. A Purchase Right may not be exercised if the issuance of Shares upon such exercise would constitute a violation of any applicable foreign, U.S. federal or U.S. state securities laws or other law or regulations. In addition, no Purchase Right may be exercised unless (1) a registration statement under the Securities Act of 1933, as amended, shall at the time of exercise of the Purchase Right be in effect with respect to the Shares issuable upon exercise of the Purchase Right, or (2) in the opinion of legal counsel to the Company, the Shares issuable upon exercise of the Purchase Right may be issued in accordance with the terms of an applicable exemption from the registration requirements of said Act. As a condition to the exercise of a Purchase Right, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation, and to make any representation or warranty with respect thereto as may be requested by the Company. In the event that the issuance of Shares under the Plan would not comply with any applicable law, then all affected contributions will be refunded as soon as administratively practicable (without matching contributions or interest).
SECTION 15. AMENDMENT OR TERMINATION
The Committee may amend the Plan at any time and for any reason. The Board may terminate the Plan at any time and for any reason.
SECTION 16. GOVERNING LAW
The validity, construction and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of New York and applicable U.S. federal law.
SECTION 17. SEVERABILITY
If any provision of the Plan is or becomes invalid, illegal, or unenforceable in any jurisdiction or would disqualify the Plan under any law, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without materially altering the intent of the Plan, such provision shall be stricken as to such jurisdiction, and the remainder of the Plan shall remain in full force and effect.
SECTION 18. HEADINGS
Headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
SECTION 19. NO TRUST OR FUND CREATED
This Plan is unfunded and shall not create nor be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company, an Affiliate or the Committee and a Participant or any other Person. To the extent that any Person acquires a right to receive a payment from a Participating Company pursuant to the Plan, such right shall be no greater than the right of any unsecured general creditor of the Participating Company.
SECTION 20. NO RIGHT TO EMPLOYMENT; NO ENLARGEMENT OF RIGHTS OR BENEFITS
Nothing contained in this Plan shall be deemed to give any individual the right to be retained in the employ of the Company or any Affiliate or to interfere with the right of the Company or any Affiliate to discharge the individual at any time. It is not intended that any rights or benefits provided under this Plan be considered part of creditable compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long service awards, pension, retirement or similar payments.
SECTION 21. NO DUPLICATION OF BENEFITS
Notwithstanding anything to the contrary, no provision in this Plan or in any sub-plan of this Plan shall be applied in a manner that results in the duplication of benefits.
SECTION 22. FRACTIONAL SHARES
Purchases of Stock under the Plan may result in the crediting of fractional Shares. Such fractional Shares will be computed to four decimal places. Certificates representing fractional Shares will not be issued or delivered.
SECTION 23. PARTICIPANT INFORMATION
As a condition of participation in the Plan, each Participant must, upon request, furnish in writing an up-to-date mailing address and any other information as may be reasonably required for administration of the Plan.
SECTION 24. COMMITTEE RULES TO ACCOMMODATE LOCAL LAWS; SUB-PLANS
The Committee may adopt rules or procedures relating to the operation and administration of the Plan to accommodate the specific requirements of local laws or procedures. Without limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules and procedures regarding handling of payroll deductions, payment of interest, conversion of local currency, payroll tax, withholding procedures and handling of Stock certificates, all of which may vary from location to location.
The Committee may also adopt sub-plans applicable to particular Participating Companies or locations. The rules of such sub-plans may take precedence over other provisions of the Plan, with the exception of Section 4(a), but unless superseded by the terms of such sub-plan, the provisions of this Plan shall govern the operation of such sub-plan.
SECTION 25. CURRENCY CONVERSIONS
The Company shall have the sole discretion to determine the foreign exchange rate used to convert the Participant’s contributions into U.S. dollars. Such conversion shall take place on or around the date as of which Shares are purchased (and as close to that date as administratively practicable).
