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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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General Electric Company
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Table of Contents
 |
| | |
 | | 2021
Notice of Annual Meeting
and Proxy Statement |
Table of Contents
GuideTable of Contents
| Index of Frequently Requested Information |
| 54 | | Auditor Fees |
| 13 | | Board Leadership Structure |
| 17 | | Board Self-Evaluation |
| 50 | | CEO Pay Ratio |
| 49 | | Clawback Policy |
| 22 | | Director Attendance |
| 16 | | Director Independence |
| 7 | | Director Qualifications |
| 7 | | Director Tenure and Term Limits |
| 8 | | Nominee Biographies |
| 22 | | Overboarding Policy |
| 29 | | Pay-for-Performance |
| 29 | | Peer Group |
| 49 | | Policies on Compensation Consultant |
| 23 | | Related Person Transactions |
| 20 | | Risk Oversight |
| 5 | | Shareholder Engagement |
| 24 | | Stock Ownership for Executives and Directors |
| 49 | | Stock Ownership Requirements |
| 20 | | Sustainability Oversight |
Also see “Acronyms Used” on page 77 for a guide to the acronyms used throughout this proxy statement.
On behalf of our Board of Directors, we are making these materials available to you (beginning on or about March 24, 2022) in connection with GE’s Proxy Statementsolicitation of proxies for our 2022 Annual Meeting.
General Electric Company Executive Offices
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Table of Contents
Letter from the Lead Director
Fellow Shareholders,
When I wrote to you last year, none of us could have imagined the scale of the challenges that 2020 would bring. I am proud of how the GE team rose to meet these challenges, while continuing to deliver for customers and propelling our transformation forward. As we begin 2021, I want to take this opportunity to share insights into how our Board worked on your behalf this past year.
PROTECTING OUR EMPLOYEES AND COMMUNITIESAs the world emerges from the pandemic and now faces the tragedy of war in Ukraine, we are reminded of the importance of GE’s role in a chaotic world. Despite powerful cross currents, this past year marks another year of progress for GE and I’m grateful to be able to share some perspective about the Board’s efforts on your behalf and priorities as we move forward. We are proud of the progress the GE team has made in strengthening the company, and we look forward to continuing the historic transformation that is underway. As we press ahead, we do so mindful of the suffering of the people of Ukraine and stand with our team, our customers and all those affected. We have and will continue to donate medical equipment and humanitarian support to help relieve the suffering from this conflict. LAYING THE FOUNDATION FOR THREE NEW COMPANIES Since I became lead director in late 2018, GE has been working through a turnaround to focus and de-risk the portfolio, stabilize the balance sheet and improve operations across our businesses. Those multi-year efforts reached significant milestones during 2021. We have executed on portfolio actions to make GE a simpler, stronger, technology-driven industrial company, and following the sale of the GECAS aircraft leasing business to AerCap in November the GE portfolio and financials are focused on our industrial core. With the proceeds from the GECAS transaction we launched one of the largest-ever debt tender offers, bringing GE’s total gross debt reduction over three years to $87 billion. And across GE’s businesses, the leadership teams are improving operations through lean and decentralization, with momentum beginning to pick up and be reflected in better financial performance—free cash flow, profit margins and earnings per share for 2021 all improved markedly and exceeded GE’s full-year outlook. These efforts have been foundational to executing what will be the biggest transformation in GE’s history. As announced in November, GE plans to create three industry-leading, global public companies focused on the growth sectors of aviation, healthcare and energy. This plan is the product of a thoughtful, deliberative strategic process by the full Board and GE leadership team, and we spent a significant portion of our time as a Board in 2021 considering a range of alternatives. The three future companies will have greater strategic, financial and operational flexibility to realize their full potential. They will also have dedicated boards of directors with deep domain expertise, and already that is beginning to influence our recruitment of new directors. In this proxy, we are nominating Steve Angel, Bella Goren and Tom Mihaljevic as new directors on the GE Board, and they bring decades of experience across the energy, aviation and healthcare industries. We believe that the planned spin-offs will best position each of our businesses to deliver long-term growth and create value for all our stakeholders. SHARPENING OUR FOCUS ON SUSTAINABILITY GE’s businesses are working to adapt and innovate solutions for three critical global needs: building the future of smarter and more efficient flight; developing precision healthcare that personalizes diagnoses and treatments; and leading the energy transition. We believe our businesses’ strategies and focus on these significant challenges are well aligned with broader goals of sustainable development, and GE approaches sustainability with a commitment to innovation as a central element. As a Board, we have been spending more time on the important linkages among long-term strategy, sustainability and risk management. In July 2021, we published an inaugural Sustainability Report to provide greater transparency on our sustainability approach and priorities, and to highlight GE achievements and work yet to be done. Among other things, the Sustainability Report provided a response to the shareholder proposal from last year’s proxy that we supported and articulates GE’s robust sustainability initiatives. ENGAGING TO STAY CLOSE TO OUR SHAREHOLDERS We remain committed to robust and meaningful engagement with our shareholders on a regular basis, spanning discussions about financial, governance, sustainability and other topics. In 2021, GE’s governance engagements encompassed meetings with shareholders representing over half of our outstanding shares, which is nearly 80% of the shares held by institutional investors. Independent directors led many of these meetings, which means that fellow Board members and I have had a chance to hear direct feedback and questions from a large portion of GE’s shareholder base. We always consider our shareholders’ interests and feedback as part of the Board’s deliberations and decision-making. And this year, following the say-on-pay vote in 2021, we have been particularly keen to understand shareholder feedback so that we could take appropriate actions in response related to compensation matters. The letter from the Management Development & Compensation Committee and the compensation section in this proxy provide more details about those actions. For 130 years, GE has leveraged innovation to build a world that works. We are committed to continuing that legacy as we execute on our plan to form three strong independent companies with bright futures. On behalf of the entire Board, I thank you for your continued investment and support of GE through this pivotal phase of the company’s history. 
THOMAS W. HORTON
Lead Director
During 2020, the GE team was focused first and foremost on protecting the health and safety of our employees and communities. At the onset of the COVID-19 pandemic, GE quickly instituted strong safety precautions for its global workforce and pledged financial support to employees and their families through GE’s new Employee Relief Fund. The Board was engaged throughout the year with leadership in taking steps to keep our workplaces around the world safe, to accelerate the manufacture of life-saving respirators and to assure GE’s operations were functioning well in a digital and remote work environment.
As part of his drive to use lean principles to improve GE’s performance, our Chairman and CEO, Larry Culp, has prioritized operational safety and product quality. We are also focused on this at the Board. We use reporting from management in both of these areas as a barometer of organizational health, as well as of the safety of our people and the products that GE produces.
ACCELERATING GE’S TRANSFORMATION
GE entered 2020 with momentum and a clear plan to drive profitable growth, margin expansion and cash generation. However, we embraced new realities due to the pandemic, and GE’s leadership team took decisive action to preserve and build GE’s strength. The Board focused on how the team was mitigating the financial impact of the pandemic on the company overall and, in particular, on the Aviation and Healthcare businesses that were most directly affected by the global downturn. Meanwhile, we engaged with leadership on the turnarounds in the Power and Renewable
| | Energy businesses, where operational improvements are underway to expand margins and improve cash realization. As a Board, we oversaw actions to:
Strengthen our businesses: reduced costs by more than $2 billion, executed on $3 billion of cash preservation actions and delivered positive free cash flow at Gas Power one year ahead of target.
Fortify the balance sheet: took action to reduce GE’s debt by $16 billion in 2020 and by $30 billion since the beginning of 2019, and reduced near-term liquidity needs by $10.5 billion.
Focus the portfolio: completed the sales of the BioPharma and Lighting businesses and launched a program to fully monetize GE’s remaining stake in Baker Hughes Company.
The Board also worked with Larry over the past year on key leadership hires and did deep dives into succession planning. What GE does is critically important to the world, and a key part of our responsibility on the Board is making sure that GE has the right people in the right jobs today and a pipeline of talent for tomorrow. We have reviewed elements of GE’s long-term strategy at every meeting, and those discussions invariably revolved around ensuring financial resilience and properly investing in people, business processes and technology for the future.
BOARD OVERSIGHT AND ENGAGEMENT
During the early months of the pandemic, our oversight at the Board was focused on health and safety, business continuity, risk management and governance for weathering an exceptionally challenging and uncertain environment. We also moved swiftly to take a series of treasury actions to shore up the balance sheet and preserve liquidity, as well as operational cost and cash actions across GE’s businesses to manage risk and mitigate adverse financial impacts from the volatile supply and demand dynamics in our industries. During the summer, after implementing those earliest stabilizing actions, the Board’s attention also shifted to the leadership team and providing appropriate incentive arrangements for the
| | CEO and other key employees, as described in greater detail in the letter from the Management Development & Compensation Committee.
As a Board, we switched from in-person to virtual meetings, just as many of our employees did the same. Directors continued their ongoing discussions with leadership throughout the year, albeit usually by video. Larry has encouraged directors to feel free to speak to any member of leadership at any time, to dive deeper into topic areas where we have specific expertise or concern and to hear directly from GE’s people. Larry regularly updates the full Board informally, and many of us talk with him individually on a wide range of topics as issues arise. We held more than 35 formal meetings across the full Board and committees in 2020, in addition to numerous other engagements with the team throughout the year, including participation in GE employee leadership meetings. The atmosphere among Board members and with Larry and the GE team is exceptionally open, engaged and constructive.
We have made meaningful progress over the past year, despite the additional unexpected challenges of a global pandemic. We also know that we have more work to do to drive the desired performance improvements and organizational change. On behalf of the entire Board, I thank you for your continued investment and support of GE as we work together to continue our transformation. We are committed to ensuring that GE is very well positioned to deliver value over the long term.
THOMAS W. HORTON
Lead Director
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GE 20212022 PROXY STATEMENT 1
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GE’s Purpose, StrategyGE: Delivering Value Now and ProgressIn the Future
OUR PURPOSE
Today, GE is a stronger, more customer-centric company. We rise to the challenge ofare building a worldculture that works. Investingputs safety at the forefront and lean at the center. As a company with momentum, we are positioned to succeed in strategic sectorsthe biggest transformation in our history—creating three companies focused on critical global needs in aviation, healthcare, and energy.
| | As independently run companies, the businesses will be better positioned to deliver long-term growth and create value for society’s future. Leadingcustomers, investors, and employees, with technology, solving sustainable development challenges,each benefitting from: | | Deeper operational focus, accountability, and partneringagility to resolve local needs.meet customer needs |  | Energy Transition
Transforming millions of livesTailored capital allocation decisions in line with access to reliable, affordable,distinct strategies and cleaner electricity.industry-specific dynamics
| |
Position of Strength
We delivered solid margin and EPS performance and $5.8 billion of free cash flow*1. We are seeing momentum in GE today including near-term improvement in our businesses, especially as Aviation recovers and our end markets strengthen. We expect to deliver between $5.5 billion and $6.5 billion in free cash flow* in 2022 and more than $7 billion in 2023.
STRONG FINANCIAL POSITION
●Significantly reduced our debt by more than $50 billion, bringing our total gross debt2 reduction over three years to $87 billion.
●Closed the GE Capital Aviation Services (GECAS) and AerCap Holdings N.V. (AerCap) transaction, creating an industry leader and strategic partner to airline customers, and retained a 46% equity stake in the combined company.
●Simplified the financial reporting structure, enhancing transparency for shareholders.
●Discontinued the majority of our factoring programs to, over time, facilitate higher and more linear cash flow.
IMPROVED BUSINESS AND OPERATING PERFORMANCE
●Lean transformation: Drove sustainable, impactful improvements in safety, quality, delivery, cost, and cash management, building a strong foundation in each business for continued and faster profitable growth.
●Decentralization: Moved the decision-making center of gravity closer to the customer, resulting in greater accountability, more transparency, and better results for our customers.
| AVIATION | | |  | | | HEALTHCARE | |  | |
Precision Health
Building an intelligence-based healthcare system and a healthier world with more integrated, efficient, and personalized care.
| | | | | |
Future Of Flight
Partnering to facilitate recovery of the commercial aviation industry and help airlines achieve their sustainability goals.
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How We Govern Our Company
Holding ourselves and our partners accountable to the highest standards of integrity and competitiveness.
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How We Invest In Our Communities
Our approach to social impact is embedded in our business strategy. Fostering innovation, building infrastructure, and shaping the diverse workforce of tomorrow.
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OUR STRATEGY
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|
1 | | Continuing to Strengthen our businesses | | Leadership
Strengthening our businesses begins with building the best team. Over the last two years we have continued to build our world-class team, with new leaders joining our strong bench of GE talent. These leaders are playing a critical role in GE’s transformation, and we are committed to the leadership behaviors of humility, transparency, and focus.
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 |  |
POWER
MISSION Powering lives and making electricity more affordable, reliable, accessible, and more sustainable
UNITS Gas Power, Power Portfolio
INSTALLED BASE 7,000+ gas turbines
CEO Gas Power: Scott Strazik; Power Portfolio: Dan Janki
EMPLOYEES ~34,000
PROGRESS
Gas Power built a lower risk equipment backlog, and delivered positive free cash flow one year ahead of its commitment due to efforts to reduce costs and improve working capital.
| RENEWABLE ENERGY
MISSION Making renewable power sources more affordable, reliable, and accessible for the benefit of people everywhere
UNITS Onshore Wind, Offshore Wind, Grid Solutions Equipment and Services, Hydro Solutions, Hybrids Solutions
INSTALLED BASE 400+ GW of renewable energy equipment
CEO Jérôme Pécresse
EMPLOYEES ~40,000
PROGRESS
●Onshore Wind delivered record global volumes in 2020, holding the No. 1 U.S. market position for the last two years.
●Offshore Wind received full certification for both the 12- and 13-megawatt Haliade™-X, the world’s most powerful offshore wind turbine in operation today, which now has 5.7 gigawatts in customer commitments.
●Renewable Energy’s growing backlog stands at an all-time high of $30 billion.
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2 | | Solidifying our Financial Position | | We reduced debt by about $16 billion in 2020 and by $30 billion since the beginning of 2019. We entered 2021 with $37 billion of liquidity, giving us that capacity to weather continued volatility, further de-lever, and focus on organic growth. |
3 | | Driving long-term profitable growth | | Lean
Our lean operating philosophy supports our long-term growth strategies by emphasizing customer focus, elimination of waste, and ruthless prioritization of work to improve safety, quality, delivery, and cost. Lean principles help us examine processes and continually improve them by solving problems at their root cause.
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2 GE 2021 PROXY STATEMENT
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New independent auditor
After a thorough and competitive review, our Board selected Deloitte as GE’s independent auditor for 2021.
| | Inclusion and diversity
We named Mike Barber Chief Diversity Officer, and appointed Chief Diversity Officers in each of our businesses. In February of 2021, we published GE’s first Diversity Annual Report in many years.
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 |  |  |
AVIATION
MISSION Providing customers with engines, components, avionics and systems for commercial, military and business & general aviation aircraft and a global service network to support these offerings UNITS Commercial, Military, Systems & Other INSTALLED BASE ~37,700~39,400 commercial aircraft engines1 3and ~26,500~26,200 military aircraft engines CEO John Slattery EMPLOYEES ~40,000 PROGRESS ●As commercial airlines lost a half-trillion dollarsThanks to operational improvements and increasing shop visits, Aviation expanded margins in 2021 to 13.5% reported, while revenue and saw demand drop by more than 65 percent2, Aviation supported our global customers throughout, helping them manage their fleets and maintenance plans as they sought to conserve cash.was slightly down, in line with departure activity. ●Aviation improved margins through the yearOrders were up across equipment and delivered nearly breakeven free cash flow. ●Our LEAP backlog stands at approximately 9,600 engines.
1Including GE and its joint venture partners
2IATA data, November 24, 2020services driven by commercial wins driving momentum.
| HEALTHCARE
| MISSION OperatingImproving lives in moments that matter; operating at the center of an ecosystem working toward precision health – health—digitizing healthcare, helping drive productivity and improving outcomes across the health system UNITS Healthcare Systems, Pharmaceutical Diagnostics BioPharma (this business was sold on March 31, 2020) INSTALLED BASE 4M+ healthcare installations, 2B+ patient exams per year CEO Kieran MurphyPeter Arduini EMPLOYEES ~47,000~48,000 PROGRESS ●Healthcare grew revenue organicallyOrders and delivered strong marginorganic revenue* were up, and cash performance. ●In 2020,margins expanded 70 basis points organically*, giving the team increased output for critical medical equipment helping doctors diagnoseboth the capital and treat patients with COVID-19, including quadrupling ventilator production.the flexibility to play offense.
●We invested foracquired BK Medical and Zionexa, two exciting companies helping to realize the future, launching more than 40 new products.potential of precision health. |
CAPITAL
| | | | | | | | | | |
| RENEWABLE ENERGY | |  | | | POWER | | |  | |
| | | | | |
MISSION DesigningMaking renewable power sources more affordable, reliable, and delivering innovative financial solutionsaccessible for GE Industrial customers in markets around the worldbenefit of people everywhere UNITS GE Capital AviationOnshore Wind, Offshore Wind, Grid Solutions Equipment and Services, (GECAS), Energy Financial Services (EFS), Working CapitalHydro Solutions, (WCS), InsuranceHybrid Solutions INSTALLED BASE 400+ GW of renewable energy equipment CEO Jennifer VanBelleJérôme Pécresse EMPLOYEES ~2,000~38,000 PROGRESS ●Renewable Energy delivered double-digit orders growth in 2021, but revenue and margin both declined organically*. ●Long-term, Renewable Energy is firmly positioned to lead the energy transition; we are being more selective up front about new business and being more disciplined on cost as we seek to continue to improve the performance of this business. | | MISSION Powering lives and making electricity more affordable, reliable, accessible, and more sustainable UNITS Gas Power, Steam Power, Power Conversion and Nuclear INSTALLED BASE 7,000+ gas turbines CEO Scott Strazik EMPLOYEES ~32,000 PROGRESS ●In 2021, Power’s services growth offset decreases in revenue, driven primarily by our selectivity strategy, which includes lower turnkey scope and exercising more discipline in the projects we choose to underwrite. ●Margins improved more than 300 basis points organically*. Orders were up slightly, driven by services growth offsetting equipment. |
| * | Non-GAAP Financial Measure. For information on how these metrics are calculated, see “Explanation of Non-GAAP Financial Measures and Performance Metrics” on page 75. |
| 1 | Based on prior three-column reporting format and excluding the impact from discontinued factoring programs in current and prior periods. For GE’s full set of reported metrics against its 2021 Outlook and more information on its transition from three- to one-column financial statement reporting, please see GE’s fourth-quarter 2021 earnings materials at ge.com/investor. |
| 2 | Includes borrowings, after tax pension & principal retiree benefit plan liabilities, operating leases, 50% preferred stock, and factoring. |
| 3 | Including GE Capital continuedand its joint venture partners. |
2 GE 2022 PROXY STATEMENT
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Strategic and financial flexibility to supportpursue growth opportunities |  | Dedicated boards of directors with deep domain expertise | | Business- and industry-oriented career opportunities and incentives for employees | | Distinct and compelling investment profiles appealing to broader, deeper investor bases |
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| Rising to the Challenge of Building a World that Works |
GE is positioned to continue to lead in three important growth sectors—creating a smarter and more efficient future of flight, enabling precision health, and driving decarbonization through the energy transition—critical to our customers and the various end-markets that we serve.
Future of Flight | Precision Health | Energy Transition |
Helping customers achieve greater efficiency and sustainability and invent the future of flight. | Driving innovation in precision health to address critical patient and clinical challenges. | Supporting customers and communities seeking to provide affordable, reliable, and sustainable power. |
| | |
| | |
●Innovations that improve fuel efficiency are defining the future of flight, and our industrial businesses andengines can operate on approved sustainable aviation fuel (SAF) today. ●Transitioning from petroleum-based fuels to SAF can reduce overall risk while navigating significant industry disruption.carbon emissions up to 80%, factoring in the entire life cycle of the fuel, significantly contributing to the commercial aviation industry’s long-term goal of net-zero carbon emissions from flight by 2050. ●With lower debtCFM International, our 50-50 joint company with Safran Aircraft Engines, GE Aviation launched the Revolutionary Innovation for Sustainable Engines (RISE) program to demonstrate advanced technologies, with ground and flight tests expected in the middle of this decade. | ●Enabling precision health—integrated, efficient, and highly personalized care—is vital to addressing critical challenges that affect patients and healthcare providers. ●In 2021, Healthcare introduced its latest pocket-size color ultrasound scanner, Vscan Air, a broader commercial market recovery,handheld, wireless device that beams images from the ultrasound probe to an app on a smartphone—bringing an essential tool to the point of care. With 30,000 units in more than 100 countries, our Vscan Family technologies help doctors deliver expanded care to more people, including in rural regions. ●At a patient level, Healthcare’s acquisition of BK Medical, an advanced surgical visualization company whose technology helps clinicians see inside the patient’s body in real time during surgery, will enable better care, faster surgeries, and reduced complications. | ●As a company whose equipment helps generate one-third of the world’s electricity, we expect GE Capital earningshave a responsibility to improve.lead the industry’s decarbonization efforts and meet the rising global demand for affordable, reliable, and sustainable energy. ●We believe in the important role of building the breakthrough technologies the world will need in the future, including carbon capture, utilization, and sequestration, low- and zero-carbon fuels like hydrogen for new and existing gas plants, and small modular nuclear reactors. ●Our gas turbines have already accumulated more than eight million hours running on blends of hydrogen and similar fuels. ●While we work on breakthrough technologies for tomorrow, we continue to build and deliver state-of-the-art equipment the world needs today to decarbonize the energy sector while building resilience in more than 175 countries around the world. |
Margins and profit also contracted organically, but they improved through the year as we executed better and streamlined our costs.
We delivered positive free cash flow despite the still-difficult macro environment.
| | Some of the information in this section is forward-looking. For more information about our forward-looking statements, see “Caution Concerning Forward-Looking Statements” on page 54.
|
In addition to improving our manufacturing processes and delivering higher quality service to our customers, we’re also running the company with a lean operating model, standardizing our quarterly operating approach to focus on key company priorities such as talent, strategy, and budgeting. We are working hard to scale lean company-wide to help GE improve performance and drive lasting cultural change. | | |
HOW GE SUPPORTED THE FIGHT AGAINST COVID-19 IN 2020
Healthcare quadrupled ventilator production; increased production capacity and output for critical medical equipment in the diagnosis and treatment of COVID-19—including monitoring solutions, x-ray, anesthesia, and point-of-care ultrasound products; and launched digital solutions to help providers deliver care to patients virtually.
Aviation produced and serviced engines and components for military and cargo aircraft flying daily around the world to assist in response efforts.
Power and Renewable Energy supported electricity generation for critical hospitals, health care facilities, and homes and businesses.
Digital offered free licenses to customers to allow plant operators and management teams real-time monitoring and control access to plant operations.
GE’s Employee Relief Fund supported 3,900 GE employees and their families around the world facing unprecedented challenges due to the pandemic.
The GE Foundation contributed to global and community health and disaster relief efforts, helped deliver personal protective equipment to U.S. healthcare workers in urgent need, and worked to shore up healthcare systems in Southeast Asia and Africa with trainings, infrastructure, and equipment.
GE 20212022 PROXY STATEMENT 3
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Voting Roadmap
| 1 | | 2 | | 3 | | 4 |
Director Elections | | Compensation | | Audit | | Reverse Stock Split |
| | | | | | | |
Election of directors | | Advisory approval of our named executives’ pay | | Ratification of Deloitte as independent auditor for 2021 | | Approve a reverse stock split and reduction in our authorized stock and par value |
| |  | | | | |
| | See page 27 for a Letter from the Management Development & Compensation Committee that discusses the Committee’s actions over the past year. | | | | |
 | | | | | | |
Your Board recommends a vote FOR each director nominee | | Your Board recommends a vote FOR this proposal | | Your Board recommends a vote FOR this proposal | | Your Board recommends a vote FOR this proposal |
See page 6 |  | | See page 27 | | | See page 57 | | | See page 60 | |
2021
Shareholder
Proposals | | SHAREHOLDER
PROPOSAL NO. 1 | | SHAREHOLDER
PROPOSAL NO. 2 | | | SHAREHOLDER
PROPOSAL NO. 3 |
Multiple Candidate Elections | | Independent Board Chairman | | | Report on Net Zero Indicator |
Your vote is neededLogistics
on three proposals:
| | Your Board recommends a vote AGAINST
Shareholder Proposals 1 and 2
| | | Your Board recommends a vote
FOR Shareholder Proposal 3
|
See page 64DATE AND TIME
May 4, 2022 at 10:00 a.m.
Eastern Time
|  | | | |
4 GE 2021 PROXY STATEMENT
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Live Webcast at:
www.virtualshareholdermeeting. com/GE2022
RECORD DATE
Shareholders of record at the close of business on March 8, 2022 are entitled to attend and vote at the Annual Meeting. On that date, there were 1,101,751,355 shares of common stock of General Electric Company outstanding and entitled vote.
You are invited to participate in GE’s 20212022 Annual Meeting. If you were a GE shareholder at the close of business on March 8, 2021,2022, you are entitled to vote at the Annual Meeting. Even if you plan to attend the live webcast, we encourage you to submit your vote as soon as possible through one of the methods below.available to you. Cordially,
MIKE HOLSTON, SECRETARY
|
| Notice of 2022
Annual Meeting |
| | | | | | |
| Agenda |
| 1 | | Elect the 1113 director nominees named in the proxy for the coming year |
|  | |  | FOR each director nominee | | Page 6 |
| 2 | | Approve our named executives’ compensation in advisory vote |
| | | | FOR | | Page 2725 |
| | |  | See page 25 for a Letter from the Management Development & Compensation Committee. |
| 3 | | Ratify the selection of Deloitte as independent auditor for 20212022 |
| | | | FOR | | Page 57 |
4
| Approve a reverse stock split and reduction in our authorized stock and par value53
|
| | | Approve the 2022 Long-Term Incentive Plan |
| | | | FOR | | Page 6055 |
| 5 | | Vote on the shareholder proposals included in the proxy, if properly presented at the meeting |
| | |  | AGAINST proposals 1 and 2
FOR each proposal 3 | Page 64 |
Shareholders also will transact any other business that properly comes before the meeting
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PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION
Notice of Annual Meeting
Voting Q&A
Who can vote? Shareholders as of our record date, March 8, 2021.
How many shares are entitled to vote? 8.8 billion common shares (preferred shares are not entitled to vote).
How many votes do I get? One vote on each proposal for each share you held as of the record date (see first question above).
Do you have an independent inspector of elections? Yes, you can reach them at First Coast Results, Inc., 200 Business Park Circle, Suite 112, Saint Augustine, FL 32095.
Can I change my vote? Yes, by voting during the meeting, delivering a new proxy or notifying First Coast Results in writing.
| | However, if you hold shares through a broker, you will need to contact them directly.
Is my vote confidential? Yes, only First Coast Results and certain GE employees/agents have access to individual shareholder voting records.
How many votes are needed to approve a proposal? Majority of votes cast, with abstentions and broker non-votes generally not being counted and having no effect, except that Management Proposal No. 3 – Approval of a Reverse Stock Split requires a majority of shares outstanding, with abstentions and broker non-votes having the same effect as a vote against.
Where can I find out more information? See “Voting and Meeting Information” on page 69.Page 59
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| HOW YOU CAN VOTE | |
 |  | Via the internet at
www.proxyvote.com, or at the website indicated on the materials provided to you by your broker | |   | By Telephone
Call the telephone number on your proxy card or voting instruction form or notice | |   | By Mail
Sign, date and return your proxy card or voting instruction form | |
| If you are a beneficial owner and received a voting instruction form, please follow the instructions provided by your bank or broker to vote your shares. | |
LogisticsWe have created an Annual Meeting website at https://www.ge.com/annualmeeting to make it easy to access our 2022 Annual Meeting materials. At the Annual Meeting website you can find an overview of the items to be voted, the proxy statement and the annual report to read online or to download, as well as a link to vote your shares.
WHERE CAN YOU FIND MORE INFORMATION?
Where can I find out more information? See “Voting and Meeting Information” on page 64.
4 GE 2022 PROXY STATEMENT
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Shareholder Engagement
We have ongoing and robust engagement with our shareholders that includes governance-focused engagement meetings throughout each year. We value being close to our shareholders and hearing their feedback directly, as we seek to continuously improve GE’s performance, programs and reporting. Following our say-on-pay vote in 2021, we widened our governance outreach and engagement even further to ensure we understood shareholders’ concerns to inform our actions in response. The governance engagements detailed below are in addition to the regular discussions that our senior leadership and Investor Relations teams have with many institutional and retail shareholders, which often include governance, sustainability and similar matters as well.
 | Engaged with shareholders representing 76% of outstanding shares held by institutional investors |  | Represents 52% of total outstanding shares |
 | Independent directors joined engagements covering 61% of outstanding shares held by institutional investors | | Represents 42% of total outstanding shares |
Integrated Engagement Team | |
|
| | | | |
Independent directors | Legal | Human Resources | Investor Relations | Sustainability |
| | | | |
Company strategy | Board oversight and governance | Executive compensation, including say-on-pay response | Climate change and other sustainability matters | Human capital, including diversity |
Taking Actions Informed by Shareholder Feedback | |
|
DATE AND TIME
STRATEGYMay 4, 2021 at 10:00 a.m. Eastern Time
| LOCATION
See Page 20 ►Live Webcast at: www.virtualshareholdermeeting.com/GE2021
| FORMATBOARD OF THE ANNUAL MEETING
DIRECTORS
| The GovernorSee Page 6 ►
|
●Conducted a comprehensive Board-led strategy review culminating in the November 2021 announcement of our plan to form three industry-leading public companies, focusing on the Stategrowth sectors of New York has issued several temporary executive orders permitting New York corporationsaviation, healthcare and energy in order to hold virtual onlydrive long-term growth and creating value for shareholders | ●Added three new directors with industry and operating expertise to GE Board aligned with our strategic transformation so that each future company will have a dedicated board with deep domain expertise |
EXECUTIVE COMPENSATION | See Page 26 ► | SUSTAINABILITY | |
●Responded to shareholder meetingsfeedback and last year’s say-on-pay vote: (1) Management Development & Compensation Committee and CEO agreed to reduce his 2022 equity incentive grant, and (2) across GE’s businesses, based annual bonus decisions on performance metrics without applying discretion ●Continued to incorporate tailored performance measures in lightour compensation programs aligned with growing investor interest in operational and ESG metrics; used safety performance as a modifier for annual bonuses, reflecting GE’s prioritization of the COVID-19 pandemic. In addition, the New York State Legislature has approved amendmentssafety | ●Published new Sustainability Report highlighting GE’s sustainability priorities, alignment with our strategy and other ESG information; informed by TCFD and SASB reporting frameworks ●Announced ambition in July 2021 to New York law, which, if signedbe a net-zero company by the Governor, would permit New York corporations2050, including greenhouse gas emissions from customers’ use of sold products in response to hold virtual-onlya shareholder meetings this year. If permitted by New York law or executive order as of the date of theproposal in 2021 that GE supported ●Published Annual Meeting, we intend to hold the Annual Meeting solely by means of remote communicationsDiversity Report, with no in-person location. In the event a solely virtual meeting is not permitted as of such date, we may provide a venue for an in-person annual meeting,EEO-1 data in addition to virtual participation. In that case, we would notify our shareholders in advance on our website and by issuing a press release and filing it as additional proxy materials with the Securities and Exchange Commission. Attendance at an in-person meeting would include additional safety precautions in light of the COVID-19 pandemic.2022 |
 | | ACCESS TO THE AUDIO WEBCAST OF THE ANNUAL MEETINGWhere to find more information about our say-on-pay response
The live audio webcast ofSee the 2021 Annual Meeting will begin at 10:00 a.m. Eastern Time. As with our past in-person annual meetings, we are makingletter from the virtual meeting available to the public to listen live. Anyone wishing to do so may go to www.virtualshareholdermeeting.com/GE2021Management Development & Compensation Committee on page 25 and enter as a guest.
ATTENDANCE INSTRUCTIONS
You are entitled to participatepages 26–27 in the Annual Meeting if you were a shareholder as of the close of business on March 8, 2021, the record date, or hold a valid proxy for the meeting. To participate in the virtual meeting, including to vote or to ask questions, you must access the meeting website at www.virtualshareholdermeeting.com/GE2021, and follow the instructions on your proxy card, voting instruction form or Notice of Internet Availability. Online check-in will begin approximately 15 minutes before the meeting and we encourage you to allow ample time for check-in procedures.
Where can I find out more information? See “Voting and Meeting Information” on page 69.Compensation section.
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GE 20212022 PROXY STATEMENT 5
Table of Contents
Governance
Election of Directors
What are you voting on?
At the 2022 Annual Meeting, thirteen director nominees are to be elected to hold office until the 2023 Annual Meeting and until their successors have been elected and qualified.
Election of Directors
|
What are you voting on? At the 2021 annual meeting, eleven director nominees are to be elected to hold office until the 2022 annual meeting and until their successors have been elected and qualified.
| |  | Your Board recommends a vote for each nominee
All nominees are current GE Board members who were elected by shareholders at the 2020 annual meeting.2021 Annual Meeting, except for Stephen Angel and Isabella Goren who were elected to the Board effective March 2022, and Tomislav Mihaljevic who was elected to the Board effective April 2022. | | 
Your Board recommends a vote for each nominee |
  | |   | | 2021 Board Rhythm | | | | | | |
| 6/year43 meetings
Regular meetingsof the full Board and committees
| | 1/year6
Strategy sessionGovernance & investor feedback reviews
| | 1/year
Board self-evaluation | | 2020 MEETINGS
Over 35 meetings of the full Board and committees, including 3 meetings of the independent directors
|
Chair | | Lead Director | | 2+/6/year
| | 2+/1/year
| | Regular Calls | |
Larry H. Lawrence
Culp, Jr.
| | TomThomas Horton
| | Business visits for each directorRegular meetings
| | Governance & investor feedback reviewsStrategic talent review
| | Between meetings | |
FOCUS ON STRATEGIC PLAN
Robust, Board-driven process during 2021; over seven full Board meetings and numerous additional sessions leading to plan announced in November to form three independent companies
6 GE 20212022 PROXY STATEMENT
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Key Corporate Governance Practices
| ● | 1012 out of 1113 director nominees are independent |
| ● | Annual election of all directors by majority voting |
| ● | No supermajority provisions in governing documents |
| ● | Annual review of Board leadership structure |
| ● | Annual Board and committee self-evaluations |
| ● | Board-level oversight of ESG matters |
| ● | Strong lead director with clearly delineated duties |
| ● | Dual-pronged Board refreshment mechanisms (age/term limits) |
| ● | Regular executive sessions of independent directors |
| ● | Board and committees may hire outside advisors independently of management |
| ● | Proactive year-round shareholder engagement program |
| ● | Clawback policy that applies to all cash and equity incentive awards |
| ● | Anti-hedging and anti-pledging provisions |
| ● | Strong stock ownership guidelines and retention provisions |
| ● | “Overboarding” limits for directors |
| ● | No poison pill or dual-class shares |
| ● | Encourage all directors to make at least two business visits per year without senior management present |
| ● | Shareholder right to call special meetings (at 10%) |
| ● | Proxy access by-law provisions on market terms |
GE 20212022 PROXY STATEMENT 7
Table of Contents
Nominee Biographies
Board Leadership |
CHAIRMAN | |
| | | LEAD DIRECTOR | CHAIR:
Management Development &
Compensation Committee
| |
| |
| | | | |
|
H. Lawrence
Culp, Jr. Director Since: 2018
Age: 58
Birthplace:
United States | | | |
H. Lawrence Culp, Jr.
Director Since: 2018
Age: 58
Birthplace:
United States
|  | | Thomas Horton Director Since: 2018
Age: 59
60
Birthplace:
United States
Independent |  | |
| Qualifications | | | Qualifications | | |
Chairman and CEO, General Electric, Boston, MA (since(since September 2018) | 
| | | Partner, Global Infrastructure Partners, an infrastructure investment fund, New York, NY (since 2019) | 
| |
Prior Business Experience ●Senior Advisor, Bain Capital Private Equity,, a global private equity firm (2017–2018) ●Senior Lecturer, Harvard Business School (2015–2018) ●Former CEO and President, Danaher (2001–2014), a global science and technology company operating in the healthcare, environmental and applied-end markets; joined Danaher subsidiary Veeder-Root in 1990, serving in a number of leadership positions within Danaher, including COO and, following his retirement, Senior Advisor (2014–2016)    Current Public Company Boards ●General Electric Past Public Company Boards ●GlaxoSmithKline ●Danaher ●T. Rowe Price Group Other Positions ●Member and former Chairman, Board of Visitors & Governors, Washington College ●Member, Board of Trustees, Wake Forest University Education ●Washington College ●MBA, Harvard Business School | | | GE Committee Membership ●Compensation (Chair) ●Governance Prior Business Experience●Senior Advisor, Warburg Pincus LLC, a private equity firm focused on growth investing (2015–2019) ●Chairman, American Airlines Group, one of the largest global airlines (formed following the merger of AMR CorpCorporation and US Airways) (2013–2014) ●Chairman and CEO, American Airlines (2011–2014) ●Chairman and CEO, AMR (parent(parent company of American Airlines) (2010–2013) ●EVP and CFO, AMR (2006–2010) ●Vice Chairman and CFO, AT&T (2002–2006) ●SVP and CFO, AMR (2000–(2000– 2002); joined AMR in 1985, serving in various finance and management roles Current Public Company Boards ●General Electric ●EnLink Midstream ●Walmart (lead director) Past Public Company Boards ●Qualcomm Other Positions ●Executive Board Member, Cox School of Business, Southern Methodist University ●Board Member, National Air and Space Museum
Education ●Baylor University ●MBA, Southern Methodist University | |
| | | | |
Qualifications | | Industry & Operations | | Finance & Accounting | | Investor |  | Technology | | Risk Management |  | Government & Regulatory | | Global |
8 GE 20212022 PROXY STATEMENT
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Board Leadership | | | |
CHAIR: Audit
Committee | |
| | | CHAIR: Governance
& Public Affairs
Committee | |
| |
| | | | | | | |
| | | | | | | |
Leslie Seidman Director Since:2018
Age: 5859
Birthplace:Birthplace:
United States
Independent |  | |
Risa Lavizzo-Mourey Director Since: 2017
Age: 66
67
Birthplace:
United States
Independent |  | |
| | Sébastien Bazin
Director Since: 2016
Age: 59
Birthplace: France
Independent
|  | | | |
| Qualifications | | | Qualifications | | | Qualifications |
Former Chairman, Financial Accounting Standards Board (FASB), independent organization responsible for financial accounting and reporting standards, Norwalk, CT (2010–2013) |  | | | | Professor emeritus, University of Pennsylvania, Philadelphia, PA (since 2018) and Former President and CEO, Robert Wood Johnson Foundation, Princeton, NJ (2003–2017) |  | | Chairman and CEO, AccorHotels, a global hotel company, Paris, France (since 2013) |  |
| GE Committee Membership ●Audit (Chair) Prior Business Experience ●Board Member, FASB (2003–2013) ●Financial reporting consultant (1999–2003) ●Staff Member, FASB (1994–1999) ●Vice President, Accounting Policy, JP Morgan (1987–1994) ●Auditor, Arthur Young (1984–1987) Current Public Company Boards ●General Electric ●Moody’s,, provider of credit ratings, research and analytical tools (chairman,(Chair, Audit Committee) Other Positions ●Advisor, Idaciti ●Founding Director, Pace University Center for Excellence in Financial Reporting (2014–2018) ●Board of Governors, Financial Industry Regulatory Authority (FINRA) (2014–2019) Education ●MS (Accounting), New York University Certifications ●Certified Public Accountant (Inactive) ●Cybersecurity Oversight CERT,, Carnegie Mellon University and NACD ●ESG Oversight certification (GCB.D) | | | | GE Committee Membership ● Governance (Chair) Prior Business Experience●SVP, Robert Wood Johnson Foundation, largest U.S. philanthropic organization dedicated to healthcare (2001–2003) Prior Academic Experience ●Sylvan Eisman Professor of Medicine and Health Care Systems (1995–2001), Director, Institute on Aging (1994–2002), Chief of Geriatric Medicine (1986–1992), University of Pennsylvania Medical School Prior Government Experience ●Advisory Committee Member, President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry (1997–1998) ●Deputy Administrator, Agency for Health Care Research and Quality (1992–1994) ●Co-Chair, White House Health Care Reform Task Force, Working Group on Quality of Care (1993–1994) ●Advisory Committee Member, Task Force on Aging Research (1985–1992) ●Advisory Committee Member, National Committee for Vital and Health Statistics (1988–1992) Current Public Company Boards ●General Electric ●Intel ●Merck ●Better Therapeutics, Inc Past Public Company Boards ●Genworth Financial ●Beckman Coulter ●Hess Other Positions ●Trustee, Smithsonian Institution Board of Regents ●Board of Fellows, Harvard Medical School ●Member, National Academy of Medicine Education ●U.University of Washington & SUNY Stony Brook ●MD, Harvard Medical School ●MBA, University of Pennsylvania
| |
GE 2022 PROXY STATEMENT 9
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Stephen
Angel Director Since: 2022
Age: 66
Birthplace:
United States
Independent |  | | Sébastien
Bazin Director Since: 2016
Age: 60
Birthplace:
France
Independent |  | | Ashton
Carter Director Since: 2020
Age: 67
Birthplace:
United States
Independent |  |
| | | | | | | |
| Former CEO of Linde, a global industrial gases and engineering company, Dublin, Ireland (2018-2022) | | | Chairman and CEO, AccorHotels, a global hotel company, Paris, France (since 2013) | | | Director, Belfer Center for Science and International Affairs, Harvard Kennedy School, Cambridge, MA (since 2017) | |
Prior Business Experience ●CEO, Linde (2018-2022) ●President & CEO, Praxair (subsequently Linde) (2007-2018) ●President & COO, Praxair (2006-2007) ●EVP, North America, Europe and Asia, Praxair (2001-2006) ●Previously held various roles at General Electric (1979-2001) Current Public Company Boards Past Public Company Boards Other Positions ●Director, the Hydrogen Council Education ●North Carolina State University ●MBA, Loyola College | | | GE Committee Membership ●Compensation ●Governance Prior Business Experience ●CEO, Europe Colony Capital,, a private investment firm (1997–2013) ●Group Managing Director, CEO and General Manager, Immobilière Hôtelière (1992–1997) ●Began career in 1985 in U.S. finance sector, becoming Vice President, M&A, PaineWebber Current Public Company Boards ●General Electric ●AccorHotels ●Huazhu Group*
Past Public Company Boards ●Vice Chairman, Huazhu Group ●Carrefour a multinational French retailer ●Banyan Tree Holding Other Positions ●Vice Chairman, Supervisory Board, Gustave Roussy Foundation, cancer research funding ●Chairman, Théâtre du Châtelet ●Chairman, Strategic Partnerships Committee, Safar Ventures
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 24 for more information.
