UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
☑ | Filed by the Registrant | ☐ | Filed by a Party other than the Registrant |
Check the appropriate box: | |
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☑ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material under § 240.14a-12 |
General Electric Company
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box): | |||
☑ | No fee required. | ||
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||
(1) | Title of each class of securities to which the transaction applies: | ||
(2) | Aggregate number of securities to which the transaction applies: | ||
(3) | Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||
(4) | Proposed maximum aggregate value of the transaction: | ||
(5) | Total fee paid: | ||
☐ | Fee paid previously with preliminary materials. | ||
☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | ||
(1) | Amount Previously Paid: | ||
(2) | Form, Schedule or Registration Statement No.: | ||
(3) | Filing Party: | ||
(4) | Date Filed: |
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 10, 2017) in connection with GEs solicitation of proxies for our 2017 Annual Meeting of Shareowners. |
What do we need from you? |
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. |
Where can you find more information? |
Check out our interactive, mobile-friendly online proxy & 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/ar2016/integrated-report |
INDEX OF FREQUENTLY REQUESTED INFORMATION | ||
63 | Auditor Fees | |
62 | Auditor Tenure | |
24 | Board Leadership | |
27 | Board Meeting Attendance | |
35 | CEO Performance Evaluation | |
51 | Clawback Policy | |
51 | Compensation Consultants | |
49 | Death Benefits | |
12 | Director Biographies | |
20 | Director Independence | |
18 | Director Qualifications | |
19 | Director Term Limits | |
52 | Dividend Equivalents Policy | |
52 | Hedging Policy | |
26 | Investor Outreach | |
40 | Long-Term Performance Award Program | |
27 | Overboarding | |
51 | Pay For Performance | |
51 | Peer Group Comparisons | |
39 | Perquisites | |
52 | Pledging Policy | |
27 | Political Spending Oversight | |
70 | Proxy Access | |
37 | Realized Compensation (W-2 income) | |
28 | Related Person Transactions | |
25 | Risk Oversight | |
49 | Severance Benefits | |
28 | Share Ownership for Executives & Directors | |
52 | Share Ownership Requirements | |
70 | Shareowner Proposal Deadlines for 2018 | |
51 | Succession Planning | |
Also see Acronyms Used on page 81 for a guide to the acronyms used throughout this proxy statement. |
GENERAL ELECTRIC COMPANY EXECUTIVE OFFICES |
41 Farnsworth
Street Boston, MA 02210 |
*To be voted on at the meeting.
Proxy Overview |
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.
Governance
Q&A WITH OUR LEAD DIRECTOR |
Can you discuss the Boards role in the strategic planning process?
One of the Boards key roles is overseeing strategy, for which we use an annual rhythm that starts in mid-summer. The Board does a deep dive, working closely in small groups with executives of varying seniority. The output of these sessions provides the strategic context for the Boards discussions at its meetings throughout the year.
While we have a multi-year strategic plan, we also realize that in todays environment we need to be nimble and opportunistic, adjusting strategy as the world around us changes. This requires a lot of Board meetings. For example, we met as a Board 13 times last year.
Large capital allocation decisions are typically the product of an iterative Board discussion. For example, one of the most important things we did in 2016 was announce our planned combination of GE Oil & Gas with Baker Hughes. This was the result of discussions over the course of 10 meetings in which we engaged on the risks and opportunities.
How does the Board approach director recruitment?
Board recruitment is a topic that is front and center with investors today and, as a Board, we spend a lot of time on it. Over the last five years, we have refreshed more than half of the Board.
In looking for candidates, we start with character, seeking candidates with the highest standards, who are committed to upholding GEs values and who will be independent, strong stewards of our investors capital. Then, as we go through the process of assessing future Board recruitment needs, we look to recruit candidates from different backgrounds so that they can contribute to the cognitive diversity on the Board.
This is an ongoing endeavor for us. We of course take a long-term look at the refreshment that is expected to occur over time as a result of our term limit and age limit policies, but we are always looking for new directors. It is vitally important that we continue to have the right skill sets on the Board as GEs portfolio and strategy change.
Can you discuss the Boards role in the investor outreach process?
One of the things that impressed me when I joined the Board was how front and center
our investors were in the Boards discussions. We think about a number of stakeholders, but a key question for us is how our decisions impact the owners of the company.
There are several ways in which the Board receives investor feedback. Our IR and governance teams are on the front lines engaging with shareowners. Throughout the year, they have 1,000+ investor engagements, including 150+ meetings with senior management, and provide feedback to the Board.
The Board also hears directly from investors. Two years ago, we began a process of inviting major shareowners into the boardroom to meet in executive session with the independent directors. We listen to their views on strategy, business and financial issues, including what we are doing well and areas for improvement. In addition, in my role as lead director, I am available to our large investors and have had the opportunity to engage with several of them on governance and compensation matters.
How do GEs executive pay plans fit together and connect to GEs strategy?
An important focus area for the Board is executive pay and ensuring that the structure provides the right incentives for our leaders. We have 3 main performance-based compensation plans. First, we have an annual cash bonus plan, in which approximately 5,000 executives participate, and which aligns with our annual investor framework. It is a relatively new plan at GE, but so far has been a tremendous cultural enhancement to drive accountability. We also have a long-term cash incentive plan (our LTPAs), in which ~1,000 senior executives participate, and which aligns with our 3-year operating plan. It is important for ensuring that our leaders do not simply focus on annual results, but are managing the company for the long term. Lastly, we have a performance-based equity plan (our PSUs), in which <25 of our most senior officers participate, and which helps drive relative stock price outperformance over a 3-year period.
John J. Brennan, Lead Director
AN ACTIVE & ENGAGED BOARD |
2016 Oversaw significant portfolio shifts: Baker Hughes and GE Digital & Additive 2015 Implemented proxy access 2014 Eliminated dividend equivalents on unvested RSUs |
BOARD ACCOUNTABILITY TO INVESTORS | ||
Annual director elections with majority voting standard | ||
![]() |
||
Proxy access at 3%, 3 years, 20% of Board, up to 20 shareowners can aggregate | ||
![]() |
||
Annual Board governance review that includes investor views & feedback | ||
![]() |
||
Periodic independent director meetings with investors |
INDEPENDENT BOARD LEADERSHIP |
3X+/year
meetings in
executive session without management present
2X+/year
visits to GE
businesses by each director
30+
committee meetings in 2016 (all committees are
independent)
annual
assessment of
Board leadership structure
![]() |
Proxy Overview Governance
GE 2017 Proxy Statement |
1 |
Board Composition & Refreshment
YOUR VOTE IS NEEDED ON DIRECTOR ELECTIONS: | |
Election of the 18 nominees named in the proxy for the coming year | |
![]() |
YOUR BOARD RECOMMENDS A VOTE FOR EACH NOMINEE |
DIVERSITY OF EXPERIENCE |
GE POLICY:
create an experienced board with
expertise in areas relevant to GE
100% |
72% | |
LEADERSHIP |
GLOBAL | |
![]() |
![]() | |
18/18 directors |
13/18 directors | |
61% |
56% | |
FINANCE |
INDUSTRY/OPERATIONS | |
![]() |
![]() | |
11/18 directors |
10/18 directors | |
50% |
33% | |
TALENT DEVELOPMENT |
TECHNOLOGY | |
![]() |
![]() | |
9/18 directors |
6/18 directors | |
28% |
22% | |
INVESTOR |
RISK MANAGEMENT | |
![]() |
![]() | |
5/18 directors |
4/18 directors | |
22% |
11% | |
GOVERNMENT |
MARKETING | |
![]() |
![]() | |
4/18 directors |
2/18 directors |
HOW WE THINK ABOUT BOARD REFRESHMENT |
Term Limits | 10 new directors |
8 retired directors | ||||||
+ | ||||||||
Retirement Age |
| |||||||
+ | ||||||||
Annual Board evaluation |
over last 5 years |
![]() |
||||||
JOINING THE BOARD SINCE THE 2016 ANNUAL MEETING |
EXPECTED TO LEAVE THE BOARD CONSISTENT WITH OUR TERM LIMIT POLICY | |||||
![]() ![]() (2017) |
► |
|
► |
![]() ![]() |
DIVERSITY OF AGE |
GE POLICY:
retirement age 75
![]() | |
39% younger than 60 | median age |
DIVERSITY OF TENURE |
GE
POLICY:
balanced mix of both deep
GE knowledge & new perspectives
![]() |
5 |
median years tenure 56% 72% |
TERM LIMIT POLICY:
15 years with a 2-year transition for existing
directors
DIVERSITY OF BACKGROUND |
GE POLICY:
build a cognitively diverse board representing a range of
backgrounds
![]() |
![]() |
![]() |
![]() |
![]() |
3 former |
2 leading |
5 women |
6 born |
14 current |
INDEPENDENCE |
GE POLICY:
all non-management directors must be independent
17/18 | |
| |
94% |
94% |
BOARD SIZE |
GE POLICY:
1318, given need for expertise across multiple
businesses
2 | Proxy Overview Governance
GE 2017 Proxy Statement |
Board Nominees
Director since |
Committee Memberships | |||||||||||||||
Name | Age | Primary Occupation & Other Public Company Boards | A | G | C | I | ||||||||||
![]() |
Bazin ![]() |
55 | 2016 |
Chair & CEO, AccorHotels
|
| |||||||||||
![]() |
Beattie ![]() |
56 | 2009 |
CEO, Generation Capital & Former
CEO, The Woodbridge Company |
| |||||||||||
![]() |
Brennan ![]() |
62 | 2012 |
Chair, FINRA & Chair Emeritus
& Senior Advisor, The Vanguard Group |
| ⦿ | ||||||||||
![]() |
DSouza ![]() |
48 | 2013 |
CEO, Cognizant Technology Solutions
|
| |||||||||||
![]() |
Dekkers ![]() |
59 | 2012 |
Chair, Unilever & Former CEO,
Bayer |
| ⦿ | ||||||||||
![]() |
Henry ![]() |
47 | 2016 |
Dean & Professor of Economics
& Finance, NYUs Stern School of Business* |
| |||||||||||
![]() |
Hockfield ![]() |
65 | 2006 |
President Emerita & Professor of Neuroscience, MIT |
| ⦿ | ||||||||||
![]() |
Immelt ![]() |
61 | 2000 |
Chair & CEO, General Electric |
||||||||||||
![]() |
Jung ![]() |
58 | 1998 |
President & CEO, Grameen America
& Former Chair/CEO, Avon |
| | ||||||||||
![]() |
Lane ![]() |
67 | 2005 |
Former Chair & CEO, Deere
|
| |||||||||||
![]() |
Lavizzo-Mourey ![]() |
62 |
Nominee |
President & CEO,
Robert Wood Johnson Foundation* |
| |||||||||||
![]() |
Lazarus ![]() |
69 | 2000 |
Chair Emeritus & Former CEO,
Ogilvy & Mather |
⦿ | | ||||||||||
![]() |
McAdam ![]() |
62 | 2016 |
Chair & CEO,
Verizon Communications |
| |||||||||||
![]() |
Mollenkopf ![]() |
48 |
2016 |
CEO, Qualcomm
|
| |||||||||||
![]() |
Mulva ![]() |
70 | 2008 |
Former Chair & CEO,
ConocoPhillips |
| | ||||||||||
![]() |
Rohr ![]() |
68 | 2013 |
Former Chair & CEO, PNC
Financial Services Group |
| | ||||||||||
![]() |
Schapiro ![]() |
61 | 2013 |
Vice Chair of Advisory Board,
Promontory & Former Chair, SEC |
⦿ |
|||||||||||
![]() |
Tisch ![]() |
64 | 2010 |
President & CEO, Loews
|
|
* |
Mr. Henry is expected to retire as Dean at the end of 2017 (but will remain a faculty member), and Dr. Lavizzo-Mourey is expected to retire from the Foundation in the first half of 2017. |
INDEPENDENCE All director nominees other than the CEO are independent ATTENDANCE All director nominees attended at least 75% of the meetings of the Board and committees on which they served in 2016 |
QUALIFICATIONS |
A Audit Committee
G Governance Committee
C Compensation Committee
I Industrial Risk Committee
⦿Chair
●Financial Expert | |||||
![]() |
Leadership | ![]() |
Investor |
||||
![]() |
Global |
![]() |
Technology |
||||
![]() |
Industry/Operations |
![]() |
Risk Management |
||||
![]() |
Finance |
![]() |
Government |
||||
![]() |
Talent Development |
![]() |
Marketing |
Proxy
Overview
Governance GE 2017 Proxy Statement |
3 |
Board & Committees
FULL BOARD | ||||
![]() |
![]() |
2016
MEETINGS 17, including 4
formal meetings of the independent directors | ||
CHAIR |
LEAD DIRECTOR
|
BOARD RHYTHM | ||
8X/year 2X+/year |
1X/year 1X/year 1X/year |
A TYPICAL GE BOARD MEETING ... 2 DAYS, 8X/YEAR | ||||
BEFORE THE MEETING | ||||
Board committee chairs: prep meetings with management & outside advisors (e.g., KPMG) | Management: internal prep meetings | |||
![]() |
||||
THURSDAY (DAY 1) | ||||
Daytime: Board committee meetings | Evening: Business presentations & dinner (Board interacts directly with senior business managers) | |||
![]() |
||||
FRIDAY (DAY 2) | ||||
Early morning: independent directors or Compensation Committee breakfast session | Late morning: full Board meeting (including reports from each committee chair) | |||
![]() |
||||
AFTER THE MEETING | ||||
Management: follow-up sessions to discuss & respond to Board requests | ||||
RECENT FOCUS AREAS |
| Capital allocation framework | |
| Significant portfolio changes | |
| Planned combination of GE Oil & Gas with Baker Hughes | |
| Launch of GE Additive (Arcam & Concept Laser acquisitions) | |
| Growth of GE Digital (ServiceMax & Meridium acquisitions) | |
| Planned sale of non-core businesses (Water & Industrial Solutions) | |
| Alstom integration & GE Capital exit plan progress | |
| Key GE initiatives (simplification, gross margin improvement, cash conversion, digitization) | |
| Healthcare industry dynamics |
COMMITTEES |
![]() |
AUDIT | ||
CHAIR: Mary Schapiro |
RECENT FOCUS AREAS | ||
2016 MEETINGS: 12 |
Implementation of the new revenue
recognition standard
Alstom purchase accounting
process
Financial reporting planning for GEs
planned combination with Baker Hughes
Resource planning for internal
audit
Legacy Alstom compliance &
investigative matters | ||
MEMBERS: Bazin, Beattie, Henry, Mulva, Rohr, Schapiro OVERSEES: KPMG, financial reporting, internal audit,
compliance, GE Capital risk management |
|||
![]() |
GOVERNANCE & PUBLIC AFFAIRS | ||
CHAIR: Shelly Lazarus |
RECENT FOCUS AREAS | ||
2016 MEETINGS: 4 |
Director recruitment
Political & lobbying strategy in the
wake of the U.S. Presidential transition
Board committee
reorganization
Environmental, human rights & supply
chain practices
Director compensation
changes | ||
MEMBERS: Brennan, Hockfield, Jung, Lavizzo-Mourey,* Lazarus, Tisch OVERSEES: director recruitment, corporate governance, sustainability,
political spending |
|||
![]() |
MANAGEMENT DEVELOPMENT & COMPENSATION | ||
CHAIR: Jack Brennan |
RECENT FOCUS AREAS | ||
2016 MEETINGS: 11 |
Leadership transitions to support the
companys portfolio changes (e.g., launch of GE Additive, GE Capital
exit)
Organizational planning for Baker
Hughes
Program design for the 20162018
LTPAs
Compensation structure for GE Digital
employees | ||
MEMBERS: Brennan, Dekkers, Jung, Lane, Lazarus, Rohr OVERSEES: CEO
& senior executive performance evaluations & compensation, equity
planning & succession planning |
|||
![]() |
TECHNOLOGY & INDUSTRIAL RISK | ||
CO-CHAIRS: |
RECENT FOCUS AREAS Product risks & cybersecurity
Launch of GE Additive
Significant product launches (LEAP aircraft engine & H-class
turbine)
Deepwater technologies
GEs nuclear activities
Market risk | ||
2016 MEETINGS: 4 |
|||
![]() |
MEMBERS: |
||
OVERSEES: technology & product risk, cybersecurity, software & innovation strategies & investments/initiatives, R&D |
* |
Effective upon her election at the annual meeting. |
4 | Proxy Overview Governance GE 2017 Proxy Statement |
Compensation
YOUR
VOTE IS NEEDED ON MANAGEMENT PROPOSAL #1 |
Advisory approval of our named executives compensation for 2016 |
![]() |
YOUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL |
Compensation Profile |
PAY CONSIDERATIONS |
PERFORMANCE |
BALANCE |
RISK | ||
Emphasize overall GE results & consistent, relative & sustainable performance |
Formulaic compensation vs. Compensation Committee judgment; future vs. current pay; mix of performance measures |
Performance metrics include specific risk- & sustainability-focused goals |
WHAT WE DO |
WHAT WE DON'T DO | |
![]() for severance & death benefits ![]() when warranted ![]() & holding period for option shares ![]() including air & auto transportation, life insurance, home security |
![]() ![]() ![]() ![]() ![]() |
PRIMARY COMPENSATION ELEMENTS FOR 2016 |
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 |
Generally every 3 years |
Annually | ||
Form of delivery | 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 | 45 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 on long- term investor framework |
Outperform peers |
Increase
stock price |
Balance against excessive risk taking |
Proxy
Overview
Compensation GE 2017 Proxy Statement |
5 |
2016 ANNUAL BONUSES (CASH) |
Result: Overall bonus pool funded at 80% of target |
20162018 LONG-TERM PERFORMANCE AWARDS (CASH) |
Result: Payout to be determined in 2019, following end of performance period |
1 | LTPA targets not yet disclosed (N.D.); will be disclosed following completion of the performance period, consistent with past practice |
20132016 PERFORMANCE SHARE UNITS (EQUITY) |
Result: CEO earned 100% of the PSUs because GE met all three targets |
20142016 PERFORMANCE SHARE UNITS (EQUITY) |
Result: CEO earned 83% of the PSUs (total cash & margin targets exceeded, but (17)% adjustment due to TSR performance) |
See How Our Incentive Compensation Plans Paid Out for 2016 on page 32 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.