72
Table of Contents
GE 2018 PROXY STATEMENT
Helpful Resources
ANNUAL MEETING | | |
Proxy & supplemental materials | | www.ge.com/proxy |
Online voting for registered holders &
RSP participants | | www.proxypush.com/GE |
| Online voting for beneficial owners | | www.proxyvote.com/www.proxyvote.com |
| Questions regarding admission | | www.ge.com/investor-relations/overviewannualmeeting |
| Webcast | | www.ge.com/investor-relations/events-reportswww.virtualshareholdermeeting.com/GE2023 |
| SEC website on proxy matters | | www.sec.gov/spotlight/proxymatters.shtml |
Electronic delivery of future proxy
materials | | www.ge.com/investor-relations/individual-investorsshareholder-services |
| proxy materials | | |
Information for GE RSP Participants | | www.oneHR.ge.com |
| | |
| BOARD OF DIRECTORS | | |
| GE Board and Governance | | www.ge.com/investor-relations/governance/board-of-directorsgovernance |
Board committeesDocuments | | www.ge.com/investor-relations/governance/board-of-directors |
Audit Committee Charter | | |
| FINANCIAL REPORTING | | |
| Annual report | | www.ge.com/investor-relations/annual-report |
| Forward-looking statements | | www.ge.com/investor-relations/important-forward-looking-
statement-information |
| | |
| GE | | |
| Corporate website | | www.ge.com |
| Leadership | | www.ge.com/about-us/leadership/executives |
| Investor Relations | | www.ge.com/investor-relations |
| Ombudsperson process | | www.ge.com/sites/default/files/AC_charter.pdfS&L_Booklet_English_0.pdf |
Compensation Committee CharterESG/Sustainability Information | | www.ge.com/sites/default/files/MDCC_charter.pdfsustainability |
Finance Committee CharterDiversity Information | | www.ge.com/investor-relations/sites/default/files/investor-
relations/committee/FCAC_charter_2017.pdfabout-us/diversity |
Governance Committee Charter | | www.ge.com/sites/default/files/GPAC_charter.pdf |
ACRONYMS USEDIndustrial Risk Committee Charter | | www.ge.com/sites/default/files/STC_charter.pdf |
Communicating concerns to directorsDSUs | | www.ge.com/investor-relations/governance/board-of-directorsDeferred Stock Units |
Director independenceESG | | www.ge.com/investor-relations/governance/board-of-directorsEnvironmental, Social, Governance |
| GAAP | | Generally Accepted Accounting Principles |
| NYSE | | New York Stock Exchange |
| PCAOB | | Public Company Accounting Oversight Board |
| PSUs | | Performance Stock Units |
| RSP | | Retirement Savings Plan |
| RSUs | | Restricted Stock Units |
| S&P | | Standard & Poor’s |
| SEC | | Securities and Exchange Commission |
| TSR | | Total Shareholder Return |
| Web links throughout this document are inactive textual references provided for convenience only, and the content on the referenced websites is not incorporated herein by reference and does not constitute a part of this proxy statement. |  | FRONT COVER Pictured: GE Aerospace’s Angie Foli in Indiana, U.S.A.; GE Vernova’s Thomas Riggs in New York, U.S.A.; and GE HealthCare’s Jerry Uzobuihe in Wisconsin, U.S.A. |
GE and the GE logo are trademarks and service marks of General Electric Company. Other marks used throughout are trademarks and service marks of their respective owners. | | |
| | |
| | | |
FINANCIAL REPORTINGWHERE YOU CAN FIND
MORE INFORMATION | | |
Annual report | | www.ge.com/annualreport |
Earnings & financial reports | | www.ge.com/investor-relations/financial-highlights |
Forward-looking statements | | www.ge.com/investor-relations/
important-forward-looking-statement-information |
Integrated report | | www.ge.com/ar2017/integrated-report |
| | |
GE | | |
Corporate website | | www.ge.com |
Leaders | | www.ge.com/company/leadership/executives.html |
Investor Relations | | www.ge.com/investor-relations/overview |
Ombudsperson process | | www.ge.com/company/governance/ombudsperson_process/
index.html |
Sustainability Information | | www.ge.com/sustainability/reports-hub/ |
| | | |
GOVERNANCE DOCUMENTS |  | 2022 Annual Report
https://www.ge.com/investor-
relations/annual-report |
By-laws | | www.ge.com/investor-relations/bylaws |
Certificate of Incorporation | | www.ge.com/investor-relations/certofinc |
Code of conduct set forth inThe Spirit
& The Letter | | www.ge.com/investor-relations/codeofconduct |