| |
| | | | | | | |
Qualifications | | Industry & Operations | | Finance & Accounting | | Investor | | Technology | | Risk Management | | Government & Regulatory | | Global |
GE 2021 PROXY STATEMENT 9
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| | | | | | | |
Ashton Carter
Director Since: 2020
Age: 66
Birthplace:
United States
Independent
|  | | Francisco D’Souza
Director Since: 2013
Age: 52
Birthplace:
Kenya
Independent
|  | | Edward Garden
Director Since: 2017
Age: 59
Birthplace:
United States
Independent
|  |
| Qualifications | | | Qualifications | | | Qualifications |
Director, Belfer Center for Science and International Affairs, Harvard Kennedy School, Cambridge, MA (since 2017)
|  | | Former CEO Cognizant Technology Solutions Corporation, a multinational IT company, Teaneck, NJ (2007-2019)GE Committee Membership
|  | | Chief Investment Officer and Founding Partner, Trian Fund Management, L.P., an investment management firm, New York, NY (since 2005)●
|  |
| Audit Prior Government Experience ●Secretary, U.S. Department of Defense (2015-2017) ●Deputy Secretary and Chief Operating Officer, U.S. Department of Defense,, responsible for oversight of personnel and management (2011-2013) ●Under Secretary of Defense for Acquisition, Technology and Logistics, U.S. Department of Defense,, responsible for global logistics and procurement (2009-2011) ●Assistant Secretary of Defense for International Security Policy U.S. Department of Defense (1993-1996) ●Began career with U.S. Department of Defense in 1981 as a program analyst Prior Academic Experience ●Prior teaching positions: Stanford University (2014-2015); Harvard Kennedy School (1984-1993; 1997-2009); and Massachusetts Institute of Technology (1982-1984) Prior Business Experience ●Senior Partner, Global Technology Partners (1998-2009) Current Public Company Boards ●General Electric ●Delta Air Lines Other Positions ●Fellow, American Academy of Arts & Sciences ●Director, Council on Foreign Relations Education ●Yale University ●PhD (Theoretical physics), Oxford University | |
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10 GE 2022 PROXY STATEMENT
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Francisco
D’Souza Director Since: 2013
Age: 53
Birthplace:
Kenya
Independent |  | | Edward
Garden Director Since: 2017
Age: 60
Birthplace:
United States
Independent |  | | Isabella
Goren Director Since: 2022
Age: 61
Birthplace:
Ukraine
Independent |  |
| | | | | | | |
| Former CEO Cognizant Technology Solutions Corporation, a multinational IT company, Teaneck, NJ (2007-2019) | | | Chief Investment Officer and Founding Partner, Trian Fund Management, L.P., an investment management firm, New York, NY (since 2005) | | | Former Chief Financial Officer of American Airlines and AMR Corporation, a global airline, Forth Worth, TX (2010-2013) | |
GE Committee Membership ●Audit ●Compensation Prior Business Experience ●CEO, Cognizant (2007–2019) ●President, Cognizant (2007–2012) ●COO, Cognizant (2003–2006) ●Co-founded Cognizant (1994) ●Previously held various roles at Dun & Bradstreet Current Public Company Boards Past Public Company Boards ●Cognizant Other Positions ●Chairman, IT and Electronics Governors community, World Economic Forum
●Board Co-Chair, New York Hall of Science ●Trustee, Carnegie Mellon University ●International Advisory Panel Member and Special Advisor to the Board, Banco Santander Education ●University of Macau ●MBA, Carnegie Mellon University | | | GE Committee Membership ●Compensation Prior Business Experience ●Vice Chairman and Director, Triarc Companies (subsequently(subsequently The Wendy’s Company and previously Wendy’s/Arby’s Group) (2004–2007) and Executive Vice President (2003–2004) ●Managing Director, Credit Suisse First Boston (1999–2003) ●Managing Director, BT Alex Brown (1994–1999) Current Public Company Boards ●General Electric ●InvescoJanus Henderson Group Past Public Company Boards ●Invesco ●Legg Mason ●The Bank of New York Mellon ●The Wendy’s Company ●Family Dollar Stores ●Pentair Education ●Harvard College | | | Prior Business Experience ●CFO, American Airlines and AMR Corporation (2010-2013) ●Senior Vice President, Customer Relationship Marketing, American Airlines and AMR Corporation (2006-2010) ●Vice President, American Airlines (1998-2006) ●President, AMR Services (1996-1998) ●Previously served in various management positions at American Airlines (1986-1996) ●Chemical Engineer, Dupont (1983-1985) Current Public Company Boards ●General Electric ●Marriott International Past Public Company Boards ●Gap ●LyondellBasell Industries Other Positions ●Director, MassMutual ●Director, National Association of Corporate Directors, North Texas ●Member of the Advisory Board, The University of Texas at Austin, Cockrell School of Engineering ●Member of the Executive Board, Lyle School of Engineering, Southern Methodist University Education ●University of Texas at Austin ●MBA, Southern Methodist University | |
| | | | | | | | |
Qualifications | | Industry & Operations | | Finance & Accounting | | Investor | | Technology | | Risk Management | | Government & Regulatory | | Global |
10 GE 20212022 PROXY STATEMENT11
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| | | | | | | |
Catherine
Lesjak Director Since: 2019
Age: 6263
Birthplace:
Canada
Independent |   | | Tomislav
Mihaljevic Director Since: 2022
Age: 58
Birthplace:
Croatia
Independent |  | | Paula Rosput
Reynolds Director Since: 2018
Age: 6465
Birthplace:
United States
Independent |  | | James Tisch
Director Since: 2010
Age: 68
Birthplace:
United States
Independent
|   |
| Qualifications | | | Qualifications | | | Qualifications | |
Former Chief Financial Officer, HP, a global technology company, and its predecessor, Hewlett-Packard, Palo Alto, CA (2007-2018) |  | | | CEO & President, Cleveland Clinic, a global integrated healthcare system, Cleveland, OH (since 2018) | | | President and CEO, PreferWest LLC, a business advisory firm, Seattle, WA (since 2009) |  | |
President and CEO, Loews Corp., a diversified holding company with subsidiaries involved in energy, insurance, packaging and hospitality, New York, NY (since 1998)GE Committee Membership
|  |
●Audit ●Governance Prior Business Experience ●Interim Chief Operating Officer, HP (2018–2019) ●Interim CEO, Hewlett Packard (2010) (2010) ●Senior Vice President and Treasurer, HP (2003-2007) (2003–2007) ●Previously served in various leadership positions within the financial organization at HP and Hewlett Packard, including as Global Controller, Software Solutions; Controller and Credit Manager for Commercial Customers; and as Manager, Financial Operations, Enterprise Marketing and Solutions (joined Hewlett Packard in 1986) Current Public Company Boards ●Pros Holdings ●SunPower (Chair, Audit Committee) Other Positions ●Board, Haas School of Business, University of California, Berkeley ●Board of Advisors, Resource Area for Teaching (RAFT)
Education ●Stanford University ●MBA, University of California, Berkeley | | | Prior Business Experience ●Vice Chairman and Chief Restructuring Officer, American International Group (2008–2009)●Chairman, President and CEO, Safeco Insurance Company of America (2005–2008)●Chairman and CEO, AGL Resources (1998–2005)●CEO Duke Energy Power Services, Duke Energy of Cleveland Clinic Abu Dhabi (CCAD) (2015-2017) and Chief of Staff and Chairman of the Heart & Vascular Institute CCAD (2011-2015)(1995–1998) ●Previously served in various leadership positions at Surgeon, Department of Thoracic and Cardiovascular Surgery, Cleveland Clinic (2004-2011) ●Associated Power Services, Pacific Gas Transmission Co. Associate surgeon, Division of Cardiac Surgery, Brigham & Women’s Hospital (2002-2004) ●and Assistant Professor of Surgery, Harvard Medical School (2002-2004)Pacific Gas and Electric Company Current Public Company Boards ●General Electric Other Positions ●Board co-chair, US-UAE Business Council ●Director, Greater Cleveland Partnership ●Director, United Way of Greater Cleveland ●Member of the Advisory Board, OneTen ●Member of the Board of Trustees,
Musical Arts Association Education ●University of Zagreb ●Residency: Brigham & Women’s Hospital | | | GE Committee Membership ●Compensation Prior Business Experience ●Vice Chairman and Chief Restructuring Officer, American International Group (2008–2009) ●Chairman, President and CEO, Safeco Insurance Company of America (2005–2008) ●Chairman and CEO, AGL Resources (1998–2005) ●CEO, Duke Energy Power Services, Duke Energy (1995–1998) ●Previously served in various leadership positions at Associated Power Services, Pacific Gas Transmission Co. and Pacific Gas and Electric Company Current Public Company Boards ●General Electric ●BP ●National Grid UK (Chair) Past Public Company Boards ●Air Products & Chemicals ●Anadarko Petroleum ●BAE Systems ●CBRE Group ●Circuit City Stores ●Coca-Cola Enterprises ●Delta Air Lines ●TransCanada Other Positions ●Trustee,Chair, Seattle Cancer Care Alliance Education ●Wellesley College | | | Current Public Company Boards
●General Electric
●Loews and two of its subsidiaries, CNA Financial, a property and casualty insurance company, and Diamond Offshore Drilling, an offshore drilling contractor*Other Positions
●Co-Chairman, Mount Sinai Medical System
●Former director, Federal Reserve Bank of New York
●Trustee, 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
* Directorships held in his capacity as President and CEO of Loews. See “Limits on Director Service on Other Public Boards” on page 24 for more information.
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12 GE 2022 PROXY STATEMENT
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Board Leadership Structure
GE believes that independent board oversight is an essential component of strong corporate performance. We also believe that the decision as to whether the positions of Chairman and CEO should be combined or separated, and whether an executive or an independent director should serve as the Chairman should be based upon the circumstances facing the company. Maintaining flexibility on this policy allows the Board to choose the leadership structure that will best serve the interests of the company and its shareholders at any particular time.
WHY OUR BOARD LEADERSHIP STRUCTURE IS APPROPRIATE FOR GE AT THIS TIME. The Board continues to believe that its current leadership structure, which has a combined role of Chairman and CEO, counterbalanced by a strong independent Board led by a lead director and independent directors chairing each of the Board committees, is in the best interests of GE and its shareholders. In the Board’s view, this structure allows Mr. Culp, as Chairman and CEO, to drive strategy and agenda setting at the Board level, while maintaining responsibility for executing on that strategy as CEO. At the same time, our lead director, Thomas Horton, works with Mr. Culp to set the agenda for the Board and also exercises additional oversight on behalf of the independent directors. The Board will continue to review the appropriateness of this structure and consider shareholder feedback from our ongoing engagements.
HOW WE SELECT THE LEAD DIRECTOR. The Governance & Public Affairs Committee (the Governance Committee) considers feedback from the current lead director, our other Board members and the Chairman, and then makes a recommendation to the Board’s independent directors. The independent directors elect the lead director, taking into account the recommendation of the Governance Committee. Thomas Horton, former Chairman and CEO of American Airlines, was first elected as the lead director in September 2018.
Under the Board’s Governance Principles, Mr. Horton also serves as chair of the Management Development & Compensation Committee. In the event of Mr. Horton’s incapacity, the chair of the Governance Committee would serve as the lead director until the independent directors selected a new lead director.
The Lead Director’s Role
The lead director has the following responsibilities (and may also perform other functions at the Board’s request), as detailed in the Board’s Governance Principles:
| ● | Board leadership – provides leadership to the Board in any situation where the Chairman’s role may be perceived to be in conflict, and chairs Board meetings in the absence of the Chairman | |
| ● | Board agenda, schedule & information – approves the agenda (with the ability to add agenda items), schedule and information sent to directors and calls additional meetings as needed |
| ● | Leadership of independent director meetings – calls and leads independent director meetings, which are regularly scheduled (in addition to the numerous informal sessions that occur throughout the year) without any management directors or GE employees present |
| ● | Chairman-independent director liaison – regularly meets with the Chairman and serves as liaison between the Chairman and the independent directors (although every director has direct access to the Chairman) |
| ● | Shareholder communications – makes himself/herself available as the primary Board contact for direct communication with our significant shareholders |
| ● | Board governance processes – works with the Governance Committee to guide the Board’s governance processes, including the annual Board self-evaluation and the annual Chairman’s evaluation |
| ● | Board leadership structure review – oversees the Board’s periodic review and evaluation of its leadership structure |
| ● | Committee chair selection – advises the Governance Committee in choosing committee chairs |
GE 20212022 PROXY STATEMENT 1113
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Board Composition
How We Are Changing the Board
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 committeeGovernance Committee continuously reviews potential candidates and recommends nominees to the Board for approval.
Over the past four years, theThe Board has undertaken significant refreshment effortstakes a thoughtful approach to better align its composition to maintain alignment with the businesses on which we expectcompany’s evolving corporate strategy. We believe our board composition strikes a balanced approach to focus going forwarddirector tenure and to bring new perspectives to the Board. As a result, of the eleven nominees proposed for election, eight are new toallows the Board in the last four years. Weto benefit from a mix of newer directors who bring fresh perspectives and seasoned directors who bring continuity and a deep understanding of our complex business. Looking forward, we have announced our plan to form three industry-leading, global, public companies. Consistent with that plan, we expect to continue to seek director candidates whose experiences support the company’s future strategy and industry focus.
DIRECTOR RECRUITMENT PRIORITIESIn March 2022, the Board elected three new directors: Stephen Angel, Isabella Goren and Tomislav Mihaljevic. These new directors bring decades of experience across the energy, aviation and healthcare industries. Ms. Goren was originally recommended for the Board by an independent director, and Mr. Angel and Dr. Mihaljevic were each recommended by management.
Director Selection Process
Our Governance Committee, together with the full Board, is responsible for establishing criteria, screening candidates and evaluating the qualifications of persons who may be considered for service on our Board. The Governance Committee considers all shareholder recommendations for director candidates. We evaluate them in the same manner as candidates suggested by other sources. The following describes the Board’s selection process:
| | | |
| 1 | | SUCCESSION PLANNING | |
| | The Governance Committee prioritizes experiences and attributes to support the current and long-term needs of the company, within the context of the current Board structure, diversity, and mix of skills and experience. |
| | | |
| 2 | | IDENTIFICATION OF CANDIDATES | |
| | The Governance Committee engages in a search process to identify qualified director candidates, which process may include the use of an independent search firm, and assesses candidates’ skills, experience and background and their alignment with the company’s portfolio and strategy. |
| | | |
| 3 | | INTERVIEWING CANDIDATES | |
| | Qualified director candidates are typically interviewed by the Chairman and CEO, Governance Committee chair and other members of the Governance Committee, as well as other members of the Board and management, as necessary. |
| | | |
| 4 | | DECISION AND NOMINATION | |
| | After determining that the director candidate meets the priorities established by the Governance Committee and will serve in the best interests of the company and its shareholders, the Governance Committee recommends, and the full Board approves, director candidates for appointment to the Board and election by shareholders. |
| | | |
| 5 | | ELECTION | |
| | The shareholders consider the nominees and elect directors by majority vote to serve one-year terms. |
| | | |
| 6 | | ONGOING ASSESSMENT | |
| | The Governance Committee continuously assesses the composition of the Board to maintain alignment with the company’s evolving corporate strategy, and in connection with the Board’s nomination of a slate of directors the Governance Committee reviews considerations including: the contributions by each director; the skills, experiences and diversity represented on the Board; and the results of previous shareholder votes. |
Director
Recruitment
Priorities |
|
| DIRECTOR “MUST-HAVES” |
●Leadership experience ●Highest personal & professional ethics ●Integrity & values ●A passion for learning ●Inquisitive & objective perspective ●A sense of priorities & balance ●Talent development experience |
| |
RECRUITMENT PRIORITIES GOING FORWARD |
▲ Technology/cyber expertise▲ ●Capital allocation expertise
▲ ●Diversity
|
HOW YOU CAN RECOMMEND A CANDIDATE
Write to the Governance Committee, c/o Corporate Secretary, GE, at the address listed on the inside front cover of this proxy statement, and include all information that our by-laws require for director nominations.
|
| HOW YOU CAN RECOMMEND A CANDIDATE |
| Write to the Governance Committee, c/o Corporate Secretary, GE, at the address listed on the inside front cover of this proxy statement, and include all information that our by-laws require for director nominations. |
|
HOW WE REFRESH THE BOARD● | Board evaluation. Each year, the Board assesses its effectiveness through a process led by its lead director. See “How We Evaluate the Board’s Effectiveness” on page 21.Board evaluation. Each year, the Board assesses its effectiveness through a thorough evaluation at the Board and committee levels to ensure the effectiveness of the directors and their ability to work as a team in the long-term interest of the company. See “How We Evaluate the Board’s Effectiveness” on page 17.●Term limits. The Board has a 15-year term limit for independent directors. ●Age limits. With limited exceptions, directors may not be renominated to the Board after their 75th birthday. | | ● | Term limits. The Board has a 15-year term limit for independent directors. | ● | Age limits. With limited exceptions, directors may not be renominated to the Board after their 75th birthday. |
See the Board’s Governance Principles (see “Helpful ResourcesResources”” on page 73)77) for more information on these policies. |
14 GE 2022 PROXY STATEMENT
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Important Factors in Assessing Board Composition
The Governance Committee strives to maintain an independent Board with broad and diverse experience and judgment that is committed to representing the long-term interests of our shareholders. The Governance Committee considers a wide range of factors when selecting and recruiting director candidates, including:
Creating an experienced, qualified Board with high personal integrity and character, and expertise in areas relevant to GE.
The Governance Committee strives to maintain an independent board with broad and diverse experience and judgment that is committed to representing the long-term interests of our shareholders. The committee considers a wide range of factors when selecting and recruiting director candidates, including:
Creating an experienced, qualified Board with high personal integrity and character, diversity of thought and expertise in areas relevant to GE.
The committee seeks directors who possess extraordinary leadership qualities and demonstrate a practical understanding of organizations, processes, people, strategy, risk management and how to drive change and growth. Additionally, we believe directors should have experience in identifying and developing talent, given the Board’s role in human capital management and succession planning. In addition to these threshold qualities, we seek directors who bring to the Board specific types of experience relevant to GE and the company’s evolving corporate strategy.
Enhancing the Board’s diversity of background.
For decades, GE has been committed to building a cognitively diverse Board comprising of individuals from different backgrounds and with a range of experiences and viewpoints. Specifically, under the Board’s diversity policy, the Governance Committee considers attributes such as race, ethnicity, gender, cultural background and professional experience when reviewing candidates for the Board and in assessing the Board’s overall composition. The Board is committed to using refreshment opportunities to strengthen its cognitive diversity. Additionally, the Governance Committee is committed to considering the candidacy of women and ethnically diverse candidates for all future vacancies on the Board. To accomplish this, the Governance Committee will continue to require that search firms engaged by GE include a robust selection of women and ethnically diverse candidates in all prospective director candidate pools. The Governance Committee reviews its effectiveness in balancing these considerations when assessing the composition of the Board.
Complying with regulatory requirements and the Board’s independence guidelines.
The Governance Committee considers regulatory requirements affecting directors, including potential competitive restrictions. It also looks at other positions the director has held or holds (including other board memberships), and the Board reviews director independence.
How We Assess Board Size
The Governance Committee takes a fresh look at Board size each year, consistent with the Board’s Governance Principles (see “Helpful Resources” on page 77). Based on the Board’s recent self-evaluations, assessment of trends with peer companies, and taking into account investor feedback, the Board anticipates maintaining a smaller size going forward. However, the Board may add additional directors in connection with our plan to form three independent companies.
| Board Skills and Experience |
 |  |
| INDUSTRY & OPERATIONS EXPERIENCE We have sought directors with management and operational experience in the industries in which we compete. For example, in the last five years we have added directors with power, aviation, healthcare and technology expertise. |
 |  |
| FINANCE & ACCOUNTING EXPERIENCE GE uses a broad set of financial metrics to measure its performance, and accurate financial reporting and robust auditing are critical to our success. We have added a number of directors who qualify as audit committee financial experts, and we expect all of our directors to have an understanding of finance and financial reporting processes. |
 |  |
| INVESTOR EXPERIENCE To promote strong alignment with our investors, we have added directors who have experience overseeing investments and investment decisions. We believe that these directors can help focus management and the Board on the most critical value drivers for the company, including with respect to setting executive compensation targets and objectives. |
 |  |
| TECHNOLOGY EXPERIENCE As a high-tech industrial company and leading innovator, we seek to add additional directors with technology backgrounds because our success depends on developing and investing in new technologies and ideas. Technology experience has become increasingly important as our products become more reliant on digital applications. |
 |  |
| RISK MANAGEMENT EXPERIENCE In light of the Board’s role in human capitaloverseeing risk management and succession planning. In addition to these threshold qualities,understanding the most significant risks facing the company, including strategic, operational, financial, legal and compliance and reputational risks, we seek directors who bring to the Board specific types ofwith experience relevant to GE shown on the next page. Enhancing the Board’s diversity of background.
For decades, GE has been committed to building a cognitively diverse Board comprising individuals from different backgroundsin risk management and with a range of experiences and viewpoints. Specifically, under the Board’s diversity policy, the committee considers attributes such as race, ethnicity, gender, cultural background and professional experience when reviewing candidates for the Board and in assessing the Board’s overall composition. The Board is committed to using refreshment opportunities to strengthen its cognitive diversity. To accomplish this, the committee will continue to require that search firms engaged by GE include a robust selection of women and ethnically diverse candidates in all prospective director candidate pools. In addition, the committee is committed to considering the candidacy of women and ethnically diverse candidates for all future vacancies on the Board. The committee reviews its effectiveness in balancing these considerations when assessing the composition of the Board.oversight.
Complying with regulatory requirements and the Board’s independence guidelines.
The committee considers regulatory requirements affecting directors, including potential competitive restrictions. It also looks at other positions the director has held or holds (including other board memberships), and the Board reviews director independence.
|
 |  |
| 12 GE 2021 PROXY STATEMENT
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BOARD SKILLS ANDGOVERNMENT & REGULATORY EXPERIENCE
We have added directors with experience in governmental and regulatory organizations because many of GE’s businesses are heavily regulated and are directly affected by governmental and regulatory actions.  |  |  | Industry & Operations Experience
We have sought directors with management and operational experience in the industries in which we compete. For example, in the last four years we have added directors with power, aviation, insurance and technology expertise. |  | Finance & Accounting Experience
GE uses a broad set of financial metrics to measure its performance, and accurate financial reporting and robust auditing are critical to our success. We have added a number of directors who qualify as audit committee financial experts, and we expect all of our directors to have an understanding of finance and financial reporting processes. |  | Investor Experience
To promote strong alignment with our investors, we have added directors who have experience overseeing investments and investment decisions. We believe that these directors can help focus management and the Board on the most critical value drivers for the company, including with respect to setting executive compensation targets and objectives. |  | Technology Experience
As a high-technology industrial company and leading innovator, we seek to add additional directors with technology backgrounds because our success depends on developing and investing in new technologies and ideas. Technology experience has become increasingly important as our products become more reliant on digital applications. |  | Risk Management Experience
In light of the Board’s role in overseeing risk management and understanding the most significant risks facing the company, including strategic, operational, financial, legal and compliance and reputational risks, we seek directors with experience in risk management and oversight. |  | Government & Regulatory Experience
We have added directors with experience in governmental and regulatory organizations because many of GE’s businesses are heavily regulated and are directly affected by governmental and regulatory actions. |  | Global Experience
We seek directors with global business experience because GE’s continued success depends on continuing to grow our businesses outside the United States. For example, in 2020, 56% of our revenue was attributable to activities outside the United States. |
DIRECTOR SELECTION PROCESS. GLOBAL EXPERIENCEOur Governance Committee, together
We seek directors with global business experience because GE’s continued success depends on continuing to grow our businesses outside the full Board, is responsible for establishing criteria, screening candidates and evaluatingUnited States. For example, in 2021, 56% of our revenue was attributable to activities outside the qualifications of persons who may be considered for service on our Board. The committee considers all shareholder recommendations for director candidates. We evaluate them in the same manner as candidates suggested by other sources.United States. The following describes the Board’s selection process:
1 | Succession planning
the Governance Committee prioritizes experiences and attributes to support the current and long-term needs of the company, within the context of the current Board structure, diversity, and mix of skills and experience. | 2 | Identification of candidates
the Governance Committee engages in a search process to identify qualified director candidates, which process may include the use of an independent search firm, and assesses candidates’ skills, experience and background and their alignment with the company’s portfolio and strategy. | 3 | Interviewing candidates
qualified director candidates are typically interviewed by the Chairman and CEO, Governance Committee Chair and other members of the Governance Committee, as well as other members of the Board and management, as necessary. | 4 | Decision and nomination
after determining that the director candidate meets the priorities established by the Governance Committee and will serve in the best interests of the company and its shareholders, the Governance Committee recommends, and the full Board approves, director candidates for appointment to the Board and election by shareholders. | 5 | Election
the shareholders consider the nominees and elect directors by majority vote to serve one-year terms. |
How We Assess Board Size
The Governance Committee takes a fresh look at Board size each year, consistent with the Board’s Governance Principles (see “Helpful Resources” on page 73). Based on the Board’s recent self-evaluations, assessment of trends with peer companies, and taking into account investor feedback, we anticipate that we will continue to maintain approximately the Board’s current size, though the number of directors may fluctuate from time to time during director transitions and as we continue to assess the company’s strategic priorities.
GE 2021 PROXY STATEMENT 13
|
GE 2022 PROXY STATEMENT 15
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How We Assess Director Independence
BOARD MEMBERS. MEMBERS. The Board’s Governance Principles require all non-management directors to be independent. All of our director nominees (listed(shown under “Election of Directors” on page 6) other than Mr. Culp are independent.
| ● | The Board’s guidelines. 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 Board’s guidelines for director independence conform to the independence requirements in the New York Stock Exchange’s (NYSE) listing standards. In addition to applying these guidelines, which you can find in the Board’s Governance Principles (see “Helpful Resources” on page 73)77), the Board considers all relevant facts and circumstances when making an independence determination. |
| ● | Applying the guidelines in 2020.2021. In assessing director independence for 2020,2021, the Board considered relevant transactions, relationships and arrangements, including relationships among Board members, their family members and the company, as described below. |
COMMITTEE MEMBERS. MEMBERS. All members of the Audit Committee, Management Development & Compensation Committee, and Governance Committee must be independent, as defined by the Board’s Governance Principles. Committee members must also meet additional committee-specific standards:
| ● | Heightened standards for Audit Committee members. Under a separate SEC independence requirement, Audit Committee members may not accept any consulting, advisory or other fees from GE or any of its subsidiaries, except compensation for Board service. |
| ● | Heightened standards for members of the Management Development & Compensation and Governance Committees. As a policy matter, the Board also applies a separate, heightened independence standard to members of the Management Development & Compensation and Governance Committees: no member of either committee may be a partner, member or principal of a law firm, accounting firm or investment banking firm that accepts consulting or advisory fees from GE or a subsidiary. In addition, in determining that Management Development & Compensation Committee members are independent, NYSE rules require the Board to consider their sources of compensation, including any consulting, advisory or other compensation paid by GE or a subsidiary. |
The Board has determined that all members of the Audit, Management Development & Compensation and Governance Committees are independent and also satisfy applicable committee-specific independence requirements.
Relationships and Transactions Considered for Director Independence
The Board considered the following relationships and transactions in making its determination that all director nominees, other than Mr. Culp, are independent.
GE TRANSACTION & 2020 MAGNITUDE
| 2021 TRANSACTIONS CONSIDERED FOR DIRECTOR INDEPENDENCE |
| DIRECTOR/NOMINEE | | ORGANIZATION | | RELATIONSHIP | | SALES TO GE <1% OF
OTHER COMPANY’S
REVENUES | | PURCHASES FROM
GE <1% OF OTHER
COMPANY’S REVENUES | | INDEBTEDNESS
TO GE <1% OF
GE’S ASSETS |
| Bazin | | AccorHotels | | Chair & CEO | |  | | N/A | | N/A |
| Horton | | Global Infrastructure Partners | | Partner | | | | N/A | | ✓ |
| Mihaljevic | | Cleveland Clinic | | CEO & President | | ✓ | | ✓ | | N/A |
| Tisch | | Loews (and its subsidiaries) | | President & CEO | | | | | | |
| All directors | | Various charitable organizations | | Executive, director
or trustee | | Charitable contributions from GE
<1% of the organization’s revenues |
1416 GE 20212022 PROXY STATEMENT
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Board Leadership Structure
GE believes that independent board oversight is an essential component of strong corporate performance. We also believe that the decision as to whether the positions of Chairman and CEO should be combined or separated, and whether an executive or an independent director should serve as the Chairman should be based upon the circumstances facing the company. Maintaining flexibility on this policy allows the Board to choose the leadership structure that will best serve the interests of the company and its shareholders at any particular time.
WHY OUR BOARD LEADERSHIP STRUCTURE IS APPROPRIATE FOR GE AT THIS TIME. The Board continues to believe that its current leadership structure, which has a combined role of Chairman and CEO, counterbalanced by a strong independent Board led by a lead director and independent directors chairing each of the Board Committees, is in the best interests of GE and its shareholders. In the Board’s view, this structure allows Mr. Culp, as Chairman and CEO, to drive strategy and agenda setting at the Board level, while maintaining responsibility for executing on that strategy as CEO. At the same time, our lead director, Tom Horton, works with Mr. Culp to set the agenda for the Board and also exercises additional oversight on behalf of the independent directors. The Board will continue to review the appropriateness of this structure and consider shareholder feedback from our ongoing engagements.
HOW WE SELECT THE LEAD DIRECTOR. The Governance Committee considers feedback from the current lead director, our other Board members and the Chairman, and then makes a recommendation to the Board’s independent directors. The independent directors elect the lead director, taking into account the recommendation of the committee. Tom Horton, former Chairman and CEO of American Airlines, was first elected as the lead director in September 2018.
Under the Board’s Governance Principles, Mr. Horton also serves as chair of the Management Development & Compensation Committee. In the event of Mr. Horton’s incapacity, the chair of the Governance Committee would serve as the lead director until the independent directors selected a new lead director.
The Lead Director’s Role
The lead director has the following responsibilities (and may also perform other functions at the Board’s request), as detailed in the Board’s Governance Principles:
● | Board leadership Governance Practices— provides leadership Our Board seeks to operate with the Board in any situation where the Chairman’s role may be perceived to be in conflict, and chairs Board meetings in the absencehighest degree of the Chairman |
● | Board agenda, schedule & information — approves the agenda (with the ability to add agenda items), schedule and information sent to directors and calls additional meetings as needed |
● | Leadershipeffectiveness, supporting a dynamic boardroom culture of independent thought and intelligent debate on critical matters. We take a comprehensive, year-round view of corporate governance and our adoption of best practices impacts our leadership structure, Board composition and recruitment, director meetings — callsengagement, and leads independent director meetings, which are scheduled at least three times per year (in additionaccountability to the numerous informal sessions that occur throughout the year) without any management directors or GE employees present |
● | Chairman-independent director liaison — regularly meets with the Chairmanshareholders. Our Board and serves as liaison between the Chairmancommittee evaluation process allows for annual assessment of our Board practices and the independent directors (although every director has direct accessopportunity to the Chairman) |
● | Shareholder communications — makes himself/herself available as the primary Board contactidentify areas for direct communication with our significant shareholders |
● | Board governance processes — works with the Governance Committee to guide the Board’s governance processes, including succession planning, the annual Board self-evaluation and the annual Chairman’s evaluation |
● | Board leadership structure review — oversees the Board’s periodic review and evaluation of its leadership structure |
● | Committee chair selection — advises the Governance Committee in choosing committee chairs |
improvement.
CHAIRMAN OF THE | |
BOARD & CEO
|
| |
LEAD DIRECTOR
elected solely by independent directors |
|
| |  | |  | |
| | LEAD
DIRECTOR
ANNUAL EVALUATION PROCESSalso serves as: Management Development & Compensation
The Governance Committee Chairoversees and approves the annual formal Board evaluation process and determines whether it is appropriate for the evaluations to be conducted by the lead director or an independent consultant each year. In 2021, the evaluation process was conducted by an independent outside consultant. | |
| 1 | Written Questionnaires
Directors completed written questionnaires, which are benchmarked and refreshed each year focusing on the performance of the Board and each of its committees. | |
| 2 | CHAIRSIndividual Interviews
The independent outside consultant conducted one-on-one interviews with each member of the Board focused on:
●reviewing the Board’s and its committees’ performance over the prior year; and ●identifying areas for potential enhancements of the Board’s and its committees’ processes going forward. | |
| 3 | Discussion of Results
The independent outside consultant reviewed the written questionnaire and interview responses with the lead director and the chairs of our Auditeach committee and Governance Committees are independentthen met with the full Board to discuss the findings from the evaluation. | |
| 4 | Use of Feedback
The Board and each of its committees developed plans to take actions based on the results, as appropriate. | |
| 5 | Changes Implemented
The 2021 evaluation reaffirmed that changes implemented in recent years, such as decreasing the size of the Board, and enhancing Board and committee materials, had resulted in improvements. Other changes coming out of the 2021 self-evaluation included: ●resumed in-person meetings with increased opportunities for executive sessions; and ●inclusion of senior leadership team and business leaders at Board dinners to foster increased oversight of and collaboration with management.
| |
| | | | | |
| |  | | | |
| | | | |
| | CONSIDERATIONS IN
SELECTING CURRENT
LEAD DIRECTOR | | |
| |  | Tom
Horton | | |
| | Mr. Horton was first elected to our Board at the 2018 annual meeting. During his tenure on our Board, he has established strong working relationships with his fellow directors and garnered their trust and respect. Furthermore, he has demonstrated strong leadership skills, independent thinking and a deep understanding of our businesses and their industries.
The Board’s decision to select Mr. Horton as lead director took into account the tenures and capabilities of each independent director, along with a potential candidate’s willingness and ability to serve as lead director, understanding that the position entails significant responsibility and time commitment. The Board considered that Mr. Horton also serves as lead independent director for Walmart. However, the fact that Walmart also has a separate board chairman mitigated concerns about Mr. Horton’s ability to dedicate sufficient time to the role as GE’s lead director. | | |
| | | | |
GE 20212022 PROXY STATEMENT15 17
Table of Contents
Full Board
16 meetings in 2021 (including
10 special strategy reviews and
3 independent director meetings)
Chairman
H. Lawrence Culp, Jr. | Lead Director
Thomas Horton |
 |  |
| Members |
Angel*
Bazin
Carter
Culp
D’Souza | Garden
Goren*
Horton
Lavizzo-
Mourey | Lesjak
Mihaljevic*
Reynolds
Seidman
Tisch |
*elected to the Board in 2022
INDEPENDENT DIRECTOR MEETINGS
The independent directors meet regularly in executive sessions at scheduled Board meetings. They may have other special meetings throughout the year. These executive sessions promote candor and discussion of matters in a setting that is independent of the Chairman and CEO. The lead director chairs each of these executive sessions.
Board Operations
Full Board
13 meetings in 2020 (including 3 independent director meetings)2021 AREAS OF FOCUS
Chairman
Larry Culp | Lead Director
Tom Horton |
 |  |
Members | | |
Bazin | Garden | Lesjak |
Carter | Horton | Reynolds |
Culp | Lavizzo- | Seidman |
D’Souza | Mourey | Tisch |
2020 AREAS OF FOCUS●
| | |
| Long-term strategy and business portfolio review, leading to our plan to form three independent companies ●Strategy for the energy transition and climate change ●Health and safety of employees and communities, ●Oversight of risk management and governance for COVID-19-related uncertainty including COVID-19
●Capital structure and liquidity, particularly | reducing leverage and de-risking the balance sheet | ●Business performanceoperating and long-term strategyperformance reviews ●Strategy for the energy transitionSustainability, including external reporting ●CybersecurityManagement succession planning ●Leadership transitions, | particularly for the CFO and Aviation CEO
●Boeing 737MAX safe return to flightsector recovery
●Enterprise risk management ●Oversight of Healthcare product development and market dynamics ●GE Capital and Insurance
|
A TYPICAL GE BOARD MEETING
During 2020,2021, the Board held 6 regularly scheduled meetings, plus 710 special meetings. Due to the COVID-19 pandemic, starting in March of 2020, thesome meetings were held virtually and the schedules were adjusted to accommodate director participation from different time zones. In June 2021, the Board started holding hybrid in-person and virtual meetings.
| 1 | Before the Meeting | Board committee chairs:
prep meetings with management, auditors and outside advisors | Management:
internal prep meetings |
| 2 | Thursday (Day 1) | Daytime:
Board committee meetings and Board meeting | Evening:
Informalinformal gathering with senior managersmanagement & Board working dinner |
| 3 | Friday (Day 2) | Early morning:
independent directors’ breakfast session | Late morning: Daytime:
full Board meeting (including reports from each committee chair) followed by an executive session
|
| 4 | After the Meeting | Management:
follow-up sessions to discuss & respond to Board requests |
INDEPENDENT DIRECTOR MEETINGS
The independent directors meet in executive session during at least 3 of the regularly scheduled Board meetings. They may have other special meetings throughout the year. These executive sessions promote candor and discussion of matters in a setting that is independent of the Chairman and CEO. The lead director chairs each of these executive sessions.
The GE Board in Action: 20202021 Highlights
Our Board recognizes that its oversight of our strategic priorities and responsibility to GE shareholders requires a personal and professional commitment that extends well beyond regularly scheduled Board meetings. Ongoing and meaningful engagement with the business is critical to staying informed and provides the type of insight that allows our directors to provide effective guidance to our leadership team and to engage in constructive dialogue with each other.