6 | Proxy Overview
Compensation GE 2017 Proxy Statement |
2016 CEO Pay
DECISIONS | ||
$3.8M | 200K | |
Base salary (same as 2015) | PSUs (same as 2015) | |
$4.3M | 600K | |
Cash bonus (80% of target, down from 100% of target in 2015) | options (same as 2015) |
TOTAL COMPENSATION ANALYSIS | ||||
Year-over-year change | Main drivers | |||
Adjusted SEC total | ▼33% | LTPA ▼ 79%, PSUs & options ▼ 26%, bonus ▼ 20% | ||
SEC total compensation | ▼35% | Reflects drivers above & 45% lower change in pension value | ||
Realized compensation | ▲174% | 3-year LTPA payout in 16 |
CEO ACCOUNTABILITY |
Significant portion of compensation tied to GEs operating and/or stock price performance |
![]() |
* | Based on the CEOs 2016 adjusted SEC total compensation |
Responsive approach
to compensation
CEO declined $11.7M LTPA payout & two bonuses over the
last 10 years
Substantial stock
ownership
~1.2M GE shares
purchased since 2001 & no shares sold, other than to pay equity
award-related taxes/exercise prices
2016 Performance
SOLID SHAREOWNER RETURNS | RETURNED $30.5B TO INVESTORS | |
![]() |
![]() |
STRENGTHENED & SIMPLIFIED THE PORTFOLIO |
OTHER KEY
PERFORMANCE METRICS | |
Aggressive execution on Alstom integration
Announced the planned Baker Hughes
combination
Investments in supply chain, Digital &
Additive
Substantial progress on GE Capital exit
plan
Plans to sell Water & Industrial
Solutions |
Industrial segment revenues ▲ 4%, ▲ 1% organically*
Industrial operating + Verticals EPS* ▲ 14% to $1.49
Gross margins* ▲ 40bps to
27.8% & Industrial operating margins (both ex. Alstom)* ▼ 30bps to 15.0%
GE CFOA (ex. deal taxes & pension funding)* ▲ $15.2B to $31.7B
*Non-GAAP financial measures. See page 52. |
2016
Summary & Realized Compensation
(in
thousands)
Name &
Principal Position |
Year | Salary | Bonus | PSUs
& RSUs |
Stock options |
LTPAs | Pension
& deferred comp |
All
other comp |
SEC total | Adjusted SEC total1 |
Realized comp (W-2)2 | |||||||||||||||
Jeff Immelt | 2016 | $3,800 | $4,320 | $4,673 | $2,142 | $1,624 | $3,580 | $1,185 | $21,325 | $17,962 | $27,467 | |||||||||||||||
Chair & CEO | 2015 | $3,800 | $5,400 | $6,239 | $2,964 | $7,614 | $6,337 | $620 | $32,974 | $26,831 | $10,029 | |||||||||||||||
Jeff Bornstein | 2016 | $1,688 | $1,920 | $1,532 | $750 | $739 | $2,882 | $395 | $9,906 | $7,082 | $13,638 | |||||||||||||||
SVP & CFO | 2015 | $1,600 | $2,500 | $2,747 | $1,087 | $3,351 | $1,815 | $161 | $13,261 | $11,498 | $5,266 | |||||||||||||||
Beth
Comstock3 Vice Chair |
2016 | $1,500 | $1,248 | $6,211 | $750 | $550 | $2,046 | $175 | $12,479 | $10,460 | $9,348 | |||||||||||||||
David
Joyce3 Vice Chair |
2016 | $1,333 | $1,524 | $6,212 | $750 | $0 | $2,524 | $239 | $12,583 | $10,059 | $12,561 | |||||||||||||||
John Rice | 2016 | $2,625 | $3,278 | $1,532 | $750 | $1,181 | $4,184 | $1,611 | $15,162 | $11,213 | $19,154 | |||||||||||||||
Vice Chair | 2015 | $2,538 | $4,088 | $2,991 | $1,186 | $5,845 | $1,318 | $1,696 | $19,660 | $18,555 | $9,671 | |||||||||||||||
Keith Sherin | 2016 | $2,575 | $3,784 | $6,965 | 4 | $2,487 | 4 | $1,287 | $12,890 | 4 | $362 | $30,351 | $17,610 | $19,791 | ||||||||||||
Former Vice Chair | 2015 | $2,500 | $5,233 | $2,991 | $1,186 | $6,751 | $6,953 | $293 | $25,906 | $19,088 | $6,947 |
1 | Represents SEC total compensation minus change in pension value. |
2 | Represents the compensation our named executives actually realized, as reported on their IRS W-2 forms. Year-over-year increase largely driven by the 3-year LTPA payout reported on the named executives W-2 forms for 2016. See Realized Compensation on page 37. |
3 | 2015 compensation not presented for Ms. Comstock and Mr. Joyce because they were not named executives in that year. |
4 | Amounts reported under PSUs & RSUs and Stock options represent the accounting value of modifications to existing equity awards (not new awards) pursuant to an early retirement agreement entered into with Mr. Sherin. $7.2M of the amount reported under Pension & deferred comp reflects early retirement allowance payments under this agreement. |
Proxy
Overview
Compensation GE 2017 Proxy Statement |
7 |
Other Compensation Proposals
YOUR VOTE IS NEEDED ON MANAGEMENT PROPOSAL #2: | |
Approve frequency of future say-on-pay votes | |
![]() |
YOUR BOARD RECOMMENDS A VOTE OF ONE YEAR ON THIS PROPOSAL |
![]() |
The Board believes that we should be accountable to shareowners annually for our executive compensation decisions |
YOUR VOTE IS NEEDED ON MANAGEMENT PROPOSAL #4: | |
Approve material terms of senior officer performance goals | |
![]() |
YOUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL |
![]() |
Approval of this proposal would allow GE to continue operating its executive compensation program in a tax-efficient manner |
YOUR VOTE IS NEEDED ON MANAGEMENT PROPOSAL #3: | |
Approve amended 2007 Long-Term Incentive Plan | |
![]() |
YOUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL |
WHAT WOULD THE AMENDMENT DO?
|
Add 150M shares to the Plans share pool, bringing total # of Plan shares available for new grants to 373.5M*, which we expect to last us 45 years |
|
Extend Plans term to 2027 (but we expect to ask shareowners to reapprove the Plan no later than the 2022 annual meeting) |
|
Add non-employee directors as Plan participants, bringing the director DSU program under the Plan |
|
Establish annual limit for director compensation ($1.5 million, applies to both cash & equity compensation) |
|
Make certain other changes to the Plan, as described on page 56 |
KEY DATA ABOUT OUR EQUITY COMPENSATION SHARE USAGE**
BURN RATE
WHAT THIS
MEASURES: how rapidly we are using the
Plans share pool
HOW WE MANAGE: by considering the aggregate value of our equity grants in the context of GEs stock price & other compensation actions (over last 5 years, the Compensation Committee has twice reset overall grant levels)
GROSS | ||
![]() |
Excludes forfeited shares | |
NET |
||
![]() |
Includes forfeited shares |
GOOD GOVERNANCE FEATURES OF THE PLAN
![]() ![]() |
![]() ![]() ![]() ![]() |
OUR CURRENT EQUITY GRANT PRACTICES
![]() ![]() |
![]() |
OVERHANG
WHAT THIS
MEASURES: potential shareowner
dilution from outstanding equity awards & available share pool
HOW WE MANAGE: through our buyback program (in 2016, we repurchased $22B of GE Shares, approximately $1.9B of which was to offset dilution)
CONCENTRATION RATIO
WHAT THIS
MEASURES: the concentration of Plan benefits
directed to our proxy officers
HOW WE MANAGE: by granting equity awards to 5,000+ employees to align their interests with shareowners
* | Total share pool under the Plan would be 1,075M shares, which reflects the Plan being in place since 2007. |
** | GE data covers 2014-2016 while Dow 30 data covers 20132015 (the last year for which data is available). Please see Key Data About Our Grant Practices on page 57 for more information about these metrics & how we calculate them. |
8 | Proxy Overview
Compensation GE 2017 Proxy Statement |
Audit
YOUR VOTE IS NEEDED ON MANAGEMENT PROPOSAL #5: | |
Ratification of our selection of KPMG as independent auditor for 2017 | |
![]() |
YOUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL |
In engaging KPMG for 2017, we reviewed: | |||
KPMGs performance on GE audit
includes results of
internal, worldwide survey
KPMGs capability
& expertise in handling breadth & complexity of our
worldwide operations
KPMGs known legal
& regulatory risks
includes interview with KPMGs 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
KPMGs fees on both an absolute basis & relative to peer
firms | ||
KPMGs
tenure & independence
including benefits & independence
risks of long-tenured auditor & controls/processes that help ensure
KPMGs independence | |||
BENEFITS OF A LONG-TENURED AUDITOR
HIGHER AUDIT QUALITY
Institutional knowledge & deep
expertise through 100+ years of experience with GE & 1,350+
statutory GE audits in 80+ 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
Committeedirected 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 (~300)
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 | |||||
2016 | $81.5 | $6.9 | $1.5 | $0.0 | $89.9 | |||||
2015 | $75.0 | $20.8 | $1.8 | $0.0 | $97.6 |
1 | Audit & review of financial statements for 10-K/10-Q, internal control over financial reporting audit, statutory audits; year-over-year increase largely driven by the Alstom acquisition. |
2 | Assurance services, M&A due diligence & audit services, employee benefit plan audits; year-over-year decrease largely driven by work performed in 2015 related to the GE Capital exit plan and Synchrony Financial split-off. |
3 | Tax compliance & tax advice/planning. |
4 | GE did not engage KPMG for any other services. |
See Audit on page 62 for more information.