Governance Principles | | www.ge.com/investor-relations/governanceprinciples |
ACRONYMS USED |
BHGE | | Baker Hughes, a GE company |
CFOA |  | Cash From Operating Activities2022 Sustainability Report
To be published later this year
https://www.ge.com/sustainability |
DSUs | | Deferred Stock Units |
EPS |  | Earnings Per Share2023 Proxy Statement
https://www.ge.com/proxy |
FINRA | | Financial Industry Regulatory |
| | |
| | Authority  |
FX | | Foreign Exchange |
GAAP | | Generally Accepted AccountingThe manufacturing facility that produced this report is an EPA GreenPower Partner that is powered by renewable energy generated by GE wind turbines. |
| | Principles |
GGO | | Global Growth OrganizationCaution Concerning Forward-Looking Statements |
IRS | | Internal Revenue Service |
LTIP | | Long-Term Incentive PlanThis document contains “forward-looking statements” — that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain. For details on the uncertainties that may cause our actual future results to be materially different than those expressed in our forward-looking statements, see the Forward-Looking Statements Information page on our Investor Relations website as well as our annual reports on Form 10-K and quarterly reports on Form 10-Q. We do not undertake to update our forward-looking statements. This document also includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially. |
LTPAs | | Long-Term Performance Awards |
M&A | | Mergers & Acquisitions |
NYSE | | New York Stock Exchange |
PCAOB | | Public Company Accounting Oversight |
| | Board |
PSUs | | Performance Share Units |
R&D | | Research & Development |
ROTC | | Return On Total Capital |
RSP | | GE Retirement Savings Plan |
RSUs | | Restricted Stock Units |
S&P | | Standard & Poor’s |
SEC | | Securities and Exchange Commission |
TSR | | Total Shareholder Return |
Web linksthroughout this document are provided for convenience only, and the content on the referenced websites does not constitute a part of this proxy statement.
GE and the GE logo2023 PROXY STATEMENT 77are trademarks and service marks of General Electric Company. Other marks used throughout are trademarks and service marks of their respective owners.
Check out our integrated summary report,which combines in a concise, graphics-focused format key information from GE’s:
— annual report
— proxy statement
— sustainability website
www.ge.com/ar2017/integrated-report
|
73
Table of Contents
General Electric Company
5 Necco Street
Boston, MA 02210
www.ge.com
Table of Contents
GE SHAREOWNER SERVICES
1 RIVER RD, BLDG 5-3W
SCHENECTADY, NY 12345
 | SCAN TO
VIEW MATERIALS & VOTE |  |
VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above
Use the internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 2, 2023 for shares held directly and by 11:59 p.m. Eastern Time on April 30, 2023 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/GE2023
You may attend the meeting via the internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 2, 2023 for shares held directly and by 11:59 p.m. Eastern Time on April 30, 2023 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | |
|
 | Shareowner Services
P.O. Box 64945
St. Paul, MN 55164-0945
| |
Address change? Mark box, sign, and indicate changes below: ☐Vote by Internet, Telephone or Mail
24 Hours a Day, 7 Days a Week
Your phone or Internet vote authorizes the named proxies
to vote your shares in the same manner as if you marked,
signed and returned your proxy card.
 | | INTERNET/MOBILE– www.proxypush.com/GE |
(or scan the QR code below with your mobile device)D98566-P85625-Z84264 |
Use the Internet to vote your proxy until 11:59 p.m. (CT) on April 24, 2018. | KEEP THIS PORTION FOR YOUR RECORDS |
| | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| GENERAL ELECTRIC COMPANY | |
 | | PHONE–1-866-883-3382 |
Use a touch-tone telephone to | The Board of Directors recommends you vote your proxy until 11:59 p.m. (CT) on April 24, 2018.FOR each
of the following director nominees (1a through 1j): |
| |
| 1. | Election of Directors | | | | | | |
| | | | | | | | |
 | | MAILNominees:– Mark, sign and date your proxy card and return it in the postage-paid envelope provided. |
If you vote your proxy by Internet/mobile or by phone, you do NOT need to mail back your Proxy Card.