ENGAGEMENT WITH SHAREHOLDERS Governance & “Say-on-Pay” Discussions
Engagement with shareholders included Thomas Horton (lead director) and other members of the Management Development & Compensation Committee DIRECTOR EDUCATION ESG external experts
Board education sessions on ESG governance reporting and the evolving regulatory climate Ongoing Functional Deep Dives
Routine sessions with tax, insurance and legal teams | ENGAGEMENT WITH THE BUSINESS Periodic Board Calls
Provide an opportunity for the CEO and the rest of the Board to discuss company operations in real-time Quarterly Senior Leadership Meetings
Director attendance and presentations Business Visits and Functional Deep Dives
Provide opportunity for direct employee interaction and better understanding of GE culture Annual Senior Leadership Meeting
Director attendance and presentations
Employee Resource Group Meetings
The Board engaged in meetings of the African American Affinity Forum and Women’s Network
| ENGAGEMENT WITH SHAREHOLDERS
“Say-on-Pay” Engagement
Engagement with shareholders included Tom Horton (Lead Director & Management Development & Compensation Committee Chair)
SUCCESSION PLANNING New AviationHealthcare CEO Recruitment
The Board engaged in the recruitment, interviewing and selection of candidates |  | DIRECTOR EDUCATIONBUSINESS AND STRATEGY REVIEW SESSIONS
|
●Director participation in 2nd quarter business operating reviews (May) ●Director participation in 3rd quarter “deep dive” business strategy reviews (September) ●Director attendance at several technology strategy sessions with the Aviation business (quarterly) |
New SITE VISITS
|
●Director Orientation
visit to GE Aviation in Lynn, MA (January)Full Board and Audit Committee orientation program for Mr. Carter |
Ongoing Functional Deep Dives
BOARD - LEADERSHIP MEETINGS
|
●Director-led diversity strategy sessions with our Chief Diversity Officer ●Board education sessions on Lean fundamentals, safety andspeakers at Leadership Meetings for top 900 company executives (quarterly) |
EMPLOYEE RESOURCE GROUP MEETINGS |
●Board speaker at the energy transitionAfrican American/Affinity Forum (February) ●Board speaker at the GE Veteran’s network in a special Veteran’s Day presentation (November) |
REGULAR CALLS WITH THE CEO |
1618 GE 20212022 PROXY STATEMENT
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Board Committees
COMMITTEE
COMPOSITION
Listed to the right are the current members of each committee. Independence. All committee members satisfy the NYSE’s and GE’s definitions of independence. | Audit | | Governance &
Public Affairs | | Management Development
& Compensation | |
Audit
13 meetings in 20202021
| | Governance & Public Affairs
56 meetings in 20202021
| | Management Development & Compensation
78 meetings in 20202021
| |
  | Chair
Leslie Seidman Other Members
Carter, D’Souza, Lesjak & Reynolds |  |  | Chair
Risa Lavizzo-Mourey Other Members
Bazin, Horton, Lesjak & Tisch |  |  | Chair
TomThomas Horton Other Members
Bazin, D’Souza, Garden & Reynolds |
COMMITTEE RESPONSIBILITIES
The primary responsibilities of each committee are listed below. For more detail, see the Governance Principles and committee charters (see “Helpful Resources” on page 73) | Recent Activities and Key Focus Areas |
●Completing the process to select an independent auditor for the fiscal-year ending December 31, 2021 and overseeing transition of the auditor
●Overseeing the detailed audit plan and independent audit budget
●Conducting cross-functional reviews with corporate audit staff, tax, IT, controllership and legal teams
●Overseeing changes to leadership and structure of the internal audit staff
●Overseeing material litigation strategy and changes to the compliance and cybersecurity programs
| ●Overseeing efforts to set new climate goals and revamp disclosure of environmental, social and governance matters
●Overseeing political spending and lobbying disclosure
●Reviewing the Board’s leadership structure and committee composition
●Overseeing management of environmental remediation efforts
●Identifying and recruiting new directors
| ●Reviewing critical talent to support the needs of GE with focus on human capital management, succession, diversity and talent development
●Overseeing COVID-related retention of critical talent, salary reductions and modification of benefit programs
●Focusing on increased alignment of pay and performance through effective short- and long-term incentive compensation design
●Reviewing shareholder feedback and external benchmarking of compensation practices
●Overseeing cultural shift for GE, prioritizing values of candor, humility and transparency
| | | | | | | |
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. Formal meetings are typically supplemented with additional calls and sessions. | Recent Activities and Key Focus Areas |
●Overseeing the simplification of the company’s financial reporting, including the transition from 3 to 1 column reporting ●Overseeing transition of the independent auditor, including the detailed audit plan and independent audit budget ●Conducting cross-functional reviews with internal audit staff, tax, cyber/IT ●Overseeing changes to leadership and structure of the internal audit function ●Overseeing material litigation strategy and changes to the compliance and cybersecurity programs | | ●Overseeing the company’s environmental, social and governance (ESG) commitments and strategies and enhancements to ESG disclosure. ●Overseeing changes to the leadership and structure of the company’s safety program ●Reviewing the Board’s leadership structure and committee composition ●Overseeing management of environmental remediation efforts ●Identifying and recruiting new directors | | ●Reviewing critical talent to support the needs of GE with focus on human capital management, succession planning, diversity and talent development and retention ●Focusing on increased alignment of pay and performance through effective short- and long-term incentive compensation design ●Engaging with shareholders and reviewing feedback and external benchmarking of compensation practices ●Overseeing cultural transformation for GE, prioritizing leadership behaviors |
| | | | | | | | | |
COMMITTEE
RESPONSIBILITIES The key responsibilities of each committee are listed to the right. For more detail, see the Governance Principles and committee charters (see “Helpful Resources” on page 77). | Key Responsibilities and Areas of Risk Oversight |
●Oversees GE’s independent auditor, including the audit plan and budget, and monitors independence and performance ●Oversees the effectiveness of GE’s financial reporting processes and systems ●Discusses with auditor and management key reporting practices (including non-GAAP), critical audit matters and new accounting standards ●Monitors the effectiveness of GE’s internal controls ●Reviews and evaluates the scope and performance of the internal audit staff and compliance program ●Oversees the company’s enterprise risk management and cybersecurity programs ●Monitors GE’s significant litigation and investigations ●Oversees external reporting on sustainability matters in coordination with the Governance Committee | | ●Oversees the Board’s governance processes, including all significant governance policies and procedures ●Oversees company policies and strategies related to climate change management, political spending & lobbying, human rights, and environment, health & safety ●Oversees external reporting on sustainability matters in coordination with the Audit Committee ●Reviews Board composition and compensation in connection with long-term strategy and identifies new directors for GE ●Oversees Board and committee self-evaluations ●Reviews any Board conflicts of interest, as applicable | | ●Oversees GE’s executive compensation policies, practices and programs ●Oversees and approves goals and objectives for performance-based equity awards and evaluates performance against those goals ●Evaluates and approves compensation of the CEO ●OverseesReviews risk assessment of compensation policies and practices to ensure that they do not encourage unnecessary risks ●Oversees development of executive succession plans, including recruitment, development and retention efforts for all employees ●Oversees strategies and policies related to human capital management, including matters such as diversity, equity and inclusion, workplace environment and culture, and talent recruitment, development, engagement and retention |
| | | | | |
| Financial acumen. The Board has determined that each of Mses. Lesjak, Reynolds and Seidman and Messrs. Carter and D’Souza are “audit committee financial experts” (per SEC rules), and each of these directors is “financially literate” (per NYSE rules). |
Financial acumen. Mses. Lesjak, Reynolds and Seidman and Messrs. Carter and D’Souza are “audit committee financial experts” (per SEC rules), and each of these directors is “financially literate” (per NYSE rules).
GE 20212022 PROXY STATEMENT 1719
Table of Contents
Key Areas of Board Oversight
| Strategy
The Board has oversight responsibility for management’s establishment and execution of corporate strategy. Elements of strategy are discussed at every regularly scheduled Board meeting, guided by the company-level priorities of continuing to strengthen our businesses, solidifying GE’s financial position, and driving long-term profitable growth. The Board also engages directly with the leaders of GE’s businesses and regularly reviews the businesses’ strategic and operational priorities, competitive environment, market challenges, economic trends and regulatory developments. GE’s annual long-term strategy process focuses on key strategic questions identified for each business. The leadership teams from the businesses discuss these questions, and their business priorities for the coming year as informed by the long-term strategy process, with the Board during a two-day strategy session in December of each year. A long-term orientation and these key strategic questions continue to be integrated with how we set multi-year priorities across our businesses, as well as our budgets and operational and financial objectives. The Board at meetings throughout the year also regularly discusses capital allocation plans, the company’s performance against its operating plan and annual budget and potential mergers, acquisitions and dispositions with a view toward alignment with our strategic priorities. | |
| Board-Driven Process for Strategic Plan to Form Three Independent Companies | |
| In 2021, the full Board conducted a rigorous portfolio and business strategy review over several months, culminating in the announcement of a plan to separate GE’s businesses into three industry-leading public companies, focusing on the growth sectors of aviation, healthcare and energy. As standalone companies, we believe each business will benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors, and employees. | |
Strategy
The Board has oversight responsibility for management’s establishment and execution of corporate strategy. Elements of strategy are discussed at every regularly scheduled Board meeting, guided by the current company-level priorities of continuing to strengthen our businesses, solidifying GE’s financial position, and driving long-term profitable growth. The Board also engages directly with the leaders of GE’s businesses and regularly reviews the businesses’ strategic and operational priorities, the competitive environment, market challenges, economic trends and regulatory developments.
The Board also reviews horizontal strategy topics that cut across GE’s businesses, such as decarbonization, the prospects for greater decoupling in US/China relations, and digital product and service offerings. For example, at meetings throughout 2020, the Board reviewed climate change-related opportunities and risks across GE’s businesses. The Board is actively engaged with management on related topics such as the competitive landscape for our businesses amidst climate-related shifts in technology, product and service demand; scenario analysis of potential pathways; customer, investor and other stakeholder expectations; and reducing the environmental impact of GE’s own operations. The Board at its meetings also regularly discusses capital allocation plans, the company’s performance against its operating plan and annual budget and potential mergers, acquisitions and dispositions with a view toward alignment with our strategic priorities.
In 2020, GE redesigned the long-term strategy process to focus on key strategic questions identified for each business. The leadership teams from the businesses discussed these questions, and their business priorities for the coming year as informed by the long-term strategy process, with the Board during a two-day strategy session in December 2020. A long-term orientation and these key strategic questions continue to be integrated with how we set multi-year priorities across our businesses, as well as our budgets and operational and financial objectives.
Enterprise Risk Management
Risk assessment and risk management are the responsibility of the company’s management, and the Board has oversight responsibility for those processes. The Audit Committee assists with the oversight of the company’s enterprise risk management framework, and the Board has also delegated specific risk oversight responsibility to committees of the Board based on the expertise of those committees. Our Governance Principles and committee charters define the risk areas for which each committee has ongoing oversight responsibility, while the Board as a whole focuses on the most significant risks facing the company. Throughout the year, the Board and the committees to which it has delegated responsibility dedicate a portion of their meetings to review and discuss specific risk topics in greater detail.
The GE Board’s risk oversight builds upon management’s risk assessment and mitigation processes. Those processes include regular discussions during operational and strategic reviews with the businesses, as well as the programs, policies, processes and controls related to the company’s financial planning and analysis; controllership and financial reporting; executive development and evaluation; compliance under the company’s code of conduct (The Spirit & The Letter); integrity programs and applicable laws and regulations; product quality; environmental, health and safety performance; information technology, information security and
cybersecurity programs; and internal audits. GE’s Chief Risk Officer coordinates the company’s enterprise risk management framework and reports periodically to the Audit Committee and the full Board on risk topics. During 2020, we adopted operational and governance rhythms across the company, and with the Board, to coordinate and oversee actions related to the COVID-19 pandemic, including an internal task force to protect the health and safety of our employees globally and maintain business continuity; the assessment of financial and operating impacts, financial planning and mitigating cost, cash, and other actions in response; funding and liquidity management and related treasury actions; enterprise risk management and other functional activities across our global commercial, supply chain, human resources, controllership, government affairs, and other organizations. Other2021, reviews with the Audit Committee or Board have included discussions of top enterprise risks, risk management processes at the GE business-level, liquidity risk management and stress testing, delegations of authority for significant transactions and expenditures, and risks related to the company’s strategic planning and priorities.
We typically organize enterprise risks into the broad categories of strategic, operational, financial, or legal and compliance or reputational risk. Risks identified through our risk management processes are prioritized and, depending on the probability and severity of the risk, escalated as appropriate. Senior management discusses these risks regularly with the risk owners within the businesses or at the Corporate level. Risk leaders within the businesses and corporate functions are responsible for presenting risk assessments and key risks to senior management and, when appropriate, to the Board or the relevant committee of the Board. For example, each GE business discusses its top enterprise risks during quarterly operating reviews, as well as risk mitigation strategies and other related considerations. In addition, GE business leaders periodically review their risk management programs and top risks with the Audit Committee, which is responsible for the oversight of GE’s overall enterprise risk management framework. Refer to the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 20202021 for a discussion of key risks that could have a material adverse effect on our business, reputation, financial position and results of operations.
Sustainability
GE is rising to the challenge of building a world that works, with a focus on opportunities for our technology in:in the energy transition to drive decarbonization,future of smarter and more efficient flight, precision medicinehealthcare that personalizes diagnoses and treatments and the future of smarter and more efficient flight.energy transition to drive decarbonization. We recognize the importance of these topics to our shareholders and other stakeholders, and sustainability is a driving force behind the work we do and the company’s long-term value. As GE continuesMore information that may be of interest to deepen its focus on thesea variety of stakeholders about GE’s sustainability approach, priorities and performance, including about safety, greenhouse gas emission reductions for our own operations and for our products, environmental stewardship, diversity and inclusion (as also discussed further below), supply chain and human rights and other matters, internally, we also plan to publish an updated GEcan be found in our Sustainability Report later in 2021.Report.
Sustainability is an integrated aspect of how we think about strategy and risk. GE’sOur Board and management believe the long-term interests of shareholders are advanced by responsibly addressing the concerns of other stakeholders and interested parties including employees, recruits, customers, suppliers, GE communities, government officials and the public at large. We believe the integration of a sustainability lens with our daily operations, culture and company priorities is important to driving results. At the Board, these topics often span multiple functional categories and areas of oversight, and therefore oftentimes involve discussion at the full Board level rather than individual committees.
| For additional reporting on sustainability and ESG matters, see our ESG webpages, our 2020 Sustainability Report and our 2021 Diversity Annual Report (see “Helpful Resources” on page 77). |
| Our Reach |
 | ENERGY TRANSITION 1/3 of the world’s electricity generated with the help of our technology |  | PRECISION HEALTHCARE Serve more than 1B patients per year |  | FUTURE OF FLIGHT Largest & youngest commercial fleet |
1820 GE 20212022 PROXY STATEMENT
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Board Oversight
Key Areas Related to Strategy, Risk & Sustainability
 | | | | |
| FULL BOARD | | AUDIT COMMITTEE
|
| | FULL BOARD
●Long-term strategy ●Most significant risks facing GE ●Reviews with each business ●De-leveraging and liquidityFinancial performance ●Energy transition and climate change | | AUDIT COMMITTEE
| ●Financial statements, systems & reporting ●Regulatory, compliance and litigation risks ●Cybersecurity ●Enterprise risk management framework ●Auditors (internal and external) |
| | | | |
| | | | |
GOVERNANCE &
PUBLIC AFFAIRS
COMMITTEE | | MANAGEMENT DEVELOPMENT &
COMPENSATION COMMITTEE |
| ●Corporate governance ●Public policy ●Environmental, health and safety matters ●Support of full Board’s oversight on climate change | | MANAGEMENT
DEVELOPMENT &
COMPENSATION
COMMITTEE
| ●Human capital management, including diversity and talentpay equity ●Talent development ●Succession planning ●Executive compensation | |
Key Governance Processes
Management Level
Key Governance Processes
Management Level
OPERATING
REVIEWS |  | ORGANIZATION &
TALENT REVIEWS | | LONG-TERM
STRATEGY REVIEWS | | 
PROCESS | | OPERATING
REVIEWS
Quarterly GE CEO reviews with each business on their operating priorities, execution against plan and top risks | | ORGANIZATION &
TALENT REVIEWS
Annual GE CEO review dedicated to organization and critical talent strategy to drive business results, including action plans related to cultural transformation and diversity | | LONG-TERM
STRATEGY
REVIEWS
Annual long-range review of business strategy, technology roadmap and competitive position, including investment requirements to deliver sustainable growth | | BUDGET PROCESS
Annual budget planning process, designed to focus shorter-term financial execution and investments profile to deliver long-term strategic objectives | | | | | | | | | | |
Enterprise Risk Management Framework STRATEGIC
RISK | | OPERATIONAL
RISK | | FINANCIAL
RISK | | LEGAL &
COMPLIANCE
RISK | | REPUTATIONAL
RISK |
GE 2021 PROXY STATEMENT 19
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Oversight of Environmental, Social and Governance (ESG) Programs
As noted above, the Board and its committees oversee the execution of GE’s environmental, social and governance strategies and initiatives as an integrated part of their oversight of the company’s overall strategy and risk management, including as it relates to climate change-related risks and opportunities. In addition, the Governance Committee assists the Board in its oversight of corporate social responsibilities, significant public policy issues, protection of human rights, environmental, health & safety (EHS) matters, political contributions and lobbying activities.
For additional reporting on these programs, see GE’s ESG webpages, our 2020 Diversity Annual Report and our forthcoming Sustainability Report (see “Helpful Resources” on page 73).
Climate and Environment, Health & Safety (EHS)
We believe that GE is uniquely positioned to contribute to efforts to reduce greenhouse gas emissions. As the company that has led the way in innovation for over a century, GE can deliver technology for the world to help nations meet their contributions toward the emissions reduction targets called for by the 2015 Paris Agreement and achieve the long-term goal of sustainable development. Over the years, we have designed a diverse portfolio of some of the most advanced products to enable emission reductions, including: our Haliade-X, the world’s most powerful offshore wind turbine in operation; our suite of GE onshore wind turbines, with more than 49,000 turbines installed globally and an industry leading 53% of new wind turbines installed in the U.S. in 2020; our 7HA.03 gas turbine, which will power the first plant in the U.S. with a large-scale turbine fired by a blend of hydrogen and natural gas; our digital grid solutions that enable rapid renewables growth and resiliency; our small modular reactors (BWRX-300 and Natrium), which could be deployed to fully decarbonize the grid as a zero emissions solution; and our GE9X engine, the world’s largest and most powerful aircraft engine that is also the most efficient engine we have ever built and is designed to deliver 10% greater fuel efficiency than its predecessor. Significant actions over the last year also demonstrate GE’s alignment with the goals of the Paris Agreement: We announced a new goal of achieving carbon neutrality for our own operations by 2030. We also announced that we are pursuing an exit from the new build coal power market. For additional discussion related to a shareholder proposal on this topic, see “Shareholder Proposal No. 3” on page 66. EHS excellence is fundamental to who we are, and we are committed to protecting our people, the environment, our communities, and the GE brand. GE is committed to ensuring that all communities where we operate realize the strongest environmental protection from our activities. We impose our heightened standards globally for our employees and communities regardless of the local regulatory regime. We strongly believe that access to affordable, reliable, sustainable electricity is critical to reducing poverty and hunger, and promoting access to education and healthcare for all people.
Human Rights and Supply Chain
GE is proud to be a leader in respecting human rights across our operations—from our supply chain to our products. We have long collaborated with peers, partners, governments and civil society in search of practical ways to address some of the world’s most complex human rights challenges such as the unethical recruitment of vulnerable workers, one of the leading causes of modern slavery.
Suppliers are critical partners in GE’s global value chain, and our supply chain extends to countries where environmental, health, safety, labor, and human rights laws have certain weaknesses. GE’s Supplier Integrity Guide governs our expectations of all suppliers and includes specific prohibitions against forced, prison or indentured labor and against subjecting workers to any form of compulsion, coercion or human trafficking. The Supplier Integrity Guide is reinforced by our industry-leading global supply chain audit program under which we audit suppliers in high risk countries before approval for onboarding and periodically thereafter. Since 2005, GE has conducted more than 31,000 supplier assessments spanning 100 countries. Wherever possible, we work with suppliers to improve their practices and build their capacity in the interests of workers and communities.
| | Human Capital Management
The strength and talent of our workforce are critical to the success of our businesses, and we continually strive to attract, develop and retain people commensurate with the needs of our businesses in their operating environments. The company’s human capital management priorities are designed to support the execution of our business strategy and improve organizational effectiveness. We monitor various factors across our priorities, including as a part of our business operating reviews during the year. The priorities focus on: protecting the health and safety of our workforce; sustaining a company culture based in leadership behaviors of humility, transparency and focus with a commitment to unyielding integrity; developing and managing our talent to best support our organizational goals; and promoting inclusion and diversity across the enterprise.
The Board believes that human capital management and succession planning, including diversity and inclusion initiatives, are critical to the company’s success. Our Board’s involvement in leadership development and succession planning is ongoing throughout the year. The Board has primary responsibility for succession planning for the CEO and oversight of other key senior management positions. The Management Development & Compensation Committee oversees the company’s talent development programs, and the Board meets regularly with high-potential executives at many levels across the company through formal presentations and informal events throughout the year. The Management Development & Compensation Committee is also regularly updated on key talent indicators for the overall workforce.
Philanthropy – GE Foundation
The GE Foundation, a philanthropic organization of GE, is committed to transforming our communities and shaping the diverse workforce of tomorrow by leveraging the power of GE. We are developing skills by bringing innovative learning in community health globally and science, technology, engineering and mathematics (STEM) education, scaling what works, and building sustainable solutions. The GE Foundation also supports employee giving with a corporate matching gift program and awards scholarships to children of eligible GE employees around the world.
Compliance and Integrity
Effective compliance depends on culture and leadership. We view our reputation for integrity and compliance as a competitive and recruiting advantage, and we expect our leaders from the top down to create a culture of compliance. We are committed to an open reporting environment in which employees are encouraged to promptly raise concerns without fear of retaliation. Our Code of Conduct policy, The Spirit & The Letter, details the expectations of everyone who works for or represents GE, in specific areas such as improper payments, working with governments, competition law, international trade compliance, cybersecurity and privacy and respectful workplace. Open reporting is the cornerstone of GE’s commitment to integrity. As a result, we rely on all of our employees to raise issues when they see something that they believe may violate a law or GE policy. We believe our employees are our first and best line of defense.
|
20 GE 2021 PROXY STATEMENT
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Board Governance Practices
Our Board seeks to operate with the highest degree of effectiveness, supporting a dynamic boardroom culture of independent thought and intelligent debate on critical matters. We take a comprehensive, year-round view of corporate governance and our adoption of best practices impacts our leadership structure, Board composition and recruitment, director engagement, and accountability to shareholders. Our Board and committee evaluation process allows for annual assessment of our Board practices and the opportunity to identify areas for improvement.
 | | | | | | | | How We Evaluate the
Board’s Effectiveness
ANNUAL EVALUATION PROCESS
The Governance Committee oversees and approves the annual formal board evaluation process and determines whether it is appropriate for the evaluations to be conducted by the lead director or an independent consultant each year. In 2020, the evaluation process was conducted by Mr. Horton as the lead director.
| | 1 | Evaluation Questionnaires
Directors completed written questionnaires focusing on the performance of the Board and each of its committees.
| | 2 | Individual Interviews
The lead director conducted a one-on-one interview with each member of the Board focused on:
●reviewing the Board’s and its committees’ performance over the prior year; and
●identifying areas for potential enhancements of the Board’s and its committees’ processes going forward.
| | 3 | Discussion of Results
The lead director reviewed the questionnaire and interview responses with the full Board.
|
| 4 | Use of Feedback
The Board and each of its committees developed plans to take actions based on the results, as appropriate.
|
| 5 | Changes Implemented
The 2020 evaluation reaffirmed that changes implemented following the 2018 and 2019 self-evaluation process, such as enhancements to Board and committee materials and elimination of the Finance and Capital Allocation Committee, had resulted in improvements. Other changes coming out of the 2020 self-evaluation included:
●increased focus on talent development and succession planning; and
●augmented focus on oversight of risk and long-term strategy.
|
| | | | | | | | | | |
GE 20212022 PROXY STATEMENT 21
Table of Contents How We Get Feedback from Investors
Our Investor Engagement Program
We conduct extensive governance reviews and investor outreach throughout the year involving our directors, senior management, investor relations, legal and human resources departments. This helps management and the Board understand and focus on the issues that matter most to our shareholders so GE can address them effectively.
GE Participants | | How the Board Receives Direct Feedback from Major Institutional Investors | ●Independent directors
●Senior management
●Investor relations department
●Legal department
●Human resources department
| | STRATEGY AND
BUSINESS MATTERS
From time to time, GE’s independent directors meet with representatives of our shareholders. This complements management’s investor outreach program and allows directors to directly solicit and receive investors’ views on GE’s strategy and performance. | | GOVERNANCE AND COMPENSATION MATTERS
Our lead director regularly accompanies management on its governance-focused roadshow with a number of significant investors, and other directors join these outreach discussions from time to time. In 2020, our lead director participated in discussions with a number of our largest investors to solicit feedback on executive compensation programs, Board engagement and the Board’s role in overseeing the company’s strategy and portfolio transformation. |
Investor Outreach and Our 2020 Say-On-Pay Vote
At our 2020 annual meeting, 74% of shareholders expressed support for the compensation of our named executives.
In advance of the 2020 annual meeting, and as part of our fall outreach after the meeting, we made significant efforts to engage with our institutional shareholders to better understand their concerns related to our executive compensation programs and to the factors impacting their say-on-pay vote. This outreach also involved Tom Horton, our lead director and chair of our Management Development & Compensation Committee. During 2020, we met with shareholders representing approximately 62% of our shares held by institutional investors as of December 31, 2020 to collect their feedback on our executive compensation programs. This was in addition to the engagement by our investor relations department as well as the engagement we do with retail investors.
HOW YOU CAN COMMUNICATE WITH YOUR BOARD
The Audit Committee and the independent directors have established procedures to enable anyone who has a comment or concern about GE’s conduct — including any employee who has a concern about our accounting, internal accounting controls or auditing matters — to communicate that comment or concern directly to the lead director or to the Audit Committee. Information on how to submit these comments or concerns can be found on GE’s website (see “Helpful Resources” on page 73). |
22 GE 2021 PROXY STATEMENT
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Recent Investor Discussion Topics and Board Response | GE STRATEGY AND
PORTFOLIO
Critically review the company’s strategy and portfolio, narrowing our focus to strengthen our businesses to improve top-line and bottom-line performance | | CLIMATE CHANGE
Assess the company’s long-term strategy and shift to a low-carbon future, with a focus on environmental impact of products and operations | | HUMAN CAPITAL
MANAGEMENT
Review key talent with a focus on diversity, development and retention efforts | | EXECUTIVE
COMPENSATION
Simplify our executive compensation programs to increase focus on key performance metrics and alignment with shareholders | | BOARD
COMPOSITION
Continue our ongoing Board refreshment, adding directors with relevant industry experience and skill sets |
Compensation-Related Investor Feedback
 | The majority of investors with whom we engaged indicated that they were supportive of the Management Development & Compensation Committee’s actions overall. In particular, investors indicated that they were supportive of: |
● | Taking action to attract and retain key talent during a period of uncertainty for the company; | ● | Focusing on incorporating performance metrics that are aligned with operational accountability for our executives; | ● | Ongoing efforts to align executive pay with results for shareholders through equity; and | ● | Simplifying the performance metrics used across our compensation programs. |
 | Investors had concerns about the following actions by the Management Development & Compensation Committee: |
● | Granting large equity awards to the CEO and CFO, at lower stock price targets than the CEO’s original inducement award; and | ● | Granting executive pay at levels that are misaligned with multi-year share performance. |
Compensation Committee Response
As part of its assessment of GE’s executive compensation programs, the Management Development & Compensation Committee reviewed these voting results, evaluated investor feedback and considered other factors discussed in this proxy statement, including the importance of maintaining the right leadership team to guide the company its multi-year transformation, alignment of our compensation program with the long-term interests of our shareholders and the relationship between risk-taking and the incentive compensation we provide to our named executives.
After considering these factors, the committee decided to take the following actions to increase management accountability and more closely align management’s interests with shareholders:
● | Continue to shift executive compensation away from cash-based programs and to equity more broadly (beyond our named executive officers); | ● | Grant PSUs to a broader swath of our executives; | ● | Change the performance metrics for the 2021 PSUs to incorporate 1-year operating metrics with a 3-year relative total shareholder return modifier; and | ● | Further align the annual bonus program with specific performance goals for 2021 by applying a performance modifier to increase or decrease awards based on achievement of safety objectives. |
GE 2021 PROXY STATEMENT 23
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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 shareholders meeting. BOARD/COMMITTEE MEETINGS. In 2020,2021, each of our current directors attended at least 75% of the meetings held by the Board and committees on which the member served during the period the member was on the Board or committee. Average attendance by our current directors for these meetings was 98%95% during 2020.2021. ANNUAL SHAREHOLDERS MEETING. All 11 orof our director nominees for 2021 attended the 2020 annual meeting.2021 Annual Meeting. Board Integrity Policies
CODE OF CONDUCT. All directors, officers and employees of GE must act ethically at all times and in accordance with GE’s code of conduct (The Spirit & The Letter). Under the Board’s Governance Principles, the Board does not permit any waiver of any ethics policy for any director or executive officer. The Spirit & The Letter, and any amendments to the code that we are required to disclose under SEC rules, are posted on GE’s website (see “Helpful Resources” on page 73)77). CONFLICTS OF INTEREST. All directors are required to recuse themselves from any discussion or decision affecting their personal, business or professional interests. If an actual or potential conflict of interest arises, the director is required to promptly inform the CEO and the lead director. The Governance Committee reviews any such conflict of interest. If any significant conflict cannot be resolved, the director involved is expected to resign. Limits on Director Service on Other Public Boards
GE POLICY. As discussed in detail in the Board’s governance documents,Governance Principles, and summarized in the table below, the Board has adopted policies designed to help ensure that all of our directors have sufficient time to devote to GE matters. In 2019, the Governance Committee decided to further reduce the number of public company boards permitted for GE directors, as disclosed below. | | PERMITTED # OF PUBLIC COMPANY BOARDS
(INCLUDING GE) | Public company
executives | | 2* | | Other directors | | 4 | | | PERMITTED # OF PUBLIC COMPANY AUDIT COMMITTEES
COMMITTEES (INCLUDING(INCLUDING GE) | Audit Committee Chair | | 2 | Audit Committee
member | | 3 | | | OTHER RESTRICTIONS | | Lead Director | | Absent special circumstances should not serve as lead director, chairmanchair or CEO of another public company |
| * | Service on the board of a public company for which a director serves as an executive, together with service on the board of any public company subsidiary or public affiliates as part of the director’s executive responsibilities, shall count as one board for purposes of this limit. |
HOW WE APPLIED TO BAZIN. Mr. Bazin is in compliance with GE’s policy on public board service although he serves on three public company boards, including GE. In assessing the time commitment for these boards, we note that Mr. Bazin serves on two of those boards in connection with his role as Chairman and CEO of AccorHotels. In addition to serving as the Chairman of Accor, he serves on the board of Huazhu Group Limited (formerly known as China Lodging Group), in which Accor owns a stake. Accor and Huazhu Group have also entered into a strategic alliance pursuant to which Huazhu Group is the master franchiser for Accor’s economy hotel business in China.
HOW WE APPLIED TO TISCH. Mr. Tisch is in compliance with GE’s policy although he serves on four public company boards, including GE. Mr. Tisch is the CEO of Loews, which is a diversified holding company whose business operations are entirely conducted through its subsidiaries. The three other public company boards on which Mr. Tisch serves are all within Loews’s reportable segments. CNA Financial is 89.6% owned and Diamond Offshore Drilling is 53% owned by Loews. Mr. Tisch serves on the boards of these subsidiaries and on the holding company’s board. Since Mr. Tisch’s responsibilities as a board member of these companies are integrally related to and subsumed within his role as CEO of Loews, the Board believes that this board service does not meaningfully increase his time commitments or fiduciary duties, as would be the case with service on unaffiliated public company boards.
HOW WE APPLIED TO HORTON. In appointing Mr. Horton as lead director, the Board considered the fact that Mr. Horton is also the lead director for Walmart. In reviewing Mr. Horton’s time commitment at Walmart, the Board noted that Walmart separates the roles of Chairman and CEO, mitigating the potential time commitment of the lead director. The Board determined that Mr. Horton could serve in both roles under the circumstances. Independent Oversight of Political Spending
The Governance Committee, composed solely of independent directors, oversees the company’s political spending and lobbying. This includes political and campaign contributions as well as any contributions to trade associations and other tax-exempt and similar organizations that may engage in political activity. As part of its oversight role in public policy and corporate social responsibility, the committee is responsible for the following:●HOW YOU CAN FIND MORE INFORMATION ABOUT OUR GOVERNANCE PRACTICES Each year we review GE’s governance documents and modify them as appropriate. These documents include the Board’s Governance Principles — which include our director qualifications and director independence guidelines — as well as Board committee charters. The web links for these materials can be found under “Helpful Resources” on page 77. | Policy oversight. A yearly review ofHOW YOU CAN COMMUNICATE WITH YOUR BOARD
The Audit Committee and the independent directors have established procedures to enable anyone who has a comment or concern about GE’s political spending policies and lobbying practices. | ● | Budget oversight. Approval ofconduct — 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 GE’s annual budget for political activities. | ● | Reporting. Oversight of a report on the company’s political spending, which is updated twice each year and made available on our ESG website (see “Helpful Resources”on page 73)77). |
2422 GE 20212022 PROXY STATEMENT
Table of Contents In 2018, the Governance Committee decided to further enhance the company’s political spending disclosures by disclosing the names of all trade associations receiving more than $50,000 from the company, including the portion of the company’s payment used for lobbying or political expenditures, as well as any contributions to 501(c)(4)s, beginning with contributions made in 2018. GE’s political spending has declined in recent years, and in 2020 we did not contribute any corporate funds to political campaigns, committees or candidates for public office.
HOW YOU CAN FIND MORE INFORMATION ABOUT OUR GOVERNANCE PRACTICES
Each year we review GE’s governance documents and modify them as appropriate. These documents include the Board’s Governance Principles — which include our director qualifications and director independence guidelines — as well as Board committee charters. The web links for these materials can be found under “Helpful Resources” on page 73.
Related Person Transactions & Other Information
HOW WE REVIEW AND APPROVE TRANSACTIONS. We review all relationships and transactions in which the company and our directors and executive officers or their immediate family members participate if the amount involved exceeds $120,000. The purpose of this review is to determine whether they have a material interest in the transaction, including an indirect interest. The company’s legal staff is primarily responsible for making these determinations based on the relevant facts and circumstances, and for developing and implementing processes and controls for obtaining information about these transactions from directors and executive officers. In addition, the Governance Committee reviews and approves any such related person transaction. As described in the Governance Principles, which are available on GE’s website (see “Helpful Resources” on page 77), in the course of reviewing and approving a disclosable related person transaction, the Governance Committee considers the factors in the box below. 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 Governance Principles, which are available on GE’s website (see “Helpful Resources” on page 73), in the course of reviewing and approving or ratifying a disclosable related person transaction, the committee considers the factors in the box below. Since the beginning of 2020,During 2021, there have beenwere no related person transactions meeting the requirements for disclosure in this proxy statement.
FACTORS USED IN ASSESSING RELATED PERSON TRANSACTIONS● | Nature of related person’s interest in transaction | ● | Material transaction terms, including amount involved and type of transaction | ● | Importance of transaction to related person and GE | ● | ●Nature of related person’s interest in transaction ●Material transaction terms, including amount involved and type of transaction ●Importance of transaction to related person and GE ●Whether transaction would impair a director or executive officer’s judgment to act in GE’s best interest | ● | Any other matters the committee deems appropriate, including any third-party fairness opinions or other expert reviews obtained in connection with the transaction |
For a description of shareholder derivative lawsuits involving certain current and former GE executives and members of the Board, refer to Note 23. Commitments, Guarantees, Product Warranties and Other Loss Contingencies in GE’s financial statementsbest interest
●Any other matters the committee deems appropriate, including any third-party fairness opinions or other expert reviews obtained in our 2020 Annual Report on Form 10-K.connection with the transaction Stock Ownership Information
Common Stock & Total Stock-Based Holdings Table
The following table includes all GE stock-based holdings, as of December 31, 2020, 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 | | COMMON STOCK | | TOTAL | | Sébastien Bazin | | | | 0 | | 120,773 | | Ashton Carter | | | | 0 | | 14,521 | | Francisco D’Souza | | | | 151,500 | | 312,948 | | Edward Garden | | | | 32,131,316 | | 32,194,599 | | Thomas Horton | | | | 55,248 | | 120,832 | | Risa Lavizzo-Mourey | | | | 25,000 | | 99,239 | | Catherine Lesjak | | | | 0 | | 41,231 | | Paula Rosput Reynolds | | | | 25,800 | | 76,550 | | Leslie Seidman | | | | 6,500 | | 96,453 | | James Tisch | | | | 3,540,000 | | 3,730,563 | | Total | | | | 35,935,364 | | 36,807,709 | | | | | | | | | | | COMMON STOCK | | | | NAMED EXECUTIVES | | STOCK | | OPTIONS | | TOTAL | | Larry Culp | | 15,125,304 | | 0 | | 17,949,831 | | Carolina Dybeck Happe | | 0 | | 0 | | 3,866,884 | | Jamie Miller | | 0 | | 1,966,869 | | 2,399,945 | | Kieran Murphy | | 188,073 | | 1,160,021 | | 3,635,220 | | John Slattery | | 0 | | 0 | | 1,626,490 | | Scott Strazik | | 136,893 | | 1,066,018 | | 3,317,088 | | Total | | 15,450,270 | | 4,192,908 | | 32,795,458 | | | | | | | | | CURRENT DIRECTORS
& EXECUTIVES | | COMMON STOCK | | TOTAL | | As a group (21 people) | | | | 62,030,317 | | 85,059,752 | | | | | | | | | | 5% BENEFICIAL OWNERS | | | | | | COMMON STOCK | | T. Rowe Price Associates | | | | | | 681,876,091 | | The Vanguard Group | | | | | | 646,951,204 | | BlackRock, Inc. | | | | | | 566,506,492 | | Fidelity Management & Research | | | | 480,790,578 | | Total | | | | | | 2,376,124,365 |
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For a description of shareholder derivative lawsuits involving certain current and former GE executives and members of the Board, refer to Note 22. Commitments, Guarantees, Product Warranties and Other Loss Contingencies in GE’s financial statements in our 2021 Annual Report on Form 10-K. Independent Oversight of Political Spending The Governance Committee, composed solely of independent directors, oversees the company’s political spending and lobbying. This includes political and campaign contributions as well as any contributions to trade associations and other tax-exempt and similar organizations that may engage in political activity. As part of its oversight role in public policy and corporate social responsibility, the Governance Committee is responsible for the following: | ● | Policy oversight. A yearly review of GE’s political spending policies and lobbying practices. | | ● | Budget oversight. Approval of GE’s annual budget for political activities. | | ● | Reporting. Oversight of a report on the company’s political spending, which is updated twice each year and made available on our ESG website (see “Helpful Resources” on page 77). |
GE currently discloses the names of all trade associations receiving more than $50,000 from the company, including the portion of the company’s payment used for lobbying or political expenditures, as well as any contributions to 501(c)(4)s, beginning with contributions made in 2018. GE’s political spending has declined in recent years, and in 2021 GE did not contribute any corporate funds to political campaigns, committees or candidates for public office.