WHAT WE ARE PAYING FOR |
500K+ |
audit hours |
1,350+ |
statutory audits globally |
~300 |
partners |
Proxy Overview Audit
GE 2017 Proxy Statement |
9 |
Shareowner Proposals
YOUR VOTE IS
NEEDED ON | |
![]() |
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 | Lobbying report see page 65 |
PhilPERS* | Provide annual report on GEs lobbying activity | GE already provides comprehensive disclosure of its political & lobbying activities on our Sustainability website | ||||
2 | Independent chair see page 66 |
Kenneth Steiner |
Require board chair to be independent at the next CEO transition | GE believes that our present leadership structure is the most effective for GE, and we will continue to monitor this issue (as we do all governance issues) | ||||
3 | Cumulative voting see page 68 |
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 | ||||
4 | Charitable giving report see page 69 |
NCPPR** | Provide annual report on GEs charitable giving | GE already provides comprehensive disclosure of its charitable giving on our Sustainability website |
* | PhilPERS = City of Philadelphia Public Employees Retirement System |
** | 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 stock ownership requirement | $2,000 | 3% for 3 years (up to 20 shareowners can aggregate) | 1 share | |||
Deadline for GE to receive | Close of business on 11/10/17 | Between 10/11/17 and close of business on 11/10/17 | ||||
Where to send | By mail: Alex Dimitrief, Secretary, General Electric Company, at the address listed on the inside front cover of this proxy 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 GEs by-law requirements, which are available on GEs website (see Helpful Resources on page 81) |
10 | Proxy Overview Shareowner Proposals GE 2017 Proxy Statement |
Annual Meeting
![]() |
You are invited to attend GEs 2017 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 check out our interactive, mobile-friendly online proxy, annual report and integrated summary report at the websites below. Cordially, | |
LOGISTICS | ||
DATE: TIME: WEBCAST: LOCATION: ATTENDING IN PERSON: |
![]() |
Want to submit a question for discussion at the annual meeting? Please visit our proxy website at www.ge.com/proxy |
VOTING Q&A Who can vote? Shareowners as of our record date, February 27, 2017 How many shares are 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? 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? |
AGENDA |
Elect the 18 directors named in the proxy for the coming year |
![]() |
Approve our named executives compensation in advisory vote |
![]() |
Approve the frequency of future say-on-pay votes |
|
Approve our amended 2007 Long-Term Incentive Plan |
|
Approve the material terms of senior officer performance goals |
|
Ratify the selection of KPMG as independent auditor for 2017 |
|
Vote on shareowner proposals included in proxy if properly presented at the meeting |
![]() |
Shareowners also will transact any other business that properly comes before the meeting |
HOW YOU CAN VOTE |
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 |
Use the
Internet | ||
![]() |
Call
toll-free (US/Canada) |
Call
toll-free (US/Canada) | ||
![]() |
Mail your signed proxy form |
Mail your signed voting instruction form |
Check out our interactive, mobile-friendly online proxy, annual report & integrated summary report www.ge.com/proxy www.ge.com/annualreport www.ge.com/ar2016/integrated-report |
Proxy
Overview
Annual
Meeting GE 2017 Proxy Statement |
11 |
Governance |
W. Geoffrey Beattie | ||||||
![]() |
![]() | |||||
![]() |
DIRECTOR SINCE: 2016 AGE: 55 BIRTHPLACE: FRANCE INDEPENDENT |
![]() |
DIRECTOR SINCE: 2009 AGE: 56 BIRTHPLACE: CANADA INDEPENDENT | |||
Chairman and CEO, AccorHotels, a global hotel company, Paris, France (since 2013) Leadership, Global |
CEO, Generation Capital, a private investment company, Toronto, Canada (since 2013) Leadership, Investor | |||||
PRIOR BUSINESS
EXPERIENCE
CEO, Europe Colony Capital, a private investment firm (19972013)
Leadership, Investor,
Industry/Operations
Group Managing Director, CEO and General Manager, Immobilière
Hôtelière (19921997)
Began career in 1985 in U.S. finance sector, becoming Vice President,
M&A, PaineWebber Finance
CURRENT PUBLIC COMPANY BOARDS
General Electric
AccorHotels
China Lodging Group*
PAST PUBLIC COMPANY BOARDS
Vice Chairman, Carrefour, a multinational French retailer
Global
OTHER POSITIONS
Vice Chairman, Supervisory Board, Gustave Roussy Foundation, cancer
research funding Industry
Chairman, Théâtre du Châtelet
EDUCATION
Sorbonne University
MA (Economics), Sorbonne University
* Directorship held in his capacity as CEO of AccorHotels. See
Limits on Director Service on Other Public Boards on page 27 for more
information. |
PRIOR BUSINESS
EXPERIENCE
CEO, The Woodbridge Company, a multinational Canadian company that
is the majority shareholder of Thomson Reuters, a large information
technology company (19982012) Leadership, Global, Investor
Deputy chairman, Thomson Reuters (20002013)
Finance
Partner at Toronto law firm Torys (prior to joining The Woodbridge
Company)
CURRENT PUBLIC COMPANY BOARDS
General Electric
Royal Bank of Canada, a leading global financial services company
(chairman of Risk Committee) Risk Management
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 (Lead Director)
PAST PUBLIC COMPANY BOARDS
Thomson Reuters
OTHER POSITIONS
Chairman, Relay Ventures, a Canadian venture capital
firm
Director, DBRS, a rating agency
EDUCATION
Law degree, University of Western
Ontario |
![]() |
12 | Governance Election of
Directors GE 2017 Proxy Statement |
John J. Brennan |
Francisco DSouza |
Marijn E. Dekkers | ||||||||
![]() |
![]() |
![]() | ||||||||
![]() |
DIRECTOR SINCE: 2012 AGE: 62 BIRTHPLACE: UNITED STATES INDEPENDENT |
![]() |
DIRECTOR SINCE: 2013 AGE: 48 BIRTHPLACE: KENYA INDEPENDENT |
![]() |
DIRECTOR SINCE: 2012 AGE: 59 BIRTHPLACE: NETHERLANDS INDEPENDENT | |||||
Chairman, FINRA, Washington, DC, and Chairman Emeritus and senior advisor, The Vanguard Group, Malvern, PA (since 2010) Leadership, Investor, Talent Development |
CEO, Cognizant Technology Solutions Corporation, a multinational IT company, Teaneck, NJ (since 2007) Leadership, Global, Technology, Finance |
Chairman of the Board, Unilever, a multinational consumer goods company, Rotterdam, Netherlands and London, United Kingdom (since 2016) Leadership, Global | ||||||||
PRIOR BUSINESS
EXPERIENCE
Chairman and CEO, Vanguard, a global investment management company
(CEO 19962008; Chairman 19982009)
CFO and president, Vanguard (joined in 1982) Finance
PRIOR REGULATORY
EXPERIENCE
Lead governor, Board of Governors of Financial Industry Regulatory
Authority (FINRA), financial services industry regulator Risk Management,
Finance
Former chairman, Financial Accounting Foundation, overseer for
financial accounting/reporting standard-setting boards Finance
CURRENT PUBLIC COMPANY BOARDS
General Electric
American Express
LPL Financial Holdings
PAST PUBLIC COMPANY BOARDS
The Hanover Insurance Group
OTHER POSITIONS
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 |
PRIOR BUSINESS
EXPERIENCE
President, Cognizant (20072012)
COO, Cognizant (20032006)
Co-founded Cognizant (1994)
Previously held various roles at Dun & Bradstreet
CURRENT PUBLIC COMPANY BOARDS
General Electric
Cognizant
OTHER POSITIONS
Board Co-Chair, New York Hall of Science
Trustee, Carnegie Mellon University
International Advisory Panel Member, Banco Santander
EDUCATION
University of Macau
MBA, Carnegie Mellon University |
PRIOR BUSINESS
EXPERIENCE
CEO, Bayer AG, a multinational life sciences company based in
Germany (20102016) Leadership, Global, Industry/Operations, Technology,
Talent Development
President and CEO, Thermo Electron Corporation, the worlds leading
manufacturer of laboratory instruments (later renamed Thermo Fisher Scientific)
(20022009) Leadership, Industry/ Operations, Technology
Previously worked at Allied Signal (subsequently Honeywell) and as
a scientist at GEs Global Research Center
CURRENT PUBLIC COMPANY
BOARDS
General Electric
Unilever
PAST PUBLIC COMPANY BOARDS
Biogen Idec, a biotechnology company Industry,
Technology
Thermo Fisher Scientific
EDUCATION
BS (chemistry), Radboud University of Nijmegen
(Netherlands)
PhD (chemical engineering), University of Eindhoven
(Netherlands)
|
![]() |
Governance
Election of Directors GE 2017 Proxy Statement |
13 |
Peter B. Henry |
Susan J. Hockfield |
Jeffrey R. Immelt | ||||||||
![]() |
![]() |
![]() | ||||||||
![]() |
DIRECTOR SINCE: 2016 AGE: 47 BIRTHPLACE: JAMAICA INDEPENDENT |
![]() |
DIRECTOR SINCE: 2006 AGE: 65 BIRTHPLACE: UNITED STATES INDEPENDENT |
![]() |
DIRECTOR SINCE: 2000 AGE: 61 BIRTHPLACE: UNITED STATES | |||||
Ninth Dean and professor of economics & finance, NYUs Stern School of Business,* New York, NY (since 2010) Leadership, Finance, Talent Development |
President Emerita and professor of neuroscience, MIT (President Emerita since 2012; Professor since 2004), Cambridge, MA Technology, Industry/ Operations |
Chairman and CEO, General Electric, Boston, MA (since 2001) Leadership, Global, Industry/Operations | ||||||||
PRIOR ACADEMIC EXPERIENCE
Konosuke Matsushita Professor of International Economics, Stanford
Universitys Graduate School of Business (20082010) Global, Finance,
Talent Development
Joined Stanford University in 1997 and held various
positions
Rhodes Scholar
Prominent writer in the field of economics, international finance and
emerging markets Global
CURRENT PUBLIC COMPANY BOARDS
General Electric
Citigroup
PAST PUBLIC COMPANY BOARDS
Kraft Foods
OTHER POSITIONS
Board member & Vice Chair, Economic Club of New
York
Board member, National Bureau of Economic Research
Member, Federal Reserve Bank of New Yorks Economic Advisory Panel
Government
Member, Presidents Commission on White House Fellowships
Government
Led 2008 Presidential Transition Teams review of international
lending agencies Government
Board member, Council on Foreign
Relations
EDUCATION
University of North Carolina at Chapel Hill
Oxford University (mathematics)
PhD (economics), MIT
*Mr.
Henry will retire as Dean at the end of 2017 but will continue to serve as
a member of the Stern faculty. |
PRIOR ACADEMIC
EXPERIENCE
President, MIT, a leading research university (20042012)
Leadership, Talent Development
Provost, Yale University, a leading university (20032004)
Leadership, Talent Development
Dean, Yale Graduate School of Arts & Sciences
(19982002)
Faculty member, Yale University
(19852004)
Previously
a member of the scientific staff at the Cold Spring Harbor Laboratory
Leading research neuroscientist
CURRENT PUBLIC COMPANY BOARDS
General Electric
PAST PUBLIC COMPANY BOARDS
Qualcomm
OTHER POSITIONS
Board member, Partners Healthcare, a large hospital operator
Industry/Operations
Former co-chair, Advanced Manufacturing Partnership, a US
Presidential manufacturing initiative
Industry/Operations
Former member, Commission to Review the Effectiveness of the National
Energy Laboratories, US Department of Energy
Industry/Operations
President, American Association for the Advancement of
Science
Member, American Academy of Arts &
Sciences
Board member, Council on Foreign
Relations
Member, MIT
Corporation
Former Foundation Board member, World Economic
Forum
EDUCATION
University of Rochester
PhD, Georgetown University (neuroscience
concentration) |
PRIOR BUSINESS
EXPERIENCE
President and chairman-elect, GE (2000)
SVP, GE, and President and CEO, GE Medical Systems
(19962000)
VP, GE, and general manager, GE Plastics Americas
(19931996)
Joined GE in 1982 in corporate marketing and held series of
leadership positions with GE Plastics in sales, marketing and global
product development
Named one of the Worlds Best CEOs three times by
Barrons
CURRENT PUBLIC
COMPANY BOARDS
General Electric
OTHER POSITIONS
Member, U.S. Presidential committee on American manufacturing
Government
Former chairman, U.S. Presidential Council on Jobs and
Competitiveness Government
Former director, Federal Reserve Bank of New York, a
government-organized financial and monetary policy organization
Former trustee, Dartmouth College
Member, American Academy of Arts & Sciences
EDUCATION
Dartmouth
MBA, Harvard University
|
![]() |
14 | Governance Election of
Directors GE 2017 Proxy Statement |
Andrea Jung |
Robert W. Lane |
Risa Lavizzo-Mourey | ||||||||
![]() |
![]() |
![]() | ||||||||
![]() |
DIRECTOR SINCE: 1998 AGE: 58 BIRTHPLACE: CANADA INDEPENDENT |
![]() |
DIRECTOR SINCE: 2005 AGE: 67 BIRTHPLACE: UNITED STATES INDEPENDENT |
![]() |
DIRECTOR SINCE: NEW NOMINEE AGE: 62 BIRTHPLACE: UNITED STATES INDEPENDENT | |||||
President and CEO, Grameen America, a non-profit microfinance organization (since 2014), New York, NY Leadership |
Former Chairman and CEO, Deere & Company, an agricultural, construction and forestry equipment manufacturing company, Moline, IL (since 2010) Leadership, Finance, Global, Industry/Operations, Talent Development |
President and CEO, Robert Wood Johnson Foundation,* largest U.S. philanthropy organization dedicated to health, Princeton, NJ (since 2003) Leadership, Industry/Operations | ||||||||
PRIOR BUSINESS
EXPERIENCE
Chairman and CEO, Avon Products, a global consumer products company
with a large and complex sales and marketing network (CEO 19992012;
Chairman 20012012) Leadership, Global, Marketing, Talent
Development
Joined Avon in 1994
Previously served as EVP, Neiman Marcus, and SVP, I.
Magnin
CURRENT PUBLIC COMPANY BOARDS
General Electric
Apple (former co-lead director), a leading technology company
Technology
Daimler, a global European automaker Global,
Technology
PAST PUBLIC COMPANY BOARDS
Avon
OTHER POSITIONS
Member, Committee for Economic Development of the Conference
Board
Director, Grameen America
Former trustee, New York Presbyterian Hospital
Former chairman, World Federation of Direct Selling
Associations
EDUCATION
Princeton University |
PRIOR BUSINESS
EXPERIENCE
Chairman and CEO, Deere (CEO 20002009; Chairman
20002010)
Previously COO and CFO at Deere Finance
Joined Deere in 1982 after career in global banking and served in
leadership positions in its global construction equipment and agricultural
divisions and at Deere Credit
CURRENT PUBLIC COMPANY BOARDS
General Electric
BMW, a global European automaker Global
PAST PUBLIC COMPANY BOARDS
Deere
Verizon Communications
Northern Trust Corporation, a global financial services company
Global, Finance
OTHER POSITIONS
Trustee, University of Chicago
EDUCATION
Wheaton College
MBA, University of Chicago |
PRIOR BUSINESS
EXPERIENCE
Senior Vice President, Robert Wood Johnson Foundation
(20012003)
PRIOR ACADEMIC
EXPERIENCE
Sylvan Eisman Professor of Medicine and Health Care Systems
(19952001), Director, Institute on Aging (19942002), Chief of Geriatric
Medicine (19861992), University of Pennsylvania Medical School
Industry/Operations, Talent Development
PRIOR GOVERNMENT
EXPERIENCE
Deputy Administrator, Agency for Health Care Research and Quality
(19921994) Government
Co-Chair, White House Health Care Reform Task Force, Working Group
on Quality of Care (19931994) Government
Advisory Committee Member, Task Force on Aging Research (19851992)
Government
Advisory Committee Member, National Committee for Vital and Health
Statistics (19881992) Government
Advisory Committee Member, Presidents Advisory Commission on
Consumer Protection and Quality in the Health Care Industry (19971998)
Government
CURRENT PUBLIC COMPANY BOARDS
Hess, a global, independent energy company
Industry/Operations
PAST PUBLIC COMPANY BOARDS
Genworth Financial
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
*Dr.