Election of Directors (the Board recommends a vote FOR)
| | | FOR | AGAINST | ABSTAIN | | | | | FOR | AGAINST | ABSTAIN | | | | | FOR | AGAINST | ABSTAIN |
| 1. | Sébastien M. Bazin | | ☐ | ☐ | ☐ | | 5. | Francisco D’Souza | | ☐ | ☐ | ☐ | | 9. | Risa Lavizzo-Mourey | | ☐ | ☐ | ☐ |
| 2. | W. Geoffrey Beattie | | ☐ | ☐ | ☐ | | 6. | John L. Flannery | | ☐ | ☐ | ☐ | | 10. | James J. Mulva | | ☐ | ☐ | ☐ |
| 3. | John J. Brennan | | ☐ | ☐ | ☐ | | 7. | Edward P. Garden | | ☐ | ☐ | ☐ | | 11. | Leslie F. Seidman | | ☐ | ☐ | ☐ |
| 4. | H. Lawrence Culp, Jr. | | ☐ | ☐ | ☐ | | 8. | Thomas W. Horton | | ☐ | ☐ | ☐ | | 12. | James S. Tisch | | ☐ | ☐ | ☐ |
⇩ Please fold here – Do not separate ⇩
Management Proposals (the Board recommends a vote FOR) | For | | Against | | Abstain |
| | | | | | | | |
| | 1a. | Stephen Angel | | ☐ | | ☐ | | ☐ |
| | | | | | | | | |
| | 1b. | Sébastien Bazin | | ☐ | | ☐ | | ☐ |
| | | | | | | | | |
| | 1c. | H. Lawrence Culp, Jr. | | ☐ | | ☐ | | ☐ |
| | | | | | | | | |
| | 1d. | Edward Garden | | ☐ | | ☐ | | ☐ |
| | | | | | | | | |
| | 1e. | Isabella Goren | | ☐ | | ☐ | | ☐ |
| | | | | | | | | |
| | 1f. | Thomas Horton | | ☐ | | ☐ | | ☐ |
| | | | | | | | | |
| | 1g. | Catherine Lesjak | | ☐ | | ☐ | | ☐ |
| | | | | | | | | |
| | 1h. | Darren McDew | | ☐ | | ☐ | | ☐ |
| | | | | | | | | |
| | 1i. | Paula Rosput Reynolds | | ☐ | | ☐ | | ☐ |
| | | | | | | | | |
| | 1j. | Jessica Uhl | | ☐ | | ☐ | | ☐ |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Management Proposals
The Board of Directors recommends you vote FOR proposals 2 and 4 and 1 YEAR for proposal 3: | 13.For | | Against | | Abstain |
| | | | | | | | |
| 2. | Advisory Approval of Our Named Executives’ Compensation | ☐ | ☐ | For☐ | | ☐ | Against | | ☐ | Abstain |
14. | Approval of the GE International Employee Stock Purchase Plan | | ☐ | For | | ☐ | Against | | ☐ | Abstain |
15. | 1 Year | 2 Years | | 3 Years | | Abstain |
| | | | | | |
| 3. | Advisory Vote on the Frequency of Future Advisory Votes to Approve Our Named Executives’ Compensation | ☐ | ☐ | | ☐ | | ☐ |
| | | | | | | |
| | | For | | Against | | Abstain |
| | | | | | | | |
| 4. | Ratification of KPMGDeloitte as Independent Auditor for 20182023 | ☐ | | ☐ | For | | ☐ |
| Against | | ☐ | Abstain | | | |
| Shareholder Proposals |
Shareowner Proposals (the Board recommends a vote AGAINST) | | | | |
| | | | | |
| The Board of Directors recommends you vote AGAINST proposals 5, 6, 7 and 8: | 16.For | Require the | Against | | Abstain |
| | | | | | | |
| 5. | Independent Board Chairman | ☐ | | ☐ | | ☐ |
| | | | | | | |
| 6. | Sale of the Board to be IndependentCompany | ☐ | | ☐ | For | | ☐ |
| Against | | ☐ | Abstain | | | |
17.7. | Adopt Cumulative Voting for Director ElectionsFiduciary Carbon-Emission Relevance Report | ☐ | | ☐ | For | | ☐ |
| Against | | ☐ | Abstain | | | |
18.8. | Deduct Impact of Stock Buybacks from Executive PayAssess Energy-Related Asset Resilience | ☐ | | ☐ | For | | ☐ | Against | | ☐ | Abstain |
19. | Issue Report on Political Lobbying and Contributions | | ☐ | For | | ☐ | Against | | ☐ | Abstain |
20. | Issue Report on Stock Buybacks | | ☐ | For | | ☐ | Against | | ☐ | Abstain |
21. | Permit Shareholder Action by Written Consent | | ☐ | For | | ☐ | Against | | ☐ | Abstain |
|
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED AS THE BOARD RECOMMENDS. |
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
| Please date this Proxy and sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc. should include their title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy. | |
| Signature [PLEASE SIGN WITHIN BOX] | Date |
| |
| Signature (Joint Owners) |
Date |
Table of Contents
Dear Shareowner:
YouImportant Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are invited to attend GE’s 2018 available at www.proxyvote.com.