GE 2022 PROXY STATEMENT 23
Table of Contents Stock Ownership Information Common Stock & Total Stock-Based Holdings Table The following table includes all GE stock-based holdings, as of December 31, 2021, of our directors and nominees, named executives, directors, nominees and executives as a group, and beneficial owners of more than 5% of our common stock. | | COMMON | | | | DIRECTORS | | STOCK | | TOTAL | | Stephen Angel | | 6,065 | | 6,065 | | Sébastien Bazin | | 0 | | 18,181 | | Ashton Carter | | 0 | | 3,643 | | Francisco D’Souza | | 18,937 | | 42,463 | | Edward Garden | | 4,016,414 | | 4,026,113 | | Isabella Goren | | 37 | | 37 | | Thomas Horton | | 6,906 | | 17,246 | | Risa Lavizzo-Mourey | | 3,125 | | 14,109 | | Catherine Lesjak | | 0 | | 7,051 | | Tomislav Mihaljevic | | 0 | | 0 | | Paula Rosput Reynolds | | 4,900 | | 13,481 | | Leslie Seidman | | 1,812 | | 14,914 | | James Tisch | | 442,500 | | 469,188 | | Total | | 4,500,696 | | 4,632,491 |
| | COMMON STOCK | | | | NAMED EXECUTIVES | | STOCK | | OPTIONS | | TOTAL | | H. Lawrence Culp, Jr. | | 1,890,661 | | 0 | | 2,204,516 | | Carolina Dybeck Happe | | 0 | | 0 | | 554,563 | | John Slattery | | 0 | | 22,482 | | 288,753 | | Russell Stokes | | 41,995 | | 202,116 | | 481,419 | | Kieran Murphy | | 25,317 | | 171,295 | | 486,966 | | Total | | 1,957,973 | | 395,893 | | 4,016,217 |
| DIRECTORS, NOMINEES & | COMMON STOCK | | TOTAL | | EXECUTIVES | | | | | | | As a group (23 people) | | | 7,713,950 | | 10,261,552 |
| 5% BENEFICIAL OWNERS | | COMMON STOCK | | T. Rowe Price Associates | | 115,488,862 | | The Vanguard Group | | 82,214,690 | | BlackRock, Inc. | | 68,206,900 | | Fidelity Management & Research | 63,476,985 | | Total | | 329,387,437 |
| PERCENTAGE OWNERSHIP | ●No director or named executive owns more than one-tenth of 1% of the total outstanding shares of GE common stock, other than Mr. Garden, who may be deemed to indirectly beneficially own 0.4% of our outstanding shares as a result of his affiliation with Trian (see note 1 below) and Mr. Culp, who has sole voting but not investment power over 0.2% of our outstanding shares. | ● | T. Rowe Price, Vanguard, BlackRock and Fidelity own 7.7%, 7.4%, 6.5% and 5.5%, respectively, of our total outstanding shares. |
GE 2021 PROXY STATEMENT 25
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COMMON STOCK. This column shows beneficial ownership of our common stock as calculated under SEC rules. Except to the extent noted below, everyone included in the table has sole voting and investment power over the shares reported. None of the shares are pledged as security by the named person, although standard brokerage accounts may include non-negotiable provisions regarding set-offs or similar rights.(1) For the named executives, the Stock sub-column includes non-voting interests that may be converted into shares of GE common stock, within 60 days including RSUs. This column also includes shares thatother than Mr. Garden, who may be acquired under stock options that are currently exercisable or will become exercisable within 60 daysdeemed to indirectly beneficially own 0.4% of our outstanding shares as a result of his affiliation with Trian (see the Options sub-column). Fornote 1 below) and Mr. Culp, this column also includes 13,943,028 performance shares over which hewho has sole voting but no investment power.
TOTAL. This column shows the individual’s total GE stock-based holdings, including voting securities shown in the Common Stock column (as described above), plus non-voting interests such as PSUs (included at the target payout level) and other interests that cannot be converted into shares of GE common stock within 60 days, including, as appropriate, RSUs, DSUs, deferred compensation accounted for as units of GE stock, and stock options. As described under “Director Compensation” on page 55, directors must hold the DSUs included in this column until one year after leaving the Board.
COMMON STOCK & TOTAL. Both columns include the following shares over which the named individual has shared voting andnot investment power through family trusts or other accounts: Cox (106,690)over 0.2% of our outstanding shares.
●T. Rowe Price, Vanguard, BlackRock and Fidelity own 10.5%, Culp (1,182,276)7.5%, Garden (32,131,316)(1)6.2% and 5.8%, Horton (55,248), Reynolds (4,300), Strazik (11,659), Timko (10,000) and Tisch (3,540,000)(2).CURRENT DIRECTORS & EXECUTIVES. These columns show ownership byrespectively, of our current directors and executive officers (therefore excluding any shares owned by Ms. Miller). This row includes: (1) 9,091,505 shares that may be acquired under stock options that are or will become exercisable within 60 days, (2) 137,123 RSUs that vest within 60 days, (3) 37,041,489 shares over which there is shared voting and investment power, and (4) 13,943,028total outstanding shares.
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COMMON STOCK. This column shows beneficial ownership of our common stock as calculated under SEC rules. Except to the extent noted below, everyone included in the table has sole voting and investment power over the shares reported. None of the shares are pledged as security by the named person, although standard brokerage accounts may include non-negotiable provisions regarding set-offs or similar rights.(1) For the named executives, the Stock sub-column includes non-voting interests that may be converted into shares of GE common stock within 60 days, including RSUs. This column also includes shares that may be acquired under stock options that are currently exercisable or will become exercisable within 60 days (see the Options sub-column).
For Mr. Culp, this column also includes 1,742,878 performance shares over which he has sole voting but no investment power.
TOTAL. This column shows the individual’s total GE stock-based holdings, including voting securities shown in the Common Stock column (as described above), plus non-voting interests such as PSUs (included at the target payout level) and other interests that cannot be converted into shares of GE common stock within 60 days, including, as appropriate, RSUs, DSUs, deferred compensation accounted for as units of GE stock, and stock options. As described under “Director Compensation” on page 51, directors must hold the DSUs included in this column until one year after leaving the Board.
COMMON STOCK & TOTAL. Both columns include the following shares over which the named individual has shared voting and investment power through family trusts or other accounts: Angel (5,927), Cox (13,335), Culp (147,783), Garden (4,016,414)(1), Horton (6,906), Reynolds (537), Strazik (13,520), Timko (1,250) and Tisch (442,500)(2).
DIRECTORS, NOMINEES & EXECUTIVES. These columns show ownership by our directors, nominees and executive officers as a group. This row includes: (1) 1,016,723 shares that may be acquired under stock options that are or will become exercisable within 60 days, (2) 5,292 RSUs that vest within 60 days, (3) 4,648,172 shares over which there is shared voting and investment power, and (4) 1,742,878 shares over which there is sole voting power but no investment power. Current directors and executive officers as a group own approximately 1.0% of GE’s total outstanding shares, including those shares owned by Trian SPV X (see note 1).
5% BENEFICIAL OWNERS. This column shows shares beneficially owned by T. Rowe Price Associates, 100 East Pratt Street, Baltimore, MD 21202; The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355; BlackRock Inc., 55 East 52nd Street, New York, NY 10055; and FMR LLC (Fidelity), 245 Summer Street, Boston, MA 02210; as follows:
| | T. ROWE | | | | | | |
| (# OF SHARES) | | PRICE | | VANGUARD | | BLACKROCK | | FIDELITY |
| Sole voting | | 49,069,480 | | 0 | | 59,597,738 | | 6,178,216 |
| power | | | | | | | | |
| Shared voting | | 0 | | 1,677,190 | | 0 | | 0 |
| power | | | | | | | | |
| Sole investment 115,488,862 | | 77,917,990 | | 68,206,900 63,476,985 |
| power | | | | | | | | |
| Shared | | 0 | | 4,296,700 | | 0 | | 0 |
| investment | | | | | | | | |
| power | | | | | | | | |
The foregoing information is based solely on a Schedule 13G/A filed by T. Rowe Price with the SEC on February 14, 2022, a Schedule 13G/A filed by Vanguard with the SEC on February 9, 2022, a Schedule 13G/A filed by Fidelity with the SEC on February 9, 2022, and a Schedule 13G filed by BlackRock with the SEC on February 1, 2022, as applicable.
| (1) | For Mr. Garden, this column refers to 4,016,414 shares owned Trian SPV (Sub) X, L.P (Trian SPV X). Trian, an institutional investment manager, serves as the management company for Trian SPV X and as such determines the investment and voting decisions of Trian SPV X with respect to the shares of the company held by Trian SPV X. None of such shares are held directly by Mr. Garden. Mr. Garden is a member of Trian Fund Management GP, LLC, which is the general partner of Trian, and therefore is in a position to determine the investment and voting decisions made by Trian on behalf of Trian SPV X. Accordingly, Mr. Garden may be deemed to indirectly beneficially own (as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act)) the shares owned by Trian SPV X (see note 1).X. Mr. Garden 5% BENEFICIAL OWNERS. This column showsdisclaims beneficial ownership of such shares beneficiallyfor all other purposes. |
| (2) | For Mr. Tisch, this refers to 67,500 shares owned by T. Rowe Price Associates, 100 East Pratt Street, Baltimore, MD 21202; The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355; BlackRock, 55 East 52nd Street, New York, NY 10055; a Tisch family trust and FMR LLC (Fidelity), 245 Summer Street, Boston, MA 02210; as follows:| (# OF SHARES) | | T. ROWE PRICE | | VANGUARD | | BLACKROCK | | FIDELITY | Sole voting
power | | 282,158,645 | | 0 | | 494,706,989 | | 34,249,213 | Shared voting
power | | 0 | | 13,866,796 | | 0 | | 0 | Sole
investment
power | | 681,876,091 | | 609,463,634 | | 566,506,492 | | 480,790,578 | Shared
investment
power | | 0 | | 37,487,570 | | 0 | | 0 |
The foregoing information375,000 shares owned by Loews Corporation, of which Mr. Tisch is based solely onthe CEO, President, a Schedule 13G/A fileddirector and shareholder. Mr. Tisch disclaims beneficial ownership of the shares owned by T. Rowe Price withLoews Corporation except to the SEC on February 16, 2021, a Schedule 13G/A filed by Vanguard with the SEC on February 10, 2021, a Schedule 13G/A filed by Fidelity with the SEC on February 8, 2021, and a Schedule 13G/A filed by BlackRock, Inc. with the SEC on January 29, 2021, as applicable.extent of his pecuniary interest, if any, in those shares.
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DELINQUENT SECTION 16(a) REPORTS. Based upon a review of reports and written representations furnished to it, General Electric believes that during 2021, no director, officer, or other person subject to Section 16(a) of the Exchange Act (Section 16) with respect to General Electric failed to file on a timely basis any report required by Section 16. However, in 2021, Ms. Rosput Reynolds reported on Form 4 one purchase of 51 shares that was transacted in 2020 on her behalf by her investment manager in a managed account without her knowledge or approval.
(1) | For Mr. Garden, this column refers to 32,131,316 shares owned Trian SPV (Sub) X, L.P (“Trian SPV X”). Trian, an institutional investment manager, serves as the management company for Trian SPV X and as such determines the investment and voting decisions of Trian SPV X with respect to the shares of the company held by Trian SPV X. None of such shares are held directly by Mr. Garden. Mr. Garden is a member of Trian Fund Management GP, LLC, which is the general partner of Trian, and therefore is in a position to determine the investment and voting decisions made by Trian on behalf of Trian SPV X. Accordingly, Mr. Garden may be deemed to indirectly beneficially own (as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) the shares owned by Trian SPV X. Mr. Garden disclaims beneficial ownership of such shares for all other purposes.
24 GE 2022 PROXY STATEMENT
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| | | | | (2) | For Mr. Tisch, this refers to 540,000 shares owned by a Tisch family trust and 3,000,000 shares owned by Loews Corporation, of which Mr. Tisch is the CEO, President, a director and shareholder. Mr. Tisch disclaims beneficial ownership of the shares owned by Loews Corporation except to the extent of his pecuniary interest, if any, in those shares. |
26 GE 2021 PROXY STATEMENT
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MANAGEMENT
PROPOSAL NO. 12 Advisory
Approval of
Our Named
Executives’ Pay What are you voting on?
In accordance with Section 14A of the Exchange Act, we We are asking shareholders to voteapprove on an advisorya non-binding basis to approve the compensation paid to our named executives, as described in this proxy statement. Impact of the say-on-pay vote. This advisory proposal, commonly referred to as a “say-on-pay” proposal, is not binding on the Board. However, the Board and the Management Development & Compensation Committee will review and consider the voting results when evaluating our executive compensation program.
We hold say-on-pay votes annually. Under the Board’s policy of providing for annual say-on-pay votes, the next say-on-pay vote will occur at our 2022 annual meeting.2023 Annual Meeting.  
Your Board recommends a vote FOR the say-on-pay proposal Why the Board recommends a vote FOR the say-on-pay proposal. The Board believes that our compensation policies and practices are effective in achieving the goals of the compensation program.program, and that our actions have been responsive to shareholder feedback related to last year’s say-on-pay vote.
| | Compensation Dear GETo Our Shareholders,
As the Management Development and Compensation Committee, we are committed to ensuring that GE has the right leadership team in place, and that our compensation programs appropriately balance business performance, individual accountability and incentives to build a stronger and more valuable GE. Amidst the unprecedented challenges from the COVID-19 pandemic, our objective has been to retain and attract individuals of outstanding character and ability who are resilient to the demands of continuing the turnaround of our complex global business. Our deliberations over the past year have been influenced by the following:
●GE’s transformation to date has been significant but remains ongoing. By the end of 2020, the leadership team had demonstrated significant progress, with improved profitability and cash performance despite a still difficult macro-environment. The team reduced external debt by $16 billion in 2020 and $30 billion since the beginning of 2019. Our committee recognizes the significance of that achievement. But this transformation is a multi-year work in progress, and the ongoing operational and cultural transformation efforts are building a foundation for long-term profitable growth. We believe it is important to provide appropriate incentives for our leaders to see this transformation through.
●GE is continuing the important work of strengthening its leadership team. SinceAs members of the Management Development & Compensation Committee, we want to thank the many of you that have met with and provided feedback to us over the course of the last year. In 2021 the company met with shareholders representing nearly 80% of institutional share ownership. Members of the committee actively participated in and led meetings with over 60% of institutional shareholders. We were pleased to hear many shareholders favorably acknowledge enhancements we have made to GE’s compensation program during the past few years, including shifting the mix of long-term incentives from cash to equity, increasing external alignment with the use of a compensation peer group and continuing to refine our compensation metrics to help drive company priorities. Shareholders did not signal concerns with any fundamental aspects of our compensation program design. Based on our extensive engagement, the concerns underlying last year’s say-on-pay vote centered on two main areas. First was the grant of performance shares to our CEO Larry Culp was hired as Chairman and CEO in September 2018 to lead GE’s transformation, we have formed a new, capable senior leadership team in which more than three-quarters of Larry’s direct reports are new to their roles, and one-third are new to GE. We fully support these appointments as necessary for the turnaround, although they introduce a significant amount of change to the organization that we seek to pace thoughtfully and carefully. ●It takes steady hands to manage a transformation. Our CEO is an experienced and outstanding leader, with a proven track record and methodology to deliver transformational results. But he cannot deliver alone, and our committee seeks to support him with the tools to attract and retain the people and skills needed for GE’s complex global business.
Strengthening and Securing our Leadership Team
As we started 2020, we had a good deal of optimism that the worst of GE’s challenges was behind us. Then came COVID-19, and during the early months of the pandemic, the Board and | | leadership team were focused first on protecting the health and safety of GE employees and our communities, as well as on taking actions across the company to maintain continuity, manage risk and proactively mitigate the adverse financial impacts from COVID-19. As the pandemic took its toll, it became abundantly clear that the GE transformation would take longer than previously contemplated. We also heard concerns from shareholders that Larry’s original employment arrangement did not provide enough retention value to be meaningful, given the extent to which the pandemic was adversely affecting both the timeline for GE’s turnaround and the company’s stock price compared to when Larry became CEO in 2018. Given Larry’s performance and total dedication to GE’s future, the full Board, with our committee playing a lead role, undertook to secure his services beyond the term of his original agreement. As GE reported in August 2020, we amended Larry’s agreement to extend the term by two years to 2024 (with an option to extend for an additional year), and we granted him performance shares with a performance period aligned to this extended employment term. Larry’s compensation remains overwhelmingly tied to GE’s performance, with the performance shares targeting a significant return to shareholders, and no performance shares will be earned unless Larry remains with GE through the extended term of the agreement.
We have engaged with shareholders about this decision. We understand the range of their views and discussed them ourselves as a committee, including both Larry’s importance to GE and perceptions about the timing of our actions relative to market declines and volatility amidst the pandemic. On balance, we concluded that securing Larry’s continued leadership was one of the most important steps that we could take during a period of great uncertainty about the company’s outlook. Our committee considered other potential alternatives for amending Larry's award agreement, but ultimately decided to stay as close as possible to the design of the original award. We made this choice considering the extraordinary circumstances, and with an objective of removing any uncertainty and risk relative to Larry's retention. We also took actions to secure and incentivize the ongoing efforts of other key employees across the organization, including members of Larry’s leadership team. We believe these actions were in the best interests of shareholders, and we ask for your support in the “say-on-pay” vote in this year’s proxy statement.
In 2020, we also focused significant attention on talent below the CEO level. Our new GE CFO, Carolina Dybeck Happe, joined in March 2020. We |
GE 2021 PROXY STATEMENT 27
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also oversaw the recruitment of John Slattery, who joined GE Aviation in July 2020, as successorpart of the company’s agreement to extend his leadership by two years through at least August 2024. Shareholders have been overwhelmingly supportive of Larry and the action in 2020 to extend the term of his employment. But there was shareholder concern around the timing, size and structure of the 2020 retention grant made as part of the extension.
After considering shareholders’ feedback and a range of alternatives, the committee and Larry have agreed to reduce his annual equity incentive grant for 2022 from $15 million as was provided in his employment agreement to $5 million, representing a 67% reduction of annual equity. This action reflects our desire to continue incentivizing Larry to lead GE’s transformation and improve the company’s financial performance alongside the rest of the senior leadership team, his demonstrated strong performance as CEO and our Board’s support for his leadership. It also reflects our desire to recognize and meaningfully respond to our long-time Vice Chairmanshareholders. Larry has done and CEOcontinues to do an extraordinary job as the leader of our company, and we believe all shareholders are pleased that business, David Joyce. Recruiting top leadership fromhe has been retained and committed to remaining in place until 2024 at a global talent pool,minimum as with Carolinawe execute our previously announced spins and John, is a complex but worthwhile undertaking to build the right team for GE. In addition to these notable external hires, we spent time as a committee in the past year on management development, including reviewsrenewal of key positions and leadership changes, diversity and inclusion and other human capital priorities. Although it is still a work in progress, our management team is becoming more diverse in gender and ethnicity. Though not sufficient, the heightened awareness throughout the organization globally will pavebusinesses. The second area of concern was the way that discretion was used in 2020 annual bonuses for a more inclusiveour businesses. With that feedback in mind, the proxy this year demonstrates an approach to annual bonuses that is formulaic and diverse GEbased only on the predetermined performance metrics for our businesses. We did not apply discretion in the future. Finalizing Compensation Decisions for 2020
In early 2021, as we met to determinedetermining bonus pool funding or individual bonuses for named executives. Many shareholders expressed that the exercise of discretion in our bonus program should not be common, and should be well-explained in disclosure when necessary. We agree and saw no basis to use discretion this year, with the result that we had starkly differentiated bonus funding by business. For example, our Aviation business performed well in 2021 and had bonus funding at 113% of target, while our Renewable Energy business had a challenging year and missed each of its performance metrics, resulting in bonus funding of 0%.
We are grateful to those of you who provided feedback that informed these actions, and we hope to have your support on this year’s say-on-pay vote. We thank you for your support of GE. | |
| Management Development & Compensation Committee | |
|  | |  | |  | |  | |  | |
| THOMAS
HORTON | | SÉBASTIEN
BAZIN | | FRANCISCO
D’SOUZA | | EDWARD
GARDEN | | PAULA ROSPUT
REYNOLDS | |
| (Chair) | | | | | | | | | |
| | | | | | | | | | | | |
GE 2022 PROXY STATEMENT 25
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Shareholder Engagement on the 2021 Say-on-Pay Vote
EXTENSIVE
ENGAGEMENT  Met with shareholders representing 76% of outstanding shares held by institutional investors |
In 2021, we received approximately 42% support for our annual say-on-pay proposal. The Management Development & Compensation Committee and entire Board take the outcome of this vote seriously and have been highly focused on understanding and responding to our shareholders’ feedback reflected in this vote. Through the company’s engagement efforts, the committee sought to elicit and consider a full range of shareholders’ perspectives related to GE’s executive compensation program, program design elements and specific actions, to inform appropriate responses to the say-on-pay vote.
We held meetings with shareholders representing 53% of our outstanding common stock and 76% of our common stock held by institutional investors. The chair and other members of our Management Development & Compensation Committee led meetings with shareholders representing 42% of our outstanding common stock and 61% of common stock held by institutional investors. Our engagements also included representatives from our Legal, Human Resources and Investor Relations teams.
In evaluating potential changes to executive compensation, the committee reviewed shareholder feedback, which represented a spectrum of views from different shareholders. As part of these engagements, many shareholders favorably acknowledged changes and enhancements we have made to GE’s program during the past few years, including changes described on the following page. This supported our conclusion that most shareholders did not have concerns with any fundamental aspects of our compensation program design, but voted against say-on-pay in 2021 based on specific compensation actions taken for 2020. The following table provides an overview of the two main areas of concern that shareholders expressed as underlying last year’s vote, and actions the committee has taken in response to those concerns.
| | | | |
| What we heard | | | | What we have done to respond | |
| Shareholders have been overwhelmingly supportive of our CEO and extending his leadership, but the primary area of concern underlying the low say-on-pay vote was about the timing, size and structure of the 2020 retention grant made as part of the extension. Shareholders expressed a range of views about actions that might be appropriate in response, and we heard from shareholders who: ●had no expectation the 2020 grant should be revisited; ●supported the 2020 grant and the strong retention that it provides; ●asked about the possibility of modifying targets in the 2020 grant; and ●asked about the possibility of lowering the value of future grants. |  | | ●The 2020 grant was driven by unique and extraordinary circumstances; as such, the Board does not intend to enter into a similar modification of the CEO’s employment agreement again in the future. ●After considering a range of alternatives, the committee agreed with the CEO to reduce his annual equity incentive grant for 2022 from a grant date fair value of $15 million to $5 million, representing a 67% reduction of annual equity compared to the amount previously provided in the CEO’s employment agreement. ●We agree with the views expressed by a majority of shareholders we met with that revisiting the 2020 grant was not a necessary action; that grant provides strong retentive value that many shareholders support. |
| | | | |
| Some shareholders did not support the way discretion was used to increase bonus funding compared to a more formulaic approach. These shareholders expressed a desire to see better alignment between future bonus payments and GE’s performance, with any future use of discretion well-explained in disclosure. | | | Our annual bonuses for 2021 were formulaic and based only on the predetermined performance metrics for our businesses, we reflected on the challenges during 2020 and the extent of each business’s progress on its operational transformation efforts despite those challenges.businesses. We calculated each business’s financial performance versus the pre-COVID-19 targets from February 2020. We also assessed each business’s operational progress during the year, considering lean management system implementation, segment decentralization and safety performance. All the businesses except Aviation achieved significantdid not apply discretion in determining bonus pool funding based on a formulaic application of their financial performance metrics, and the funding levels were then adjusted downwards or upwards using the discretionary framework based on operational progress. In our final assessment, we applied negativeindividual bonuses for named executives. We will use discretion at some businesses (such as Healthcare and Renewable Energy), and we determined that thesparingly in determining bonus pools, at other businesses (including Gas Power, Power Portfolio and Aviation) shouldif discretion is warranted in the future will be funded at higher levels than their financial performance alone would dictate becauseaccompanied by enhanced disclosure to explain the rationale. |
See the letter from the Management Development & Compensation Committee on page 25 for more information about our say-on-pay response.
26 GE 2022 PROXY STATEMENT
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Regular Outreach to Seek Shareholder Feedback
The Board views shareholder engagement as a continuous process and regularly seeks feedback directly from our shareholders. Through these engagements, we receive constructive feedback on executive compensation that informs the committee’s program design and specific decisions.
The Board remains committed to continuing the dialogue with shareholders regarding our compensation philosophy and practices.
Compensation Program Structural Improvement Our compensation programs focus leadership on key areas that drive the business forward and align to the interests of their substantial progress on these operational factors. We believe this use of discretion was appropriate to recognize employees’ contributions and incentivize their continued efforts against the backdrop of the unique financial and operational challenges arising from the COVID-19 pandemic.our shareholders. The combination of both negative and positive discretion, tied to operational progress, should assure shareholders thatcommittee considers many factors when evolving our decisions are based on solid demonstration of performance and that we use discretion thoughtfully. Engaging with Shareholders and Continuing to Enhance our Programs
In linecompensation programs, including alignment with the broader transformation taking place across GEcompany’s strategy, market practice and trends, and shareholder feedback, including the results of say-on-pay votes. We have taken numerous actions over the past twoseveral years we have continued working to enhance our programs, strengthen the links between pay and contemporize GE’s approachperformance and incentivize management to executivedeliver for shareholders, including the following:
|
| ● | | 2018-2019 |
| | ●Increased accountability with alignment of annual incentive at GE businesses to business-level performance goals, rather than total company performance goals … simpler annual bonus plan focused on earnings and cash generation ●Began shift to greater proportion of equity as percentage of total compensation with a renewed focus on, reducing proportion of cash in pay mix ●Adopted compensation peer group for benchmarking and greater external benchmarking (includingperspective in compensation program design and actions |
| ● | | 2020-2021 |
| | ●Increased use of performance-based equity by granting PSUs to a formal peer group)broader group of executives ●Continued refinement of PSU metrics to align with peers and aligning with the expectations of our long-term shareholders. We recognize that we have opportunities to further improve our programscompany performance goals … in 2020, adopted more tailored relative TSR metric based on S&P Industrial Index rather than S&P 500 … in 2021, added GE-specific metrics based on earnings and free cash flow performance, in response to shareholder feedback and we are committed to continuing our work to achieve that. During 2020 members of this committee and GE’s leadership team engaged on compensation matters with shareholders representing roughly 62% of our shares held by institutional investors. As we look forward to 2021, based on external benchmarking and shareholder feedback, we have restructured the PSU metrics to focus on earnings per share and free cash flow (with relative TSR as a modifier, rather than the sole PSU metric). This change aligns payouts under our performance-based equity with key operational metrics to focus our executives on the most critical areas of performance, which we believe are aligned with generating long-term shareholder value. Also for 2021, in addition to financial metrics, our annual bonus program will add a bonus ●Introduced modifier for safety reflecting GE’s company-wide prioritization of improvement relativeperformance in annual incentive plan … drives alignment with important company priority, and aligned with growing investor interest in incorporating ESG metrics in compensation program design |
| ● | | 2022 |
| | ●Added operating profit as an additional annual incentive plan metric, to health and safety in the workplace.Having worked on improvements in our compensation structure over the last two years, the pay-for-performance culture is firmly embedded in GE at this juncture. Performance is being measured by the financial metrics that shareholders expect: cash realization, margin enhancement, organic growth and operational improvement, including safety and quality. We ask for your support of our 2020 compensation decisions.
Management Development & Compensation Committee
 | |  | |  | |  | |  | THOMAS HORTON
(Chairman)
| | SÉBASTIEN BAZIN
| | FRANCISCO D’SOUZA
| | EDWARD GARDEN
| | PAULA ROSPUT REYNOLDS
|
28 GE 2021 PROXY STATEMENT
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Overview of Our Executive Compensation Program
Although the executive compensation discussion in this proxy statement focusesdrive continued focus on the compensation decisionspriority of increasing profitability as we prepare to form three independent companies
●Refined weighting of annual incentive plan metrics to be more tailored by business … allows greater alignment for our named executives—Larry Culp (Chairman & CEO)each business with specific financial priorities (e.g., Carolina Dybeck Happe (SVP, CFO), Jamie Miller (Former SVP, CFO), Kieran Murphy (SVP, GE & CEO, GE Healthcare), John Slattery (SVP, GE & CEO, Aviation), and Scott Strazik (SVP, GE & CEO Gas Power) — our compensation programsvariability in weighting for top-line growth vs. profitability vs. cash flow) |
GE 2022 PROXY STATEMENT 27
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Overview of Our Executive Compensation Program
The executive compensation discussion in this proxy statement focuses on the compensation decisions for our named executives, however our compensation program and plans described below generally apply broadly across GE’s executives.
Compensation Philosophy
The table below describes the key elementsfactors the Management Development & Compensation Committee considers when designing pay programs and making compensation decisions.
OBJECTIVE | | HOW OUR COMPENSATION PROGRAM SUPPORTS THIS PHILOSOPHY |
Drive
Accountability
and
Performance | | ●Our incentive programs are designed to drive accountability for executing our strategy. ●We set target performance levels that are challenging but reasonably achievable and are aligned to the goals we communicate to investors.
●We set commensurately more challenging goals in association with above-target payout levels.
●Annual bonuses are tied to business unit results for business unit executives or to total company performance for corporate executives; annual equity awards for all executives are based on overall company performance. ●We set target performance levels that are challenging and aligned to the goals we communicate to investors. ●We set commensurately more challenging goals in association with above-target payout levels. |
Incentivize
Short- and
Long-Term
Performance | | ●Our program provides an appropriate mix of compensation elements. ●Cash payments reward achievement of short-term goals while equity awards encourage our named executives to deliver sustained strong results over multi-year performance periods. ●The committee continues to increase the portion of our executive compensation delivered in the form of long-term equity incentive compensation, rather than cash, to further align our executives with investors’ interests. |
Attract and
Retain Top
Talent | | ●Provide competitive compensation programs that attract and retain talented executives with a strong track record of success, assuring a high performing and stable leadership team to lead our long-cycle businesses. ●Continue to monitor market trends and align compensation programs with market where relevant. |
No Excessive
Risk Taking | | ●Our equity awards have specific holding and retention requirements for senior executives, which discouragesdiscourage excessive risk taking by ensuring that pay remains subject tokeeping long-term compensation aligned with our share price performance even after it is earned. ●In addition, theThe committee retains discretion to adjust compensation pursuant to our clawback policy, as well as for quality of performance and lack of adherence to company values. See “Clawbacksvalues, and Other Remedies for Potential Misconduct” on page 53 for more information.in cases of detrimental misconduct pursuant to our clawback policy. |
2021 Compensation Program Elements
Components
The table below sets forth the primary elementscomponents of our executive compensation programs.
2020 COMPENSATION PROGRAM FRAMEWORK: PRIMARY ELEMENTSprogram framework.
| Fixed | Performance-Based / At-Risk |
| Short-Term Incentive | Long-Term Equity-Based Incentive (generally 3-year vesting) |
| Component | SALARY | BONUS | PSUs | OPTIONS | RSUs |
ObjectiveLink to Shareholder Value
| Provide base pay level aligned with roles, responsibilities and responsibilities individual performance to attract and retain top talent | Deliver on annual investor framework Serves as key compensation vehicle for differentiating performance each year | DriveFocus executives on the achievement of specific financial performance goals directly aligned with our operating and strategic plans, and with a TSR modifier based on three-year return from stock price appreciation and dividends
PSUs provide a significant stake in the long-term financial success of GE that is aligned with shareholder interests and promote employee retention | IncreaseReward stock price
performance over time | Provide for long-term employee retention |
Performance period
| Ongoing | Annual
| 3-year performance period
| Generally 3-year vesting period
|
Performance measures
| | ●Organic Margin Expansion, Organic Revenue Growth and Free Cash Flow
●Individual performance
| GE TSR v. S&P 500 Industrial Index
| Stock price appreciation
|
CEO target pay mix*
|  |  |  |  |  |
Average other NEO target pay mix*
|  |  | 
|  |  |
| | | | | | | |
Performance-Based Compensation Structure
*CEO 2021 TARGET COMPENSATION | Pay mix reflects annual compensation program elements and does not include Leadership Equity Awards or other special compensation arrangements.
| AVERAGE 2021 TARGET COMPENSATION FOR OTHER NEOs |
 | |  |
PEER GROUP28 . In 2019, our Management Development & Compensation Committee adopted a peer group for compensation benchmarking purposes. We use the peer group to assess the pay level of our executives, pay mix, compensation program design and pay practices. The peer group is also used as a reference point when assessing individual pay, though pay
decisions are also impacted by internal equity, retention considerations, succession planning and internal GE dynamics. For more information on the peer group, see “Other Executive Compensation Practices and Policies” on page 53.
GE 20212022 PROXY STATEMENT29
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Peer Group and Benchmarking | |
DETERMINING OUR PEER GROUP. Since 2019, the committee has used a peer group for compensation benchmarking purposes. Based on the criteria set forth below, the committee reviews the peer group each year and made no changes to the peer group for 2021. In determining the peer group, the committee considered the following factors: ●Industry – companies operating in similar or comparable industry spaces and with comparable operational scope ●Size – companies that are comparable to GE in terms of revenues, market capitalization and number of employees ●Investment Peers – U.S. public companies whose performance is monitored regularly by the same market analysts who monitor GE HOW WE USE THE PEER GROUP. The committee uses the peer group to assess the pay level of our executives, pay mix, compensation program design and pay practices. The peer group is also used as a reference point when assessing individual pay, though pay decisions are also supplemented by input from the company’s independent compensation consultant and are impacted by internal equity, retention considerations, succession planning and internal GE dynamics. | PEER COMPANIES | |
3M
Abbott Laboratories
Boeing
Caterpillar
Chevron
Cisco
Deere
DuPont
Exxon Mobil
Ford
General Dynamics
General Motors | Honeywell
HP
IBM
Intel
Johnson Controls
Johnson & Johnson
Lockheed Martin
Medtronic
Northrup Grumman
Raytheon Technologies
United Parcel Service | |
| | |
| | |
| | |
| | |
Overview of Our Incentive Compensation Plans
This section provides an overview of GE’s incentive compensation plans and how GE performed against the goals established under its 20202021 annual bonus program 2018 PSUs and the Gas Power Free Cash Flow Incentive Program.2019 PSUs. See “Compensation Actions for 2020”2021” on page 3533 for amounts paid to thedetails about 2021 compensation for each of our named executives as well as how we assessed their individual performance.executives.
Annual Bonuses
We provide annual cash incentive opportunities to our named executives under GE’s Annual Executive Incentive Plan (AEIP). Awards grantedThe targets for awards under the AEIP are designed to drive company and business unit performance, (for the relevant business unit executives).based on financial and operational priorities. When determining the actual annual incentive award payable to each executive officer, the Management Development & Compensation Committee firstcommittee considers performance achieved relative to these pre-established targets to determine the AEIP pool funding. Thefunding for Corporate and each relevant GE business. While the committee has the authorityability under the AEIP to apply discretion based onat the qualitybusiness and individual levels when appropriate, we have engaged with shareholders and have heard the concerns some of them have expressed about the results or extraordinary or unusual events and adjustuse of this discretion for bonuses in 2020. In the AEIP pool payout level, if warranted. The committee can further modify individual awards up or down based on performance against individual objectives.2021 bonuses for named executives, as described below, no discretion was used.
METRICS FOR THE ANNUAL BONUS POOL. At the beginning of the performance period, theThe committee sets the performance goals for the Corporate and business unit bonus pools. For 2020,2021, financial metrics for the annual bonus program were based upon free cash flow, organic margin expansion and organic revenue growth. Organic margin expansion and organic revenue growth were new metrics for 2020, replacing earnings and earnings per share. The committee made this change after reviewing all facets of the annual bonus program in 2019, with an aimselected these metrics, and weighted them to incentivize executives with metrics that arestrong performance across key drivers of long-term value creation, which are more reflective ofand these metrics also reflect how the businesses are managed internally. In addition, to further align the AEIP with GE’s overarching operational priority of safety, the committee for the first time in 2021 applied a performance modifier to increase or decrease awards by up to 10% based on achievement of defined safety metrics. The safety performance modifier was determined based on an assessment for each business of the following safety metrics relative to targets set at the beginning of the performance year: injury and illness rates; serious incidents; fatalities; and overall safety culture and progress since the prior year. For 2020,2021, the bonus pool performance metrics continued to be based upon company-wide results for our Corporate named executives, and upon business unit results for named executives who lead an individual business.
HOW THE BONUS PROGRAM WORKS. We pay cash bonuses to our named executives each February or March for the prior performance year. All employees at the executive-band level and above within GE are eligible to participate in the annual bonus program. For our named executives, target bonuses are typically set at 100-150% of salary.
In February following the performance period, the committee assesses performance against the financial metrics for the prior year to determine the payout level for each bonus pool, including whether positive or negative discretion should be applied.pool. The CEO also leads thean assessment of each named executive’s individual performance against relevant business and personal priorities, and makes an initial compensation recommendationrecommendations to the committee related to compensation for each executive. In doing so, he receives input and data from our chief human resources officer.Chief Human Resources Officer. The chief human resources officerChief Human Resources Officer also provides input and information as to the CEO’s compensation directly to the committee for their consideration. The CEO has no role in the committee’s determination of his bonus. These assessments inform the committee’s compensation decisions for named executives each year, and provide a basis for the committee to consider whether factors such as the quality of financial or operating results or the impact of extraordinary or usual events should be considered in those compensation decisions. For 2021, the committee sought to eliminate all use of discretion, and individual performance factors were not considered for bonus determinations of our named executives.
| INDIVIDUAL AWARDS
| |
| | |
|  | COMPANY/BUSINESS
| | INDIVIDUAL
| |
| TARGET BONUS AWARD
| PERFORMANCE
| PERFORMANCE FACTOR
| |
|
| | | (0-150%)NAMED EXECUTIVE OFFICER BONUS DETERMINATIONS | (0-125%) bonus not to exceed 2x target
| | | |
| | | | | | | | |
| | | | | | | | | | |
| BASE SALARY |  | TARGET AWARD PERCENTAGE | | COMPANY/
BUSINESS
PERFORMANCE | | SAFETY
MODIFIER (+/-10%) | |
| | | | | | | | | | |
30 GE 20212022 PROXY STATEMENT29
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How We Evaluated Business Performance and SetPerformed Against Annual Bonus PoolsTargets for 2020
In light of the unprecedented challenges that the company faced in 2020 as a result of the COVID-19 pandemic and the resulting global economic downturn, the committee decided it was appropriate to exercise discretion in determining bonus pools for 2020. Primarily, the committee evaluated actual performance of the AEIP’s financial metrics against the original performance goals. Then, a framework was established to take into account (1) the financial performance against a re-weighted composite of the core performance metrics, with an increased emphasis on cash flow (weighted 75% instead of 50%) in line with the company’s efforts to preserve financial strength during the pandemic; (2) financial performance against forecasted full-year results as of the beginning of the second half of the year; and (3) business unit progress on key operational priorities, such as progress on Lean cultural transformation and improvement of safety metrics. The committee applied its judgment in evaluating these additional considerations, including their relative weighting, with some business units receiving a higher pool but below target funding than they would have received solely based on financial performance against original goals and other business units pool funding decreasing based on this evaluation.2021
The chart below sets forth how Corporate (based on total company) and each of the business units performed relative to the targets under the AEIP for the 20202021 performance period. As noted above, in our engagement with shareholders we have heard some concerns about the use of discretion for bonuses in 2020. As part of our response to that feedback, the bonuses awarded to our named executive officers for 2021 are based solely on the relevant performance metrics with no use of discretion.
| * | | AEIP POOL
PERFORMANCE METRICS | | THRESHOLD
(50%) | TARGET
(100%) | MAXIMUM
(150%) | | WEIGHT | | RESULT | | ADJUSTED BONUS
POOL PAYOUT |
GE Corporate
(Culp, Dybeck
Happe, and Miller) | | Free Cash
Flow ($M)* | |  | | 50% | | Below
Threshold | | 80%
(0% for Mr.