Lavizzo-Mourey is expected to retire from the Foundation in the first half
of 2017. |
![]() |
Governance Election of Directors
GE 2017 Proxy Statement |
15 |
Rochelle B. Lazarus |
Lowell C. McAdam |
Steven M. Mollenkopf | ||||||||
![]() |
![]() |
![]() | ||||||||
![]() |
DIRECTOR SINCE: 2000 AGE: 69 BIRTHPLACE: UNITED STATES INDEPENDENT |
![]() |
DIRECTOR SINCE: 2016 AGE: 62 BIRTHPLACE: UNITED STATES INDEPENDENT |
![]() |
DIRECTOR SINCE: 2016 AGE: 48 BIRTHPLACE: UNITED STATES INDEPENDENT | |||||
Chairman Emeritus and former CEO, Ogilvy & Mather Worldwide, a global marketing communications company, New York, NY (since 2012) Leadership, Global, Talent Development, Marketing |
Chairman and CEO, Verizon Communications, a leading provider of wireless and global Internet networks and services, New York, NY (CEO since 2011, chair since 2012) Leadership, Global, Technology, Finance |
CEO and director, Qualcomm, a multinational semiconductor and telecommunications equipment company, San Diego, CA (CEO since 2014, director since 2013) Leadership, Global, Technology, Finance | ||||||||
PRIOR BUSINESS
EXPERIENCE
Chairman and CEO, Ogilvy & Mather (CEO 19962008; Chairman
19972012)
President and COO, Ogilvy & Mather (19951996)
Joined Ogilvy & Mather in 1971 and served in leadership
positions in its U.S. direct marketing business and its New York and North
American operations
CURRENT PUBLIC COMPANY BOARDS
General Electric
Blackstone Group, a global financial services company Industry/Operations, Global
Merck, a global pharmaceutical company
Industry/Operations
OTHER POSITIONS
Trustee, New York Presbyterian Hospital, a leading U.S. hospital
Industry/Operations
Board of Governors, FINRA
Director, World Wildlife Fund
Director, Lincoln Center for the Performing Arts
Defense Business Board
Board of Overseers, Columbia Business School
EDUCATION
Smith College
MBA, Columbia University |
PRIOR BUSINESS
EXPERIENCE
President and COO, Verizon (20102011)
Previously held key executive positions at Verizon Wireless,
including president and CEO (20002010)
President and CEO, PrimeCo Personal Communications
(19972000)
Held various executive positions at AirTouch Communications and
Pacific Bell
CURRENT PUBLIC COMPANY BOARDS
General Electric
Verizon Communications
OTHER POSITIONS
Trustee, Cornell University
Chair, Cornell Tech Board of Overseers
EDUCATION
Cornell University
MBA, University of San Diego |
PRIOR BUSINESS
EXPERIENCE
CEO-elect and President, Qualcomm (20132014)
President and COO, Qualcomm (20112013)
Joined Qualcomm in 1994 as an engineer and held series of
leadership positions in engineering and product management
Published author and holder of seven patents in the semiconductor
and telecommunications fields
CURRENT PUBLIC COMPANY BOARDS
General Electric
Qualcomm
OTHER POSITIONS
Director, Global Semiconductor Alliance
Director, Semiconductor Industry Association
Engineering Advisory Council, University of Michigan
EDUCATION
Virginia Tech
MS (electrical engineering), University of
Michigan |
![]() |
16 | Governance
Election of Directors GE 2017 Proxy Statement |
James J. Mulva |
James E. Rohr |
Mary L. Schapiro | ||||||||
![]() |
![]() |
![]() | ||||||||
![]() |
DIRECTOR SINCE: 2008 AGE: 70 BIRTHPLACE: UNITED STATES INDEPENDENT |
![]() |
DIRECTOR SINCE: 2013 AGE: 68 BIRTHPLACE: UNITED STATES INDEPENDENT |
![]() |
DIRECTOR SINCE: 2013 AGE: 61 BIRTHPLACE: UNITED STATES INDEPENDENT | |||||
Former Chairman, President and CEO, ConocoPhillips, an integrated global energy company, Houston, TX (since 2012) Leadership, Global, Industry/Operations |
Former Chairman and CEO, PNC Financial Services Group, a large financial services company, Pittsburgh, PA (since 2014) Leadership, Risk Management, Talent Development |
Vice Chair, Advisory Board, Promontory Financial Group, a leading strategy, risk management and regulatory compliance consulting firm, Washington, DC (since 2014) Risk Management, Finance | ||||||||
PRIOR BUSINESS
EXPERIENCE
Chairman, President and CEO, ConocoPhillips (President and CEO
20022012; Chairman 20042012)
Previously served in various leadership positions at Phillips
Petroleum, including CFO, chairman and CEO Finance
CURRENT PUBLIC COMPANY BOARDS
General Electric
General Motors Global
PAST PUBLIC COMPANY BOARDS
Statoil, a leading oil and gas company based in Norway Industry/Operations, Global
OTHER POSITIONS
Chair, Board of Visitors, M.D. Anderson Cancer Center, a leading
cancer center Industry/Operations
Former chairman, American Petroleum Institute
EDUCATION
University of Texas
MBA, University of Texas |
PRIOR BUSINESS
EXPERIENCE
Chairman and CEO, PNC (CEO 20002013; Chairman
20012014)
Joined PNC in 1972 and served in various management positions,
including as president, vice chair and COO
CURRENT PUBLIC COMPANY BOARDS
General Electric
Allegheny Technologies
EQT (lead independent director), a large natural gas company
Industry/Operations
Marathon Petroleum, a multinational oil company
Industry/Operations
PAST PUBLIC COMPANY BOARDS
BlackRock, a multinational investment management company
Investor
PNC
OTHER POSITIONS
Former President, Federal Advisory Council of Board of Governors,
Federal Reserve, the U.S. central banking system Risk
Management
Chairman, Board of Trustees, Carnegie Mellon
University
Trustee, University of Notre Dame
EDUCATION
University of Notre Dame
MBA, The Ohio State University |
PRIOR BUSINESS
EXPERIENCE
Managing director and chairman of governance and markets practice,
Promontory (20132014)
PRIOR REGULATORY EXPERIENCE
29th Chairman, SEC, U.S. agency that implements and enforces the
federal securities laws (20092012) Leadership, Government
Chairman and CEO, FINRA, financial services industry regulator
(20062008) Leadership, Government
Previously, held key executive positions at FINRA, including vice
chairman and president of NASD Regulation (19962006)
Chairman, CFTC, U.S. federal agency that regulates the futures
trading industry (19941996) Leadership, Government
Commissioner, SEC (19881994) Government
CURRENT PUBLIC COMPANY BOARDS
General Electric
London Stock Exchange Group
PAST PUBLIC COMPANY BOARDS
Duke Energy
Kraft Foods
OTHER POSITIONS
Vice chair, Sustainability Accounting Standards Board
Governing Board member, Center for Audit Quality
Senior advisor for governance and regulatory, Hudson Executive
Capital
Advisory Board member, SpruceView Capital
Trustee, MITRE Corporation
EDUCATION
Franklin & Marshall College
JD, George Washington
University |
![]() |
Governance Election of Directors
GE 2017 Proxy Statement |
17 |
James S. Tisch | ||
![]() | ||
![]() |
DIRECTOR SINCE: 2010 AGE: 64 BIRTHPLACE: UNITED STATES INDEPENDENT | |
President and CEO, Loews Corp., a diversified holding company with subsidiaries involved in energy, insurance and hospitality, New York, NY (since 1998) Leadership, Global, Finance, 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 contractor Industry/Operations
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
Chairman, 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 | ||
![]() |
How We Build a Board That Is Right for GE
We believe that GE benefits by fostering a mix of experienced directors with a deep understanding of the companys industries and technologies and who bring fresh perspectives. The Governance & Public Affairs Committee (the Governance Committee) is charged with reviewing the composition of the Board and refreshing it as appropriate. With this in mind, the committee continuously reviews potential candidates and recommends nominees to the Board for approval.
Because GE is considered a very desirable Board, we are able to recruit exceptionally talented directors on an ongoing basis. In this regard, the committee has recruited 10 new directors to the Board over the past five years, including two new directors since the 2016 annual meeting.
IMPORTANT FACTORS IN ASSESSING BOARD
COMPOSITION
The Governance Committee strives to
maintain an engaged, independent board with broad and diverse experience and
judgment that is committed to representing the long-term interests of our
shareowners. The committee considers a wide range of factors when selecting and
recruiting director candidates, including:
|
Ensuring an experienced, qualified Board with expertise in areas relevant to GE. The committee seeks directors who have held significant leadership positions and can bring to the Board specific types of experience relevant to GE, as described below. |
LEADERSHIP EXPERIENCE | ||
![]() |
![]() |
18/18 directors |
We believe that directors who have held significant leadership positions over an extended period, especially CEO positions, possess extraordinary leadership qualities and demonstrate a practical understanding of organizations, processes, strategy and risk management, and know how to drive change and growth. | ||
GLOBAL EXPERIENCE | ||
![]() |
![]() |
13/18 directors |
We have added directors with global business experience because GEs continued success depends, in part, on continuing to grow its businesses outside the US. For example, approximately 57% of our revenues and 62% of our infrastructure orders came from outside the US in 2016. | ||
FINANCE EXPERIENCE | ||
![]() |
![]() |
11/18 directors |
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. | ||
INDUSTRY/OPERATIONS EXPERIENCE | ||
![]() |
![]() |
10/18 directors |
We have sought directors with leadership and operational experience in the industries in which we compete. For example, over the last few years we have added directors with oil and gas and healthcare industry experience given the significance of our Oil & Gas and Healthcare businesses, which comprise 10% and 15% of our revenues, respectively. | ||
TALENT DEVELOPMENT EXPERIENCE | ||
![]() |
![]() |
9/18 directors |
In light of the importance of the Boards role in succession planning, we have sought directors with talent development experience, including those with academic backgrounds. We believe that these directors have a unique ability to inspire and develop others and are highly skilled in identifying talent. | ||
TECHNOLOGY EXPERIENCE | ||
![]() |
![]() |
6/18 directors |
As a science and technology company and leading innovator, we have added 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 focus on software and the Industrial Internet with the launch of GE Digital. | ||
INVESTOR EXPERIENCE | ||
![]() |
![]() |
5/18 directors |
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. |
18 | Governance
Board Composition GE 2017 Proxy Statement |
RISK MANAGEMENT EXPERIENCE | ||
![]() |
![]() |
4/18 directors |
In light of the Boards role in overseeing risk management and understanding the most significant risks facing the company, we have added directors with experience in risk management and oversight. As the Boards risk management focus shifts from financial services to industrial and product risk (as reflected in our committee structure changes), we expect to calibrate our future recruitment priorities accordingly. |
GOVERNMENT EXPERIENCE | ||
![]() |
![]() |
4/18 directors |
We have added directors with experience in governmental and regulatory organizations because many of GEs businesses are heavily regulated and are directly affected by governmental actions and socioeconomic trends. |
MARKETING EXPERIENCE | ||
![]() |
![]() |
2/18 directors |
GE seeks to grow organically by identifying and developing new markets for its products and services. Directors with marketing expertise, especially on an international scale, are therefore important to us. Marketing and branding expertise is also important as we shift our portfolio to be more industrial and software focused. |
| Enhancing the Boards diversity of background. The Board does not have a formal diversity policy, but the Governance Committee takes into account a candidates ability to contribute to the cognitive diversity of backgrounds on the Board. To this end, we consider attributes such as race, ethnicity, gender, age, cultural background and professional experience. The committee reviews its effectiveness in balancing these considerations when assessing the composition of the Board. |
| Complying with regulatory requirements and the Boards 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. |
CANDIDATE RECOMMENDATIONS. The committee considers all shareowner recommendations for director candidates. We evaluate them in the same manner as candidates suggested by other directors and candidates suggested by third-party search firms (which the company retains from time to time, and has retained over the past year, to help identify potential candidates). Mr. Mollenkopf and Dr. Lavizzo-Mourey were initially recommended to the Governance Committee by a third-party search firm and an independent director, respectively.
The Governance Committee takes a fresh look at Board size each year, consistent with the Boards Governance Principles (see Helpful Resources on page 81). The committee believes that the proposed size of the Board (18 directors), while large, is appropriate in view of the size of GE and the diversity and complexity of the businesses and markets in which we operate. The committee also expects to reduce the size of the Board as incumbent directors transition off the Board. For example, the committee expects that Andrea Jung (our longest-tenured director) will not be renominated in 2018 and that Shelly Lazarus (our next longest-tenured director) will not be renominated in 2019. Following these final transitions under the Boards term limit policy, which we believe will ensure Board continuity, we do not expect that any other director will be allowed to serve on the Board for more than 15 years.
BOARD
PRIORITIES GOING FORWARD |
Continuing to ensure a cognitively diverse Board, with the following priorities:
![]() |
![]() |
![]() |
HOW YOU CAN RECOMMEND A CANDIDATE |
Write to the Governance Committee, c/o Alex Dimitrief, 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. The general qualifications and specific qualities and skills sought by the committee for directors are discussed under How We Build a Board That Is Right for GE on page 18. |
HOW WE REFRESH THE BOARD |
| Term limits. The Board has a 15-year term limit for independent directors (with a 2-year transition period for existing directors). |
| Age limits. With limited exceptions, directors may not be renominated to the Board after their 75th birthday. |
| Board evaluation. Each year, the Board assesses its effectiveness through a process led by its lead director. See How We Evaluate the Boards Effectiveness on page 23. |
See the Boards Governance Principles (see Helpful Resources on page 81) for more information on these policies.
DIRECTOR MUST-HAVES |
Highest personal & professional ethics
Integrity & values
A passion for learning
Inquisitive & objective perspective
A sense of priorities &
balance |
Governance Board Composition
GE 2017 Proxy Statement |
19 |
How We Assess Director Independence
BOARD MEMBERS. The Boards Governance Principles require all non-management directors to be independent. All of our director nominees (listed under Election of Directors on page 12) other than Mr. Immelt are independent, as were former directors James I. Cash, Jr., Robert J. Swieringa and Douglas A. Warner III throughout the period they served on our Board.
| The Boards guidelines. For a director to be considered independent, the Board must determine that he or she does not have any material relationship with GE. The Boards guidelines for director independence conform to, and in some ways are more exacting than, the independence requirements in the New York Stock Exchanges (NYSE) listing standards. In addition to applying these guidelines, which you can find in the Boards Governance Principles on GEs website (see Helpful Resources on page 81), the Board considers all relevant facts and circumstances when making an independence determination. |
|
Applying the guidelines in 2016. In assessing director independence for 2016, the Board considered relevant transactions, relationships and arrangements, including relationships among Board members, their family members and the company. For details, see Relationships and Transactions Considered for Director Independence below. |
COMMITTEE MEMBERS. All members of the Audit Committee, Management Development and Compensation Committee (the Compensation Committee), and Governance Committee must be independent, as defined by the Boards Governance Principles. Some committee members must also meet additional 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 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 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, Compensation and Governance Committees as well as the Technology & Industrial Risk Committee (the Industrial Risk Committee) are independent and also satisfy any committee-specific independence requirements.
Relationships and Transactions Considered for Director Independence
GE Transaction & 2016 Magnitude | ||||||||||
Director/ nominee |
Organization | Relationship | Sales to GE <1% of other companys revenues |
Purchases from GE <1% of other companys revenues |
Indebtedness to GE <1% of GEs assets | |||||
Bazin |
AccorHotels |
Chair & CEO |
![]() |
N/A |
![]() | |||||
DSouza |
Cognizant |
CEO & director |
![]() |
![]() |
N/A | |||||
McAdam |
Verizon |
Chair & CEO |
![]() |
N/A |
![]() | |||||
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 |
20 | Governance
Board Composition GE 2017 Proxy Statement |
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. Each year, there are eight regularly scheduled Board meetings to review and discuss GEs performance and prospects as well as issues we face. A significant portion of the Boards oversight responsibilities is carried out through its four independent committees.
WHATS CHANGED SINCE
OUR LAST PROXY STATEMENT? |
Reflecting the substantial progress made on GEs strategic shift away from financial services to focus on its industrial businesses, in December 2016 the Board eliminated the GE Capital Committee and shifted oversight responsibility for the continuing GE Capital businesses, including their risk appetite, to the Audit Committee.
COMMITTEE COMPOSITION |
Independence. All committee members satisfy the NYSEs and GEs definitions of independent director.
Financial acumen. Ms. Shapiro 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).
COMMITTEE OPERATIONS |
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.
COMMITTEE RESPONSIBILITIES |
The primary responsibilities of each committee are listed to the right. For more detail, see the committee charters and key practices on GEs website (see Helpful Resources on page 81).
Full Board | Audit | ||||
![]() ![]() |
![]() | ||||
A WORD FROM THE CHAIR & THE LEAD DIRECTOR, JEFF IMMELT & JACK BRENNAN |
A WORD FROM THE CHAIR, | ||||
In 2016, the Board focused on portfolio changes, including the planned Baker Hughes combination and Digital and Additive investments. Other priorities included: Alstom integration & GE Capital exit
plan progress
Capital return vs. M&A/organic
investment
Key GE initiatives (simplification, gross margins,
cash conversion) |
Purchase accounting related to the Alstom acquisition was a key focus for us in 2016. Other priorities included: New revenue recognition
standard
Financial reporting for GEs planned
combination with Baker Hughes
Resource planning for internal
audit
Legacy Alstom compliance &
investigative matters | ||||
17 MEETINGS IN 2016 |
12 MEETINGS IN 2016 | ||||
MEMBERS |
MEMBERS | ||||
Bazin |
Hockfield |
McAdam |
Bazin |
Mulva | |
KEY OVERSIGHT RESPONSIBILITIES |
KEY OVERSIGHT RESPONSIBILITIES | ||||
Corporate strategy
Capital allocation
Business development
Risk management (except as delegated to the
committees) |
Independent auditor
engagement
Financial reporting & accounting
standards
Internal audit functions (Corporate Audit
Staff & GE Capital Audit)
Disclosure & internal
controls
Compliance & integrity
programs | ||||
TYPICAL UPDATES AT EVERY MEETING |
|||||
Operations (CFO)
Global growth (CEO of
GGO)
Key businesses (rotates among business
CEOs) & initiatives (e.g., Digital & simplification)
M&A (VP of Business
Development) *Effective upon her election at the annual meeting. |
Governance Board Operations
GE 2017 Proxy Statement |
21 |
Governance | Compensation | Industrial Risk | |||||
![]() |
![]() |
![]() ![]() |
|||||
A WORD FROM THE
CHAIR, SHELLY LAZARUS |
A WORD FROM THE
CHAIR, JACK BRENNAN |
A WORD FROM THE
CHAIRS, MARIJN DEKKERS & SUSAN HOCKFIELD | |||||
Refreshing the Board and recruiting new directors were key priorities in 2016. We also focused on: Political/lobbying strategy after the U.S.