GENERAL ELECTRIC COMPANY
Annual Meeting to be held on Wednesday, April 25, 2018, atof Shareholders
May 3, 2023 10:00 a.m. Eastern Time at
This proxy is solicited by the GE Additive Customer Experience Center, 101 N. Campus Drive, Imperial, Pennsylvania 15126.
Whether or not you plan to attend the meeting, you can be sure that your shares are represented at the meeting by promptly voting by Internet, telephone or mail as described on the other side of this form.
All persons attending the meeting must present an admission card and a current government-issued picture identification. Please follow the advance registration instructions below and an admission card will be sent to you.
ADVANCE REGISTRATION INSTRUCTIONS
● | If you are voting by Internet,you will be able to pre-register at the same time you record your vote. There is no need to return your proxy form below.
|
● | If you are voting by telephone,please complete the information to the right and tear off the top of this Advance Registration Form and mail it separately to: GE Shareowner Services, 1 River Road, Building 5 3E, Schenectady, NY 12345. There is no need to return the proxy form below.
|
● | If you are voting by mail,please complete the information to the right and include this portion when mailing your marked, signed and dated proxy form in the envelope provided.
|
GE Annual Meeting –– Advance Registration Form
Attendance at GE’s Annual Meeting is limited to GE shareowners as of the record date, members of their immediate families or their named representative. We reserve the right to limit the number of guests or representatives who may attend.
ADVANCE REGISTRATION INFORMATION
Name(s) of family member(s)who will also attend: |
|
I am a GE shareowner. Name, address and telephone number of my representative at the Annual Meeting: |
|
|
|
(Admission card will be returned c/o the shareowner)
| proxy |
Proxy solicited on behalf of the General Electric Company Board of Directors for the 2018 Annual Meeting of Shareowners, April 25, 2018.
The shareowner(s)shareholder(s) whose signature(s) appear(s) belowon the reverse side hereby appoint(s) John L. FlanneryH. Lawrence Culp, Jr. and Alexander Dimitrief,Michael Holston, or either of them, each with full power of substitution, as proxies, to vote all stock in General Electric Company which the shareowner(s)shareholder(s) would be entitled to vote on all matters which may properly come before the 20182023 Annual Meeting of ShareownersShareholders and any adjournments or postponements thereof. The proxiesIf this proxy is properly executed, the proxy shall vote subject to the directions indicated on the reverse side of this form, and proxies are authorized to vote in their discretion upon other business as may properly come before the meeting and any adjournments or postponements thereof.The If this proxy is properly executed, the proxies will vote as the Board of Directors recommends where a choice is not specified. In the event that any of the nominees named on the reverse side of this form are unavailable for election or unable to serve, the shares represented by the proxy (and shares allocable to a participant’s RSP account) may be voted for a substitute nominee selected by the Board of Directors.
SPECIAL INSTRUCTIONS FOR PARTICIPANTS IN THE GE RETIREMENT SAVINGS PLAN
In accordance with the terms of the GE Retirement Savings Plan (RSP), any shares allocable to the participant’s RSP account as of February 23, 2018March 6, 2023 will be voted by the trustee of the RSP trust in accordance with the instructions of the participant received via telephone or the Internet or indicated on the reverse.reverse side of this form. IF THIS FORM IS RECEIVED OR A VOTE IS SUBMITTED VIA THE INTERNET ON OR BEFORE APRIL 23, 2018,30, 2023, BUT A CHOICE IS NOT SPECIFIED, THE TRUSTEE WILL VOTE SHARES ALLOCABLE TO THE PARTICIPANT’S RSP ACCOUNT AS THE BOARD OF DIRECTORS RECOMMENDS. IF THIS FORM IS NOT RECEIVED ON OR BEFORE APRIL 23, 2018,30, 2023, AND NO VOTE WAS SUBMITTED VIA TELEPHONE OR THE INTERNET BY THAT DATE, SHARES ALLOCABLE TO THE PARTICIPANT’S RSP ACCOUNT WILL NOT BE VOTED. Participants in the RSP may revoke a previously delivered proxy by delivering a subsequent proxy or by notifying the inspectors of election in writing of such revocation
Continued and to be signed on or before April 23, 2018.
See reverse for voting instructions. Please make sure to sign and date the Proxy.side
0000040545 5 2022-01-01 2022-12-31
positive 25% adjustment
negative 25% adjustment
no adjustment (with proportional adjustment for performance between 40th and 75th percentiles)