Culp) |
| Organic Margin
Expansion (bps)* | |  | | 25% | | Below
Threshold | |
| Organic
Revenue
Growth* | |  | | 25% | | Below
Threshold | |
*
| Non-GAAP financial measures.Financial Measure. For information on how these metrics are calculated, see “Explanation of Non-GAAP Financial Measures and Performance Metrics” on page 54.75. |
AVIATION. Mr. Slattery’s bonus was based upon the Aviation business, for which he is the CEO. The Aviation business was particularly impacted by the challenges of the COVID-19 pandemic, but managed to improve margins in the second half of the year, ultimately delivering nearly breakeven free cash flow. Although the Aviation payout would have been 0% based on the metrics established prior to the COVID-19 pandemic, the business executed strongly on operational priorities, as well as cost and cash actions designed to mitigate the impact of COVID-19, and the committee determined that it was appropriate to fund the Aviation bonus pool at 65% of target, with a goal of incentivizing the team to remain engaged and focused in the face of ongoing global airline industry uncertainty.
| | AEIP POOL
PERFORMANCE METRICS | | THRESHOLD
(50%) | TARGET
(100%) | MAXIMUM
(150%) | | WEIGHT | | RESULT | | ADJUSTED BONUS
POOL PAYOUT |
Aviation
(Slattery) | | Free Cash
Flow ($M)* | |  | | 50% | | Below
Threshold | | 65% |
| Organic Margin
Expansion (bps)* | |  | | 25% | | Below
Threshold | |
| Organic
Revenue
Growth* | |  | | 25% | | Below
Threshold | |
*
| Non-GAAP financial measures. For information on how these metrics are calculated, see “Explanation of Non-GAAP Financial Measures and Performance Metrics” on page 54. |
GE 2021 PROXY STATEMENT 31
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GAS POWER. Mr. Strazik’s bonus was based upon the Gas Power business, for which he is the CEO. The Gas Power business was negatively impacted by the effects of the COVID-19 pandemic but executed strongly on operational improvements including building a lower-risk equipment backlog. The committee determined to adjust upward Gas Power’s bonus pool to 80% of target from a payout level that would have been 75% of target, in light of the progress on operational performance and the strong free cash flow performance (delivering positive free cash flow one year ahead of its commitment due to its success in reducing costs and improving working capital).
| | AEIP POOL
PERFORMANCE METRICS | | THRESHOLD
(50%) | TARGET
(100%) | MAXIMUM
(150%) | | WEIGHT | | RESULT | | ADJUSTED BONUS
POOL PAYOUT |
Gas Power
(Strazik) | | Free Cash
Flow ($M)* | |  | | 50% | | Maximum | | 80% |
| Organic Margin
Expansion (bps)* | |  | | 25% | | Below
Threshold | |
| Organic
Revenue
Growth* | |  | | 25% | | Below
Threshold | |
* | Non-GAAP financial measures. |
| ** | The company does not report free cash flow, organic margin expansion or organic revenue growth metrics at the sub-segment level for Gas Power.Aviation Services. |
30 GE 2022 PROXY STATEMENT
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HEALTHCARE. Mr. Murphy’s bonus was based upon the achievement of performance goals for the Healthcare business, for which he iswas the CEO. The HealthcareCEO until the end of 2021.
RENEWABLE ENERGY. There were no named executives from the Renewable Energy business performed strongly in 2020, supportingfor 2021.
| | | | AEIP POOL FINANCIAL
PERFORMANCE METRICS | | THRESHOLD
(50%) | | TARGET
(100%) | | MAXIMUM
(150%) | | WEIGHT | | RESULT | | SAFETY
PERFORMANCE
MODIFIER
(+/- 10%) | | BONUS
POOL PAYOUT | |
| Renewable
Energy | | Free Cash
Flow ($M)* | |  | | 0% | | | | | |
| Organic Margin
Expansion (bps)* | |  | | 0% | | -10% | | No Payout | |
| Organic
Revenue
Growth* | |  | | 0% | | | | | |
| | | | | | | | | | | |
POWER. There were no named executives from the front lines of the COVID-19 pandemic by responding to the exponential increases in demandPower business for certain products. In addition, the Healthcare team drove cost-out improvements, reduced inventory, and improved on-time delivery. Notwithstanding these results, the committee determined to adjust downward Healthcare’s bonus pool from a payout level of 138% to 125% of target in light of the fact that the business, while performing well on its operational goals, also in part benefitted from increased demand related to COVID-19.2021.
| | AEIP POOL
PERFORMANCE METRICS** | | THRESHOLD
(50%) | TARGET
(100%) | MAXIMUM
(150%) | | WEIGHT | | RESULT | | ADJUSTED BONUS
POOL PAYOUT |
Healthcare
(Murphy) | | Free Cash
Flow ($M)* | |  | | 34% | | Maximum | | 125% |
| Organic Margin
Expansion (bps)* | |  | | 33% | | Maximum | |
| Organic
Revenue
Growth* | |  | | 33% | | Above
Target | |
| * | Non-GAAP financial measures.Financial Measure. For information on how these metrics are calculated, see “Explanation of Non-GAAP Financial Measures and Performance Metrics”on page 54.75. |
| ** | ExcludesThe company does not report free cash flow, organic margin expansion or organic revenue growth metrics at the BioPharmasub-segment level within the Power business. |
POWER PORTFOLIO. The Power Portfolio business was negatively impacted by the effects of the COVID-19 pandemic, but executed strongly on operational improvements. The committee determined to adjust upward Power Portfolio’s bonus pool from a payout level of 63% to 80% of target in light of the business’ performance against mid-year forecasts and meeting expectations on the specified operational goals.
RENEWABLES. The Renewables business performed strongly in 2020, with Onshore Wind delivering record global volumes and Offshore Wind receiving certification for the world’s most powerful offshore wind turbine in operation today. Grid Solutions and Hydro delivered better project execution and reduced costs. Notwithstanding these results, the committee determined to adjust downward the Renewable’s bonus pool from a payout level of 100% to 90% of target as a result of the execution against specific operational priorities including improvement of safety metrics.
CAPITAL. GE Capital was impacted by the effects of the COVID-19 pandemic, especially at GECAS, our aircraft leasing business. The business delivered reduced debt and executed strongly on operational goals. The 2020 AEIP pool performance metrics for GE Capital were based on financial and strategic metrics. The committee determined to adjust upward GE Capital’s bonus pool from a payout level of 90% to 100% of target based on the business’s performance against operational goals.
32 GE 20212022 PROXY STATEMENT31
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Overview of Long-Term Incentive Compensation
In recent years,
As part of our annual compensation program we have useduse a mix of long-term incentive compensation awards: Performance ShareStock Units (PSUs), Performance Shares, Restricted Stock Units (RSUs) and stock options. In 2020, we made Annual Equity Awards in March as well as Leadership Equity Awards in August and September.
Annual Equity Incentive Awards
HOW WE DETERMINE AWARD AMOUNTS. In determining award amounts, the committee evaluates each executive’s overall compensation relative to the market for similar talent, the mix of cash versus equity as a percentage of the executive’s overall compensation, the executive’s expected future contribution to the success of the company and the retentive value of such awards. In 2020,2021, our annual equity incentive awards for senior executives other than Mr. Culp (who only received PSUs) were weighted approximately 50% as PSUs, 30% as stock options and 20% as RSUs.
WHY WE USE PSUs AND PERFORMANCE SHARES.TO ALIGN PAY WITH PERFORMANCE. We see PSUs and performance shares as a means to focus our named executives on particular goals, including long-term operating goals. Consistent with this philosophy, in recent years we have expanded the number of senior leaders receiving PSU awards to drive greater alignment between these executives and shareholders. PSUs and performance shares each have formulaically determined payouts that are earned only if the company achieves specified performance goals. PSUs and performance shares reward and retain the named executives by offering them the opportunity to receive GE stock if the performance goals are achieved and if they are still employed by us on the date the restrictions lapse.
OUR CEO’S LONG-TERM INCENTIVE AWARDS ARE ENTIRELY PERFORMANCE-BASED. Since he was hired in 2018, all of Mr. Culp’s equity awards have been in the form of either PSUs or Performance Shares,performance-based equity, as agreed in his employment agreement. By granting Mr. Culp solely performance-based equity, the committee has put more of Mr. Culp’s compensation at risk, providing him with increased incentive to drive longer-term improvements in the business.
WHY WE USE STOCK OPTIONS AND RSUs. We believe that stock options and RSUs effectively focus our named executives on delivering long-term value to our shareholders. Options have value only to the extent that the price of GE stock rises between the grant date and the exercise date. RSUs reward and retain the named executives by offering them the opportunity to receive GE stock if they are still employed by the company on the date the restrictions lapse.
OUR POLICY ON DIVIDEND EQUIVALENTS. With respect to PSUs, performance shares and RSUs, dividend equivalents or dividends, as applicable, are paid out only on shares actually received.
2020 PSUs.2019 PSUs HAD NO PAYOUT. All ofThe annual PSUs granted to the named executives other than Ms. Miller, were granted PSUs in 2020 that2019 could convert into shares of GE stock at the end of the approximately three-year performance period based on GE’s Total Shareholder Return (TSR) versus the S&P 500 Industrial Index, from the beginning of the performance period of March 2, 202019, 2019 through December 31, 2022.2021. The company did not meet this performance goal, and accordingly the committee, in February 2022, cancelled all 2019 PSUs with no payout, including for Messrs. Culp, Murphy and Stokes.
| | | | | | (2019-2021) | | |
| 2019 PSU PERFORMANCE GOAL | | HOW MEASURED | | WEIGHTING | | THRESHOLD
EARN 25% | | TARGET
EARN 100% | | MAXIMUM
EARN 175% | | RESULT |
| Relative TSR | | Cumulative GE TSR vs. S&P 500 Index | | 100% | |  | | No
Payout |
2020 PSUPSUs. The annual PSUs granted to the named executives in 2020 had similar terms to those that were granted to all executives in 2019, with an approximately three-year performance period based on GE’s TSR versus the S&P 500 Industrial Index. The S&P 500 Industrial Index performance metric represents a more tailored group of industry peers as compared to the S&P 500 Index, which was used in prior years.
2021 PSUs. The 2020annual PSUs are eligiblegranted to be earned as follows (withthe named executives in 2021 could convert into shares of GE stock at the end of the three-year performance period based on performance under GE’s one-year 2021 adjusted Earnings per Share (50% weighting) and Free Cash Flow (50% weighting) targets and modification of +/- 20% based on three-year relative TSR versus the S&P 500 Industrials Index, with proportional adjustment for performance between threshold, target and maximum):
| | | | | | (2020-2022) |
2020 PERFORMANCE GOAL | | HOW MEASURED | | WEIGHTING | | THRESHOLD
EARN 25% | | TARGET
EARN 100% | | MAXIMUM
EARN 175% |
Relative TSR*
| | Cumulative GE TSR vs. S&P 500 Industrial Index
| | 100% | |  |
* | The Management Development & Compensation Committee has the authority to adjust this metric for extraordinary items. |
maximum. Performance below threshold against the one-year adjusted Earnings per Share and Free Cash Flow results in no PSUs
being earned. The named executives may receive between 0% and 175% of the target number of PSUs granted. The committee selected the 2021 PSU metrics of Earnings per Share and Free Cash Flow to add operating metrics to the PSU design, rather than using only relative TSR as in prior years. The committee chose these operating metrics to incentivize and focus management on both profitability and cash generation, and these continue to be important financial priorities as we execute on our plan to form three independent companies. The use of a one-year performance period for Earnings per Share and Free Cash Flow reflects variability in these metrics and the challenges of setting long-term financial targets in the face of difficult macroeconomic conditions.
20202021 RSUs AND STOCK OPTIONS. The annual RSUs and stock options granted in 2020 generally2021 will vest in two equal installments on the second and third anniversary of the grant date.
2019 PSUs. The PSUs granted to the named executives in 2019 could convert into shares of GE stock at the end of the approximately three-year performance period based on GE’s TSR versus the S&P 500 from the beginning of the performance period of March 19, 2019 through December 31, 2021. The 2019 PSUs are eligible to be earned as follows (with proportional adjustment for performance between threshold, target and maximum):
| | | | | | (2019-2021) |
2019 PERFORMANCE GOAL | | HOW MEASURED | | WEIGHTING | | THRESHOLD
EARN 25% | | TARGET
EARN 100% | | MAXIMUM
EARN 175% |
Relative TSR*
| | Cumulative GE TSR vs. S&P 500 Index
| | 100% | |  |
* | The Management Development & Compensation Committee has the authority to adjust this metric for extraordinary items. |
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2018 PSUs CANCELLED. The PSUs granted to the named executives in 2018 (excluding the PSU award granted to Mr. Culp) had similar terms to those that were granted to all executives in 2019, with an approximately three-year performance period based on GE’s TSR versus the S&P 500, except that the performance period for the 2018 PSUs ran from February 26, 2018 through December 31, 2020. In February 2021, the committee cancelled the PSUs that were granted to executives in 2018, including Ms. Miller and Mr. Murphy, because the company did not achieve the performance goal.
2020 Leadership Awards
In August and September 2020, the committee granted Leadership equity awards to certain executives throughout GE. The Leadership Awards were structured to align with market practice, and with a goal of retaining the executive team and other key personnel throughout the company to lead GE through its multi-year transformation. The awards generally vest over three to five years, with the goal of aligning with shareholder’s expectations to deliver performance over the long-term. Mr. Culp and Ms. Dybeck Happe were granted performance-based Leadership Awards that pay out only to the extent that GE’s stock price significantly appreciates over a four- or five-year performance period. For more information on the Leadership Awards granted to Mr. Culp and Ms. Dybeck Happe, see “Compensation Actions for 2020” on page 35.
As part of a broad effort to secure and incentivize the ongoing efforts of key employees across the company, other executives were granted RSUs, which incentivize continued service and balance against excessive risk taking. The Leadership RSUs generally vest in two equal installments on the third and fourth anniversary of the grant date.
2020 New Hire Awards
The committee granted New Hire awards in the form of stock options to Ms. Dybeck Happe and Mr. Slattery. The grant date fair value of the awards reflects the value forfeited from the executives leaving their prior employers. The stock options vest on the fourth anniversary of the grant date (in the case of Ms. Dybeck Happe) and annually over three years (in the case of Mr. Slattery).
Gas Power Free Cash Flow Incentive Program
From time to time the committee may authorize special compensation programs to incentivize acceleration of specific goals and priorities for a particular business. Such programs may be structured to pay out in the form of cash or equity. In December 2018, the committee approved a special 2-year program for leaders within the Gas Power business, to focus on accelerating free cash flow improvement. The cash award was to be paid at target if the 2019-2020 cumulative free cash flow goal of $(2.11) billion was met or exceeded. If 2019-2020 cumulative free cash flow was less than $(2.36) billion, no cash award would be paid, and if 2019-2020 cumulative free cash flow was $(1.86) billion or more, the cash award was to be paid at 150% of the target cash value (but in no event would it exceed 150%). Due to effective management of cost measures and operational improvements, the business delivered strong free cash flow during 2019 and positive cash flow in 2020, resulting in the award paying out at 150% of target. The award had a target value of $1.9 million for Mr. Strazik, based on 100% of Mr. Strazik’s target cash compensation for 2020 (including salary and target bonus). To remain eligible for the award, Mr. Strazik was required to remain the CEO of the Gas Power business through the end of 2020.
3432 GE 20212022 PROXY STATEMENT
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Compensation Actions for 20202021
LarryH. Lawrence Culp, Jr.
CHAIRMAN & CEO
Age: 57
58
Education:
Washington College; MBA,
Harvard Business School
GE Tenure: 23 Years
| | | PERFORMANCE ASSESSMENT. CURRENT AND PRIOR ROLES
Chairman & CEO (since September 2018); former senior lecturer, Harvard Business School (2015-2018); former Senior Advisor, Bain Capital Private Equity (2017-2018); former CEO & President, Danaher (2001-2014)
| |
| | 2021 Performance Highlights
As the Chairman & CEO, Mr. Culp plays a central role in shaping the company’s strategy, establishing the framework against which performance is measured and delivering on that performance. Performance highlights during 2021 included: ●Creating a more focused, simpler, stronger high-tech industrial company, including the milestone of closing the sale of the GECAS business to AerCap for cash and other proceeds of more than $30 billion ●Strengthening GE’s businesses with operational improvements, driving decentralization and using lean to generate sustainable improvements in safety, quality, delivery, cost and cash performance across the company ●Solidifying the company’s financial position with gross debt reduction and improved liquidity, enabling the businesses to play more offense through both organic and inorganic growth opportunities ●Leading the Board’s strategic review process that culminated with the announcement of GE’s plan to form three independent, investment-grade, industry-leading companies focused on the growth sectors of aviation, healthcare and energy | |
| |  | |
| | Response to 2021 Say-on-Pay Vote
In setting Mr. Culp’s compensation,response to shareholder feedback, the committee recognized that he has made significant steps forward in GE’s multi-year transformation, and the importance of extending his leadership tenure with GE. Under his leadership and despite the challenges of COVID-19, the company made progress in strengthening the business by improving operational execution, building better cost structures, and reducing debt and balance sheet risk. Mr. Culp has bolsteredagreed to reduce his leadership team through strategic hiring of external talent in key roles and reassigning of internal talent. |
 | 2020 EARNED COMPENSATION
Base Salary $653,409 paid in 2020 (voluntarily forfeited most of $2.5 million annual salary)
Annual Bonus$0 Mr. Culp did not receiveequity incentive grant for 2022 from a bonus.
2020 GRANTED COMPENSATION
Annual PSU Grant $15 million grant date fair value of $15 million to $5 million. This grant will be reflected as 2022 compensation in next year’s proxy statement. The $15 million grant for 2021 was made pursuant to Mr. Culp’s employment agreement and prior to the 2021 Annual Meeting and say-on-pay vote. For more information, see the
Leadership Performance Share Award $57.1 millionLetter from the Management Development & Compensation Committee grant date fair valueon page 25.
| |
CEO Pay Structure
| ● | Salary. Upon his appointment as CEO, Mr. Culp’s salary was set at $2,500,000 under his 2018 employment agreement. In Aprilagreement and (other than certain forfeitures of his salary in 2020 in light of the business challenges and economic uncertainty resulting fromconnection with the COVID-19 pandemic, Mr. Culp voluntarily forfeited his salary for the remainder of 2020.pandemic), has not changed. |
| ● | Bonus. Mr. Culp’s bonus target is set at 150% of salary and has not changed since his appointment as CEO. Mr. Culp voluntarily forfeited his bonus for 2020, despite the 80% discretionary funding for the Corporate bonus pool. |
| ● | Annual equity awards. Under the terms of his employment agreement, Mr. Culp was granted a PSU award in March 20202021 with a grant date fair value of $15 million, and the final determination of how many shares will be earned, if any, will be based upon GE’s relative total shareholder return versus the S&P 500 Industrial Index for the period from the grant date of March 2, 2020 through December 31, 2022.million. For more information on the PSUs awarded in March 2020,2021, see “Annual EquityOverview of Long-Term Incentive AwardsCompensation – 20202021 PSUs” on page 33. |
Leadership Performance Share Award
In recognition of Mr. Culp’s essential role in leading GE’s ongoing transformation, on August 18, 2020, the committee recommended, and the Board approved, an amendment to Mr. Culp’s employment agreement to extend the term of the agreement through August 2024, or such later date as mutually agreed by the parties up to and through August 17, 2025. In connection with the extension, the Board also approved a one-time equity performance grant to Mr. Culp, which was intended to provide Mr. Culp with the incentive to continue to provide services to GE during this extended employment term, and reward returns to investors through stock price appreciation. Mr. Culp voluntarily relinquished any rights to the inducement PSUs, which were granted when he became CEO in 2018.32.
BACKGROUND
As discussed in more detail in the Letter from the Management Development & Compensation Committee on page 27, as it became clear in 2020 that the GE transformation would take longer than previously contemplated, the Board determined that securing
Mr. Culp’s continued leadership was one of the most important steps it could take during a period of great uncertainty about GE’s outlook. Led by the committee, the Board engaged in a process for developing an incentive award that it believed would be in the best interests of shareholders during this extended employment term, after considering the circumstances at the time such as:
● | The additional time it would require to execute GE’s transformation in light of the unprecedented challenges from the COVID-19 pandemic. |
| ● | RecognitionLeadership Performance Share Award. On August 18, 2020, the Board approved a one-time equity performance grant to Mr. Culp, which was intended to ensure retention of Mr. Culp for a longer period of time than he had originally agreed to when he became CEO. The grant provides strong retention incentives through 2024. During 2021, the Board conducted a rigorous portfolio and business strategy review, culminating in the announcement of a plan for two spin-offs—creating three new companies from the current GE businesses. In connection with the anticipated spin-offs, Mr. Culp’s Performance Share award is aligned with shareholders, and achievement of the progressperformance goal will also factor in GE’s transformation that Mr. Culp had led since his appointment as CEO. Under Mr. Culp’s leadership, GE has demonstrated significant progress, with improved profitability and cashthe performance despite a still difficult macro-environment. |
● | The Board’s conviction that Mr. Culp is an experienced and outstanding leader, with a proven track record and methodology to deliver transformational results for GE. The Board concluded that extending Mr. Culp’s services was necessary forof spun-off securities from the turnaround. |
● | The Board heard concerns from shareholders that Mr. Culp’s original inducement award did not provide enough retention value to be meaningful, given the extent to which the pandemic was adversely affecting both the timeline for GE’s turnaround and the company’s stock price compared to when Mr. Culp became CEO in 2018.spin date. |
AWARD MECHANICS
The Leadership Performance Share Award granted to Mr. Culp uses the same relative performance thresholds (i.e., 50-150% increase above baseline price) as the 2018 inducement PSUs, but is intended to secure Mr. Culp’s service for two more years (for a total of 6 years). The award will pay out as a number of GE shares, subject to his continued service to the company or termination under certain conditions, based upon the highest average closing price of GE’s stock for any 30 consecutive trading days during the four-year performance period from August 18, 2020 to August 17, 2024, or such later date
GE 20212022 PROXY STATEMENT 3533
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as mutually agreed by the parties up to and through August 17, 2025. Achievement of the performance goal is measured against a baseline
price of $6.67 (the average of the closing prices of GE’s stock over the period of 30 consecutive trading days up to and including August 18, 2020) as set forth in the table below.
| | THRESHOLD | | TARGET | | MAXIMUM |
| Percentage increase above baseline price | | 50% | | 100% | | 150% |
| 30 consecutive trading day average GE closing price | | $10.01 | | $13.34 | | $16.68 |
| Payout (number of GE shares) | | 4,647,676 | | 9,295,352 | | 13,943,028 |
If the 30 consecutive trading day average GE closing price is between the threshold, target and maximum levels, a proportionate number of shares between those levels will be earned, subject to vesting at the end of the performance period. Dividends are paid out only on shares actually received. In the event of a spin-off of a business to GE shareholders, achievement of the performance goal will also factor in the performance of those securities from the spin date, and Mr. Culp’s Leadership Performance Share Award will also be adjusted to pay out
in shares of the spun-off entity (or, where infeasible, the company may adjust the award or the performance targets to prevent the enlargement or diminution of the award) at the end of the performance period. The award will be adjusted for any extraordinary dividends. Mr. Culp is also entitled to payment of the award if (i) the company undergoes a change of control, (ii) he is terminated other than for cause, (iii) he dies or is disabled, or (iv) he leaves the company for good reason. For more information, see “Potential Termination Payments” on page 48.
Compensation for Our Other Named Executives
Carolina Dybeck Happe  Age: 48
49
Education:
Uppsala University, Sweden
GE Tenure: <1 Year2 Years | | | CURRENT AND PRIOR ROLES
Senior Vice President & CFO (since March 2020); former CFO and Executive committee member, A.P. Moller-Maersk A/S (2019-2020); former Executive Vice-presidentVice-President and CFO, Assa Abloy AB (2012-2018) | |
| | PERFORMANCE ASSESSMENT 2021 Performance Highlights
During her first year as the leader of our finance organization,As CFO, Ms. Dybeck Happe was criticalleads the company’s Finance organization and also has responsibility for treasury activities and GE Capital. Performance highlights during 2021 included:
●Achieving more than $50 billion of gross debt reduction during the year, marking a significant milestone in the company’s progress to our efforts to enhance liquidity, de-riskstrengthen the balance sheet and reduce leverage ●Delivering on the company’s financial riskgoals, with profit margin expansion, earnings per share and free cash flow for 2021 all exceeding outlook ●Simplifying the company’s financials following completion of the GECAS/AerCap transaction, with the transition from three-column to one-column financial statement reporting enabled by a smaller GE Capital no longer being a separate reporting segment ●Continuing to drive reduction in functional and operational costs, lean processes and reduction of waste, including significant reduction of Corporate costs during a time of significant economic uncertainty. During 2020, Ms. Dybeck Happe led GE’s actions that reduced debt by approximately $16 billion, reduced near-term liquidity needs by $10.5 billion, reduced our commercial paper use, continued to de-risk our pension liabilities and maintained a higher cash balance. The committee applied an individual performance factor of 105% in recognition of Ms. Dybeck Happe’s contributions.the year | |
 | 2020 EARNED COMPENSATION
Base Salary $1.25 million paid in 2020 (for partial year service, based on $1.5 million annual salary)
Annual Bonus$1.3 million (equal to 80% funding for Corporate, with an individual performance rating of 105%, based on target at 125% of salary, prorated for partial year service)
2020 GRANTED COMPENSATION
New Hire Equity Grant $8.0 million grant date fair value stock option grant (reflecting value forfeited by leaving her prior employer)
Annual Equity Grant $4.9 million grant date fair value, approximately 50% as PSUs, 30% as stock options and 20% as RSUs
Leadership PSU Grant$7 million grant date fair value, delivered as PSUs
|  | |
LEADERSHIP PSU GRANT. In September 2020, the committee granted Ms. Dybeck Happe a Leadership PSU award, recognizing the importance of her decisive actions to build better cost structures, and reduce debt and balance sheet risk, and the importance of ensuring her leadership over the long term. Her Leadership PSU award will pay out as a number of GE shares, subject to her continued service, if the company’s stock price appreciates significantly during the five-year performance period between September 3, 2020 and September 2, 2025. Achievement of the performance goals will be measured against a baseline price of
$6.67 (the average of the closing prices of the company’s stock over the period of 30 consecutive trading days up to and including August 18, 2020) as set forth in the table below. In defining these performance and service requirements, the committee intended to set performance criteria that align her interests with shareholders over the long term. Ms. Dybeck Happe’s Leadership PSUs were designed to secure long-term leadership of the finance organization with a longer vesting period than the CEO’s Leadership Performance Share Award.
| | THRESHOLD | | TARGET | | MAXIMUM |
| Percentage increase above baseline price | | 50% | | 100% | | 150% |
| 30 consecutive trading day average GE closing price | | $10.01 | | $13.34 | | $16.68 |
| Payout (number of GE shares) | | 546,960 | | 1,093,920 | | 1,640,880 |
If the 30 consecutive trading day average GE closing price is between the threshold, target and maximum levels, a proportionate number of shares between those levels will be earned. Dividend equivalents are paid out only on shares actually received. Ms. Dybeck Happe’s PSU award is subject to the same adjustment provisions as described above with respect to Mr. Culp’s Performance Share
Award. Ms. Dybeck Happe is also entitled to payment of the award if (i) the company undergoes a change of control, (ii) she is terminated other than for cause, (iii) she dies or is disabled, or (iv) she leaves the company for a good reason. For more information, see “Potential Termination Payments” on page 48.
36 GE 2021 PROXY STATEMENT
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Jamie MillerJohn Slattery
Age: 52
53
Education:Miami University
GE Tenure: 15 Years | PRIOR ROLES Special Advisor to the CEO (March 2020-September 2020); former Senior Vice President, CFO (November 2017-March 2020); former President & CEO, GE Transportation (2015-2017); former Chief Information Officer, GE (2013-2015); former Controller, GE (2008-2013)
PERFORMANCE ASSESSMENT Ms. Miller strengthened the Finance organization, preparing and executing on a successful transition to GE’s new CFO. She also played a key role in re-establishing investor credibility through significant action to de-lever and reduce financial risk. Based on her contributions and the terms of her separation agreement, the committee applied an individual performance factor of 100%.
SEVERANCE ARRANGEMENTS In determining the amount of Ms. Miller’s severance and her ongoing eligibility for certain equity awards, the committee took into account her 14 years of service to GE in a number of significant leadership roles, including developing and supporting the company’s strategic plan to reshape its portfolio structure and executing on the company’s strategy of mitigating financial risk and reducing its leverage. The committee determined that these arrangements were fair to Ms. Miller and consistent with market practice.
|
 | 2020 EARNED COMPENSATION
Base Salary $1.1 million (for partial year service, based on $1.45 million annual salary)
Annual Bonus$0.9 million (equal to 80% funding for Corporate, with an individual performance rating of 100% based on target at 100% of salary, prorated for partial year service)
2020 GRANTED COMPENSATION
Severance $688,889 (partial payment of $2.9 million severance pay pursuant to separation agreement) and $6.2 million for value associated with modification of certain equity awards pursuant to separation agreement
No Annual Equity Award
|
Kieran Murphy
Age: 58
Education: University College Dublin; MSc Marketing, University of Manchester
GE Tenure: 13 Years
| CURRENT AND PRIOR ROLESSenior Vice President, GE and President & CEO, GE Healthcare (since 2017); former President and CEO, GE Life Sciences (2011-2017); former CEO and Executive Director, Whatman plc (2007-2008)
PERFORMANCE ASSESSMENT In his role as CEO of Healthcare, Mr. Murphy delivered a strong year in the face of unforeseen challenges. The committee recognized Mr. Murphy’s contribution toward the Healthcare business meeting nearly all of its financial and strategic goals, including growing revenue organically and delivering strong margin and cash performance. Under Mr. Murphy’s leadership, the Healthcare business oversaw the launch of 40 new products and expanded its photon-counting CT technology capabilities with the acquisition of Prismatic Sensors. The committee applied an individual performance factor of 115% in recognition of Mr. Murphy’s contributions.
|
 | 2020 EARNED COMPENSATION
Base Salary $1.2 million (£925,000) paid in 2020
Annual Bonus$1.7 million (£1.325 million) (equal to 125% funding for the Healthcare business, with an individual performance rating of 115%, based on target at 100% of salary)
2020 GRANTED COMPENSATION
Annual Equity Awards $4.9 million grant date fair value, approximately 50% as PSUs, 30% as stock options and 20% as RSUs
Leadership Equity Award $4.9 million grant date fair value, delivered as RSUs
|
GE 2021 PROXY STATEMENT 37
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John Slattery
Age: 52
Education: University of Glamorgan; MBA, University of Limerick
GE Tenure: <1 Year2 Years
| | | CURRENT AND PRIOR ROLES
Senior Vice President, GE and President & CEO, Aviation (since September 2020); former President & CEO of Commercial Aviation, Embraer S.A. (2016-2020); former Chief Commercial Officer, Embraer S.A. (2012-2016) | |
| | PERFORMANCE ASSESSMENT 2021 Performance Highlights
Since his appointment asAs CEO of Aviation, Mr. Slattery led the Aviation business, Mr. Slattery leads an organization with $21 billion of revenues in 2021 and operations spanning commercial and military aircraft engines, integrated engine components, electric power and mechanical aircraft systems and aftermarket services. Performance highlights during 2021 included:
●Leading the Aviation business through the still ongoing commercial aviation recovery, in a market that has been significantly challenged during the COVID-19 pandemic ●Driving leadership changes, operational improvements and cultural transformation across the business, amidst production ramps for significant new engine platforms and rising shop visits ●Innovating for a more sustainable future of flight by developing relationships with partners and customers to take significant actions in responsefoster future technological progress, including powering the first passenger flight to use 100% sustainable aviation fuel, and working toward the pressures faced during 2020,next generation of engines, including realizing more than $1 billion in operational cost reductionsopen fan architectures, hybrid-electric capability, and $2 billion in cash preservation actions. The committee applied an individual performance factor of 100% in recognition of Mr. Slattery’s contributions.advanced thermal management concepts | |
 | 2020 EARNED COMPENSATION
Base Salary $588,768 paid in 2020 (for partial year service based on $1.25 million annual salary)
Hiring Bonus $1 million (pursuant to offer letter agreement)
Annual Bonus $375,000 (equal to 65% funding for Aviation business, with an individual performance rating of 100% based on target at 100% of salary, prorated for partial year service)
2020 GRANTED COMPENSATION
New Hire Equity Grant $1.5 million grant date fair value stock option grant (reflecting value forfeited by leaving his prior employer)
Annual Equity Awards $3.0 million grant date fair value, approximately 50% as PSUs, 30% as stock options and 20% as RSUs
|  | |
34 GE 2022 PROXY STATEMENT
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Scott StrazikRussell Stokes
Age: 42
50
Education:
Cornell University; M.A. Economics and Public Policy, ColumbiaCleveland State University
GE Tenure: 2025 Years | | | CURRENT AND PRIOR ROLES
Senior Vice President, GE & President and CEO, GasGE Aviation Services (since October 2020); former Senior Vice President, GE & President and CEO, GE Power (since 2018)Portfolio (2018-2020); former Senior Vice President, GE & President and CEO, GE Power (2017-2018); former President of Power Services (2017 – 2018)& CEO, GE Energy Connections (2015-2017); former CFO, Gas Power Systems,President & CEO, GE Power (2013-2017); Former CFO Commercial Engine Operations, GE Aviation (2011-2013)Transportation (2013-2015) PERFORMANCE ASSESSMENT In his role as CEO of Gas Power, Mr. Strazik led the business unit in building a lower-risk equipment backlog and delivering positive free cash flow one year ahead of its commitment as a result of efforts to reduce costs and improve working capital. In recognition of Mr. Strazik’s efforts in strengthening the foundations of the Gas Power business to expand margins and generate cash in the years ahead, the committee applied an individual performance factor of 110%.
| |
 | | 2020 EARNED COMPENSATION2021 Performance Highlights
Base Salary $925,000 paidAs CEO of the Aviation Services business, a business unit within our Aviation segment, Mr. Stokes leads an organization that provides maintenance, component repair and overhaul services, including sales of replacement parts, to support our fleet of commercial engines. Performance highlights during 2021 included:
●Driving operational improvements that resulted in 2020Annual Bonus $0.8 million (equal to 80% funding for Gas Power, with an individual performance rating of 110%, based on target at 100% of salary)
Special Gas Power Incentive Bonus$2.85 million based on achievements of 2-year freeimproved revenue, profit and cash flow objectivesperformance in 2021 for a key business unit within the Aviation business
●Implementing lean and new processes globally to improve turnaround time, contract selectivity, and estimates of future contract performance, driving increased profitability ●Leading growth and customer-focused modernization of the business’s global repair network | |
| |  | |
Kieran Murphy 2020 GRANTED COMPENSATIONAge: 59
Education:
University College Dublin; MSc Marketing, University of Manchester
Annual Equity AwardsGE Tenure: $3.3 million grant date fair value, approximately 50% as PSUs, 30% as stock options and 20% as RSUs14 Years
| | | Leadership Equity Award $4.9 million CURRENT AND PRIOR ROLES
grant date fair value, deliveredFormer Senior Vice President, GE and President & CEO, GE Healthcare (2017-2021); former President and CEO, GE Life Sciences (2011-2017); former CEO and Executive Director, Whatman plc (2007-2008)
| |
| | 2021 Performance Highlights
As CEO of the Healthcare business until his retirement at the end of 2021, Mr. Murphy led an organization with $18 billion of revenues in 2021 and operations spanning healthcare systems for medical imaging and patient monitoring, pharmaceutical diagnostics, digital solutions and other healthcare technologies. Performance highlights during 2021 included: ●Driving strong operational and financial performance, including strong order demand during the year and evidence of lean-driven improvements to strengthen execution and reduce costs ●Delivering new products and technology to healthcare customers globally, including the Vscan Air wireless pocket-sized ultrasound, AIR Recon DL imaging technology, the modular Revolution APEX CT, and other products to provide more integrated, efficient and personalized healthcare ●Investing in precision health and other innovations to grow and strengthen the business, including the BK Medical ultrasound business and other acquisitions, as RSUswell as investments in digital capabilities and artificial intelligence | |
| |  | |
38 GE 20212022 PROXY STATEMENT 35
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Summary Compensation
Summary Compensation Table
NAME &
PRINCIPAL POSITION | | YEAR | | SALARY | | BONUS | | | STOCK
AWARDS | | STOCK
OPTIONS | | PENSION &
DEFERRED
COMP. | | ALL OTHER
COMP | | SEC TOTAL |
Larry Culp
Chairman & CEO | | 2020 | | $ | 653,409 | | $ | 0 | | | $ | 72,054,874 | | $ | 0 | | $ | 463,799 | | $ | 19,950 | | $ | 73,192,032 |
| 2019 | | $ | 2,500,000 | | $ | 5,600,000 | | | $ | 15,465,000 | | $ | 0 | | $ | 969,188 | | $ | 19,600 | | $ | 24,553,788 |
| 2018 | | $ | 625,000 | | $ | 937,500 | | | $ | 13,740,000 | | $ | 0 | | $ | 86,662 | | $ | 9,665 | | $ | 15,398,827 |
Carolina Dybeck Happe*
SVP & CFO | | 2020 | | $ | 1,250,000 | | $ | 1,325,000 | | | $ | 10,415,106 | | $ | 9,500,003 | | $ | 246,010 | | $ | 1,032,906 | | $ | 23,769,025 |
Jamie Miller
Former SVP & CFO | | 2020 | | $ | 1,087,500 | | $ | 875,000 | | | $ | 4,940,432 | | $ | 1,254,957 | | $ | 0 | | $ | 783,756 | | $ | 8,941,645 |
| | 2019 | | $ | 1,450,000 | | $ | 2,000,000 | | | $ | 3,236,850 | | $ | 1,350,030 | | $ | 2,352,445 | | $ | 80,835 | | $ | 10,470,160 |
| 2018 | | $ | 1,450,000 | | $ | 1,160,000 | | | $ | 4,334,060 | | $ | 0 | | $ | 0 | | $ | 457,618 | | $ | 7,401,678 |
Kieran Murphy**
SVP, GE & CEO Healthcare | | 2020 | | $ | 1,186,657 | | $ | 1,699,805 | | | $ | 8,291,656 | | $ | 1,500,002 | | $ | 338,157 | | $ | 64,175 | | $ | 13,080,452 |
| 2019 | | $ | 1,125,210 | | $ | 1,532,201 | | | $ | 2,517,550 | | $ | 1,050,019 | | $ | 266,876 | | $ | 57,877 | | $ | 6,549,733 |
| 2018 | | $ | 1,135,814 | | $ | 1,703,721 | | | $ | 2,608,677 | | $ | 1,670,000 | | $ | 118,580 | | $ | 53,373 | | $ | 7,290,165 |
John Slattery*
SVP, GE & CEO Aviation | | 2020 | | $ | 588,768 | | $ | 1,375,000 | *** | | $ | 2,097,221 | | $ | 2,399,998 | | $ | 87,815 | | $ | 4,685,336 | | $ | 11,234,138 |
Scott Strazik*
SVP, GE & CEO, Gas Power | | 2020 | | $ | 925,000 | | $ | 3,675,000 | **** | | $ | 7,164,670 | | $ | 1,005,000 | | $ | 3,153,578 | | $ | 28,654 | | $ | 15,951,902 |
NAME &
PRINCIPAL POSITION | | YEAR | | SALARY | | BONUS | | | STOCK
AWARDS | | STOCK
OPTIONS | | CHANGE IN
PENSION
VALUE &
DEFERRED
COMP. | | ALL OTHER
COMP | | SEC TOTAL |
| H. Lawrence Culp, Jr. | | 2021 | | $ | 2,500,000 | | $ | 4,200,000 | | | $ | 14,999,996 | | $ | 0 | | $ | 943,153 | | $ | 20,300 | | $ | 22,663,449 |
| Chairman & CEO | | 2020 | | $ | 653,409 | | $ | 0 | | | $ | 72,054,874 | | $ | 0 | | $ | 463,799 | | $ | 19,950 | | $ | 73,192,032 |
| | 2019 | | $ | 2,500,000 | | $ | 5,600,000 | | | $ | 15,465,000 | | $ | 0 | | $ | 969,188 | | $ | 19,600 | | $ | 24,553,788 |
| Carolina Dybeck Happe* | | 2021 | | $ | 1,500,000 | | $ | 2,100,000 | | | $ | 3,602,609 | | $ | 1,499,998 | | $ | 351,465 | | $ | 1,415,986 | | $ | 10,470,058 |
| SVP & CFO | | 2020 | | $ | 1,250,000 | | $ | 1,325,000 | | | $ | 10,415,106 | | $ | 9,500,003 | | $ | 246,010 | | $ | 1,032,906 | | $ | 23,769,025 |
| John Slattery* | | 2021 | | $ | 1,250,000 | | $ | 1,337,500 | | | $ | 4,323,123 | | $ | 1,799,998 | | $ | 292,217 | | $ | 451,616 | | $ | 9,454,454 |
| SVP, GE & CEO Aviation | | 2020 | | $ | 588,768 | | $ | 1,375,000 | ** | | $ | 2,097,221 | | $ | 2,399,998 | | $ | 87,815 | | $ | 4,685,336 | | $ | 11,234,138 |
| Russell Stokes | | 2021 | | $ | 1,400,000 | | $ | 1,456,000 | | | $ | 2,521,819 | | $ | 1,050,001 | | $ | 2,733 | | $ | 89,211 | | $ | 6,519,764 |
| SVP, GE & CEO Aviation Services | | 2020 | | $ | 1,400,000 | | $ | 1,300,000 | | | $ | 7,267,127 | | $ | 1,050,002 | | $ | 5,919,977 | | $ | 89,573 | | $ | 17,026,679 |
| | 2019 | | $ | 1,400,000 | | $ | 2,000,000 | | | $ | 2,517,550 | | $ | 1,050,019 | | $ | 3,494,084 | | $ | 54,769 | | $ | 10,516,422 |
| Kieran Murphy*** | | 2021 | | $ | 1,273,148 | | $ | 1,273,148 | | | $ | 3,602,609 | | $ | 1,499,998 | | $ | 166,364 | | $ | 79,081 | | $ | 7,894,348 |
| Former SVP, GE & | | 2020 | | $ | 1,186,657 | | $ | 1,699,805 | | | $ | 8,291,656 | | $ | 1,500,002 | | $ | 338,157 | | $ | 64,175 | | $ | 13,080,452 |
| CEO Healthcare | | 2019 | | $ | 1,125,210 | | $ | 1,532,201 | | | $ | 2,517,550 | | $ | 1,050,019 | | $ | 266,876 | | $ | 57,877 | | $ | 6,549,733 |
| * | Ms. Dybeck Happe and Mr. Slattery were first employed by the company in 2020. Under applicable SEC rules, we have excluded Mr. Strazik’s compensation for 2018 and 2019 as he was not a named executive during those years. |
| ** | Includes $1.0 million signing bonus for Mr. Slattery, pursuant to his offer letter agreement. |
| *** | For Mr. Murphy, all cash amounts (including salary and bonus) were originally paid in British pounds and converted for purposes of this presentation at an exchange rate of $1.2829$1.3764 per £1.00, the 20202021 average noon buying rate certified for customs purposes by the U.S. Federal Reserve Bank of New York set forth in the H.10 statistical release of the Federal Reserve Board. |
*** | Includes $1.0 million signing bonus for Mr. Slattery, pursuant to his offer letter agreement. |
**** | Includes $2.85 million bonus, pursuant to the Gas Power Free Cash Flow Incentive Program. |
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. Salary increases for senior executives are assessed on a case-by-case basis in light of these considerations. 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, other than Mr. Murphy, contributed a portion of his or her salary to the GE Retirement Savings Plan (RSP)(GE RSP), the company’s 401(k) savings plan. AsMr. Culp voluntarily forfeited 74% of Aprilhis salary for 2020, in light of the business challenges and economic uncertainty resulting from the COVID-19 pandemic, Mr. Culp voluntarily forfeited his salary for the remainder of 2020. The salary amount for Ms. Miller is through her departure on September 30, 2020.pandemic.