Presidential transition
Board committee
reorganization
Environmental, human rights & supply
chain practices
Director compensation
changes |
An important item in 2016 was overseeing leadership transitions to support the companys portfolio changes, such as the launch of GE Additive Manufacturing and the GE Capital exit. We also focused on: 20162018 LTPA program
design
Planning for Baker
Hughes
GE Digital compensation
structure |
During 2016, we focused on product risks and cybersecurity. Other priorities included overseeing: Launch of GE Additive
Manufacturing
Significant product launches (LEAP aircraft
engine & H-class gas turbine)
Deepwater technologies
GEs nuclear activities
Market risk | |||||
4 MEETINGS IN 2016 |
11 MEETINGS IN 2016 |
4 MEETINGS IN 2016 | |||||
MEMBERS |
MEMBERS |
MEMBERS | |||||
Brennan |
Lavizzo-Mourey* |
Brennan |
Lane |
DSouza |
McAdam | ||
Hockfield |
Lazarus |
Dekkers |
Lazarus |
Dekkers |
Mollenkopf | ||
Jung |
Tisch |
Jung |
Rohr |
Hockfield |
Mulva | ||
KEY OVERSIGHT RESPONSIBILITIES |
KEY OVERSIGHT RESPONSIBILITIES |
KEY OVERSIGHT RESPONSIBILITIES | |||||
Director recruitment
Corporate governance
Board committee structure &
membership
Annual Board
self-evaluation
Conflict-of-interest
reviews
Director compensation
GE positions on corporate social
responsibilities
Political spending &
lobbying |
CEO & senior executive performance
evaluations
CEO & senior executive
compensation
Executive succession
planning
Development & selection of senior
management
Incentive compensation programs, including
GEs 2007 Long-Term Incentive Plan |
Technology & product risk &
strategy
Cybersecurity
Investments & initiatives in science,
technology & software
Science & technology
trends
R&D operations, including our Global
Research Centers |
*Dr. Lavizzo-Mourey is expected to join the Governance Committee effective upon her election at the annual meeting.
22 | Governance
Board Operations GE 2017 Proxy Statement |
Board
Members Visit at Least Two
GE Businesses Per Year
GE PRACTICE. We encourage our directors to meet with GE senior managers throughout the company. To facilitate this contact, directors are expected 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 companys 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 Boards succession planning process for the CEO and the rest of the senior leadership team.
How We
Evaluate the Boards
Effectiveness
ANNUAL EVALUATION PROCESS. Each year, the lead director interviews each director to obtain his or her assessment of director performance, Board dynamics and the effectiveness of the Board and its committees. The interview focuses on:
| Improving issue prioritization |
| Enhancing the quality of written materials and oral presentations |
| Assessing how Board matters from the past year could have been handled better |
| Identifying specific issues to be discussed in future Board meetings |
At times, directors may also complete written assessments. After consulting with the chair of the Governance Committee, the lead director summarizes the directors assessments for discussion with the Board and committees. From time to time, we engage an independent, third-party governance expert to conduct the interviews. For more information on this evaluation process, see the Boards Governance Principles and the Governance Committees Key Practices (see Helpful Resources on page 81).
CHANGES MADE IN RESPONSE TO 2016 EVALUATIONS |
In response to
feedback received from our directors in 2016, the Board determined
to:
Recalibrate its risk management focus by restructuring its
committee structure (eliminating the GE Capital Committee and creating the
Technology & Industrial Risk Committee) in light of the substantial
progress made on the GE Capital exit plan;
Increase its focus on overseeing execution of the companys digital
industrial strategy; and
Continue its robust oversight of the Alstom
integration. |
Governance
Board Operations GE 2017 Proxy Statement |
23 |
Structure
Our CEO serves as the chairman of the Board. An independent director serves as the Boards lead director, with broad authority and responsibility over Board governance and operations.
WHY OUR BOARD LEADERSHIP STRUCTURE IS APPROPRIATE FOR GE. The Board periodically reviews its leadership structure to determine whether it remains appropriate for the company. We believe that our present structure allows our CEO to speak for and lead both GE and the Board and to focus the independent directors attention on the issues of greatest importance to the company and its shareowners. A strong independent lead director ensures effective and independent Board oversight.
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 Boards independent directors. Acting on this recommendation, the independent directors elect the lead director. Jack Brennan, chair emeritus of the Vanguard Group, was elected as the lead director in 2014. Under the Boards Governance Principles, Mr. Brennan also serves as chair of the Compensation Committee and as a member of the Governance Committee. In the event of Mr. Brennans incapacity, the chair of the Governance Committee would serve as the lead director until the independent directors selected a new lead director.
THE LEAD DIRECTORS ROLE. The lead director focuses on optimizing the Boards processes and ensuring that it is prioritizing the right matters. Specifically, the lead director has the following responsibilities (and may also perform other functions at the Boards request), as detailed in the Boards Governance Principles:
| Board leadership provides leadership to the Board in any situation where the chairmans role may be perceived to be in conflict, and chairs meetings when the chairman is absent |
| Leadership of independent director meetings leads independent director meetings, which are scheduled at least three times per year (in addition to the numerous informal sessions that occur throughout the year) without any management directors or GE employees present |
| Additional meetings calls additional Board or independent director meetings as needed |
| Chairman-independent director liaison regularly meets with the chairman and serves as liaison between the chairman and the independent directors |
| Shareowner communications makes himself/herself available for 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 Governance Committee to guide the Boards governance processes, including succession planning and the annual Board self-evaluation |
| Board leadership structure review oversees the Boards periodic review and evaluation of its leadership structure |
| Chairman evaluation leads annual chairman evaluation |
| Committee chair selection advises the Governance Committee in choosing committee chairs |
24 | Governance Board Leadership
Structure GE 2017 Proxy Statement |
For more information, see the Risk Management and Risk Factors sections in our 2016 annual report on Form 10-K.
Board Oversight
Management Oversight
Core Risk Focus Areas
PRODUCT QUALITY |
CYBERSECURITY | LIQUIDITY | GLOBAL COMPLIANCE & INTEGRITY |
BUSINESS INTEGRATIONS |
Governance How We Oversee & Manage Risk
GE 2017 Proxy Statement |
25 |
How We Get Feedback from Investors
We Have a Robust Investor Engagement Program
We conduct extensive governance reviews (i.e., assessing trends in global governance) and investor outreach throughout the year. This ensures that management and the Board understand and consider the issues that matter most to our shareowners so GE can address them effectively.
How
the Board Receives Direct
Feedback from Major
Institutional
Investors
STRATEGY AND BUSINESS MATTERS. In 2015, the company began inviting major institutional investors to meet periodically with GEs independent directors. This complements managements investor outreach program and allows directors to directly solicit and receive investors views on GEs strategy and performance.
GOVERNANCE AND COMPENSATION MATTERS. Beginning in 2016, the lead director regularly accompanies management on its governance-focused roadshow with select investors.
How We
Incorporated Investor
Feedback Over the Past Year
For 2016, we sought feedback from investors on a number of issues, and the Board decided to:
| Enhance our proxy disclosures, including providing more explanation for why we pay each element of compensation (see Primary Compensation Elements for 2016 on page 31) and adding more disclosure around changes in our incentive compensation performance metrics and targets from the prior year (see Aligning Pay with Performance on page 6); and |
| Strengthen our director overboarding policy by adding a prohibition on our lead director serving as the lead director, chairman of the board or CEO of another public company (see Limits on Director Service on Other Public Boards on page 27). |
OUR INVESTOR ENGAGEMENT PROGRAM |
Investor Outreach and Our 2016
Say-On-Pay Vote
At our 2016 annual meeting, shareowners expressed a high level of support (94%) 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 GEs 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.
After considering these factors, as well as the significant changes made to both our cash and equity incentive compensation programs in 2015, the committee reaffirmed the elements of our executive compensation program and policies.
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 GEs 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 be found on GEs website (see Helpful Resources on page 81). |
26 | Governance
How We Get Feedback from Investors GE 2017 Proxy Statement |
Other Governance Policies & Practices
Director Attendance at Meetings
The Board expects directors to attend all meetings of the Board and the committees on which the director serves as well as the annual shareowners meeting.
BOARD/COMMITTEE MEETINGS. In 2016, each of our director nominees and 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.
ANNUAL SHAREOWNERS MEETING. 13 out of 16 director nominees for 2016 attended the 2016 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 GEs code of conduct (contained in the companys integrity policy, The Spirit & The Letter). Under the Boards 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 GEs website (see Helpful Resources on page 81).
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 Boards 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.
Permitted # of public company
boards (including GE) | ||
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 | Cant serve as lead director, chairman 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 Loewss 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 (90% owned) and Diamond Offshore Drilling (53% owned), accounted for more than 85% of Loewss revenues over the past three years. Mr. Tisch serves on the boards of these subsidiaries and on the holding companys board. Since Mr. Tischs 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 serves on a total of three public company boards. However, he serves on two of the boards in connection with his role as CEO of AccorHotels. He serves on the boards of Accor and China Lodging Group, which have entered into a strategic alliance pursuant to which China Lodging Group is the master franchiser for Accors economy hotel business in China and owns a 29% stake in Accors luxury and upscale operating platform in China, and Accor owns an 11% stake in China Lodging Group.
Independent Oversight of Political Spending
The Governance Committee, composed solely of independent directors, oversees the companys 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 GEs political spending policies and lobbying practices. |
| Budget oversight. Approval of GEs annual budget for political activities and a semi-annual review of how it is being spent. |
| Reporting. Issuance of a yearly report on the companys political spending, which is available on our Sustainability website (see Helpful Resources on page 81). |
RECONSIDERING GES LOBBYING STRATEGY. In light of developments over the past several years on policies that are critical to the success of GE and the ongoing changes in the dynamics of elections, the company is continuing a comprehensive review of our policies on lobbying and campaign contributions to ensure that we are appropriately advancing and safeguarding GEs business interests.
HOW YOU CAN FIND MORE INFORMATION ABOUT OUR GOVERNANCE PRACTICES Each year we review GEs governance documents and modify them as appropriate. These documents include the Boards Governance Principles which include our director qualifications and director independence guidelines as well as Board committee charters and key practices. The web links for these materials can be found under Helpful Resources on page 81, and you can receive copies upon request. |
Governance Other Governance Policies & Practices
GE 2017 Proxy Statement |
27 |
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 companys legal staff is primarily responsible for making these determinations based on the facts and circumstances, and for developing and implementing processes and controls for obtaining information about these transactions from directors and executive officers. As SEC rules require, we disclose in this 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 such related person transaction. As described in the committees Key Practices, which are available on GEs website (see Helpful Resources on page 81), 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.
FACTORS USED IN ASSESSING RELATED PERSON
TRANSACTIONS
Nature of related persons 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 officers
judgment to act in GEs 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 2016. There were no related person transactions for 2016.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (Exchange Act) requires GEs 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 and officers by monitoring transactions and completing and filing Section 16 reports on their behalf.
TIMELINESS OF 2016 REPORTS. Based solely on a review of the reports filed for fiscal 2016 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), except that one Form 4 to report a lapse of RSU restrictions for Susan Peters and one transaction that should have been included on Form 3 to report RSU holdings for David Joyce were inadvertently filed late due to administrative error.
28 | Governance Stock Ownership Information GE 2017 Proxy Statement |
Common Stock & Total Stock-Based Holdings Table
The following table includes all GE stock-based holdings, as of December 31, 2016, 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 | 6,164 | ||||
W. Geoffrey Beattie | 60,743 | 175,012 | ||||
John J. Brennan | 25,000 | 84,478 | ||||
Francisco DSouza | 36,500 | 77,038 | ||||
Marijn E. Dekkers | 21,000 | 53,209 | ||||
Peter B. Henry | 0 | 4,619 | ||||
Susan J. Hockfield | 0 | 81,971 | ||||
Andrea Jung | 7,519 | 147,812 | ||||
Robert W. Lane | 14,500 | 152,309 | ||||
Risa Lavizzo-Mourey | 15,000 | 15,000 | ||||
Rochelle B. Lazarus | 38,372 | 241,752 | ||||
Lowell C. McAdam | 1,600 | 7,255 | ||||
Steven M. Mollenkopf | 0 | 1,085 | ||||
James J. Mulva | 4,105 | 137,348 | ||||
James E. Rohr | 30,000 | 52,753 | ||||
Mary L. Schapiro | 7,100 | 36,154 | ||||
James S. Tisch | 440,000 | 515,781 | ||||
Total | 701,439 | 1,789,740 | ||||
Common Stock | ||||||
Named Executives | Stock | Options | Total | |||
Jeffrey R. Immelt | 2,221,434 | 1,100,000 | 5,378,290 | |||
Jeffrey S. Bornstein | 102,290 | 3,309,000 | 4,884,515 | |||
Elizabeth J. Comstock | 203,721 | 1,881,800 | 3,241,010 | |||
David L. Joyce | 366,642 | 4,339,000 | 5,204,269 | |||
John G. Rice | 586,062 | 5,765,000 | 6,926,914 | |||
Keith S. Sherin | 265,085 | 5,765,000 | 6,294,830 | |||
Total | 3,745,234 | 22,159,800 | 31,929,828 | |||
Current Directors & Executives | Common Stock | Total | ||||
As a group (24 people) | 23,619,763 | 31,427,979 | ||||
5% Beneficial Owners | Common Stock | |||||
BlackRock, Inc. | 504,192,300 | |||||
The Vanguard Group | 581,182,624 | |||||
Total | 1,085,374,924 |
PERCENTAGE OWNERSHIP
No director or named executive owns more than one-tenth of 1% of the total outstanding shares of GE common stock. BlackRock and Vanguard own 5.8% and 6.6%, respectively, of the 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 is pledged as security by the named person, although standard brokerage accounts may include non-negotiable provisions regarding set-offs or similar rights. For 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 subcolumn). For Mr. Immelt, this column also includes 60,000 shares of restricted stock over which he has sole voting but no investment power.
TOTAL. This column shows the individuals 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. As described under Director Compensation on page 53, directors must hold the DSUs included in this column until one year after leaving the Board. For Mr. Immelt, this column also includes 565,000 PSUs for which the performance goals had been met, but that had not settled within 60 days of December 31, 2016.
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 (16,035), Dekkers (20,000), Jung (69), Lazarus (8,000), McAdam (1,600), Mulva (4,030), Rohr (30,000) and Tisch (440,000).
CURRENT DIRECTORS & EXECUTIVES. These columns show ownership by our current directors and executive officers (therefore excluding any shares owned by Dr. Lavizzo-Mourey or Mr. Sherin). This row includes: (1) 19,143,800 shares that may be acquired under stock options that are or will become exercisable within 60 days, (2) 10,967 RSUs that vested within 60 days, (3) 559,733 shares over which there is shared voting and investment power, and (4) 60,000 shares over which there is sole voting power but no investment power. Current directors and executive officers as a group do not own more than 1% of the total outstanding shares.
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 | 428,051,546 | 14,047,785 | ||
Shared voting power | 56,787 | 1,656,316 | ||
Sole investment power | 504,135,513 | 565,607,461 | ||
Shared investment power | 56,787 | 15,575,163 |
The foregoing information is based solely on a Schedule 13G/A filed by BlackRock with the SEC on January 24, 2017, and a Schedule 13G/A filed by Vanguard with the SEC on February 13, 2017, as applicable.
Governance Stock Ownership Information
GE 2017 Proxy Statement |
29 |
Compensation |
Overview of Our Executive Compensation Program
Although the executive compensation discussion in this proxy statement focuses on the compensation decisions for our named executives Jeff Immelt (Chair & CEO), Jeff Bornstein (SVP & CFO), Beth Comstock (Vice Chair & CEO of Business Innovations), David Joyce (Vice Chair & CEO of Aviation), John Rice (Vice Chair & CEO of our Global Growth Organization) and Keith Sherin (Former Vice Chair & CEO of GE Capital) our executive compensation programs apply broadly across GEs employee ranks. For example, approximately 120,000 employees participate in an annual bonus program, more than 5,000 executives receive equity incentives, and approximately 1,000 senior executives participate in our long-term performance award (LTPA) program. We strive to pay fair and competitive wages to all of our employees, considering the specific job markets and peer compensation.
Key Considerations in Setting Pay
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 GEs strategy through business cycles (for example, maintaining consistent levels of R&D investment through economic 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 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. For example, all of our LTPA programs have paid out at less than 105% of target performance, with payouts ranging between 71% and 104%.
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, with an emphasis on long-term operating and stock-price performance.
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.
30 | Compensation Overview of Our Executive
Compensation Program GE 2017 Proxy Statement |
SIGNIFICANCE OF OVERALL COMPANY RESULTS |
The committees evaluation of the named executives performance places strong emphasis on their contributions to the companys overall performance rather than focusing only on their particular businesses or functions. The committee believes that the named executives, as key members of the companys leadership team, share the responsibility to support GEs goals and performance. While this compensation philosophy influences all of the committees compensation decisions, it has the biggest impact on annual equity incentive grants.
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. Goals and objectives, which include specific, risk- and sustainability-focused measures, reflect a balanced mix of performance measures to avoid placing excessive weight on any single measure. Compensation is also balanced among current cash payments, deferred cash and equity awards. With limited exceptions, the committee retains discretion to adjust compensation pursuant to our clawback policy as well as for quality of performance and adherence to company values. See How We Oversee & Manage Risk on page 25 for more information.
Primary Compensation Elements for 2016
Salary | Bonus | LTPAs | PSUs | Options | RSUs | |
Who receives | All named executives | All named executives except CEO | ||||
When granted |
Reviewed every 18 mos. |
Annually in February or March for prior year | Generally every 3 years (current cycle 20162018) | Annually | ||
Form
of delivery |
Cash | Equity | ||||
Type
of performance |
Short-term emphasis | Long-term emphasis | ||||
Performance period |
Ongoing | 1 year | 3 years | Generally vest 20% per year over five years or longer | ||
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 | 45 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 on long-term investor framework | Outperform peers |
Increase stock price | Balance against excessive risk taking |
Compensation
Overview of Our Executive Compensation Program
GE 2017 Proxy Statement |
31 |
How Our Incentive Compensation Plans Paid Out for 2016
This section provides an overview of how GE performed against the goals established under its 2016 annual bonus program and the 20132016 PSUs and 20142016 PSUs. See Compensation Actions for 2016 on page 35 for amounts paid to the named executives under these programs as well as how we assessed their individual performance. See Long-Term Performance Awards (LTPAs) on page 40 for information on our 20162018 LTPAs.
BONUS POOL FUNDED AT 80%. We granted bonuses to our named executives under a recently redesigned, more formulaic bonus program. The size of the bonus pool was contingent on the achievement of specified financial and strategic performance metrics as shown below.
* | Non-GAAP financial measures. For information on how these metrics are calculated, see Explanation of Non-GAAP Financial Measures and Performance Metrics on page 52. |
** | Percentages may not add due to rounding. |
*** | Also can be calculated as adjusted Industrial revenues less adjusted Industrial costs. Excludes non-operating pension costs, restructuring & other charges, and gains. |
**** | Also can be calculated as (adjusted Industrial revenues less adjusted Industrial costs)/(adjusted Industrial revenues). Excludes non-operating pension costs, restructuring & other charges, and gains. |
NO ADJUSTMENTS TO FINANCIAL PERFORMANCE METRICS. Although the Compensation Committee had the authority under the terms of the bonus program to adjust the financial performance metrics, it did not make any such adjustments for 2016 (i.e., they were calculated the same way GE reported them for financial reporting purposes).
HOW WE
PERFORMED AGAINST OUR STRATEGIC GOALS |
|
EXECUTE ON PORTFOLIO TRANSFORMATION. In 2016, GE aggressively executed on its Alstom integration, with cost synergies ahead of plan and Alstom contributing $0.05 to GEs earnings per share (excluding foreign exchange impact). The company also capitalized on the oil and gas cycle, planning a combination with Baker Hughes to create a digitized, fullstream oil and gas company (subject to customary closing conditions). GE made strategic investments to recapture supply chain value and grow the companys Digital and Additive businesses. The company also continued simplifying the portfolio, announcing plans to sell Water and Industrial Solutions and making substantial progress on the GE Capital exit plan (signing deals for 96% of the planned asset sales as of 2016 year-end and terminating GE Capitals designation as a nonbank SIFI). |
|
MAINTAIN BALANCED CAPITAL ALLOCATION STRATEGY. GE executed on a balanced capital allocation strategy in 2016, returning $30.5 billion to investors ($8.5 billion in dividends and $22.0 billion in buyback), which exceeded our investor framework target of approximately $26 billion. The company also made $8.9 billion in organic investments (capital expenditures including |
R&D, P&E and Digital) and invested $2.3 billion on M&A to support GEs long-term growth. | |
|
IMPROVE CHALLENGED GE BUSINESSES. Healthcare had an excellent year, turning around business declines in 2015 to increase segment profit 10% to $3.2 billion and operating margins 100 basis points to 17.3% in 2016, driven by productivity improvements and strong growth in Life Sciences. Oil & Gas experienced continued market pressure from depressed oil prices, but has taken advantage of the cycle by planning a combination with Baker Hughes and reducing costs by $700 million while restructuring the business. Energy Connections & Lighting had a tough year, but is working to integrate Alstoms grid business and restructure to position the business for growth in 2017. |
|
ACCELERATE DIGITAL INDUSTRIAL. The company made significant progress in building out its digital capability in 2016, ending the year with $4 billion Predix-powered and software orders (up 22% year-over-year). GE invested more than $1 billion to acquire ServiceMax, BitStew, Wise.io and Meridium. The company also continued to expand Predix, GEs software platform for the Industrial Internet, which, at the end of 2016, had approximately 22,000 developers and more than 400 partners. |
32 | Compensation How Our Incentive Compensation
Plans Paid Out for 2016 GE 2017 Proxy Statement |
|
LOWER PRODUCT COSTS. Industrial segment gross margins increased by 40 basis points in 2016 to 27.8% (excluding Alstom).* GE continued to execute on its product cost reduction initiative through investments in additive manufacturing (Concept Laser and Arcam acquisitions) and backwards integration of the supply chain (planned LM Wind Power acquisition). The company also captured $0.9 billion in sourcing value through deflation. |
|
REALIZE GE STORE OUTCOMES. Industrial segment organic revenue growth (adjusted to include Alstom for November and December of both 2015 and 2016) of 1%* for 2016 missed our investor framework of 2–4%, and Industrial operating margins (excluding Alstom) were down 30 basis points* (also below target). Industrial return on total capital was down 150 basis points.* However, the company continued to intensify its focus on demonstrating the value of the GE Store (a global exchange of technology, talent and expertise through GEs broad and diverse network of businesses and markets). GEs industrial segment revenues from growth markets were $45 billion (up 6%) while growth market infrastructure orders were $47 billion (flat year-over-year). Industrial segment revenues from services were $52 billion (up 9%). Backlog increased by $6 billion to a record $321 billion as of year-end. GE Capital enabled (through financing or arranging financing) more than $13 billion of industrial orders. |
The company also continued to improve new product introduction efficiency while executing on significant product launches. | |
|
MANAGE ENTERPRISE RISK AND CULTURE. The company continued to focus on managing critical enterprise risks, including liquidity (maintaining a strong balance sheet, ending 2016 with $48.1 billion in cash and equivalents, including $10.5 billion at the parent level), product quality (reformulating the Board committees to focus on industrial risk), cybersecurity (continuing to expand capabilities), and compliance and business integrations (with a keen focus on Alstom). GE also focused on accelerating its digital industrial cultural transformation with the roll-out of its performance development tool and sending key leaders to its global leadership institute (~28% of salaried employees attended Crotonville in 2016). |
The Compensation Committee assessed GEs performance on its strategic goals at 95% instead of 100% because, although the company overall had a good year, GE missed some of its key investor goals (organic revenue growth and margin expansion) and some key businesses, including Power, Oil & Gas and Energy Connections, experienced challenging business environments.
*Non-GAAP financial measure. See page 52.
HOW WE EVALUATED BUSINESS PERFORMANCE AND ALLOCATED THE BONUS POOL |
Business | Executive | Performance Assessment | Business Funding as % of target* | |||
Corporate |
Immelt |
Financial. Same goals described above for GEs overall bonus pool
funding.
Strategic. Same goals described above for GEs overall bonus pool
funding. |
80% | |||
Business |
Comstock |
Financial. Current had $1.1 billion of revenues, but Current & Lighting did not meet
its operating plan with a $56 million loss and negative free cash flow.
The corporate marketing and commercial functions and GE Ventures managed
their costs lower, ahead of plan.
Strategic. Business Innovations continued to transform Lighting, digitize
sales and marketing operations, scale GE Ventures, and strengthen the
companys brand, focusing on the digital industrial narrative and
positioning the company externally as a technology
leader. |
66%** | |||
Aviation |
Joyce |
Financial. Aviations profits were $6.1 billion with an operating margin of
23.3%, both of which exceeded the operating plan. Aviations free cash
flow and gross margin fell short of the plan.
Strategic. Aviation executed on the launch of its LEAP engine, shipping 77
units in 2016 and accelerating program cost-out, digitized its services
business, positioned the Military Engines business for future growth, and
led product safety and reliability initiatives. |
89% | |||
Global
Growth |
Rice |
Financial. GGO brought in $69.2 billion of non-U.S. orders, including $15.6
billion from Alstom, which was short of the operating plan. GGO met its
financing and sourcing goals for the year.
Strategic. GGO continued building out local capabilities through in-country
investments and strengthening its leadership ranks, supporting the
businesses with key growth market wins, growing its project finance
capabilities and making progress on integrating
Alstom. |
75%*** | |||
Capital |
Sherin |
Financial. GE Capital earned $1.9 billion (Verticals),**** paid dividends of
$20.1 billion to GE and closed sales of $86.4 billion of ENI, all of which
exceeded the operating plan.
Strategic. GE Capital made substantial progress on the exit plan, completing
96% of the planned asset sale signings as of the end of 2016 and being
de-designated as a nonbank SIFI, while positioning the business to support
growth in our industrial businesses. |
94% |
* | Reflects negative 20% adjustment to each business funding percentage based on the 80% funding for the bonus pool. Business funding percentages, determined based on each business achievement of its financial and strategic goals, are adjusted upward or downward to reflect overall GE bonus pool funding. |
** | Reflects blended funding percentage based 1/3 on Lightings funding (37%) and 2/3 on Corporates funding (80%). |
*** | Reflects blended funding percentage based 1/2 on GGOs funding (69%) and 1/2 on Corporates funding (80%). |
**** | Non-GAAP financial measure. See page 52. |
Compensation
How Our Incentive Compensation Plans Paid Out for 2016
GE 2017 Proxy Statement |
33 |
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. Heres how the plan works:
What | When | How | 2016 result | |||||
STEP 1 | DETERMINE PARTICIPANTS & SET TARGET BONUSES | Beginning of the year or upon hiring/promotion |
All executive-level employees & above eligible to
participate
Target bonus is % of salary based on level of seniority
for VP+
employees target = 100% of salary* |
Named executives target bonus same as 2015 | ||||
STEP 2 |
ESTABLISH PERFORMANCE
GOALS
Select performance metrics & set targeted performance levels for: the company
funds
the bonus pool (step 4)
GEs businesses
allocates the pool (step 5)
individuals
determines individual performance adjustments (step
6) |
Beginning of the year |
Aligned to yearly operating framework disclosed to investors each December at GEs annual outlook meeting |
See 2016 Annual Bonuses on page 32 | ||||
STEP 3 |
CALCULATE TARGET GE BONUS POOL |
Beginning of the year & adjusted throughout to reflect employee population changes |
Sum of the aggregate amount of target bonuses established in Step 1 |
N/A | ||||
STEP 4 |
FUND GE BONUS
POOL |
End of the year |
Formulaic, based on GEs performance against target performance levels for financial goals (75%) & the committees view of GEs performance on its strategic goals (25%) |
Bonus pool funded at 80% (vs. 103% for 2015) | ||||
STEP 5 |
ALLOCATE POOL TO BUSINESSES &
CORPORATE |
End of the year |
First, assess business performance
based on the CEOs
view of the business performance against financial goals (50%) &
strategic goals (50%)**
Second, adjusted business funding %
based on bonus pool funding
& ensures sum of the parts doesnt exceed overall pool
|
Business funding percentages ranged from 3794% (after adjusting for bonus pool funding) | ||||
STEP 6 |
DETERMINE INDIVIDUAL
BONUSES |
After year-end |
60% formulaic, based on funding % for the named executives
business
40% subjective, based on individual performance |
Named executive bonuses ranged from $1.24.3 million |
* | 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 amount allocated to the businesses. |
2013 PSUs PAY OUT AT 100% AND 2014 PSUs PAY OUT AT 83%. In February 2017, Mr. Immelt earned 100% of the PSUs granted to him in 2013 and 83% of the PSUs granted to him in 2014. The remaining PSUs from the 2014 grant were forfeited because of the negative adjustment from the TSR modifier. (The table below is specific to Mr. Immelt as we did not start granting PSUs to the full senior leadership team until 2015.)
PERFORMANCE METRICS | 20132016 PSUs | 20142016 PSUs | ||
Total cash (cumulative) |
![]() |
![]() | ||
Industrial segment |
![]() |
![]() | ||
Relative TSR vs. S&P
500 |
![]() |
![]() | ||
PAYOUTS | ||||
Number earned/granted | 400,000 / 400,000 | 165,000** / 200,000 | ||
Grant date fair value | $7.8 million | $3.7 million | ||
Value earned*** | $11.9 million | $4.9 million | ||
Value forfeited*** | $0 | $1.0 million |
* | Difference between 2013 and 2014 grants is due to a different calculation of operating margin specified in the grant terms. For the 2013 grant, the calculation excludes Alstom, and for the 2014 grant, it excludes both Alstom and Appliances (the sale of which was contemplated at the time of the 2014 grant but not the 2013 grant). |
** | Represents a 17.5% negative adjustment (based on TSR) from the 200,000 PSUs otherwise earned (based on total cash and operating margin). |
*** | Based on the closing price of GE stock on February 10, 2017, the date the Compensation Committee certified the achievement of the performance conditions. |
34 | Compensation How Our Incentive Compensation
Plans Paid Out for 2016 GE 2017 Proxy Statement |
CEO Compensation Aligns With Performance |
Jeff Immelt CHAIRMAN & CEO AGE: 61 |
![]() |
PERFORMANCE. As the Chairman & CEO, Mr. Immelt plays a critical role in delivering on the performance framework for the companys annual bonus program and, as such, his performance goals were the same as the financial and strategic goals used to fund the 2016 bonus pool (see 2016 Annual Bonuses on page 32). The Compensation Committee believes that Mr. Immelt performed well in a challenging environment.
PAY. In light of his performance, the Compensation Committee awarded Mr. Immelt a $4.3 million cash bonus, 80% of target (same as the companys bonus pool funding). In addition, the committee granted Mr. Immelt an equity award with a grant date fair value of $6.8 million (down 26% from $9.2 million in 2015), weighted 2/3 PSUs (200k granted) and 1/3 stock options (600k granted). Mr. Immelts base salary remained flat at $3.8 million (and has been increased only twice since 2005).
CEO Compensation Analysis
($ in millions) | 2015 | 2016 | Year-over- Year Change |
Main Drivers | ||||
Adjusted SEC
total |
$26.8 |
$18.0 |
Down 33% |
79% lower LTPA payment as 2015 was
the final year of the previous LTPA program & 61% of the total 3-year
payout was reflected in that year
26% lower accounting value for
equity awards, reflecting a ~5% decline in GEs stock price between the
2015 & 2016 grant dates
20% lower bonus as Mr. Immelt
received 100% of his target bonus in 2015
| ||||
SEC total compensation |
$33.0 |
$21.3 |
Down 35% |
Drivers discussed above
45% lower change in pension value,
due in part to Mr. Immelts lower bonus payment and being over age
60
| ||||
Realized compensation |
$10.0 |
$27.5 |
Up 174% |
3-year LTPA payout reported as
2016 income (vs. $0 in 2015)
|
CEO Accountability
A significant portion of Mr. Immelts compensation is at risk each year, tied to the companys operating and stock price performance. For 2016, 71% of his compensation was at risk.* As a result, Mr. Immelt may not earn all of the compensation that we are required to include in the Summary Compensation Table.