BONUS. Amounts earned under our annual cash bonus program. For Mr. Slattery, who joined the company in July 2020, this amount includes a $1.0 million signing bonus. For Mr. Strazik, this amount includes a $2.85 million bonus earned in connection with the Gas Power Free Cash Flow Incentive Program. See “Overview of Our Incentive Compensation Plans” on page 3029 for additional information on the bonus program.
STOCK AWARDS. Aggregate grant date fair value of stock awards in the form of PSUs and RSUs, and in the case of Mr. Culp, performance shares, granted in the years shown. Generally, the aggregate grant date fair value is the amount that the company expects to expense for accounting purposes over the award’s vesting schedule and does not correspond to the actual value that the named executives will realize from the award. In particular, the actual value of PSUs and performance shares received are different from the accounting expense because it depends on performance. For example, as described under “20182019 PSUs Cancelled”Had No Payout” on page 34,32, the 20182019 PSU grants were cancelled by the committee and as a result, none of our
named executives received a payout for these awards. Although the PSUs were cancelled, GE does not adjust the related amounts previously reported as compensation in the year of the PSU award to reflect the cancellation. For Ms. Miller,In accordance with SEC rules, the reported amountaggregate grant date fair value of the 2021 PSUs is calculated based on the most probable outcome of the performance conditions as of the grant date, which was less than maximum performance. If the most probable outcome of the performance conditions on the grant date had been maximum performance, then the grant date fair value of the 2021 PSUs would have been as follows: Culp ($23,119,639), Dybeck Happe ($3,853,348), Slattery ($4,623,946), Stokes ($2,697,407) and Murphy ($3,853,348). See the Grants of Plan-Based Awards Table on page 38 for 2020 relates to the modification of certain awards under the terms of her separation agreement.
additional information for PSUs and RSUs granted in 2021.STOCK OPTIONS. Aggregate grant date fair value of option awards granted in the years shown. These amounts reflect the company’s accounting expense and do not correspond to the actual value that the named executives will realize. For information on the assumptions used in valuing a particular year’s grant, see the note on Share-Based Compensation in GE’s financial statements in our annual report on Form 10-K. See the Long-Term Incentive Compensation2021 Grants of Plan-Based Awards Table on page 4138 for additional information on 20202021 grants. For Ms. Miller, the reported amount for 2020 relates to the modification of certain awards under the terms of her separation agreement.
CHANGE IN PENSION VALUE & DEFERRED COMP. Sum of the change in pension value and above-market earnings on nonqualified deferred compensation, which break down as shown in the following table.
| NAME | | CHANGE IN
PENSION VALUE | | ABOVE MARKET
EARNINGS |
| Culp | | $ | 463,799 | | | $ | 0 |
| Dybeck Happe | | $ | 246,010 | | | $ | 0 |
| Miller | | $ | 0 | * | | $ | 0 |
| Murphy | | $ | 338,157 | | | $ | 0 |
| Slattery | | $ | 87,815 | | | $ | 0 |
| Strazik | | $ | 3,153,578 | | | $ | 0 |
* | The change in pension value was a decrease of $6,624,103. |
GE 2021 PROXY STATEMENT 39
| NAME | | CHANGE IN
PENSION VALUE | | ABOVE MARKET
EARNINGS |
| Culp | | $ | 943,153 | | $ | 0 |
| Dybeck Happe | | $ | 351,465 | | $ | 0 |
| Slattery | | $ | 292,217 | | $ | 0 |
| Stokes | | $ | 0 | | $ | 2,733 |
| Murphy | | $ | 166,364 | | $ | 0 |
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Year-over-year changes in pension value generally are driven by changes in actuarial pension assumptions as well as increases in service, age and compensation. See “Pension Benefits” on page 4643 for additional information, including the present value assumptions used in this calculation. Above-market earnings represent the difference
between market interest rates calculated under SEC rules 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 1991 and 2020.2021. See “Deferred Compensation” on page 4441 for additional information.
36 GE 2022 PROXY STATEMENT
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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 2020,2021, minus any reimbursements by the named executives, are shown in the table below.
| NAME | | LIFE INSURANCE
PREMIUMS | | RETIREMENT
SAVINGS PLAN | | FINANCIAL AND
TAX PLANNING | | RELOCATION
AND EXPATRIATE
BENEFITS | | RELOCATION
AND EXPATRIATE
TAX BENEFITS | | OTHER | | TOTAL | | LIFE
INSURANCE
PREMIUMS | | COMPANY
CONTRIBUTIONS
TO SAVINGS PLANS | | FINANCIAL
AND TAX
PLANNING | | RELOCATION
AND
EXPATRIATE
BENEFITS | | RELOCATION
AND EXPATRIATE
TAX BENEFITS | | OTHER | | TOTAL |
| Culp | | $ | 0 | | $ | 19,950 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 19,950 | | $ | 0 | | $ | 20,300 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 20,300 |
| Dybeck Happe | | $ | 0 | | $ | 9,950 | | $ | 0 | | $ | 604,756 | | $ | 402,931 | | $ | 15,269 | | $ | 1,032,906 | | $ | 0 | | $ | 8,700 | | $ | 0 | | $ | 467,563 | | $ | 865,322 | | $ | 74,401 | | $ | 1,415,986 |
| Miller | | $ | 77,638 | | $ | 9,975 | | $ | 7,254 | | $ | 0 | | $ | 0 | | $ | 688,889 | | $ | 783,756 | |
| Slattery | | | $ | 0 | | $ | 20,300 | | $ | 0 | | $ | 70,909 | | $ | 335,488 | | $ | 24,919 | | $ | 451,616 |
| Stokes | | | $ | 67,665 | | $ | 18,850 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 2,696 | | $ | 89,211 |
| Murphy | | $ | 47,241 | | | N/A | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 16,934 | | $ | 64,175 | | $ | 54,632 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 24,449 | | $ | 79,081 |
| Slattery | | $ | 0 | | $ | 19,950 | | $ | 0 | | $ | 2,703,099 | | $ | 1,951,782 | | $ | 10,505 | | $ | 4,685,336 | |
| Strazik | | $ | 13,646 | | $ | 7,125 | | $ | 7,883 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 28,654 | |
LIFE INSURANCE PREMIUMS. Taxable payments to cover premiums for universal life insurance policies the named executives own. These policies include: (1) Executive Life, which provides universal life insurance policies for the indicated named executives totaling up to $3 million in coverage at the time of enrollment and increased 4% annually thereafter; and (2) Leadership Life, which provides universal life insurance policies for the indicated named executives with coverage of 2X their annual pay (salary plus most recent bonus). As of January 1, 2018, these plans were closed to new employees and employees who were not already employed at the relevant band level, including Messrs. Culp and Slattery and Ms. Dybeck Happe.
RETIREMENTCOMPANY CONTRIBUTIONS TO SAVINGS PLAN.PLANS. Represents contributions under the GE RSP. For Messrs. Culp, Slattery and Stokes and Ms. Miller and Mr. Strazik,Dybeck Happe, represents GE’s matching contributions to the named executives’ RSP accounts equaling up to 3.5% of eligible pay, up to the caps imposed under IRS rules, based on employee contributions (resulting match was 3.5% for Ms. Miller and 2.5% for Mr. Strazik). Messrs. Culp and Slattery and Ms. Dybeck Happe are eligible for matching contributions equaling 4% of eligible pay, and automatic contributions equaling 3% of eligible pay, up to the caps imposed under IRS rules. Mr. Murphy is based outside the United States and is ineligible for this program.plan.
FINANCIAL AND TAX PLANNING. Expenses for the use of advisors for financial, estate and tax preparation and planning, and investment analysis and advice.
RELOCATION AND EXPATRIATE BENEFITS. Expenses for relocating the named executives and their families in connection with their hiring from outside GE. With respect to Ms. Dybeck Happe, this amount includes expenses for relocating her and her family from Sweden to GE’s headquarters in Boston and continued residence outside her home country, which includes the following: (1) travel and shipment expenses to relocate her, her family and household goods ($186,548), (2) housing and utilities ($213,899)300,000), (3)(2) educational support for her children ($145,044)151,803), (3) tax preparation services ($11,943) and (4) other relocation benefits. With respect to Mr. Slattery, this column includes the following
benefits provided to him in connection with his relocation from Ireland to GE Aviation’s headquarters in Cincinnati: (1) travelshipment and shipmentrental expenses to relocate him, his family and household goods ($100,615), (2) temporary living expenses ($15,855), (3) home purchase closing costs ($20,155)53,260), and (4)(2) other relocation benefits, including a one-time housing allowance payment ($2,500,000) and educational
support for his children ($60,375)17,649). Relocation and international assignment benefits, such as those provided to Ms. Dybeck Happe and Mr. Slattery, allow us to recruit the best executives from all over the world, regardless of where they are based.
RELOCATION AND EXPATRIATE TAX BENEFITS. Tax gross-ups and equalization benefits provided in connection with new hire relocations and international assignments.
OTHER. Total amount of other benefits provided, none of which individually exceeded the greater of $25,000 or 10% of the total amount of personal benefits for the named executive (except as otherwise described in this section). These other benefits included items such as: (1) car service fees; (2) an annual physical examination; (3) certain expenses associated with the named executives’ and (3)their invited guests’ attendance at sporting events; and (4) incremental costs associated with personal use of aircraft and travel by guests accompanying the executive on business travel on company leaseda company-leased aircraft, such as for catering. Our named executives are permitted to use an aircraft that is leased by the company for personal use, but, to the extent the named executives engaged in such use during 2020,2021, all such use was reimbursed to the company at rates sufficient to cover the variable costs associated with those flights, other than certain incremental costs as noted above and reported under this item. For Ms. Miller, this amount includes $688,889In addition, the company engages in certain sponsorships and purchases tickets to sporting events in advance for the purposes of her $2.9 million severance benefits that were paidcustomer entertainment. Occasionally, tickets from sponsorship agreements or accruedunused tickets purchased for customer entertainment are made available for personal use by the named executives or other employees. These tickets typically result in no incremental cost to her under the terms of her separation agreement during 2020.company. For Mr. Murphy, this amount includes a monthly car allowance, totaling $16,934$18,168 in 2020.2021.
SEC TOTAL. Total compensation, as determined under SEC rules.
40 GE 20212022 PROXY STATEMENT37
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Long-Term Incentive Compensation
In recent years, we have used a mix of long-term incentive compensation awards: PSUs, Performance Shares, RSUs, and stock options. In 2020,2021, we madegranted Annual Equity Awards in March as well as Leadership Equity Awards in August and September.March.
Long-Term Incentive Compensation Table
The following table — also known as the2021 Grants of Plan-Based Awards Table —
The following table shows Performance Shares, PSUs, RSUs and stock options granted to our named executives in 2020.2021. Each of these awards was approved under the 2007 Long-Term Incentive Plan, a plan that shareholders approved in 2007, 2012 and 2017. For more information on each of the award types, see “Overview of Long-Term Incentive Compensation”on page 33.32. Where applicable, the number of securities and option exercise prices reported in this table have been adjusted to reflect the one-for-eight reverse stock split effective July 30, 2021.
| | | | | | ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE SHARES / PSUs | | RESTRICTED
STOCK UNITS
(#) | | STOCK
OPTIONS
(#) | | OPTION
EXERCISE
PRICE | | GRANT DATE
FAIR VALUE OF
AWARDS |
| NAME | | GRANT DATE | | AWARD TYPE | | THRESHOLD | | TARGET | | MAXIMUM | |
| Culp | | 3/2/2020 | | Annual Equity | | 331,132 | | 1,324,527 | | 2,317,922 | | | | | | | | | $ | 15,000,003 |
| | 8/18/2020 | | Leadership | | 4,647,676 | | 9,295,352 | | 13,943,028 | | | | | | | | | $ | 57,054,871 |
| Dybeck Happe | | 3/2/2020 | | New Hire | | | | | | | | | | 2,061,856 | | $ | 11.21 | | $ | 8,000,001 |
| | 3/2/2020 | | Annual Equity | | 55,189 | | 220,755 | | 386,321 | | | | | | | | | $ | 2,500,006 |
| | 3/2/2020 | | Annual Equity | | | | | | | | 81,633 | | | | | | | $ | 915,106 |
| | 3/2/2020 | | Annual Equity | | | | | | | | | | 408,720 | | $ | 11.21 | | $ | 1,500,002 |
| | 9/3/2020 | | Leadership | | 546,960 | | 1,093,920 | | 1,640,880 | | | | | | | | | $ | 6,999,994 |
| Miller | | 2/25/2020 | | Separation | | 108,269 | | 433,076 | | 757,883 | | | | | | | | | $ | 3,921,632 |
| | | | Modification* | | | | | | | | | | | | | | | | |
| | 2/25/2020 | | Separation | | | | | | | | 90,000 | | | | | | | $ | 1,018,800 |
| | | | Modification* | | | | | | | | | | | | | | | | |
| | 2/25/2020 | | Separation | | | | | | | | | | 380,290 | | $ | 10.19 | | $ | 1,254,957 |
| | | | Modification* | | | | | | | | | | | | | | | | |
| Murphy | | 3/2/2020 | | Annual Equity | | 55,189 | | 220,755 | | 386,321 | | | | | | | | | $ | 2,500,006 |
| | 3/2/2020 | | Annual Equity | | | | | | | | 81,633 | | | | | | | $ | 915,106 |
| | 3/2/2020 | | Annual Equity | | | | | | | | | | 408,720 | | $ | 11.21 | | $ | 1,500,002 |
| | 9/3/2020 | | Leadership | | | | | | | | 771,605 | | | | | | | $ | 4,876,544 |
| Slattery | | 7/13/2020 | | New Hire | | | | | | | | | | 539,568 | | $ | 6.70 | | $ | 1,499,999 |
| | 9/2/2020 | | Annual Equity | | 162,669 | | 650,675 | | 1,138,681 | | | | | | | | | $ | 1,500,001 |
| | 9/2/2020 | | Annual Equity | | | | | | | | 92,736 | | | | | | | $ | 597,220 |
| | 9/2/2020 | | Annual Equity | | | | | | | | | | 343,511 | | $ | 6.44 | | $ | 899,999 |
| Strazik | | 3/2/2020 | | Annual Equity | | 36,977 | | 147,906 | | 258,836 | | | | | | | | | $ | 1,675,006 |
| | 3/2/2020 | | Annual Equity | | | | | | | | 54,694 | | | | | | | $ | 613,120 |
| | 3/2/2020 | | Annual Equity | | | | | | | | | | 273,842 | | $ | 11.21 | | $ | 1,005,000 |
| | 9/3/2020 | | Leadership | | | | | | | | 771,605 | | | | | | | $ | 4,876,544 |
* | Amounts reported as PSUs, RSUs and stock options for Ms. Miller reflect awards previously granted that were modified pursuant to Ms. Miller’s separation agreement (“Separation Agreement with Ms. Miller” on page 49).
|
| | GRANT
DATE | | AWARD
TYPE | | ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE SHARES / PSUs | | RESTRICTED
STOCK UNITS
(#) | | STOCK
OPTIONS
(#) | | OPTION
EXERCISE
PRICE | | GRANT DATE
FAIR VALUE OF
AWARDS |
| NAME | | | | THRESHOLD | | TARGET | | MAXIMUM | | | | |
| Culp | | 3/1/2021 | | Annual Equity | | 14,653 | | 146,531 | | 256,429 | | | | | | | | | $ | 14,999,996 |
| Dybeck Happe | | 3/1/2021 | | Annual Equity | | 2,442 | | 24,422 | | 42,739 | | | | | | | | | $ | 2,500,006 |
| | 3/1/2021 | | Annual Equity | | | | | | | | 10,513 | | | | | | | $ | 1,102,603 |
| | 3/1/2021 | | Annual Equity | | | | | | | | | | 36,266 | | $ | 104.88 | | $ | 1,499,998 |
| Slattery | | 3/1/2021 | | Annual Equity | | 2,931 | | 29,306 | | 51,286 | | | | | | | | | $ | 2,999,997 |
| | 3/1/2021 | | Annual Equity | | | | | | | | 12,616 | | | | | | | $ | 1,323,127 |
| | 3/1/2021 | | Annual Equity | | | | | | | | | | 43,520 | | $ | 104.88 | | $ | 1,799,998 |
| Stokes | | 3/1/2021 | | Annual Equity | | 1,710 | | 17,096 | | 29,918 | | | | | | | | | $ | 1,749,994 |
| | 3/1/2021 | | Annual Equity | | | | | | | | 7,360 | | | | | | | $ | 771,825 |
| | 3/1/2021 | | Annual Equity | | | | | | | | | | 25,386 | | $ | 104.88 | | $ | 1,050,001 |
| Murphy | | 3/1/2021 | | Annual Equity | | 2,442 | | 24,422 | | 42,739 | | | | | | | | | $ | 2,500,006 |
| | 3/1/2021 | | Annual Equity | | | | | | | | 10,513 | | | | | | | $ | 1,102,603 |
| | 3/1/2021 | | Annual Equity | | | | | | | | | | 36,266 | | $ | 104.88 | | $ | 1,499,998 |
Option Exercise Price
Stock option exercise prices reflect the closing price of GE stock on the grant date.
Grant Date Fair Value of Awards
Generally, the aggregate grant date fair value is the amount that the company expects to expense in its financial statements over the award’s vesting schedule.
| ● | For stock options, fair value is calculated using the Black-Scholes value of each option on the grant date (resulting in a $3.67$41.36 per unit value for the March 20202021 stock option grants, and a $2.78 and $2.62 per unit value for the new hire and annual equity stock option grants to Mr. Slattery in July 2020 and September 2020, respectively)grants). |
| ● | For RSUs, fair value is calculated based on the closing stock price on the date of grant, reduced by the present value of dividends expected to be paid on GE common stock before the RSUs vest |
| (resulting (resulting in a $11.21$104.88 per unit value for the March 2020 grants, $6.44 per unit value for the September 2, 2020 grant, and $6.32 per unit value for the September 3, 20202021 grants) because dividend equivalents on unvested RSUs are accrued and paid out only if and when the award vests. |
| ● | For Performance Shares and PSUs, the actual value of units received will depend on the company’s performance, as described above. Fair value is calculated by multiplying the per unit value of the award ($11.32102.37 for the March 2020 grants, $6.14 for Mr. Culp’s Leadership grant, $6.40 for Ms. Dybeck Happe’s Leadership grant, and $2.31 for Mr. Slattery’s annual equity award)2021 grants) by the number of units at target. The per unit value is based on the closing price of the company’s stock price on the grant date, adjusted to reflect the probabilityimpact of achieving the performance conditions,TSR modifier using a Monte Carlo simulation that includes multiple inputs such as stock price, performance period, volatility and dividend yield.simulation. |
38 GE 20212022 PROXY STATEMENT41
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Outstanding Equity Awards Table
The following table — also known as the2021 Outstanding Equity Awards at Fiscal Year-End Table —
The following table shows the named executives’ stock and option grants as of year-end. It includes unexercised stock options (vested and unvested), RSUs, Performance Shares and PSUs for which vesting conditions were not yet satisfied as of December 31, 2020.2021. Where applicable, the number of securities and option exercise prices reported in this table have been adjusted to reflect the one-for-eight reverse stock split effective July 30, 2021.
OUTSTANDING EQUITY AWARDS TABLENAME OF
EXECUTIVE | | GRANT DATE | | AWARD TYPE | | NUMBER
OUTSTANDING | | PORTION
EXERCISABLE | | EXERCISE
PRICE | | EXPIRATION
DATE | | MARKET VALUE | | VESTING SCHEDULE | | Culp | | 3/19/2019 | | PSUs | | 375,000 | | | | | | | | | $ | 4,050,000 | | 100% in 2022, subject to performance | | | 3/2/2020 | | PSUs | | 331,132 | | | | | | | | | $ | 3,576,226 | | 100% in 2023, subject to performance | | | 8/18/2020 | | Performance | | 9,295,352 | | | | | | | | | $ | 100,389,802 | | 100% in 2024, subject to performance | | | | | Shares | | | | | | | | | | | | | | | | Total | | | | | | 10,001,484 | | | | | | | | | $ | 108,016,028 | | | | Dybeck Happe | | 3/2/2020 | | Options | | 2,061,856 | | 0 | | $ | 11.21 | | 3/2/2030 | | $ | 0 | | 100% in 2024 | | | 3/2/2020 | | Options | | 408,720 | | 0 | | $ | 11.21 | | 3/2/2030 | | $ | 0 | | 50% in 2022 and 2023 | | | 3/2/2020 | | PSUs | | 55,189 | | | | | | | | | $ | 596,041 | | 100% in 2023, subject to performance | | | 3/2/2020 | | RSUs | | 81,633 | | | | | | | | | $ | 881,636 | | 50% in 2022 and 2023 | | | 9/3/2020 | | PSUs | | 1,093,920 | | | | | | | | | $ | 11,814,336 | | 50% in 2024 and 2025, | | | | | | | | | | | | | | | | | | | subject to performance | | Total | | | | | | 3,701,318 | | 0 | | | | | | | $ | 13,292,013 | | | | Miller | | 9/7/2012 | | Options | | 338,123 | | 338,123 | | $ | 20.76 | | 9/7/2022 | | $ | 0 | | | | | 9/13/2013 | | Options | | 364,133 | | 364,133 | | $ | 22.86 | | 12/31/2022 | | $ | 0 | | | | | 9/5/2014 | | Options | | 416,152 | | 416,152 | | $ | 25.09 | | 12/31/2022 | | $ | 0 | | | | | 9/11/2015 | | Options | | 156,057 | | 156,057 | | $ | 23.99 | | 12/31/2022 | | $ | 0 | | | | | 9/9/2016 | | Options | | 156,057 | | 156,057 | | $ | 28.95 | | 12/31/2022 | | $ | 0 | | | | | 9/6/2017 | | Options | | 156,057 | | 156,057 | | $ | 23.96 | | 12/31/2022 | | $ | 0 | | | | | 2/26/2018 | | PSUs | | 52,019 | | | | | | | | | $ | 561,805 | | 100% in 2021, subject to performance | | | 3/19/2019 | | Options | | 380,290 | | 380,290 | | $ | 10.19 | | 12/31/2022 | | $ | 231,977 | | | | | 3/19/2019 | | PSUs | | 56,250 | | | | | | | | | $ | 607,500 | | 100% in 2022, subject to performance | | Total | | | | | | 2,075,138 | | 1,966,869 | | | | | | | $ | 1,401,282 | | | | Murphy | | 9/7/2012 | | Options | | 104,038 | | 104,038 | | $ | 20.76 | | 9/7/2022 | | $ | 0 | | | | | 9/13/2013 | | Options | | 83,230 | | 83,230 | | $ | 22.86 | | 9/13/2023 | | $ | 0 | | | | | 9/5/2014 | | Options | | 102,089 | | 102,089 | | $ | 25.09 | | 9/5/2024 | | $ | 0 | | | | | 9/5/2014 | | Options | | 1,948 | | 1,948 | | $ | 25.09 | | 9/5/2024 | | $ | 0 | | | | | 9/11/2015 | | Options | | 130,047 | | 130,047 | | $ | 23.99 | | 9/11/2025 | | $ | 0 | | | | | 7/28/2016 | | RSUs | | 10,404 | | | | | | | | | $ | 112,363 | | 100% in 2021 | | | 9/30/2016 | | Options | | 156,057 | | 124,845 | | $ | 28.47 | | 9/30/2026 | | $ | 0 | | 100% in 2021 | | | 2/10/2017 | | RSUs | | 10,404 | | | | | | | | | $ | 112,363 | | 50% in 2021 and 2022 | | | 6/9/2017 | | RSUs | | 52,019 | | | | | | | | | $ | 561,805 | | 100% in 2022 | | | 9/6/2017 | | Options | | 156,057 | | 93,634 | | $ | 23.96 | | 9/6/2027 | | $ | 0 | | 50% in 2021 and 2022 | | | 9/6/2017 | | RSUs | | 8,739 | | | | | | | | | $ | 94,381 | | 50% in 2021 and 2022 | | | 1/29/2018 | | Options | | 520,190 | | 0 | | $ | 15.65 | | 1/29/2028 | | $ | 0 | | 100% in 2021 | | | 2/26/2018 | | RSUs | | 31,212 | | | | | | | | | $ | 337,090 | | 100% in 2021 | | | 2/26/2018 | | PSUs | | 23,408 | | | | | | | | | $ | 252,806 | | 100% in 2021, subject to performance | | | 3/19/2019 | | Options | | 295,780 | | 0 | | $ | 10.19 | | 3/19/2029 | | $ | 180,426 | | 50% in 2021 and 2022 | | | 3/19/2019 | | RSUs | | 70,000 | | | | | | | | | $ | 756,000 | | 50% in 2021 and 2022 | | | 3/19/2019 | | PSUs | | 43,750 | | | | | | | | | $ | 472,500 | | 100% in 2022, subject to performance | | | 3/2/2020 | | Options | | 408,720 | | 0 | | $ | 11.21 | | 3/2/2030 | | $ | 0 | | 50% in 2022 and 2023 | | | 3/2/2020 | | PSUs | | 55,189 | | | | | | | | | $ | 596,041 | | 100% in 2023, subject to performance | | | 3/2/2020 | | RSUs | | 81,633 | | | | | | | | | $ | 881,636 | | 50% in 2022 and 2023 | | | 9/3/2020 | | RSUs | | 771,605 | | | | | | | | | $ | 8,333,334 | | 50% in 2023 and 2024 | | Total | | | | | | 3,116,519 | | 639,831 | | | | | | | $ | 12,690,745 | | | | Slattery | | 7/13/2020 | | Options | | 539,568 | | 0 | | $ | 6.70 | | 7/13/2030 | | $ | 2,212,229 | | 33% in 2021, 2022 and 2023 | | | 9/2/2020 | | Options | | 343,511 | | 0 | | $ | 6.44 | | 9/2/2030 | | $ | 1,497,708 | | 50% in 2022 and 2023 | | | 9/2/2020 | | RSUs | | 92,736 | | | | | | | | | $ | 1,001,549 | | 50% in 2022 and 2023 | | | 9/2/2020 | | PSUs | | 162,669 | | | | | | | | | $ | 1,756,825 | | 100% in 2023, subject to performance | | Total | | | | | | 1,138,484 | | 0 | | | | | | | $ | 6,468,311 | | |
|
|
42 NAME OF
EXECUTIVE | | GE 2021 PROXY STATEMENTGRANT
DATE
| | AWARD
TYPE | | Table of ContentsNUMBER
OUTSTANDING | | PORTION
EXERCISABLENAME OF
EXECUTIVE | | GRANT DATE | | AWARD TYPE | | NUMBER
OUTSTANDING | | PORTION
EXERCISABLE | | EXERCISE
PRICE | | EXPIRATION
DATE | | MARKET VALUE | | VESTING SCHEDULE | | Strazik | | 6/9/2011 | | Options | | 31,211 | | 31,211 | | $ | 17.86 | | 6/9/2021 | | $ | 0 | | | | | 9/7/2012 | | Options | | 41,615 | | 41,615 | | $ | 20.76 | | 9/7/2022 | | $ | 0 | | | | | 9/13/2013 | | Options | | 52,019 | | 52,019 | | $ | 22.86 | | 9/13/2023 | | $ | 0 | | | | | 9/5/2014 | | Options | | 78,028 | | 78,028 | | $ | 25.09 | | 9/5/2024 | | $ | 0 | | | | | 9/11/2015 | | Options | | 93,634 | | 93,634 | | $ | 23.99 | | 9/11/2025 | | $ | 0 | | | | | 7/28/2016 | | RSUs | | 10,404 | | | | | | | | | $ | 112,363 | | 100% in 2021 | | | 9/30/2016 | | Options | | 114,441 | | 91,552 | | $ | 28.47 | | 9/30/2026 | | $ | 0 | | 100% in 2021 | | | 2/10/2017 | | RSUs | | 10,404 | | | | | | | | | $ | 112,363 | | 50% in 2021 and 2022 | | | 11/17/2017 | | Options | | 119,643 | | 71,785 | | $ | 17.51 | | 11/17/2027 | | $ | 0 | | 50% in 2021 and 2022 | | | 1/29/2018 | | Options | | 130,047 | | 0 | | $ | 15.65 | | 1/29/2028 | | $ | 0 | | 100% in 2021 | | | 3/19/2018 | | Options | | 208,102 | | 138,734 | | $ | 13.53 | | 3/19/2028 | | $ | 0 | | 100% in 2021 | | | 3/19/2018 | | Options | | 130,047 | | 86,698 | | $ | 13.53 | | 3/19/2028 | | $ | 0 | | 100% in 2021 | | | 12/21/2018 | | Options | | 501,390 | | 250,695 | | $ | 7.13 | | 12/21/2028 | | $ | 1,840,101 | | 100% in 2021 | | | 3/19/2019 | | Options | | 194,370 | | 0 | | $ | 10.19 | | 3/19/2029 | | $ | 118,566 | | 50% in 2021 and 2022 | | | 3/19/2019 | | RSUs | | 46,000 | | | | | | | | | $ | 496,800 | | 50% in 2021 and 2022 | | | 3/19/2019 | | PSUs | | 28,750 | | | | | | | | | $ | 310,500 | | 100% in 2022, subject to performance | | | 4/11/2019 | | Options | | 60,995 | | 0 | | $ | 9.12 | | 4/11/2029 | | $ | 102,472 | | 50% in 2021 and 2022 | | | 3/2/2020 | | Options | | 273,842 | | 0 | | $ | 11.21 | | 3/2/2030 | | $ | 0 | | 50% in 2022 and 2023 | | | 3/2/2020 | | PSUs | | 36,977 | | | | | | | | | $ | 399,352 | | 100% in 2023, subject to performance | | | 3/2/2020 | | RSUs | | 54,694 | | | | | | | | | $ | 590,695 | | 50% in 2022 and 2023 | | | 9/3/2020 | | RSUs | | 771,605 | | | | | | | | | $ | 8,333,334 | | 50% in 2023 and 2024 | | Total | | | | | | 2,988,218 | | 935,971 | | | | | | | $ | 12,416,546 | | |
| | EXERCISE
PRICE | | EXPIRATION
DATE | | MARKET VALUE.
VALUEThe market value of RSUs, Performance Shares and PSUs is calculated by multiplying the closing price of GE stock as of December 31, 2020 ($10.80) (the last trading day for the year) by the number of shares underlying each award. With respect to the Performance Shares granted to Mr. Culp on August 18, 2020 and the PSUs granted to Ms. Dybeck Happe on September 3, 2020, this value assumes satisfaction of the target-level payout for the awards. With respect to all other PSUs granted, this value assumes satisfaction of the threshold-level payout for the awards. For options, the market value is calculated by multiplying the number of shares underlying each award by the spread between the award’s exercise price and the closing price of GE stock as of December 31, 2020.Vesting Schedule
| | Options VESTING
SCHEDULE |
vest on the anniversary of the grant dateCulp | | 3/19/2019 | | PSUs | | 46,875 | | | | | | | | | $ | 4,428,281 | | 100% in the years shown in the table. See “Potential Termination Payments” on page 48 regarding other vesting events.RSUs vest on the anniversary of the grant date in the years shown in the table. See “Potential Termination Payments” on page 48 regarding other vesting events.
Leadership Performance Shares and Leadership PSUs vest on the anniversary of the grant date in the years shown in the table, to the extent that the performance conditions have been achieved. The Leadership Performance Shares and Leadership PSUs are also2022, subject to accelerated vesting upon a change of control, termination other than for cause, or good leaver termination. See “Potential Termination Payments” on page 48 for additional details regarding this acceleration.
|
| | 3/2/2020 | | PSUsvest at the beginning of the year indicated when the committee certifies that the performance conditions have been achieved, unless otherwise stated. The 2018 PSU grants, the 2019 PSU grants and the 2020 PSU grants (other than the Leadership PSUs granted to Ms. Dybeck Happe) are also | | 41,392 | | | | | | | | | $ | 3,910,302 | | 100% in 2023, subject to a one-year holding requirement, regardless of whether the executive has met his or her stock ownership requirements. For further detail on the termsperformance |
| | 8/18/2020 | | Performance
Shares | | 1,742,878 | | | | | | | | | $ | 164,649,685 | | 100% in 2024, subject to performance |
| | 3/1/2021 | | PSUs | | 256,429 | | | | | | | | | $ | 24,224,848 | | 100% in 2024, subject to performance |
| Total | | | | | | 2,087,574 | | | | | | | | | $ | 197,213,116 | | |
| Dybeck | | 3/2/2020 | | Options | | 257,732 | | 0 | | $ | 89.68 | | 3/2/2030 | | $ | 1,234,536 | | 100% in 2024 |
| Happe | | 3/2/2020 | | Options | | 51,090 | | 0 | | $ | 89.68 | | 3/2/2030 | | $ | 244,721 | | 50% in 2022 and conditions of the PSU awards, see 2023 |
| | 3/2/2020 | | PSUs | | 6,899 | | | | | | | | | $ | 651,749 | | 100% in 2023, subject to performance |
| | 3/2/2020 | | RSUs | | 10,205 | | | | | | | | | $ | 964,066 | | 50% in 2022 and 2023 |
| | 9/3/2020 | | PSUs | | 205,110 | | | | | | | | | $ | 19,376,742 | | 50% in 2024 and 2025, |
| | | | | | | | | | | | | | | | | | subject to performance |
| | 3/1/2021 | | Options | | 36,266 | | 0 | | | 104.88 | | 3/1/2031 | | $ | 0 | | 50% in 2023 and 2024 |
| | 3/1/2021 | | PSUs | | 42,739 | | | | | | | | | $ | 4,037,553 | | 100% in 2024, subject to performance |
| | 3/1/2021 | | RSUs | | 10,513 | | | | | | | | | $ | 993,163 | | 50% in 2023 and 2024 |
| Total | | | | | | “Annual Equity Incentive Awards” 620,554 | | on page 33.0 | | | | | | | $ | 27,502,530 | | |
| Slattery | | 7/13/2020 | | Options | | 67,446 | | 22,482 | | $ | 53.60 | | 7/13/2030 | | $ | 2,756,518 | | 50% in 2022 and 2023 |
| | 9/2/2020 | | Options | | 42,938 | | 0 | | $ | 51.52 | | 9/2/2030 | | $ | 1,844,187 | | 50% in 2022 and 2023 |
| | 9/2/2020 | | RSUs | | 11,592 | | | | | | | | | $ | 1,095,096 | | 50% in 2022 and 2023 |
| | 9/2/2020 | | PSUs | | 20,334 | | | | | | | | | $ | 1,920,953 | | 100% in 2023, subject to performance |
| | 3/1/2021 | | Options | | 43,520 | | 0 | | $ | 104.88 | | 3/1/2031 | | $ | 0 | | 50% in 2023 and 2024 |
| | 3/1/2021 | | PSUs | | 51,286 | | | | | | | | | $ | 4,844,988 | | 100% in 2024, subject to performance |
| | 3/1/2021 | | RSUs | | 12,616 | | | | | | | | | $ | 1,191,834 | | 50% in 2023 and 2024 |
| Total | | | | | | 249,732 | | 22,482 | | | | | | | $ | 13,653,576 | | |
| Stokes | | 9/7/2012 | | Options | | 14,306 | | 14,306 | | $ | 166.08 | | 9/7/2022 | | $ | 0 | | |
| | 9/13/2013 | | Options | | 16,256 | | 16,256 | | $ | 182.88 | | 9/13/2023 | | $ | 0 | | |
| | 9/5/2014 | | Options | | 32,512 | | 32,512 | | $ | 200.72 | | 9/5/2024 | | $ | 0 | | |
| | 9/11/2015 | | Options | | 15,216 | | 15,216 | | $ | 191.92 | | 9/11/2025 | | $ | 0 | | |
| | 9/9/2016 | | Options | | 19,508 | | 19,508 | | $ | 231.60 | | 9/9/2026 | | $ | 0 | | |
| | 2/10/2017 | | RSUs | | 1,041 | | | | | | | | | $ | 98,343 | | 100% in 2022 |
| | 9/6/2017 | | Options | | 26,010 | | 20,808 | | $ | 191.68 | | 9/6/2027 | | $ | 0 | | 100% in 2022 |
| | 9/6/2017 | | RSUs | | 729 | | | | | | | | | $ | 68,869 | | 100% in 2022 |
| | 1/29/2018 | | Options | | 65,024 | | 65,024 | | $ | 125.20 | | 1/29/2028 | | $ | 0 | | |
| | 3/19/2019 | | Options | | 36,972 | | 18,486 | | $ | 81.52 | | 3/19/2029 | | $ | 478,787 | | 100% in 2022 |
| | 3/19/2019 | | RSUs | | 4,375 | | | | | | | | | $ | 413,306 | | 100% in 2022 |
| | 3/19/2019 | | PSUs | | 5,469 | | | | | | | | | $ | 516,656 | | 100% in 2022, subject to performance |
| | 3/2/2020 | | Options | | 35,763 | | 0 | | $ | 89.68 | | 3/2/2030 | | $ | 171,305 | | 50% in 2022 and 2023 |
| | 3/2/2020 | | PSUs | | 4,829 | | | | | | | | | $ | 456,196 | | 100% in 2023, subject to performance |
| | 3/2/2020 | | RSUs | | 7,143 | | | | | | | | | $ | 674,799 | | 50% in 2022 and 2023 |
| | 9/3/2020 | | RSUs | | 96,451 | | | | | | | | | $ | 9,111,726 | | 50% in 2023 and 2024 |
| | 3/1/2021 | | Options | | 25,386 | | 0 | | $ | 104.88 | | 3/1/2031 | | $ | 0 | | 50% in 2023 and 2024 |
| | 3/1/2021 | | PSUs | | 29,918 | | | | | | | | | $ | 2,826,353 | | 100% in 2024, subject to performance |
| | 3/1/2021 | | RSUs | | 7,360 | | | | | | | | | $ | 695,299 | | 50% in 2023 and 2024 |
| Total | | | | | | 444,268 | | 202,116 | | | | | | | $ | 15,511,639 | | |
GE 2022 PROXY STATEMENT 39
Table of Contents
NAME OF
EXECUTIVE | | GRANT
DATE | | AWARD
TYPE | | NUMBER
OUTSTANDING | | PORTION
EXERCISABLE | | EXERCISE
PRICE | | EXPIRATION
DATE | | MARKET
VALUE | | VESTING
SCHEDULE |
| Murphy | | 9/7/2012 | | Options | | 13,005 | | 13,005 | | $ | 166.08 | | 9/7/2022 | | $ | 0 | | |
| | 9/13/2013 | | Options | | 10,404 | | 10,404 | | $ | 182.88 | | 9/13/2023 | | $ | 0 | | |
| | 9/5/2014 | | Options | | 243 | | 243 | | $ | 200.72 | | 9/5/2024 | | $ | 0 | | |
| | 9/5/2014 | | Options | | 12,762 | | 12,762 | | $ | 200.72 | | 9/5/2024 | | $ | 0 | | |
| | 9/11/2015 | | Options | | 16,256 | | 16,256 | | $ | 191.92 | | 9/11/2025 | | $ | 0 | | |
| | 9/30/2016 | | Options | | 19,508 | | 19,508 | | $ | 227.76 | | 9/30/2026 | | $ | 0 | | |
| | 2/10/2017 | | RSUs | | 651 | | | | | | | | | $ | 61,500 | | 100% in 2022 |
| | 6/9/2017 | | RSUs | | 6,503 | | | | | | | | | $ | 614,338 | | 100% in 2022 |
| | 9/6/2017 | | Options | | 19,508 | | 15,607 | | $ | 191.68 | | 9/6/2027 | | $ | 0 | | 100% in 2022 |
| | 9/6/2017 | | RSUs | | 547 | | | | | | | | | $ | 51,675 | | 100% in 2022 |
| | 1/29/2018 | | Options | | 65,024 | | 65,024 | | $ | 125.20 | | 1/29/2028 | | $ | 0 | | 100% in 2021 |
| | 3/19/2019 | | Options | | 36,972 | | 18,486 | | $ | 81.52 | | 3/19/2029 | | $ | 478,787 | | 100% in 2022 |
| | 3/19/2019 | | RSUs | | 4,375 | | | | | | | | | $ | 413,306 | | 100% in 2022 |
| | 3/19/2019 | | PSUs | | 5,469 | | | | | | | | | $ | 516,656 | | 100% in 2022, subject to performance |
| | 3/2/2020 | | Options | | 51,090 | | 0 | | $ | 89.68 | | 3/2/2030 | | $ | 244,721 | | 50% in 2022 and 2023 |
| | 3/2/2020 | | PSUs | | 6,899 | | | | | | | | | $ | 651,749 | | 100% in 2023, subject to performance |
| | 3/2/2020 | | RSUs | | 10,205 | | | | | | | | | $ | 964,066 | | 50% in 2022 and 2023 |
| | 9/3/2020 | | RSUs | | 96,451 | | | | | | | | | $ | 9,111,726 | | 50% in 2023 and 2024 |
| | 3/1/2021 | | Options | | 36,266 | | 0 | | $ | 104.88 | | 3/1/2031 | | $ | 0 | | 50% in 2023 and 2024 |
| | 3/1/2021 | | PSUs | | 42,739 | | | | | | | | | $ | 4,037,553 | | 100% in 2024, subject to performance |
| | 3/1/2021 | | RSUs | | 10,513 | | | | | | | | | $ | 993,163 | | 50% in 2023 and 2024 |
| Total | | | | | | 465,390 | | 171,295 | | | | | | | $ | 18,139,240 | | |
MARKET VALUE. The market value of RSUs, Performance Shares and PSUs is calculated by multiplying the closing price of GE stock as of December 31, 2021 ($94.47) (the last trading day for the year) by the number of shares underlying each award. With respect to the Leadership Performance Shares granted to Mr. Culp on August 18, 2020 and the Leadership PSUs granted to Ms. Dybeck Happe on September 3, 2020, this value assumes satisfaction of the maximum-level payout for the awards, representing the achievement of goals delivering significant shareholder returns. With respect to the 2019 PSUs (which were cancelled without any payouts) and the other 2020 PSUs granted, this value assumes satisfaction of the threshold-level payout for the awards, and with respect to the 2021 PSUs, this value assumes satisfaction of the maximum-level payout for the awards. For options, the market value is calculated by multiplying the number of shares underlying each award by the spread between the award’s exercise price and the closing price of GE stock as of December 31, 2021.