Over the past five years, GEs earnings have ranked 1016th in the S&P 500, while Mr. Immelts compensation has ranked 21st169th among S&P 500 CEOs.**
* |
Represents the sum of the amounts reported in the Bonus, PSUs & RSUs, Stock Options and LTPAs columns as a percentage of total compensation minus change in pension value. |
** |
Earnings reflects reported net earnings, except for 2015 and 2016, which reflect Industrial operating + Verticals earnings in light of the GE Capital exit plan charges (based on Bloomberg data). Compensation data is through 2015 (the most recent year for which data is available) and reflects reported SEC total compensation minus change in pension value (based on Equilar data). |
OUR CEO OWNS A SUBSTANTIAL AMOUNT OF GE STOCK AND IS ALIGNED WITH SHAREOWNERS |
As an indication of Mr. Immelts alignment with shareowners, he has purchased approximately 1.2 million shares in the open market since he became CEO in 2001. Also, since he became CEO, he has not sold any of the shares he has acquired through exercising stock options or the vesting of RSUs or PSUs (except those withheld to pay option exercise prices and taxes on such awards). See Stock Ownership Information on page 28 for more information on Mr. Immelts ownership of GE stock.
CEO PAY ADJUSTMENTS OVER THE LAST 10 YEARS |
8 out of 10 years |
$11.7M | |
Twice |
2.4M+ |
Compensation Compensation
Actions for 2016 GE 2017 Proxy Statement |
35 |
Compensation for Our Other Named Executives | ||||||
![]() |
Jeff
AGE: 51 |
CURRENT AND PRIOR
ROLES PERFORMANCE
ASSESSMENT |
COMPENSATION DECISIONS FOR 2016 Base salary increased by 11% to $1.775 million, effective July 2016, after an
18-month interval since his last salary increase that is standard for GEs
named executives
Cash bonus $1.9 million, 80%
of $2.4 million target (same as Corporates 80% funding)
Equity grant $2.3 million
grant date fair value (same as the vice chairs), divided evenly among PSUs, RSUs and
options | |||
![]() |
Beth
AGE: 56 |
CURRENT AND PRIOR
ROLES PERFORMANCE
ASSESSMENT |
COMPENSATION DECISIONS FOR 2016 Base salary remained flat at
$1.5 million, with her last salary increase effective September
2015
Cash bonus $1.2 million, 66% of $1.9 million target (equal to
Lighting/Corporates blended funding of 37/80%, with Corporate weighted
2/3)
Equity grant $2.3 million
grant date fair value (same as the other vice chairs), divided evenly
among PSUs, RSUs and options
Special retention grant 150k
RSUs for retention | |||
![]() |
David Joyce AGE: 60 |
CURRENT AND PRIOR
ROLES PERFORMANCE
ASSESSMENT |
COMPENSATION DECISIONS FOR 2016 Base salary increased by 8% to
$1.3 million, effective March 2016, after an 18-month interval since his
last salary increase that is standard for GEs named executives;
subsequently increased by 12% to $1.45 million, effective September 2016,
upon his promotion to vice chair
Cash bonus $1.4 million, 89%
of $1.6 million target (same as Aviations 89% funding), plus $100,000 for
extraordinary performance at Aviation and with GE Additive
Equity grant $2.3 million
grant date fair value (same as the other vice chairs), divided evenly
among PSUs, RSUs and options
Special retention grant 150k RSUs for
retention | |||
36 | Compensation Compensation Actions for
2016 GE 2017 Proxy Statement |
![]() |
John Rice AGE: 60 |
CURRENT AND PRIOR
ROLES PERFORMANCE
ASSESSMENT |
COMPENSATION DECISIONS FOR 2016 Base salary increased by 7% to
$2.8 million, effective January 1, 2017, after an 18-month interval since
his last salary increase that is standard for GEs named
executives
Cash bonus $3.3 million, 75%
of $4.4 million target (equal to GGO/Corporates blended funding of
69/80%, each weighted 1/2)
Equity grant $2.3 million
grant date fair value (same as the other vice chairs), divided evenly among PSUs, RSUs and
options | |||
![]() |
Keith Sherin AGE: 58 |
CURRENT AND PRIOR
ROLES PERFORMANCE
ASSESSMENT |
COMPENSATION DECISIONS FOR 2016 Base salary increased by 6% to
$2.65 million, effective July 1, 2016, after an 18-month interval since
his last salary increase that is standard for GEs named
executives
Cash bonus $3.8 million, 94%
of $4.0 million target (same as GE Capitals 94% funding)
Equity grant did not receive
an equity grant in light of his planned retirement | |||
The SECs calculation of total compensation, as shown in the Summary Compensation Table on page 38, includes several items driven by accounting and actuarial assumptions. 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 GEs proxy website (see Helpful Resources on page 81).
Realized Compensation | ||||||
Name | 2014 | 2015 | 2016 | |||
Immelt | $9,560,031 | $10,028,885 | $27,466,598 | |||
Bornstein | $4,271,938 | $5,266,094 | $13,638,042 | |||
Comstock* | - | - | $9,348,124 | |||
Joyce* | - | - | $12,561,316 | |||
Rice | $9,409,173 | $9,671,232 | $19,154,417 | |||
Sherin | $6,460,460 | $6,947,307 | $19,791,210 |
* |
Under applicable SEC rules, we have excluded Ms. Comstocks and Mr. Joyces compensation for 2014 and 2015 as they were not named executives during those years. |
2016 VS. 2015 AMOUNTS. The increase in realized compensation from 2015 to 2016 is due primarily to the payout in early 2016 of LTPAs earned over the three-year performance period from 2013 to 2015. On average, these payouts comprised 45% of the named executives realized compensation in 2016.
Compensation Realized Compensation GE 2017 Proxy Statement |
37 |
Name & Principal Position |
Year | Salary | Bonus | PSUs & RSUs |
Stock Options |
LTPAs | Pension & Deferred Comp. |
All Other Comp. |
SEC Total | Adjusted SEC Total** |
Jeff Immelt | 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 |
Chairman & 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 |
2014 | $3,750,000 | $5,400,000 | $3,676,157 | $2,565,000 | $2,484,000 | $18,568,983 | $806,634 | $37,250,774 | $18,855,141 | |
Jeff Bornstein | 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 |
SVP & 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 |
2014 | $1,450,000 | $2,400,000 | $2,585,000 | $2,893,000 | $1,080,000 | $5,661,859 | $180,850 | $16,250,709 | $10,635,919 | |
Beth Comstock* | 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 |
Vice Chair | ||||||||||
David Joyce* | 2016 | $1,333,333 | $1,524,000 | $6,212,431 | $750,000 | $0 | $2,523,853 | $239,240 | $12,582,857 | $10,059,004 |
Vice Chair | ||||||||||
John Rice | 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 |
Vice Chair | 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 |
2014 | $2,450,000 | $4,400,000 | $0 | $3,419,000 | $1,849,500 | $13,216,460 | $2,860,207 | $28,195,167 | $15,169,747 | |
Keith Sherin | 2016 | $2,575,000 | $3,784,000 | $6,965,400 | $2,486,860 | $1,286,800 | $12,890,425 | $362,291 | $30,350,776 | $17,609,982 |
Former Vice Chair | 2015 | $2,500,000 | $5,232,500 | $2,991,242 | $1,185,600 | $6,750,550 | $6,953,331 | $292,836 | $25,906,059 | $19,087,703 |
2014 | $2,300,000 | $4,025,000 | $0 | $3,419,000 | $1,761,750 | $12,982,498 | $260,151 | $24,748,399 | $11,887,684 |
* |
Under applicable SEC rules, we have excluded Ms. Comstocks and Mr. Joyces compensation for 2014 and 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 40. |
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. Generally, they are 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 companys 401(k) savings plan.
BONUS. Amounts earned under our annual cash bonus program. See How the Bonus Program Works on page 34 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. Generally, the aggregate grant date fair value is the amount that the company expects to expense for accounting purposes over the awards 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 Compensation Actions for 2016 on page 35, Mr. Immelt earned 100% of the PSUs granted to him in 2013, but only 83% of the PSUs granted to him in 2014. Although any PSUs not earned by Mr. Immelt are canceled, GE does not adjust the related amounts previously reported as compensation in the year of the PSU award to reflect the cancellation (in this case, $0.6 million reported as compensation for him in 2014).
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, which, for the 2016 PSUs, was between threshold and target performance. If the most probable outcome of the performance conditions on the grant date had been target performance, then the grant date fair value of the PSUs would have been $5,224,500 for Mr. Immelt and $779,547 for the other named executives. See the Long-Term Incentive Compensation Table on
page 42 for additional information, including performance conditions and valuation assumptions, as applicable, for 2016 grants.
For Mr. Sherin, the 2016 amounts reported under PSUs & RSUs and Stock Options represent the incremental accounting value of previously granted awards (223,250 RSUs and 5,765,000 stock options) that the Compensation Committee modified in connection with his early retirement agreement (see Early Retirement Agreement with Mr. Sherin on page 49). These modifications accelerate vesting and, with respect to the options, extend the exercise period for up to five years following Mr. Sherins retirement, in both cases consistent with the benefits provided to other employees impacted by the GE Capital exit plan.
STOCK OPTIONS. Aggregate grant date fair value of option awards granted in the years shown. These amounts reflect the companys 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 years grant, see the note on Other Stock-Related Information in GEs financial statements in our annual report on Form 10-K for that year. See the Long-Term Incentive Compensation Table on page 42 for additional information on 2016 grants.
LTPAs. Amounts earned under our Long-Term Performance Awards (LTPAs), a non-equity incentive plan arrangement, which we generally grant only once every three or more years. LTPA earnings reflect achievement of pre-established performance goals over the performance period. The amounts for 2016 reflect the first-year installments of the 20162018 LTPAs and are based on salaries in effect as of December 31, 2016 and bonuses paid for the 2016 performance period. See Long-Term Performance Awards (LTPAs) on page 40 for additional information. Because Mr. Joyce was not a named executive officer when the 20162018 LTPAs were granted, his LTPA award does not include the annual installment provision that applies to other named executives, and the amount reported for him in 2016 is therefore $0.
38 | Compensation Summary
Compensation GE 2017 Proxy Statement |
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 | |
Immelt | $3,362,402 | $217,886 | |
Bornstein | $2,824,230 | $57,971 | |
Comstock | $2,019,696 | $26,105 | |
Joyce | $2,523,853 | $0 | |
Rice | $3,949,148 | $235,156 | |
Sherin | $12,740,794 | $149,631 |
Year-over-year changes in pension value generally are driven in large part by changes in actuarial pension assumptions as well as increases in service, age and compensation. For 2016, the change in
pension value for Mr. Immelt was lower than 2015, due in part to his lower bonus payment and being over age 60. Except for Mr. Sherin, the other named executives change in pension value was higher than 2015 in part due to the 27-basis-point decrease in the statutory discount rate assumption from 4.38% to 4.11%. See Pension Benefits on page 48 for additional information, including the present value assumptions used in this calculation. For Mr. Sherin, the change in pension value includes early retirement allowance payments valued at $7,191,154 (see Early Retirement Agreement with Mr. Sherin on page 49).
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 2016. See Deferred Compensation on page 46 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 2016, 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 |
HQ Relocation |
Relocation Tax Benefits |
Other | Total | |||||||||
Immelt | $445,136 | $9,275 | $257,639 | $19,516 | $0 | $376,744 | $7,150 | $69,678 | $1,185,138 | |||||||||
Bornstein | $92,106 | $9,275 | $37,725 | $26,361 | $15,190 | $193,107 | $20,837 | $0 | $394,601 | |||||||||
Comstock | $134,167 | $9,275 | $0 | $16,262 | $15,350 | N/A | N/A | $0 | $175,054 | |||||||||
Joyce | $187,457 | $9,275 | $0 | $24,406 | $0 | N/A | N/A | $18,102 | $239,240 | |||||||||
Rice | $366,633 | $9,275 | $35,435 | $0 | $15,125 | N/A | N/A | $1,185,198 | $1,611,666 | |||||||||
Sherin | $305,887 | $9,275 | $2,051 | $26,131 | $15,350 | N/A | N/A | $3,597 | $362,291 |
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. GEs 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, the committee requires our CEO to use company aircraft for all air travel (personal and business). 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 executives family or guests is also included.
Leased Cars. Expenses for the leased cars program, such as leasing and management fees, administrative costs and maintenance costs.
Financial & Tax Planning. Expenses for the use of advisors for financial, estate and tax preparation and planning, and investment analysis and advice.
HQ Relocation. Expenses for relocating the named executives and their families in connection with the move of GEs corporate headquarters from Fairfield, CT to Boston, MA. 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 companys officers received a higher potential home loss buyout benefit than other employees.
Relocation Tax Benefits. Tax benefits provided in connection with the companys headquarters relocation.
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, HQ Relocation 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; (3) participation in the Executive Products and Lighting Program, which was terminated for executives in June 2016 when we sold our Appliances business; (4) an annual physical examination; and (5) certain expenses associated with the named executives and their invited guests attendance at the 2016 Olympic Games in Rio de Janeiro, Brazil, of which GE was an official sponsor.
With respect to Mr. Rice, this column also reports the following benefits provided to him in connection with his non-permanent relocation, at the companys request, to Hong Kong. These benefits, which are consistent with those we provide to employees working on non-permanent assignments outside their home countries, consisted of: (1) cost-of-living adjustment ($397,622); (2) housing and utilities ($699,125); and (3) other expatriate and relocation allowances and
Compensation Summary Compensation
GE 2017 Proxy Statement |
39 |
expenses ($84,276). Any benefits paid in Hong Kong dollars (HKD) were converted to USD on a monthly basis using the following average monthly exchange rates for 2016 (expressed as HKD per USD): January through June 7.75; July through December 7.76.
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
Long-Term Performance Awards (LTPAs)
We grant LTPAs only once every three or more years, in contrast to many companies that grant such awards annually. These awards have 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 (as with the Industrial operating profit margin and cash returned to investors metrics in our 20162018 LTPA program). LTPAs are paid in cash or, at the committees discretion, in stock.
20162018 LTPAs. In March 2016, the Compensation Committee granted contingent LTPAs for the 20162018 performance period to approximately 1,000 executives across the company, including the named executives. The awards are payable based on achievement of the performance metrics shown in the table below. The terms and conditions of this LTPA program are the same as the 20132015 LTPA program, except for the following modifications:
GE Goal | Performance Metric1 | Performance Period |
Threshold | Target5 | Maximum | Weight | ||||||
Attractive earnings profile | Industrial Operating + Verticals EPS | 20162018 | $5.05 | N.D. | $5.55 | 20% | ||||||
High cash flows | Total cash generation2 | 20162018 | $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 | 20162018 | $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. |
40 | Compensation Long-Term Incentive Compensation
GE 2017 Proxy Statement |
TARGET PERFORMANCE LEVELS ARE CHALLENGING. As with our prior LTPA programs, the target performance levels of the 20162018 LTPA metrics are challenging and difficult to achieve, while the maximum performance levels represent stretch goals.
PAST LTPA PAYOUT LEVELS FOR NAMED EXECUTIVES
HOW THE COMPENSATION COMMITTEE CALCULATES PAYOUTS. For each named executive, LTPA payouts are calculated as shown below (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. LTPAs are subject to forfeiture under our compensation recoupment policy or if employment terminates before the end of the performance period for any reason other than disability, death or retirement.