Vesting Schedule
Options vest on the anniversary of the grant date in the years shown in the table. See “Potential Termination Payments” on page 45 regarding other vesting events.
RSUs vest on the anniversary of the grant date in the years shown in the table. See “Potential Termination Payments” on page 45 regarding other vesting events.
Leadership Performance Shares and Leadership PSUs vest on the anniversary of the grant date in the years shown in the table, solely to the extent that the performance conditions have been achieved. The Leadership Performance Shares and Leadership PSUs are also subject to accelerated vesting upon a change of control, termination other than for cause, or good leaver termination. See “Potential Termination Payments” on page 45 for additional details regarding this acceleration.
Other PSUs vest at the beginning of the year indicated when the committee certifies that the performance conditions have been achieved, unless otherwise stated. The 2019 PSU grants, the 2020 PSU grants (other than the Leadership PSUs granted to Ms. Dybeck Happe) and the 2021 PSU grants are also subject to a one-year holding
requirement, regardless of whether the executive has met his or her stock ownership requirements. For further detail on the terms and conditions of the PSU awards, see “Overview of Long-Term Incentive Compensation” on page 32.
Option Exercises and Stock Vested Table
The following table shows the number of shares the named executives acquired and the values they realized upon the vesting of RSUs during 2020.2021. During the year, none of the named executives exercised stock options and none of them had PSU or performance share awards that were earned.earned, and only Messrs. Stokes and Murphy had RSUs that vested. Values are shown before payment of any applicable withholding taxes or brokerage commissions. Executives that remain employed by GE are required to hold the stock that they receive following the exercise of stock options (less those shares that are withheld to satisfy the exercise price and pay taxes) for a year following exercise. Similarly, continuing executives cannot sell stock they receive as the result of the vesting of RSUs or PSUs until they have satisfied their stock ownership requirement. See “ShareStock Ownership and Equity Grant Policies” on page 54.49. The 2019 PSU grants and the 2020 PSU grants (other than the Leadership PSUs granted to Ms. Dybeck Happe) and the 2021 PSU grants are also subject to a one-year holding requirement, regardless of whether the executive has met his or her stock ownership requirements.
GE 2021 PROXY STATEMENT 43
Table of Contents
| | OPTION AWARDS | | STOCK AWARDS* | | OPTION AWARDS | | PSUs & RSUs* |
| NAME | | NUMBER OF SHARES
ACQUIRED ON EXERCISE | | VALUE REALIZED
ON EXERCISE | | NUMBER OF SHARES
ACQUIRED ON VESTING | | VALUE REALIZED
ON VESTING | | NUMBER OF
SHARES
ACQUIRED
ON EXERCISE | | VALUE
REALIZED
ON EXERCISE | | NUMBER
OF SHARES
ACQUIRED
ON
VESTING | | VALUE
REALIZED
ON VESTING |
| Culp | | 0 | | $ | 0 | | 0 | | $ | 0 | | 0 | | | $ | 0 | | 0 | | | $ | 0 |
| Dybeck Happe | | 0 | | $ | 0 | | 0 | | $ | 0 | | 0 | | $ | 0 | | 0 | | | $ | 0 |
| Miller | | 0 | | $ | 0 | | 259,860 | | $ | 1,806,675 | |
| Slattery | | | 0 | | $ | 0 | | 0 | | | $ | 0 |
| Stokes | | | 0 | | $ | 0 | | 11,723 | | | $ | 1,198,294 |
| Murphy | | 0 | | $ | 0 | | 108,407 | | $ | 964,910 | | 0 | | $ | 0 | | 10,774 | | | $ | 1,110,410 |
| Slattery | | 0 | | $ | 0 | | 0 | | $ | 0 | |
| Strazik | | 0 | | $ | 0 | | 20,807 | | $ | 169,117 | |
| * | Subject to stock ownership requirement for continuing executives; dollar amount represents pre-tax value on vesting, not cash payment.vesting. |
40 GE 2022 PROXY STATEMENT
Table of Contents
Equity Compensation Plan Information
The following table provides information regarding outstanding equity awards and shares available for future issuance under all of GE’s equity plans. The number of shares available for future issuance
decreased increased compared to the prior year, primarily due to the issuance of Leadership equity awards, offset by the expiration
of unexercised stock options that had an exercise price above our stock price in recent years, and the forfeiture of unvested equity awards upon employee departures, each of which were returned to the pool. Where applicable, the number of shares and weighted average exercise prices reported in this table have been adjusted to reflect the one-for-eight reverse stock split effective July 30, 2021.
| (IN MILLIONS EXCEPT PER SHARE $ AMOUNTS, AS OF 12/31/2020) | | SHARES TO BE ISSUED
UPON EXERCISE OR
SETTLEMENT | | WEIGHTED AVERAGE
EXERCISE PRICE | | SHARES AVAILABLE
FOR FUTURE ISSUANCE | |
(IN THOUSANDS EXCEPT PER SHARE
$ AMOUNTS, AS OF 12/31/2021) | | | SHARES TO
BE ISSUED
UPON
EXERCISE OR
SETTLEMENT | | WEIGHTED
AVERAGE
EXERCISE
PRICE | | SHARES
AVAILABLE
FOR
FUTURE
ISSUANCE |
| Plans approved by shareholders (2007 LTIP) | | | | | | | | | | | | | | | |
| Options | | 400.3 | | $ | 18.16 | | | | (a) | | 38,407 | | $ | 144.97 | | | (a) |
| RSUs | | 60.5 | | | (b) | | | (a) | | 8,057 | | | | (b) | | | (a) |
| PSUs | | 12.2 | | | (b) | | | (a) | | 2,053 | | | | (b) | | | (a) |
| Performance Shares | | 9.3 | | | (b) | | | (a) | | 1,162 | | | | |
| Plans not approved by shareholders (Consultants’ Plan) | | | | | | | | | | | |
| Options | | 0.1 | | $ | 21.14 | | | | (c) | | 7 | | $ | 182.16 | | | (c) |
| RSUs | | 0.0 | | | (b) | | | (c) | | - | | | (b) | | | (c) |
| Total | | 482.3 | | $ | 18.16 | | | 286.0 | | | 49,686 | | $ | 144.97 | | 43,412 | |
| (a) | Total shares available for future issuance under the 2007 Long-Term Incentive Plan (the 2007 LTIP) amounted to 282.343 million shares as of December 31, 2020.2021. Of the 1,075134 million shares approved under the 2007 LTIP, no more than 23028.75 million may be available for awards granted in any form other than options or stock appreciation rights. |
| (b) | Not applicable. |
| (c) | Total shares available for future issuance under the GE Stock-Based Compensation and Incentive Plan for Consultants, Advisors and Independent Contractors (the Consultants’ Plan) amounted to 3.70.5 million shares at December 31, 2020.2021. |
Deferred Compensation
The company has offered both aWe offer certain deferred bonus programcompensation programs and in prior years, a deferred salary program. These deferral programs are intended to promote retention by providing a long-term savings opportunity on a tax-efficient basis. Because the deferral programs are unfunded and deferred payments are satisfied from the company’s general assets, they provide an incentivearrangements for the company’s executives to minimize risks that could jeopardize the long-term financial health of the company.executives.
Bonus Deferrals
ELIGIBILITY AND DEFERRAL OPTIONS. EmployeesU.S. employees in our executive band and above, including the named executives, can elect to defer all or a portion of their annual bonus payments intopayment and be credited
with earnings on those deferrals under the earnings options shown below. Participants may change their earnings option up to four times per year. The company makes all decisions regarding the earnings options that are offered and the measures for calculating earnings under those options.
TIME AND FORM OF PAYMENT. Participants can elect to receive their deferred amounts upon termination of employmentseparation from service either in a lump sum or in 10 to 20 annual installments. Participants may not withdraw any deferred amounts prior to separating from service.
| EARNINGS OPTION | | TYPE OF EARNINGS | | ACCOUNT BALANCE FOR
EARNINGS CALCULATION | | EARNINGS AMOUNT* | | WHEN EARNINGS
CREDITED |
GE Stock Units
(based on GE stock value) | | Dividend- equivalent income | | Units in account on NYSE ex-dividend date | | Quarterly dividend declared for GE stock or the S&P 500, as applicable | | Quarterly |
S&P 500 Index Units
(based on S&P 500) | | Dividend- equivalent
income | | Units in account on NYSE
ex-dividend date | | Quarterly dividend
declared for GE stock or
the S&P 500, as applicable | | Quarterly |
Deferred Cash Units
(cash units) | | Interest income | | Daily outstanding account
balance | | Prior calendar month’s
average yield for U.S.
Treasury Notes and Bonds
issued with maturities of
10 years and 20 years | | Monthly |
| * | None of the bonus deferral options provide for “above-market interest” as defined by the SEC. |
* None of the bonus deferral options provide for “above-market interest” as defined by the SEC.
44 GE 2021 PROXY STATEMENT
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Salary Deferrals
ELIGIBILITY. In prior years, we periodically offered eligible employees in our executive band and above the opportunity to defer their salary payments (the last such plan was offered in 2010 for 2011 salary). Individuals who were named executives at the time a deferred salary program was initiatedoffered were not eligible to participate. None ofAmong our named executives, haveonly Mr. Stokes has participated in a salary deferral program or have balances outstanding.program.
INTEREST INCOME. These programs provide accrued interest on deferred amounts (including an above-market interest rate as defined by the SEC) ranging from 6% to 14% compounded annually.
TIME AND FORM OF PAYMENT. Our deferred salary programs have required participants to elect, before the salary was deferred, to receive deferred amounts either in a lump sum or in 10 to 20 annual installments.
The company makes all decisions regarding the measures for calculating interest or other earnings on deferred bonuses and salary. The named executives cannot Participants may not withdraw any amountsdeferred amount prior to separating from their deferred compensation balances until they either leave or retire from GE.service.
GE 2022 PROXY STATEMENT 41
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ELIGIBILITY. U.S. employees who become U.S. executives on or after January 1, 2021 will accrue benefits under the GE Restoration Plan, instead of any benefits under the GE Supplementary Pension Plan (including the Executive Retirement Benefit) (see “Pension Benefits”on page 4643 for information regarding the GE Supplementary Pension Plan). As of December 31, 2021 none of our named executives received benefits under the Restoration Plan.
BENEFIT FORMULA. GE Restoration Plan participants are credited with 7% of their annual earnings, which include base salary and up to one-half of eligible bonus payments, that exceed the IRS-prescribed limit applicable to tax-qualified plans ($290,000 for 2021). These amounts
EARNINGS OPTIONS AND VESTING. The annual credits are notionally invested as elected by the participant in earnings options that mirror the investment options available under the broad-based tax-qualifiedtax qualified GE Retirement SavingsRSP. Participants may change their election up to 12 times per quarter. The company makes all decisions regarding the earnings options that are offered and the measures for calculating earnings under those options. Earnings are currently credited daily. Participants generally vest in their Restoration Plan and generally vestaccounts after 3 years of service.
TIME AND FORM OF PAYMENT. Vested amounts under the Restoration Plan are paid in a lump sum, generally in July of the year following when the participant either leaves or retiresyear of the participant’s separation from GE.service.
Nonqualified Deferred Compensation Table
The table below — also known as the Nonqualified Deferred Compensation Table — shows amounts credited to the named executives’ accounts under nonqualified deferred compensation plans and plan balances as of December 31, 2020. For 2020, the company did not make any matching contributions into these plans. In addition, no2021. No withdrawals or distributions from these plans were made in 2020.2021.
| | AGGREGATE EARNINGS
IN LAST FISCAL YEAR | | AGGREGATE BALANCE
AT LAST FISCAL YEAR-END | | EXECUTIVE
CONTRIBUTIONS
IN 2021 | | AGGREGATE EARNINGS
IN LAST FISCAL YEAR | | AGGREGATE EARNINGS
AT LAST FISCAL YEAR-END |
| NAME | | EXECUTIVE
CONTRIBUTIONS
IN 2020 | | DEFERRED
BONUS
PROGRAM | | DEFERRED
SALARY
PROGRAM | | DEFERRED
BONUS
PROGRAM | | DEFERRED
SALARY
PROGRAM | | | DEFERRED
BONUS PROGRAM | | DEFERRED
SALARY PROGRAM | | DEFERRED
BONUS PROGRAM | | DEFERRED
SALARY PROGRAM |
| Culp | | $ | 1,400,000 | | $ | 209,172 | | $ | 0 | | $ | 1,609,172 | | $ | 0 | | | $ | 0 | | | $ | 460,728 | | | | N/A | | | $ | 2,069,900 | | | | N/A |
| Dybeck Happe | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | | $ | 0 | | | $ | 0 | | | N/A | | | $ | 0 | | | N/A |
| Miller | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | |
| Slattery | | | | $ | 0 | | | $ | 0 | | | N/A | | | $ | 0 | | | N/A |
| Stokes | | | | $ | 0 | | | $ | 59 | | $ | 7,567 | | | $ | 3,610 | | $ | 96,589 |
| Murphy | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | | $ | 0 | | | $ | 0 | | | N/A | | | $ | 0 | | | N/A |
| Slattery | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | |
| Strazik | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | |
EXECUTIVE CONTRIBUTIONS IN 2020.2021. Amounts represent compensation deferred during 2020.2021. This column maydoes not reflect any 20202021 compensation in the Summary Compensation Table on page 3936 which was credited to the named executive’s deferred account, if any, in 2021.2022.
AGGREGATE EARNINGS IN 2020.2021. Reflects earnings on each type of deferred compensation listed in this section that were deposited intocredited to the named executive’s deferred compensation account during 2020.2021. The earnings on deferred bonus payments may be positive or negative, depending on the named executive’s investment choice, and are calculated based on: (1) the total number of deferred units in the account multiplied by the GE stock or S&P 500 Index pricebalance attributable to each earnings option as of
December 31, 2020;2021; minus (2) that amount as of December 31, 2019; 2020;
minus (3) any named executive contributions during the year. The earnings on the deferred salary programs are calculated based on the total amount of interest earned. See the Summary Compensation Tableon page 3936 for the above-market portion of those interestthese earnings in 2020.2021.
AGGREGATE BALANCE AT 12/31/20.DECEMBER 31, 2021. The fiscal year-end balance reported in the table above includes $1.4 million for Mr. Culp that was previously reported in the Summary Compensation Table as 2019 compensation. The table above doescompensation; $2,519 for Mr. Stokes that was not include any amounts that were previously reported in the Summary Compensation Table as 20182020 compensation; and $2,322 for Mr. Stokes that was previously reported on the Summary Compensation Table as 2019 compensation.
42 GE 20212022 PROXY STATEMENT45
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Pension Benefits
The company provides retirement benefits to thecertain named executives based in the United States under the same GE Pension Plan and GE Supplementary Pension Plan in which other eligible U.S. employees participate. The GE Pension Plan is a funded, tax-qualified plan. The Supplementary Pension Plan is an unfunded, unsecured obligation of the company and is not qualified for tax purposes. Mr. Murphy participates in the UK Pension Plan on the same terms as other UK-based eligible employees.
GE Pension Plan
ELIGIBILITY AND VESTING. The GE Pension Plan is a broad-based retirement program for U.S.-based employees that has been closed to new participants since 2012 (2011 for salaried new hires). Employees who began working at GE after the plan was closed, including Messrs. Culp and Slattery and Ms. Dybeck Happe, are not eligible for this plan. Those employees who are eligible generally vest in the plan after five years of qualifying service. The plan also requires employee contributions, which vest immediately. Effective January 1, 2021, participants with salaried benefits stopped accruing benefits (and making contributions) under this plan and became eligible for the automatic contributions available to new hires under the GE Retirement Savings PlanRSP equaling 3% of eligible pay (up to the caps imposed under IRS rules), plus two years of transition credits equaling 2% of eligible pay.pay per year.
BENEFIT FORMULA. For Ms. Miller and Mr. Strazik,Stokes, the plan provides benefits based primarily on a formula that takes into account theirhis earnings for each fiscal year (through 2020). Since 1989, this formula has provided an annual benefit accrual equal to 1.45% of a named executive’s earnings for the year up to covered compensation and 1.9% of his or her earnings for the year in excess of covered compensation. “Covered compensation” was $60,000 for 2020 and has varied over the years based in part on changes in the Social Security taxable wage base. For purposes of the formula, annual earnings include base salary and up to one-half of bonus payments, but may not exceed an IRS-prescribed limit applicable to tax-qualified plans ($285,000 for 2020). As a result, the maximum incremental annual benefit a named executive could have earned for service in 2020 was $5,145.$5,145, and in 2021 was $0 due to the stoppage of accruals. Over the years, we have made special one-time adjustments to this plan that increased eligible participants’ pensions, but no adjustment was made in 2020.2021.
TIME AND FORM OF PAYMENT. The accumulated benefit an employee earns is payable after retirement on a monthly basis for life with a guaranteed minimum benefit of five years. The normal retirement age as defined in this plan is 65; however, employees who began working at GE prior to 2005, including Ms. Miller, and Mr. Strazik,Stokes, may retire at age 60 without any reduction in benefits. In addition, the plan provides for Social Security supplements and spousal joint and survivor annuity options.
TAX CODE LIMITATIONS ON BENEFITS. The tax code limits the benefits payable under the GE Pension Plan. For 2020,2021, the maximum single life annuity a named executive could have received under these limits was $230,000 per year. This ceiling is actuarially adjusted in accordance with IRS rules to reflect employee contributions, actual forms of distribution and actual retirement dates.
GE Supplementary Pension Plan
ELIGIBILITY.ELIGIBILITY AND VESTING. The GE Supplementary Pension Plan is an unfunded and non-tax-qualified retirement program that is offeredprovides retirement benefits to eligible U.S.-based employees in the executive band and above, including the named executives. Employees generally must remain continuously employed until age 60 in order to vest in a benefit under the plan. For those who became U.S. executives prior to January 1, 2011, including Mr. Strazik,Stokes, the plan provides an annuity benefit above amounts available under the GE Pension Plan (a “supplementary pension“Supplementary Pension benefit”). For those who became U.S. executives on or after January 1, 2011 (and before January 1, 2021), including Messrs. Culp and Slattery and Ms. Dybeck Happe, the plan provides a retirement benefit paid in 10 annual installments (an “executive retirement benefit”“Executive Retirement Benefit”). Effective January 1, 2021, participants eligible for the supplementary pensionSupplementary Pension benefit, including Mr. Strazik,Stokes, stopped accruing that benefit and began accruing an executive retirement benefitExecutive Retirement Benefit for their future credited service. The executive retirement benefitExecutive Retirement Benefit was also closed to new participants and, effective January 1, 2021, new and rehired U.S. executives are instead participating in the Restoration Plan (described above). Ms. Miller did not vest in or receive any benefits under the GE Supplementary Pension Plan.
Supplementary Pension Benefit
BENEFIT FORMULA. A named executive’s annual supplementary pension,Supplementary Pension benefit, when combined with certain amounts payable under the company’s other pension programs and Social Security, will equal 1.75% of his or her “earnings credited for retirement benefits” multiplied by the number of years of credited service (through 2020), up to a maximum of 60% of such earnings credited for retirement benefits. The “earnings credited for retirement benefits” are the named executive’s average annual compensation (base salary and bonus) for the highest 36 consecutive months out of the last 120 months prior to retirement (or December 31, 2020, if earlier).
TIME AND FORM OF PAYMENT. The supplementary pensionSupplementary Pension benefit would be provided to eligible employees, including Mr. Strazik,Stokes, after retirement as monthly payments for life (with a guaranteed minimum benefit of five years), and could not be received in a lump sum. The plan also provides for spousal joint and survivor annuity options. The normal retirement age under the plan is 65; however, executives eligible for this benefit who began working at GE prior to 2005, including Mr. Strazik,Stokes, may retire at age 60 without any reduction in benefits.
Executive Retirement Benefit
BENEFIT FORMULA. A named executive’s executive retirement benefitExecutive Retirement Benefit will equal 18% of his or her earnings credited for retirement benefits for each year of credited service as a GE Officer, plus 14% of such earnings for each year of credited service as aan Executive Director or Senior Executive Director and 10% of such earnings for each year of credited service as an Executive. The “earnings credited for retirement benefits” are the named executive’s average annual compensation (base salary and bonus) for the highest 36 consecutive months out of the last 120 months prior to retirement.
TIME AND FORM OF PAYMENT. The executive retirement benefitExecutive Retirement Benefit would be provided to Messrs. Culp and Slattery and Ms. Dybeck Happe after retirement as 10 equal annual installment payments, and could not be received in a lump sum. Mr. StrazikStokes also began accruing an executive retirement benefitExecutive Retirement Benefit beginning January 1, 2021, when he stopped accruing additional Supplementary Pension benefits. Executives eligible for this benefit may retire at age 60, but are subject to a reduction in benefits of up to 25% for commencementretirement prior to age 65.
46 GE 20212022 PROXY STATEMENT43
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GE Excess Benefits Plan
ELIGIBILITY. The GE Excess Benefits Plan is an unfunded and non-tax-qualified retirement program that is offered to employees whose benefits under the GE Pension Plan are limited by certain tax code provisions. There were no accruals for named executives under this plan in 2020, and beginningBeginning January 1, 2021, no further benefit accruals are permitted for any participants under this plan.
BENEFIT FORMULA. Benefits payable under this plan are equal to the amount that would be payable under the terms of the GE Pension Plan disregarding the limitations imposed by certain tax code provisions minus the amount actually payable under the GE Pension Plan taking those limitations into account.
TIME AND FORM OF PAYMENT. Benefits for the named executives are generally payable at the same time and in the same manner as theira participant’s GE Pension Plan benefits.
GE UK Pension Plan
ELIGIBILITY. The UK GE Pension Plan is a broad-based, tax registered and qualified pension program for U.K.-based employees that has been closed to new participants since 2011. Those employees of GE who are eligible to participate in the plan vest after two years of pensionable service. The plan requires employee contributions (these(which are refunded if pensionable service does not meet vesting requirements). Effective January 1, 2022, participants stopped accruing benefits and making contributions under this plan (subject to certain statutorily required increases), and became eligible for a core annual employer contribution under the GE Pension Saver defined contribution plan equaling 10-25% of base salary, plus two years of transition credits equaling 2% of base salary (each up to statutory caps). Mr. Murphy is the only named executive who participates in this plan.
BENEFIT FORMULA. The UK GE Pension Plan offers two accrual rates (1/60ths and 1/80ths) applied to final pensionable pay, which is defined as the annual average of the highest three complete years’ base salary only, less an initial offset in respect of salary subject to social security
retirement benefits, and capped at a plan earnings cap. Both indices are updated and released by Her Majesty’s Revenue and Customs (HMRC) each new tax year. Credit is awarded on this formula for every whole month earned under the plan as pensionable service. The accrual is monitored for tax purposes on an annual basis and an annual allowance is set according to earnings. Tax relief on the pension accrual is provided only up to an individual limit falling between £10,000£4,000 and £40,000.
Pension contributions in excess of this individual limit result in tax at applicable individual rates. All GE employees who were in the executive band and above and members of the UK GE Pension Plan when it was closed to new entrants, including Mr. Murphy, are entitled to accrue additional benefits on a special defined contribution basis. Under these additional benefit provisions, Mr. Murphy is entitled to an annual GE cash contribution of 25% of eligible earnings each year.
TIME AND FORM OF PAYMENT. The UK GE Pension Plan pays out the accumulated benefit after retirement on a monthly basis for life with a guaranteed minimum benefit of five years. The normal retirement age under the plan is 65; however, certain employees with special benefits, may, in accordance with a longstanding discretionary practice, retire at age 60 without any reduction in benefits. Mr. Murphy is not eligible for such unreduced early retirement under this plan. In addition, the plan provides for social security supplements and a spousal annuity.
TAX CODE LIMITATIONS ON BENEFITS. Benefits from the UK GE Pension Plan are subject to the Lifetime Allowance which measures individual pension accruals/contributions against an overall limit that is updated and released by HMRC each new tax year. For 2020,2021, this limit was £1,073,100.
Pension Benefits Table
The table below shows the present value of the accumulated benefit as of December 31,
20202021 for the named executives under each plan, as calculated based upon the assumptions described below. Although SEC rules require us to show this present value, the named executives are not entitled to receive these amounts in a lump sum. None of the named executives received a payment under these plans in
2020. | | | | PRESENT VALUE OF ACCUMULATED BENEFIT |
| NAME | | NUMBER OF YEARS
CREDITED SERVICE | | PENSION
PLAN | | SUPPLEMENTARY
PENSION | | EXCESS
BENEFITS
PLAN | | EXECUTIVE
RETIREMENT
BENEFIT | | UK PENSION
PLAN | | PAYMENT
DURING LAST
FISCAL YEAR |
| Culp | | 2 | | | N/A | | | N/A | | | N/A | | $ | 1,519,649 | | | N/A | | $ | 0 |
| Dybeck Happe | | <1 | | | N/A | | | N/A | | | N/A | | $ | 246,010 | | | N/A | | $ | 0 |
| Miller* | | 15 | | $ | 1,200,903 | | $ | 0 | | $ | 0 | | | N/A | | | N/A | | $ | 0 |
| Murphy | | 12 | | | N/A | | | N/A | | | N/A | | | N/A | | $ | 1,702,923 | | $ | 0 |
| Slattery | | <1 | | | N/A | | | N/A | | | N/A | | $ | 87,815 | | | N/A | | $ | 0 |
| Strazik | | 20 | | $ | 992,176 | | $ | 5,207,392 | | $ | 0 | | | N/A | | | N/A | | $ | 0 |
| | | PRESENT VALUE OF ACCUMULATED BENEFIT | | |
| | | | | | | EXECUTIVE | | EXCESS | | UK | | PAYMENT |
| NUMBER OF YEARS | | PENSION | | SUPPLEMENTARY | | RETIREMENT | | BENEFITS | | PENSION | | DURING LAST |
| NAME | CREDITED SERVICE | | PLAN | | PENSION PLAN | | BENEFIT | | PLAN | | PLAN | | FISCAL YEAR |
| Culp | 3 | | N/A | | N/A | | $ | 2,462,802 | | N/A | | N/A | | $0 |
| Dybeck Happe | 2 | | N/A | | N/A | | $ | 597,475 | | N/A | | N/A | | $0 |
| Slattery | 1 | | N/A | | N/A | | $ | 380,032 | | N/A | | N/A | | $0 |
| Stokes* | 24 | | $1,293,536 | | $13,239,284 | | $ | 309,610 | | $0 | | N/A | | $0 |
| Murphy ** | 13 | | N/A | | N/A | | | N/A | | N/A | | $1,869,287 | | $0 |
| * | Mr. Stokes’s credited service is limited to 24 years under the Pension Plan and the Supplementary Pension benefit, as no future accruals of those benefits are permitted effective January 1, 2021. For purposes of the Executive Retirement Benefit, Mr. Stokes’s credited service is limited to his service on and after January 1, 2021 (one year as of December 31, 2021). |
| ** | On February 17, 2020, Ms. MillerDecember 21, 2021, Mr. Murphy and the company entered into a separation agreement and release in connection with herpursuant to which Mr. Murphy will remain employed for a period of garden leave, from January 1, 2022 until September 30, 2023, during which time he will not receive pension contributions. Upon his departure, from the company. Upon her departure, Ms. Miller did not vest in or receive any benefits under the GE Supplementary Pension Plan, but sheMr. Murphy remains vested in herhis accrued benefit under the GEUK Pension Plan, with payments to begin in accordance with the terms of the plan. |
PRESENT VALUE OF ACCUMULATED BENEFIT. The accumulated benefit is based on years of service and earnings (base salary and bonus) considered by the plans for the period through December 31, 2020.2021. It also includes the value of contributions made by the named executives throughout their careers. For purposes of calculating the present value, we assume that the named executives will remain in service until the age at which they may retire without any reduction in benefits. For Messrs. Culp, Murphy and Slattery and Ms. Dybeck Happe this is age 65, and for Ms. Miller and Mr. StrazikStokes this is age 60 (notwithstanding that Ms. Miller separated fromfor the company in 2020, prior to reachingPension Plan and the Supplementary Pension benefit and age 60).65 for the Executive Retirement Benefit. We also assume that benefits are payable under the available forms of annuity
consistent with the assumptions described in the Postretirement Benefit Plans notes in GE’s financial statements in our 2020 annual report2021 Annual Report on Form 10-K, including the statutory discount rate assumption of 2.61%2.94% in the United States and the statutory discount rate of 2.41% in the U.K.States. The postretirement mortality assumption used for present value calculations for U.S. beneficiaries is the Pri-2012 Healthy Retiree mortality table projected to 2016, adjusted for GE’s experience and factoring in projected generational improvements andimprovements. The assumptions for U.K. beneficiaries isare a discount rate of 1.76% and a postretirement mortality assumption based upon the SAPS S2 Normal tables with future generational improvements in line with the CMI 2017 projection model (with a 1.5% improvement trend) as at December 31, 2020.2021.
44 GE 20212022 PROXY STATEMENT47
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Potential Termination Payments
In this section, we describe and quantify certain compensation that would have been payable under existing compensation plans and arrangements had a named executive’s employment terminated on December 31, 2020.2021. For this hypothetical calculation, we have used each executive’s compensation and service levels as of this date (and, where applicable, GE’s closing stock price on December 31, 2020)2021). Since many factors (e.g., the time of year when the event occurs, GE’s stock price and the executive’s age) could affect the nature and amount of benefits a named executive could potentially receive, any amounts paid or distributed upon a future termination may be different from those shown in the tables below. The amounts shown are in addition to benefits generally available to salaried employees, such as distributions under the Retirement Savings Plan, and for salaried employees who joined the company before 2005, subsidized retiree medical benefits and disability benefits.GE RSP.
EMPLOYMENT AGREEMENTS FOR EMPLOYEES. Historically we have not entered into employment agreements with our U.S.-based executives, and they served at the will of the Board. This practice preserved the committee’s flexibility to set the terms of any employment termination based on the particular facts and circumstances. Ms. Miller and Mr. Strazik are not parties to employment agreements. However, Ms. Miller entered into a separation agreement and release with the company, dated February 17, 2020, in connection with her departure and transition. Mr. Murphy is party to an employment agreement, which is more typical of our practice for executives at his seniority in the U.K., but it does not entitle him to any particular benefits upon termination or a change of control.
As we have hired new executive talent from outside the company, we have entered into employment agreements with those individuals, generally at their request. Mr. Culp and Ms. Dybeck Happe each entered into employment agreements and Mr. Slattery entered into an offer letter agreement upon joining GE. The agreements for Messrs. Culp and Slattery and Ms. Dybeck Happe entitle them to certain post-termination benefits, in each case as further described below. FollowingPrior to January 1, 2022, Mr. Murphy was party to an employment agreement, which is typical of our practice for executives at his seniority in the say-on-pay vote at the 2019 annual meeting, and basedU.K., but it did not entitle him to any particular benefits upon discussions with shareholders, the committee determined that it will no longer provide single-triggertermination or a change of control provisions for any new executives enteringcontrol. Mr. Murphy entered into employment agreementsa separation agreement and release with the company.company, dated December 21, 2021, in connection with the previously reported GE Healthcare leadership transition.
EMPLOYMENT AGREEMENT WITH MR. CULP. We entered into an employment agreement with Mr. Culp upon his employment with GE, which was amended in August 2020 to extend the term to August 17, 2024, or such later date as mutually agreed by the parties up to and through August 17, 2025 (such date is referred to as the Expiration Date). His agreement provides for an annual base salary of $2.5 million, a bonus target at 150% of his salary, and annual PSU awards with a grant date fair value of $15 million, beginning in 2019.and was further amended on March 15, 2022, to reduce the 2022 annual grant of PSUs from $15 million to $5 million. His original employment agreement provided for a PSU inducement award with a target award of 5 million shares, which he voluntarily relinquished in August 2020. In connection with the amendment in August 2020, he received a one-time Leadership Performance Share Award, with a target of 9,295,3521,161,919 shares. Under the employment agreement, Mr. Culp receives other benefits given to senior executives of the company. Mr. Culp is also subject to a non-compete agreement, which terminates 24 months after his termination if his employment is terminated on or before the Expiration Date, and which terminates 12 months after termination of his employment if his employment
terminates between the Expiration Date and 12 months thereafter. Mr. Culp is not subject to a non-compete agreement if his employment terminates after the date that is 1218 months following the Expiration Date. He is also subject to a non-solicitation clause covering the same periods as his non-compete agreement.
Under the terms of this agreement, if Mr. Culp is terminated for any reason other than “cause” or due to a resignation without “good reason,” he would be entitled to the balance of his prior year’s annual bonus (to the extent earned, but not paid). Assuming a termination date of December 31, 2020,2021, Mr. Culp would not have been entitled to any amount with respect to these benefits. Additionally, if Mr. Culp is terminated without “cause” or voluntarily leaves for “good
“good reason,” he would be entitled to cash severance equal to two times his annual salary plus target bonus, payable in bi-weekly installments over a two-year period, subject to any delay required by tax regulations. Assuming a termination date of December 31, 2020,2021, Mr. Culp would have been entitled to a severance payment in the amount of $12,500,000. This severance would be subject to his providing a release to the company and his ongoing compliance with perpetual confidentiality and non-disparagement provisions and 24-month non-compete and non-solicitation provisions under his employment agreement.
Under the award agreement for Mr. Culp’s one-time Leadership Performance Share Award, Mr. Culp is entitled to accelerated vesting of the performance shares as described below for such events that occur prior to the end of the performance period:
| ● | Retirement on August 17, 2024 (coinciding with the end of his employment agreement): the performance shares for which performance was actually achieved during the portion of the performance period that has already elapsed as of August 17, 2024. |
| ● | Death or “Disability”: followingPrior to the end of the performance period, the greater of (i) the performance shares for which performance was actually achieved during the portion of the performance period that has already elapsed as of the date of such termination or (ii) the performance shares for which performance was actually achieved during the entire performance period, prorated based on length of service during the performance period. |
| ● | Termination without “Cause” or Resignation for “Good Reason”: the greater of (i) the performance shares for which performance was actually achieved during the portion of the performance period that has already elapsed as of the date of such termination or (ii) the threshold number of performance shares, prorated based on length of service during the performance period. |
| ● | “Change in Control”: the greatest of (i) the performance shares for which performance was actually achieved during the portion of the performance period that has elapsed prior to the date of such change in control; (ii) the performance shares for which performance was actually achieved during the portion of the performance period that has elapsed prior to the date of such change in control, with the relevant stock price based on the per-share consideration received by shareholders in connection with the change in control; or (iii) for a change in control prior to August 18, 2022, the target number of performance shares and for a change of control on or after August 18, 2022, the threshold number of performance shares. |
See “Equity Awards” on page 5047 regarding the value of the equity treatment.
48 GE 2021 PROXY STATEMENT
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Under Mr. Culp’s employment agreement and Leadership Performance Share Award agreement, the following terms have the meanings set forth below:
| ● | “Cause” generally means (i) the willful and continued failure of Mr. Culp to substantially perform his assigned duties for more than 30 days after the company notifies Mr. Culp of such failure, (ii) willfully engaging in conduct that is materially injurious to the company, including violating company policies, or (iii) the commission of a felony or crime involving dishonesty related to the company. |
| ● | “Change in control” generally means (i) the acquisition of more than 30% of the company’s stock or voting power by any person, or (ii) the reorganization, merger, consolidation, sale or disposition of all or substantially all of the assets of the company, unless more than 50% of the surviving entity is controlled by the shareholders immediately prior to such event, in substantially the same proportions as their ownership immediately prior to the event. |
GE 2022 PROXY STATEMENT 45
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| ● | “Disability” generally means that, as a result of Mr. Culp’s incapacity due to physical or mental illness, he is absent from his duties on a full-time basis for six consecutive months and does not return to the performance of his duties within 30 days after written notice is provided. |
| ● | “Good reason” generally means (i) a reduction in Mr. Culp’s compensation rights, other than the agreed reduction in base salary, commencing April 2020, (ii) failure to renominate Mr. Culp to the boardBoard or removing him from the position of CEO, (iii) materially reducing Mr. Culp’s duties and responsibilities, (iv) assigning Mr. Culp duties that are materially inconsistent with his position or duties that materially impair his ability to function as CEO, (v) relocation of the company’s headquarters by more than 50 miles, or (vi) a material breach of Mr. Culp’s employment agreement by the company. |
The previously announced plan to separate GE’s businesses into three industry-leading public companies does not constitute a “change in control” for purposes of the agreements.