20162018 LTPA PAYOUT CALCULATION
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 credited to each named executives deferred compensation account in annual installments but not actually paid out until after the third year. (This installment structure does not apply to Mr. Joyce for the 20162018 LTPAs, as he was not a named executive when they were granted.) The amount of each 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, the named executives receive the amounts credited, without interest, adjusted to reflect GEs actual 3-year performance. The first-year installment is reported as 2016 compensation in the LTPAs column in the Summary Compensation Table on page 38.
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 in the form of stock options, RSUs and PSUs to better align the equity compensation structure for the companys most senior leaders and drive greater accountability.
How we determine award amounts. Annual equity incentive awards are targeted to be equally weighted (by approximate accounting value) among stock options, RSUs and PSUs, except that the CEOs award is targeted to be weighted 2/3 PSUs and 1/3 options (he does not receive RSUs). 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 GEs long-term success, using past performance as a key indicator.
Why we use equity awards. Equity awards encourage our named executives to continue to deliver results over a longer period of time, and they also serve as a retention tool.
Compensation
Long-Term Incentive Compensation GE 2017 Proxy Statement |
41 |
Long-Term Incentive Compensation Table
The following table also known as the Grants of Plan-Based Awards Table shows LTPAs, PSUs, RSUs and stock options granted to our named executives in 2016 under the 2007 Long-Term Incentive Plan, a plan that shareowners approved in 2007 and 2012 (and that shareowners are being asked to reapprove at the annual meeting, see Management Proposal No. 3 Approval of the GE 2007 Long-Term Incentive Plan, as Amended to Extend the Plan and Increase the Number of Plan Shares on page 56).
Name | Grant Date |
Award Type | Estimated Future Payouts Under Long-Term Performance Awards ($) |
Estimated Future Payouts Under Performance Share Units (#) |
Restricted Stock Units (#) |
Stock Options (#) |
Stock Option Exercise Price |
Grant Date Fair Value of Awards | ||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||
Immelt | 3/10/2016 | 3-year LTPA | $4,600,000 | $9,200,000 | $18,400,000 | |||||||||||||||||||
11/3/2016 | Annual Equity | 37,500 | 200,000 | 250,000 | $4,673,098 | |||||||||||||||||||
11/3/2016 | Annual Equity | 600,000 | $28.28 | $2,142,000 | ||||||||||||||||||||
Bornstein | 3/10/2016 | 3-year LTPA | $2,000,000 | $4,000,000 | $8,000,000 | |||||||||||||||||||
9/9/2016 | Annual Equity | 5,063 | 27,000 | 33,750 | $721,081 | |||||||||||||||||||
9/9/2016 | Annual Equity | 27,000 | $811,350 | |||||||||||||||||||||
9/9/2016 | Annual Equity | 200,000 | $30.11 | $750,000 | ||||||||||||||||||||
Comstock | 3/10/2016 | 3-year LTPA | $1,700,000 | $3,400,000 | $6,800,000 | |||||||||||||||||||
7/28/2016 | Special Retention | 150,000 | $4,678,500 | |||||||||||||||||||||
9/9/2016 | Annual Equity | 5,063 | 27,000 | 33,750 | $721,081 | |||||||||||||||||||
9/9/2016 | Annual Equity | 27,000 | $811,350 | |||||||||||||||||||||
9/9/2016 | Annual Equity | 200,000 | $30.11 | $750,000 | ||||||||||||||||||||
Joyce | 3/10/2016 | 3-year LTPA | $1,450,000 | $2,900,000 | $5,800,000 | |||||||||||||||||||
7/28/2016 | Special Retention | 150,000 | $4,680,000 | |||||||||||||||||||||
9/9/2016 | Annual Equity | 5,063 | 27,000 | 33,750 | $721,081 | |||||||||||||||||||
9/9/2016 | Annual Equity | 27,000 | $811,350 | |||||||||||||||||||||
9/9/2016 | Annual Equity | 200,000 | $30.11 | $750,000 | ||||||||||||||||||||
Rice | 3/10/2016 | 3-year LTPA | $3,512,500 | $7,025,000 | $14,050,000 | |||||||||||||||||||
9/9/2016 | Annual Equity | 5,063 | 27,000 | 33,750 | $721,081 | |||||||||||||||||||
9/9/2016 | Annual Equity | 27,000 | $811,350 | |||||||||||||||||||||
9/9/2016 | Annual Equity | 200,000 | $30.11 | $750,000 | ||||||||||||||||||||
Sherin | 3/10/2016 | 3-year LTPA | $3,262,500 | $6,525,000 | $13,050,000 | |||||||||||||||||||
9/1/2016 | Retirement | 223,250 | $6,965,400 | |||||||||||||||||||||
Modification* | ||||||||||||||||||||||||
9/1/2016 | Retirement | 5,765,000 | $18.95 | $2,486,860 | ||||||||||||||||||||
Modification* |
* | Amounts reported as RSUs and stock options for Mr. Sherin reflect awards previously granted that were modified pursuant to Mr. Sherins early retirement agreement (see Early Retirement Agreement with Mr. Sherin on page 49). The exercise price reflects the weighted average exercise price for the previously granted options that were modified. |
ESTIMATED FUTURE PAYOUTS UNDER LONG-TERM PERFORMANCE AWARDS. The named executives were granted LTPAs under the 20162018 LTPA program (reported as a multiple of the executives salary and bonus at the time of grant), subject to achievement of the threshold, target and maximum goals for all five performance measures. The actual payouts, if any, will be calculated using the executives base salary as in effect in December 2018 and the average of the executives bonuses awarded for 2016 through 2018. The potential LTPA payouts are performance-driven and therefore completely at risk. See Long-Term Performance Awards (LTPAs) on page 40 for a description of the performance goals and salary and bonus multiples for determining payouts. See the Summary Compensation Table on page 38 for the first-year (2016) installments for these awards.
ESTIMATED FUTURE PAYOUTS UNDER PERFORMANCE SHARE UNITS. The named executives were granted PSUs in 2016 that could convert into shares of GE stock at the end of the three-year performance period based on two equally weighted operating goals: Total Cash and Operating Margin. Each operating goal has specified
threshold and target performance levels such that performance below threshold results in no PSUs being earned, performance at threshold results in 50% of the PSUs being earned, and performance at or above target results in 100% of the PSUs being earned (with proportional adjustments for performance between threshold and target). In addition, the PSUs have a relative TSR modifier so that the number of PSUs that convert into shares based on achievement of the two operating goals may be adjusted upward or downward by up to 25%, depending on the companys TSR performance versus the S&P 500 over the performance period. Accordingly, the named executives may receive between 0% and 125% of the target number of PSUs granted. Dividend equivalents are paid out only on shares actually received.
The number of PSUs shown in the threshold, target and maximum columns are calculated as follows: (1) threshold assumes that GE achieves the threshold performance level for only one operating goal and there is a negative 25% adjustment for relative TSR performance, (2) target assumes that GE achieves the target performance level for both operating goals and there is no adjustment for relative TSR performance, and (3) maximum assumes that GE achieves the target
42 | Compensation
Long-Term Incentive Compensation GE 2017 Proxy Statement |
performance level for both operating goals and there is a positive 25% adjustment for relative TSR performance. See PSUs on page 45 for additional information.
RESTRICTED STOCK UNITS. The number of RSUs granted in 2016, which will vest in five equal annual installments, with the first installment (20%) vesting one year from the grant date (except that Mr. Joyces special retention grant in July will cliff vest 100% on December 31, 2019). Dividend equivalents are paid out only on shares actually received.
STOCK OPTIONS. The number of stock options granted in 2016, which will vest in five equal annual installments, with the first installment (20%) becoming exercisable one year from the grant date. See the Outstanding Equity Awards Table below and Potential Termination Payments on page 49 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 awards vesting schedule.
|
For stock options, fair value is calculated using the Black-Scholes value of each option on the grant date (resulting in a $3.75 per unit value for the September grants and a $3.57 per unit value for the November grant). |
|
For RSUs, fair value is calculated based on the closing price of the companys 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 $31.19 per unit value for Ms. Comstocks July grant, a $31.20 per unit value for Mr. Joyces July grant, and a $30.05 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 PSUs, the actual value of units received will depend on the companys performance, as described above. Fair value is calculated by multiplying the per unit value of the award ($28.87 for the September grants and $26.12 for the November grant) by the number of units corresponding to the most probable outcome of the performance conditions as of the grant date. The per unit value is based on the closing price of the companys stock on the grant date, adjusted to reflect the relative TSR modifier by using a Monte Carlo simulation that includes multiple inputs such as stock price, performance period, volatility and dividend yield. |
Outstanding Equity Awards Table
The following table also known as the Outstanding 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, 2016.
Name of Executive |
Grant Date |
Award Type |
Number Outstanding |
Portion Exercisable |
Exercise Price |
Expiration Date |
Market Value |
Vesting Schedule | ||||||||
Immelt | 7/3/1989 | Rest. Stock | 60,000 | $1,896,000 | 100% on 2/19/21 | |||||||||||
12/20/1991 | RSUs | 68,860 | $2,175,976 | 100% on 2/19/21 | ||||||||||||
6/23/1995 | RSUs | 71,729 | $2,266,636 | 100% on 2/19/21 | ||||||||||||
6/26/1998 | RSUs | 107,594 | $3,399,970 | 100% on 2/19/21 | ||||||||||||
11/24/2000 | RSUs | 143,459 | $4,533,304 | 100% on 2/19/21 | ||||||||||||
9/13/2013 | PSUs | 400,000 | $12,640,000 | 100% in 2017, subject to performance | ||||||||||||
11/6/2014 | Options | 500,000 | 500,000 | $26.36 | 11/6/2024 | $2,620,000 | ||||||||||
11/6/2014 | PSUs | 200,000 | $6,320,000 | 100% in 2017, subject to performance | ||||||||||||
11/5/2015 | Options | 600,000 | 600,000 | $29.64 | 11/5/2025 | $1,176,000 | ||||||||||
11/5/2015 | PSUs | 200,000 | $6,320,000 | 100% in 2018, subject to performance | ||||||||||||
11/3/2016 | Options | 600,000 | 0 | $28.28 | 11/3/2026 | $1,992,000 | 100% on 11/3/17 | |||||||||
11/3/2016 | PSUs | 200,000 | $6,320,000 | 100% in 2019, subject to performance | ||||||||||||
Total | 3,151,642 | 1,100,000 | $51,659,886 | |||||||||||||
Bornstein | 9/7/2007 | Options | 112,500 | 112,500 | $38.75 | 9/7/2017 | $0 | |||||||||
9/9/2008 | Options | 137,500 | 137,500 | $28.12 | 9/9/2018 | $478,500 | ||||||||||
3/12/2009 | Options | 95,000 | 95,000 | $9.57 | 3/12/2019 | $2,092,850 | ||||||||||
7/23/2009 | Options | 440,000 | 440,000 | $11.95 | 7/23/2019 | $8,646,000 | ||||||||||
6/10/2010 | Options | 650,000 | 650,000 | $15.68 | 6/10/2020 | $10,348,000 | ||||||||||
6/9/2011 | Options | 700,000 | 700,000 | $18.58 | 6/9/2021 | $9,114,000 | ||||||||||
7/27/2012 | RSUs | 200,000 | $6,320,000 | 100% on 7/27/17 | ||||||||||||
9/7/2012 | Options | 725,000 | 580,000 | $21.59 | 9/7/2022 | $7,257,250 | 100% on 9/7/17 | |||||||||
9/13/2013 | Options | 550,000 | 330,000 | $23.78 | 9/13/2023 | $4,301,000 | 50% in 2017 and 2018 | |||||||||
7/24/2014 | RSUs | 60,000 | $1,896,000 | 33% in 2017, 2018 and 2019 | ||||||||||||
9/5/2014 | Options | 550,000 | 220,000 | $26.10 | 9/5/2024 | $3,025,000 | 33% in 2017, 2018 and 2019 | |||||||||
11/5/2015 | Options | 220,000 | 44,000 | $29.64 | 11/5/2025 | $431,200 | 25% in 2017, 2018, 2019 and 2020 | |||||||||
11/5/2015 | RSUs | 29,600 | $935,360 | 25% in 2017, 2018, 2019 and 2020 | ||||||||||||
11/5/2015 | PSUs | 53,000 | $1,674,800 | 100% in 2018, subject to performance | ||||||||||||
9/9/2016 | Options | 200,000 | 0 | $30.11 | 9/9/2026 | $298,000 | 20% in 2017, 2018, 2019, 2020 and 2021 | |||||||||
9/9/2016 | RSUs | 27,000 | $853,200 | 20% in 2017, 2018, 2019, 2020 and 2021 | ||||||||||||
9/9/2016 | PSUs | 27,000 | $853,200 | 100% in 2019, subject to performance | ||||||||||||
Total | 4,776,600 | 3,309,000 | $58,524,360 |
Compensation
Long-Term Incentive Compensation GE 2017 Proxy Statement |
43 |
Name of Executive |
Grant Date |
Award Type |
Number Outstanding |
Portion Exercisable |
Exercise Price |
Expiration Date |
Market Value |
Vesting Schedule | ||||||||
Comstock | 9/7/2007 | Options | 67,500 | 67,500 | $38.75 | 9/7/2017 | $0 | |||||||||
9/9/2008 | Options | 87,500 | 87,500 | $28.12 | 9/9/2018 | $304,500 | ||||||||||
6/10/2010 | Options | 400,000 | 400,000 | $15.68 | 6/10/2020 | $6,368,000 | ||||||||||
6/9/2011 | Options | 500,000 | 500,000 | $18.58 | 6/9/2021 | $6,510,000 | ||||||||||
7/27/2012 | RSUs | 10,000 | $316,000 | 100% on 7/27/17 | ||||||||||||
9/7/2012 | Options | 500,000 | 400,000 | $21.59 | 9/7/2022 | $5,005,000 | 100% on 9/7/17 | |||||||||
7/25/2013 | RSUs | 30,000 | $948,000 | 50% in 2017 and 2018 | ||||||||||||
9/13/2013 | Options | 400,000 | 240,000 | $23.78 | 9/13/2023 | $3,128,000 | 50% in 2017 and 2018 | |||||||||
9/5/2014 | Options | 400,000 | 160,000 | $26.10 | 9/5/2024 | $2,200,000 | 33% in 2017, 2018 and 2019 | |||||||||
9/11/2015 | Options | 134,000 | 26,800 | $24.95 | 9/11/2025 | $891,100 | 25% in 2017, 2018, 2019 and 2020 | |||||||||
9/11/2015 | RSUs | 21,600 | $682,560 | 25% in 2017, 2018, 2019 and 2020 | ||||||||||||
9/11/2015 | PSUs | 39,000 | $1,232,400 | 100% in 2018, subject to performance | ||||||||||||
7/28/2016 | RSUs | 150,000 | $4,740,000 | 20% in 2017, 2018 and 2019 and 40% in 2020 | ||||||||||||
9/9/2016 | Options | 200,000 | 0 | $30.11 | 9/9/2026 | $298,000 | 20% in 2017, 2018 and 2019 and 40% in 2020 | |||||||||
9/9/2016 | RSUs | 27,000 | $853,200 | 20% in 2017, 2018 and 2019 and 40% in 2020 | ||||||||||||
9/9/2016 | PSUs | 27,000 | $853,200 | 100% in 2019, subject to performance | ||||||||||||
Total | 2,993,600 | 1,881,800 | $34,329,960 | |||||||||||||
Joyce | 9/7/2007 | Options | 55,000 | 55,000 | $38.75 | 9/7/2017 | $0 | |||||||||
9/9/2008 | Options | 100,000 | 100,000 | $28.12 | 9/9/2018 | $348,000 | ||||||||||
3/12/2009 | Options | 400,000 | 400,000 | $9.57 | 3/12/2019 | $8,812,000 | ||||||||||
7/23/2009 |