EMPLOYMENT AGREEMENT WITH MS. DYBECK HAPPE. We entered into an employment agreement with Ms. Dybeck Happe upon her employment with GE. The agreement provides for an annual salary of $1.5 million, a bonus target at 125% of her salary, and long-term equity incentive awards with a grant date fair value of $4.9 million for 2020 and with a target grant date fair value of not less than $5.0 million for subsequent years. Upon commencement of her employment, she also received an award of stock options with a grant date fair value of $8.0 million (2,061,856 options)(257,732 options, as adjusted for the reverse stock split) to compensate Ms. Dybeck Happe for value forfeited by her for leaving her prior employer. Ms. Dybeck Happe is subject to a non-compete and non-solicitation agreement, which terminates 12 months after her termination (for whatever reason).
Under the terms of her employment agreement, if Ms. Dybeck Happe is terminated without “cause” or voluntarily leaves for “good reason” at any time, subject to her providing a release to the company, she would be entitled to accelerated vesting of her new hire stock options which would remain exercisable through the end of the second calendar year following the year in which termination occurs. In addition, if such termination or departure occurs on or before December 31, 2023, she would be entitled to: (i) accelerated vesting of all then-outstanding long-term incentive awards, with the options remaining exercisable through the end of the second calendar year following the year in which termination or departure occurs, (ii) a lump sum cash payment equal to 12 months of base salary and target bonus and (iii) if she relocates back to Sweden within six months, reimbursement for certain relocation expenses. If such termination or departure occurs after December 31, 2023, Ms. Dybeck Happe will be eligible to receive the standard severance package provided
to similarly situated officers of the company (which as of the signing date consisted of 12 months of base salary). Assuming a termination of employment as of December 31, 2020,2021, the cash portion of this severance amount, excluding any relocation reimbursements, would be $3,375,000. See “Equity Awards” on page 5047 regarding the value of the equity treatment.
Under the award agreement for Ms. Dybeck Happe’s one-time award of Leadership PSUs, Ms. Dybeck Happe is entitled to accelerated vesting of the PSUs on the same terms as described above with respect to Mr. Culp’s Leadership performance shares; provided, that for purposes of a change in control, the final prong is instead conditioned on a change in control occurring relative to September 3, 2022 (rather than August 18, 2022).
Under Ms. Dybeck Happe’s employment agreement and Leadership PSU award agreement, the following terms have the meanings set forth below:
| ● | “Cause” generally means (i) the willful failure of Ms. Dybeck Happe to perform her duties or to comply with a valid and legal directive of the company or the Board, (ii) engaging in dishonesty, illegal conduct or misconduct that materially harms or is reasonably likely to materially harm the company, (iii) conviction of, or nolo contendere plea to, a felony or of a misdemeanor involving moral turpitude, (iv) willful or grossly negligent unauthorized disclosure of confidential information, (v) material breach of any material obligation under the employment agreement or other agreement with the company, which harms or is reasonably likely to materially harm the company, or (vi) willful material failure to comply with company policies (and in the case of (i), (iv), (v) and (vi), the failure to cure such circumstances within 30 days of receiving notice). |
| ● | “Change in control” generally has the same meaning described above with respect to Mr. Culp’s employment agreement and Leadership Performance Share Award agreement. |
| ● | “Good reason” generally means (i) a material reduction in Ms. Dybeck Happe’s compensation, (ii) a material breach by the company of any material provision of the employment agreement or other agreement with the company, or (iii) a material, adverse change in Ms. Dybeck Happe’s title, authority, duties, responsibilities or reporting relationship, provided Ms. Dybeck Happe provides notice to the company and Board of the circumstances giving rise to the “good reason” and the circumstances are not cured within 30 days. |
OFFER LETTER AGREEMENT WITH MR. SLATTERY. We entered into an offer letter agreement with Mr. Slattery upon the commencement of his employment with GE. The agreement provides for an annual salary of $1.25 million, a bonus target at 100% of his salary, long-term equity incentive awards with a grant date fair value of $3.0 million for 2020 and with a target grant date fair value of not less than $6.0 million for subsequent years. Upon commencement of his employment, he also received a new hire cash bonus of $1.0 million, and an award of stock options with a grant date fair value of $1.5 million (539,568 options)(67,446 options, as adjusted for the reverse stock split) to compensate Mr. Slattery for value forfeited by him for leaving his prior employer. He is subject to a non-compete and non-solicitation agreement, which terminates 12 months after his termination (for whatever reason). Upon Mr. Slattery’s termination of employment, he will be eligible to receive the standard severance package provided to similarly situated officers of the company (which as of the signing date consisted of 12 months of base salary).
SEPARATION AGREEMENT WITH MS. MILLER.MR. MURPHY. Ms. Miller left the company on September 30, 2020, as part of a leadership transition to a new CFO. In connection with this, on February 17, 2020, Ms. Millerthe previously reported GE Healthcare leadership transition, Mr. Murphy no longer serves as President and
Chief Executive Officer of GE Healthcare after December 31, 2021. On December 21, 2021, PROXY STATEMENT 49
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the companyGE and Mr. Murphy entered into a Separation Agreement & Release. Pursuantseparation agreement pursuant to the termswhich Mr. Murphy will remain employed for a period of the agreement, upon the appointment of her successor on March 1, 2020, she remained employed in a special projects role to assist with the CFO transitiongarden leave, which is typical for senior UK-based employees. During this period, Mr. Murphy will remain available for advisory services or other work as required, and to work on such other matters and projects as directed by the CEO. Ms. Miller remained employed with the company until September 30, 2020 (the Separation Date), during which period she remained eligible tohe will receive herhis regular salary, and benefits.
Under the terms of the agreement, GE will provide certain compensation arrangements, including: (i) Ms. Miller is receiving severance pay in the amount of $2,900,000 (equal to one times heran annual salary and target bonus), paid in equal bi-weekly installments for the twelve-month period following the Separation Date, during which time Ms. Miller must be available to provide reasonable transition assistance and answer questions related to her employment; (ii) Ms. Miller received a bonus for the 20202021 plan year at no less than the Corporate pool funding level, which was pro-rated based on time employed with the company during the year, for a paymentperformance of $875,000; (iii) Ms. Miller’s outstanding stock optionsGE Healthcare and RSUs granted at least one year prior to the Separation Datehealth and that would otherwise vest through December 31, 2022 vested as soon as practicable after the Separation Date, and such stock options have an exercise period up to the earlier of their existing expiration date and December 31, 2022; and (iv) Ms. Miller’s outstanding PSUs that were granted at least one year prior to the Separation Date remain eligible to vest based upon the company’s actual performance in accordance with GE’s normal processes. Ms. Miller didlife insurance benefits; he will not receive an annualpension contributions, future bonuses or equity award in 2020. Upon her departure, Ms. Miller did not vest in or receive any benefits under the GE Supplementary Pension Plan, but she remains vested in her accrued benefit under the GE Pension Plan, with payments to begin in accordance with the terms of the plan.awards. Under the separation agreement, Ms. MillerMr. Murphy also granted a release to the companyin favor of GE and agreed to certain cooperation, confidential information, non-competition and non-solicitation covenants. See
“Equity Awards”46 below for more information regarding the valueGE 2022 PROXY STATEMENT
Table of the equity treatment under Ms. Miller’s separation agreement.Contents
US EXECUTIVE SEVERANCE PLAN. In order to standardize the severance payments available to U.S. executives who are not otherwise subject to an employment agreement providing a different amount, we adopted the GE US Executive Severance Plan effective January 1, 2021. Eligible executives who experience an employer-initiated termination of employment that is not for “cause,” and who are not offered a “suitable position,” receive between 6 to 18 months of base salary (based on their career band), which is paid in a lump sum. Outplacement services are also provided for the same period. To receive a benefit under the plan, the executive must enter into a separation agreement and release in a form acceptable to GE, which may also include cooperation, confidential information, non-disparagement, non-competition,
non-solicitation and other covenants. With respect to our named executives, Messrs. Slattery and StrazikStokes are eligible to participate under the plan at the 18-month level.
Under the Plan, the following terms have the meanings set forth below:
| ● | “Cause” generally means: (i) breach of any confidentiality, non-solicitation, non-competition or other material provision of an agreement with the company, (ii) conduct that has the potential to cause material harm to the company, (iii) an act of dishonesty, fraud, embezzlement or theft, (iv) conviction of, or plea of guilty or no contest to, a felony or crime involving moral turpitude, or (v) failure to comply with the company’s policies and procedures. |
| ● | “Suitable position” generally means a position providing at least 80% of the executive’s base salary and annual incentive award opportunity. If the position is with the company, rather than a successor employer in a business disposition or other third-party in an outsourcing arrangement, the position must also be within 50 miles of the executive’s job location and in the same career band. |
SHAREHOLDER APPROVAL OF SEVERANCE AND DEATH BENEFITS. If the Board were to agree to pay certain severance benefits or unearned death benefits to a named executive, we would seek shareholder approval. For severance benefits, this policy applies only when the executive’s employment had been terminated before retirement for performance reasons and the value of the proposed severance benefits exceeded 2.99 times the sum of his or her base salary and bonus. For this purpose, severance benefits would not include: (1) any payments based on accrued pension benefits; (2) any payments of salary or bonus amounts that had accrued at the time of termination; (3) any RSUs paid to a named executive who was terminated within two years prior to age 60; (4) any stock-based incentive awards that had vested or would otherwise have vested within two years following the named executive’s termination; and (5) any retiree health, life or other welfare benefits. See the Board’s Governance Principles (see “Helpful Resources” on page 73)77) for the full policies.
Equity Awards
The following table shows the intrinsic value of equity awards that would have vested or become exercisable if the named executive had died, become disabled, retired or separated from the company as of December 31, 2020.2021. Intrinsic value is based upon the company’s stock price (minus the exercise price in the case of stock options). Amounts shown assume the achievement of all applicable performance objectives at the target level. Our named executives generally are not entitled to benefits if they leave voluntarily or are terminated for cause (other than benefits already accrued), unless they satisfy the conditions for retirement eligibility.
| POTENTIAL TERMINATION PAYMENTS TABLE (EQUITY BENEFITS) |
| UPON DEATH | | UPON DISABILITY | | UPON RETIREMENT | | UPON INVOLUNTARY
TERMINATION* | | UPON CHANGE OF
CONTROL** |
| NAME | STOCK
OPTIONS | RSUs/PSUs/
PERFORMANCE
AWARDS | | STOCK
OPTIONS | RSUs/PSUs/
PERFORMANCE
AWARDS | | STOCK
OPTIONS | RSUs/PSUs/
PERFORMANCE
AWARDS | | STOCK
OPTIONS | RSUs/PSUs/
PERFORMANCE
AWARDS | | STOCK
OPTIONS | RSUs/PSUs/
PERFORMANCE
AWARDS |
| Culp | $ | N/A | $ | 84,788,148 | | $ | N/A | $ | 84,788,148 | | N/A | N/A | | | N/A | $ | 37,591,219 | | | N/A | $ | 109,766,488 |
| Dybeck Happe | $ | 1,479,257 | $ | 10,297,136 | | $ | 1,479,257 | $ | 10,297,136 | | N/A | N/A | | $ | 0 | $ | 3,425,860 | | $ | 0 | $ | 12,917,828 |
| Slattery | $ | 3,681,866 | $ | 12,739,185 | | $ | 3,681,866 | $ | 12,739,185 | | N/A | N/A | | $ | 0 | $ | 0 | | $ | 0 | $ | 0 |
| Stokes | $ | 410,698 | $ | 16,568,810 | | $ | 410,698 | $ | 16,470,467 | | N/A | N/A | | $ | 0 | $ | 0 | | $ | 0 | $ | 0 |
| Murphy | $ | 484,115 | $ | 19,190,352 | | $ | 484,115 | $ | 18,514,514 | | N/A | N/A | | $ | 0 | $ | 0 | | $ | 0 | $ | 0 |
POTENTIAL TERMINATION PAYMENTS TABLE (EQUITY BENEFITS)
| | UPON DEATH | | UPON DISABILITY | | UPON RETIREMENT | | UPON INVOLUNTARY
TERMINATION* | | UPON CHANGE OF
CONTROL** |
| NAME | | STOCK
OPTIONS | | RSUs/PSUs/
PERFORMANCE
AWARDS | | STOCK
OPTIONS | | RSUs/PSUs/
PERFORMANCE
AWARDS | | STOCK
OPTIONS | | RSUs/PSUs/
PERFORMANCE
AWARDS | | STOCK
OPTIONS | | RSUs/PSUs/
PERFORMANCE
AWARDS | | STOCK
OPTIONS | | RSUs/PSUs/
PERFORMANCE
AWARDS |
| Culp | | $ | 0 | | $ | 39,787,514 | | $ | 0 | | $ | 39,787,514 | | N/A | | N/A | | | $0 | | $ | 4,641,311 | | | $0 | | $ | 100,389,802 |
| Dybeck Happe | | $ | 0 | | $ | 4,036,154 | | $ | 0 | | $ | 4,036,154 | | N/A | | N/A | | | $0 | | $ | 385,182 | | | $0 | | $ | 11,814,336 |
| Miller | | | N/A | | | N/A | | | N/A | | | N/A | | N/A | | N/A | | | $0 | | $ | 3,718,310 | | | N/A | | | N/A |
| Murphy | | $ | 180,426 | | $ | 16,474,374 | | $ | 180,426 | | $ | 15,687,842 | | N/A | | N/A | | | N/A | | | N/A | | | N/A | | | N/A |
| Slattery | | $ | 3,709,937 | | $ | 8,028,839 | | $ | 3,709,937 | | $ | 8,028,839 | | N/A | | N/A | | | N/A | | | N/A | | | N/A | | | N/A |
| Strazik | | $ | 118,566 | | $ | 12,484,940 | | $ | 118,566 | | $ | 12,260,214 | | N/A | | N/A | | | N/A | | | N/A | | | N/A | | | N/A |
| * | Addresses separation “without cause” or where the executive leaves for “good reason,” as defined under the applicable employment agreement. Benefits are not otherwise payable in the event of voluntary separation. Amounts disclosed reflect the terms of the separation agreement entered into between the company and Ms. Miller on February 17, 2020, in connection with her departure from the company. See “Separation Agreement with Ms. Miller” on page 49. |
| ** | In each case as defined under Mr. Culp’s employment agreement and Ms. Dybeck Happe’s Leadership PSU award agreement, as detailed above. |
50 GE 2021 PROXY STATEMENT
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DEATH/DISABILITY. Unvested options, RSUs and PSUs/performance shares would generally vest, depending on the award terms. Vested options would generally remain exercisable until their expiration date, and PSUs and performance shares would remain subject to the achievement of the performance objectives. In the case of disability, the award must generally have been held for at least one year in order to be vested. For these purposes, “disability” generally means the executive being unable to perform his or her job.
RETIREMENT. Unvested options, RSUs and PSUs/performance shares held for at least one year would generally vest, depending on the award terms. Vested options would generally remain exercisable until their expiration date, and PSUs and performance shares would remain subject to the achievement of the performance objectives. For these purposes, “retirement” generally means reaching the applicable retirement age, typically age 60.60, and completing 5 years of service.
INVOLUNTARY TERMINATION. Under the terms of the Leadership Performance Share and Leadership PSU Award Agreements with Mr. Culp and Ms. Dybeck Happe, respectively, and Ms. Dybeck Happe’s employment agreement, amounts shown reflect the value of their Leadership Awards if they had been terminated without cause or left for good reason. None of the other named executives were entitled to any potential payments upon separation from the company, except for vesting of certain equity awards in the event that the executive is laid off (and his or her position is not replaced) or the executive transfers to a successor employer in a business disposition.
CHANGE OF CONTROL. Under the terms of the Leadership Performance Share and Leadership PSU Award Agreements with each of Mr. Culp and Ms. Dybeck Happe, they would have been eligible for the accelerated vesting of their Leadership Awards in the event of a change of control. For additional detail, see “Employment Agreement with Mr. Culp” on page 4845 and “Employment Agreement with
GE 2022 PROXY STATEMENT 47
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Ms. Dybeck Happe” on page 49.46. None of our other named executives are entitled to the acceleration or payment of benefits in the event of a change of control.
Pension Benefits
“Pension Benefits” on page 4643 describes the general terms of each pension plan in which the named executives participate, the years of credited service and the present value of their accumulated
pension benefit (assuming payment begins at age 60 or 65, as noted above). The table below shows the pension benefits that would have become payable if the named executives had died, become disabled, voluntarily terminated or retired as of December 31, 2020.2021.
In the event of death before retirement,,for Messrs. Culp, Slattery, and Stokes and Ms. Dybeck Happe, each of their respective beneficiaries may receive the named executive’sfollowing benefit:
| ● | Executive Retirement Benefit. 10 equal annual installments of his or her accrued benefit, reduced by 25% for commencement before attaining age 65. |
For Mr. Stokes, his surviving spouse (or beneficiary for the executive retirement benefit) may receive the following pension benefits:
| ● | GE Pension Plan and GE Excess Benefits PlanPlan. . EitherBecause Mr. Stokes has 15 years of service, either an annuity, as if the named executivehe had retired and elected the spousal 50% joint and survivor annuity option prior |
| to death, or an immediate lump-sum payment based on five years of pension distributions, in each case based upon the accrued benefits under these plans.benefit. |
| ● | Supplementary Pension BenefitBenefit. . For executives who haveBecause Mr. Stokes has 15 years of service, a lump-sum payment based on whichever of the following has a higher value: (1) the 50% survivor annuity that the spouse would have received under this plan if the named executiveMr. Stokes had retired and elected the spousal 50% joint and survivor annuity option prior to death, or (2) five years of pension distributions under this plan. |
The amounts payable depend on several factors, including employee contributions and the ages of the named executive and surviving spouse.
● | Executive Retirement Benefit. For Messrs. Culp and Slattery and Ms. Dybeck Happe, 10 equal annual installments of his or her accrued benefit, reduced by 25% for commencement before attaining age 65. |
In the event a disability occurs before retirementretirement:, executives with 15 years of service eligible for the Supplementary Pension Benefit may receive an annuity payment of accrued pension benefits, payable immediately. Executives with 15 years of service eligible for the executive retirement benefit
For Messrs. Culp and Slattery and Ms. Dybeck Happe, they may receive 10 equal annual installments of the executive’stheir accrued benefit,Executive Retirement Benefit, reduced by up to 25% for commencement before attaining age 65.65, but only once they have attained 15 years of service.
Mr. Stokes, having 15 years of service, may receive an annuity payment of accrued GE Pension and Supplementary Pension benefits, and 10 equal annual installments of his Executive Retirement Benefit.
POTENTIAL TERMINATION PAYMENTS TABLE (PENSION BENEFITS)
| POTENTIAL TERMINATION PAYMENTS TABLE (PENSION BENEFITS) | | | | | | | |
| NAME | | LUMP SUM
UPON DEATH | | ANNUAL
BENEFIT*
UPON
DEATH | | ANNUAL
BENEFIT*
UPON
DISABILITY | | ANNUAL
BENEFIT*
UPON
VOLUNTARY
TERMINATION | | ANNUAL
BENEFIT*
UPON
RETIREMENT | LUMP SUM
UPON DEATH | ANNUAL
BENEFIT*
UPON
DEATH | ANNUAL
BENEFIT*
UPON
DISABILITY | ANNUAL
BENEFIT*
UPON
VOLUNTARY
TERMINATION | ANNUAL
BENEFIT*
UPON
RETIREMENT |
| Culp | | | N/A | | $ | 154,839 | | | N/A | | $ | 0 | | N/A | | N/A | $ | 253,168 | | N/A | $ | 0 | N/A |
| Dybeck Happe | | | N/A | | $ | 31,883 | | | N/A | | $ | 0 | | N/A | | N/A | $ | 80,498 | | N/A | $ | 0 | N/A |
| Miller** | | | N/A | | | N/A | | | N/A | | | N/A | | N/A | |
| Slattery | | | N/A | $ | 45,820 | | N/A | $ | 0 | N/A |
| Stokes | | $ | 9,256,707 | $ | 87,626 | $ | 1,082,831 | $ | 85,682 | N/A |
| Murphy | | $ | 29,410 | | $ | 45,119 | | $ | 87,908 | | | N/A | | $38,114 | $ | 31,554 | $ | 49,121 | $ | 96,546 | | N/A | $48,240 |
| Slattery | | | N/A | | $ | 10,311 | | | N/A | | $ | 0 | | N/A | |
| Strazik | | $ | 2,093,056 | | $ | 38,808 | | $ | 501,930 | | $ | 73,744 | | N/A | |
| * | Annual amounts shown for Mr. Strazik are annuity payments applicable to GE Pension and Supplementary Pension participants. Annual amounts shown for Messrs. Culp and Slattery and Ms. Dybeck Happe are forpayable in 10 installments as applicable tothe Executive Retirement Benefit participants. |
** | Ms. Miller left the company on September 30, 2020. Under theBenefit. Annual amounts shown upon death or disability for Mr. Stokes are annuity payments applicable to GE Pension Plan and Supplementary Pension participants, except that $40,523 of such amount is payable in 10 installments as the annualExecutive Retirement Benefit. Annual amounts shown upon voluntary termination for Mr. Stokes are annuity payable as a 50% joint and survivorpayments applicable to GE Pension Plan participants. Annual amounts for Mr. Murphy are annuity following her 60th birthday would be $72,453.payments applicable under the U.K. GE Pension Plan. |
LUMP SUM UPON DEATH. Lump sum payable to the surviving spouse. A lump sum is not available to the surviving spouse of Ms. Miller because she did not qualify for a Supplementary Pension.after death. A lump sum is not available to the surviving spouse of Messrs. Culp and Slattery and Ms. Dybeck Happe under the terms of the executive retirement benefit.Executive Retirement Benefit. For Mr. Stokes, the lump sum represents the Supplementary Pension benefit payable in the event of death. For Mr. Murphy, the lump sum represents the return of contributions and interest under the U.K. GE Pension Plan.
ANNUAL BENEFITS UPON DEATH. 50% joint and survivor annuity payable for the life of the surviving spouse, commencing after his 60th birthday in the case of Mr. Strazik. For Messrs. Culp and Slattery and Ms. Dybeck Happe, 10 annual installment payments commencingas the Executive Retirement Benefit. For Mr. Stokes, the annual amount is payable for the life of the surviving spouse as the GE Pension Plan benefit, except that $40,523 of such amount is payable in 10 annual installments as the Executive Retirement Benefit. For Mr. Murphy, the annual amount is payable for the life of the surviving spouse. In each case, amounts commence after death.
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ANNUAL BENEFITS UPON DISABILITY. 50% joint and survivor annuity payable to Mr. Strazik, or 10 annual installment payments commencing after disability under the executive retirement benefit. Messrs. Culp and Slattery, and Ms. Dybeck Happe would not be eligible for disability benefits because they do not yet have 15 years of service. For Mr. Stokes, the annual amount includes the 50% joint and survivor annuity as the GE Pension Plan and Supplementary Pension benefits, except that $40,523 of such amount is payable in 10 annual installment payments as the Executive Retirement Benefit, in each case commencing after
disability. For Mr. Murphy, the amount is payable as a 50% joint and survivor annuity.
ANNUAL BENEFITS UPON VOLUNTARY TERMINATION. For Mr. Stokes, the annual amount includes the 50% joint and survivor annuity payable to the executive at age 60;60 under the GE Pension Plan; this does not include any payments under the GE Supplementary Pension Plan (either the supplementary pensionSupplementary Pension benefit or the executive retirement benefit)Executive Retirement Benefit) because they are forfeited upon voluntary termination before age 60. Because he is retirement-eligible, the benefits for Mr. Murphy are shown under Annual Benefit Upon Retirement.
ANNUAL BENEFITS UPON RETIREMENT. Represents partial pension eligibility for Mr. Murphy.Murphy, with the amount payable as a 50% joint and survivor annuity. The other named executives are not eligible to retire.
Deferred Compensation
The named executives are entitled to receive the amount in their deferred compensation accounts if their employment terminates. Between the termination event and the date that distributions are made, these accounts would continue to increase or decrease in value based on changes in the value of the named executive’s earnings
48 GE Stock Units or S&P 500 Index Units, and to accrue interest income or dividend payments, as applicable.2022 PROXY STATEMENT
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option. Therefore, amounts received by the named executives would differ from those shown in the Deferred Compensation Table on page 45.42. See “Deferred Compensation” on page 4441 for information on the available distribution types under each deferral plan.
Life Insurance Benefits
For a description of the supplemental life insurance plans that provide coverage to the named executives, see “Life Insurance Premiums” on page 40.37. Messrs. Culp and Slattery, and Ms. Dybeck Happe do not qualify for these supplemental life insurance plans, as they were discontinued for executives joining the company (or being promoted to the relevant band of seniority) on or after January 1, 2018. Ms. Miller surrendered her policies in November 2020. If the named executives had died on December 31, 2020,2021, the survivors of the named executives would have received the following under these arrangements.
| NAME | | DEATH BENEFIT | DEATH
BENEFIT |
| Culp | | $ | 0 | $ | 0 |
| Dybeck Happe | | $ | 0 | $ | 0 |
| Miller | | $ | 0 | |
| Slattery | | $ | 0 |
| Stokes | | $ | 9,410,940 |
| Murphy | | $ | 3,618,346 | $ | 3,763,080 |
| Slattery | | $ | 0 | |
| Strazik | | $ | 5,069,859 | |
The company would continue to pay the premiums in the event of a disability for Executive Life, until the later of age 60 or 15 years in the plan, and under Leadership Life, until the later of age 65 or 10 years in the plan.
52 GE 2021 PROXY STATEMENT
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Other Executive Compensation PracticesPolicies & PoliciesPractices
Roles and Responsibilities in Succession Planning and Compensation
MANAGEMENT DEVELOPMENT & COMPENSATION COMMITTEE.The committee has primary responsibility for helping the Board develop and evaluate potential candidates for executive positions and for overseeing the development of executive succession plans. As part of this responsibility, the committee oversees the compensation program for the CEO and the other named executives.
MANAGEMENT. Our CEO and our chief human resources officerChief Human Resources Officer help the committee administer our executive compensation program. The chief human resources officerChief Human Resources Officer also advises the committee on matters such as past compensation, total annual compensation, potential accrued benefits, GE compensation practices and guidelines, company performance, industry compensation practices and competitive market information.
Our Policies on Compensation Consultants
STRATEGIC USE OF COMPENSATION CONSULTANTS. From time to time, the committee and the company’s human resources function have sought the views of Semler Brossy Consulting Group LLC (Semler Brossy) about market intelligence on compensation trends and on particular compensation programs designed by our human resources function. For 2020,2021, the Management Development & Compensation Committee and the company’s human resources function consulted with Semler Brossy on market practices relating
to senior executive compensation. In addition, the Governance Committee and the company’s legal function consulted with Semler Brossy on market practices relating to compensation and benefits for non-employee directors. All of these services were obtained under hourly fee arrangements with Semler Brossy rather than through a standing engagement.
COMPENSATION CONSULTANT INDEPENDENCE POLICY. Any compensation consultant that advises the Board on executive or director compensation will not at the same time advise the company on any other human resources matter, and the committee has determined that Semler Brossy’s work with the committee, the Governance Committee and the company’s human resources and legal functions does not raise any conflict of interest.
Clawbacks and Other Remedies for Potential Misconduct
CLAWBACKS. The Board may seek reimbursement fromof any portion of incentive compensation in connection with an executive officerofficer’s fraudulent or illegal misconduct, or if it determines that the officer engaged inan executive officer’s conduct that was detrimental to the company and resulted in a material inaccuracy in either ourthe company’s financial statements or in performance metrics that affectedaffecting the executive officer’s compensation. If the Board determines that thean executive officer engaged in fraudulent or illegal misconduct it mustthat resulted in a material inaccuracy in the company’s financial statements or in performance metrics affecting the executive officer’s compensation, the Board will seek such reimbursement.reimbursement of any portion of incentive compensation paid or awarded to the executive that is greater than would have been paid or awarded if calculated based on the accurate financial statements or performance metric. For more information, see our Governance Principles (see “Helpful Resources” on page 73)77).
OTHER REMEDIES. In cases of detrimental misconduct by an executive officer, the Board may also take a range of other actions to remedy the misconduct, prevent its recurrence, and discipline the individual as appropriate, including terminating the individual’s employment. These remedies would be in addition to, and not in lieu of, any actions imposed by law enforcement agencies, regulators or other authorities.
Peer Group and Benchmarking
DETERMINING OUR PEER GROUP. In 2019, the committee adopted a peer group for compensation benchmarking purposes. Based on the criteria set forth below, the committee reviewed the peer group and retained the 2019 peer group for 2020.
In determining the peer group, the committee considered the following factors:
● | Industry – companies operating in similar or comparable industry spaces and with comparable operational scope |
● | Size – companies that are comparable to GE in terms of revenues, market capitalization and number of employees (GE was in the top quartile in terms of revenues and third quartile in terms of market capitalization as of the reference date when the peer group was determined) |
● | Investment Peers – U.S. public companies whose performance is monitored regularly by the same market analysts who monitor GE |
HOW WE USE THE PEER GROUP. The committee uses the peer group to assess the pay level of our executives, pay mix, compensation program design and pay practices. The peer group is also used as a reference point when assessing individual pay, though pay decisions are also impacted by internal equity, retention considerations, succession planning and internal GE dynamics.
PEER COMPANIES
3M | | Honeywell |
Abbott Laboratories | | HP |
Boeing | | IBM |
Caterpillar | | Intel |
Chevron | | Johnson Controls |
Cisco | | Johnson & Johnson |
Deere | | Lockheed Martin |
DuPont | | Medtronic |
Exxon Mobil | | Northrup Grumman |
Ford | | Raytheon Technologies |
General Dynamics | | United Parcel Service |
General Motors | | |
GE 2021 PROXY STATEMENT 53
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Stock Ownership and Equity Grant Policies
STOCK OWNERSHIP REQUIREMENTS. We require our named executives to own significant amounts of GE stock as shown below. The required amounts are set at multiples of base salary. Executives have five years from the time they are first hired or promoted into a position at the senior vice president level or above to meet the requirement. All named executives are in compliance with our stock ownership requirements. For details on these requirements, see our Governance Principles (see “Helpful Resources” on page 73)77). The named executives’ ownership is shown in the Common Stock & Total Stock-Based Holdings Table on page 25.24.
STOCK OWNERSHIP REQUIREMENTS
(MULTIPLES OF BASE SALARY) |
| | | | |
| 10X | | 5X | | 4X |
| for CEO | | for vice chairs | | for senior vice
vice presidents |
GE 2022 PROXY STATEMENT 49
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HOLDING PERIOD REQUIREMENTS. Our executive officers must also hold for at least one year any net shares of GE stock they receive through stock option exercises, in addition to any holding periods that may be assigned to PSUs and RSUs, such as the PSUs and RSUs granted as part of the annual grant of PSUs in 2019 and 2020. In addition, netincentive program. Net shares received from the vesting of PSUs or RSUs must be held until the stock ownership requirement is met.
NO HEDGING. We believe our executive officers and directors should not speculate or hedge their interests in our stock. We therefore prohibit them from entering into any derivative transactions in GE stock, including any short sale, forward, equity swap, option or collar that is based on GE’s stock price. These restrictions are contained in our Governance Principles (see “Helpful Resources” on page 73)77). This rule is not applicable to other GE employees.
NO PLEDGING. We prohibit executive officers and directors from pledging GE stock. These restrictions are contained in our Governance Principles (see “Helpful Resources” on page 73)77).
NO OPTION BACKDATING OR SPRING-LOADING. The exercise price of each stock option is based on the closing price of GE stock on the grant date.
NO OPTION REPRICING. We prohibit the repricing of stock options. This includes amending outstanding options to lower their exercise price, substituting new awards with a lower exercise price or executing a cash buyout.
NO UNEARNED DIVIDEND EQUIVALENTS. Performance Shares,shares, PSUs and RSUs granted to our named executives do not pay dividends or dividend equivalents on shares that are not yet owned. Instead, dividends and dividend equivalents are accrued during the vesting or performance period and paid out only on shares actually received. For more information, see our Governance Principles (see “Helpful Resources” on page 73)77).
Tax Deductibility of Compensation
The Internal Revenue Code generally imposes a $1 million limit on the amount that a public company may deduct for compensation paid to the company’s applicable named executives. Priorexecutives, subject to the Tax Cuts and Jobs Actan exception for qualifying performance-based compensation provided pursuant to a binding written contract in effect as of 2017 this limitation generally did not apply to compensation that met the tax code requirements for “qualifying performance-based” compensation. Following enactment of the Tax Act, weNovember 2, 2017. We generally expect that compensation paid to our applicable named executives in excess of $1 million will not be deductible, subject to an exception for compensation provided pursuant to a binding written contract in effect as of November 2, 2017.deductible.
Explanation of Non-GAAP Financial Measures and Performance Metrics
Information on how GE calculates the following metrics (presented on pages 31-32) is presented either in the Management's Discussion and Analysis within our Form 10-K for 2020 on the pages of the 10-K indicated after each metric (see “Helpful Resources” on page 73), or below in the case of free cash flow for Healthcare excluding BioPharma:
● | Free cash flow (for GE Industrial and Aviation) (page 28) |
● | Free cash flow for Healthcare excluding BioPharma |
● | Adjusted GE Industrial organic profit margin (page 41) |
● | Organic profit margin (for Aviation and Healthcare excluding BioPharma) (page 40) |
● | Organic revenues (for GE Industrial, Aviation and Healthcare excluding BioPharma) (page 40) |
The organic profit margin expansion amounts for 2020 presented on pages 31-32 reflect the change in presentation of GE Industrial restructuring program costs described in our Form 10-K for 2020, and that change had no impact on the AEIP determinations described on pages 31-32.
We use the non-GAAP financial measure free cash flow for Healthcare excluding BioPharma, so that investors can evaluate cash flow performance that includes investments in property, plant and equipment and additions to internal-use software, without the effects of the BioPharma business that we sold in 2020. A reconciliation to the most directly comparable GAAP measure is set forth below.
| HEALTHCARE FREE CASH FLOW (FCF) (NON-GAAP) |
| (DOLLARS IN MILLIONS) | | | 2020 |
| Healthcare CFOA (GAAP) | | $ | 3,143 | |
| Add: gross additions to property, plant and equipment | | | (256 | ) |
| Add: gross additions to internal-use software | | | (24 | ) |
| Healthcare free cash flow (Non-GAAP) | | $ | 2,863 | |
| Less: BioPharma CFOA | | | 315 | |
| Less: BioPharma gross additions to property, plant and equipment | | | (17 | ) |
| Less: BioPharma gross additions to internal-use software | | | (2 | ) |
| Healthcare excluding BioPharma free cash flow (Non-GAAP) | | $ | 2,568 | |
Caution Concerning Forward-Looking Statements
This document contains “forward-looking statements” — that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain. For details on the uncertainties that may cause our actual future results to be materially different than those expressed in our forward-looking statements, see the Forward-Looking Statements Information page on our Investor Relations website (see “Helpful Resources” on page 73) as well as our annual reports on Form 10-K and quarterly reports on Form 10-Q. We do not undertake to update our forward-looking statements. This document also includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.
54 GE 2021 PROXY STATEMENT
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Management Development & Compensation Committee Report
The Management Development & Compensation Committee has reviewed the compensation discussion and analysis (pages 2725 through 55,50, which, pursuant to SEC rules, does not include the “CEO Pay Ratio” discussion below)discussion) and discussed that analysis with management. Based on its review and discussions with management, the committee recommended to the Board that the compensation discussion and analysis be included in the company’s annual report on Form 10-K for 20202021 and this proxy statement. This report is provided by the following independent directors, who comprise the committee:
Thomas Horton (Chairman)(Chair) | Edward Garden |
| Sébastien Bazin | Paula Rosput Reynolds |
| Francisco D’Souza | |
CEO Pay Ratio
RATIO OF CEO PAY TO MEDIAN EMPLOYEE PAY. Our median employee earned $53,928 in total compensation for 2020. The total 2020 compensation reported for Mr. Culp as reported under “SEC Total” in the Summary Compensation Table on page 39 was $73,192,032. This includes the full grant date fair value of his Leadership Performance Share Award, which does not vest until performance and service requirements are met. Based upon total compensation for 2020, we calculated that our ratio of CEO to median employee pay was 1,357 to 1. Our median employee is employed in the United States in our Aviation business. Year-over-year changes in our median employee pay are partially attributable to changes in our employee mix, including disposition and restructuring activities.
HOW WE IDENTIFIED THE MEDIAN EMPLOYEE. To identify the median GE employee for 2021, we identified our total employee population as of December 31, 2020,2021, and, in accordance with SEC rules, excluded the CEO and employees from certain countries representing in aggregate less than 5% of our employee base,*base*, to arrive at the initial median employee consideration pool.employee. We then used annualized salary data converted to U.S. dollars, including target bonus award payments to identify a group of 28the 20 employees with similar annualized salary.salaries directly above and below the initial median employee. Once we identified this narrowed pool, we used actual salary and bonus compensation paid for the 2020 year, and re-ranked the middle 28consideration pool of employees to find the median employee. We then calculated the median employee’s total compensation in accordance with SEC rules to use as the basis for the pay ratio. Foreign exchange rates were translated to the U.S. dollar equivalent based on rates as of December 31, 2020.2021.
RATIO OF CEO PAY TO MEDIAN EMPLOYEE PAY. Our median employee earned $55,064 in total compensation for 2021. The total 2021 compensation reported for Mr. Culp as reported under “SEC Total” in the Summary Compensation Table on page 36 was $22,663,449. Based upon total compensation for 2021, we calculated that our ratio of CEO to median employee pay was 412 to 1. Our median employee is employed in France in our Power business.
| * | These 8076 countries and their headcounts as of the calculation date were: Albania (4), Algeria (327)(321), Angola (26)(23), Argentina (322)(310), Austria (412)(444), Azerbaijan (4), Bahrain (45), Bangladesh (52)(56), Belgium (246)(215), Benin (8), Bermuda (2), Bulgaria (15)(17), Cambodia (3), Cameroon (4)(7), Chad (1), Chile (189)(190), Colombia (253)(274), Côte d’Ivoire (51)(49), Croatia (494)(515), Czechia (576)(536), Denmark (447), Dominican Republic (1)(647), Ecuador (3)(2), Egypt (440)(420), Estonia (16)(12), Ethiopia (9), Georgia (2), Ghana (36)(33), Greece (168)(179), Hong Kong (143)(123), Iraq (108)(101), Jordan (27)(28), Kazakhstan (56), Kenya (100)(96), Kosovo (3)(7), Kuwait (87)(70), Kyrgyzstan (5), Laos (1)(3), Latvia (7), Lebanon (37)(39), Libya (14)(12), Lithuania (9)(10), Luxembourg (6)(4), Mali (1), Mauritius (3), Mongolia (2)(3), Montenegro (5), Morocco (86)(94), Mozambique (3), Myanmar (11)(10), Nepal (5), Netherlands (645)(625), New Zealand (53), Nigeria (186)(159), Oman (16), Pakistan (165)(152), Panama (20)(19), Peru (89)(95), Philippines (109)(105), Portugal (107)(127), Qatar (121)(112), Romania (578)(619), Senegal (2)(4), Serbia (34)(36), Slovakia (42), Slovenia (1)(38), South Africa (472)(473), Sri Lanka (9)(10), Sweden (670)(583), Tajikistan (8), Tanzania (1), Thailand (277)(275), Trinidad and Tobago (3), Tunisia (74)(77), Turkmenistan (10), Ukraine (36)(41), Uruguay (1), Uzbekistan (2)(3), Venezuela (3)(1), and Zambia (4)(1), for a total of 8,6138,651 employees. As of December 31, 2020,2021, using the methodology required by the rule governing this disclosure, GE had approximately 57,00058,000 U.S. employees and approximately 124,000123,000 employees in other countries, for a total of approximately 181,000 employees globally factored into the sample before the country exclusions listed above. |
50 GE 2022 PROXY STATEMENT
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Director Compensation
The compensation program for independent directors is designed to achieve the following goals:
| ● | Fairly pay directors for the work required at a company of GE’s size and scope, as benchmarked against our peer group; |
| ● | Align directors’ interests with the long-term interests of GE shareholders; and |
| ● | Be simple,, transparent and easy for shareholders to understand. |
Annual Compensation
OVERVIEW. Our independent directors receive annual compensation as shown in the table below. There are no additional meeting fees. The lead director and members of our Board committees receive additional compensation due to the workload and broad responsibilities of these positions.
| All independent directors | $ | 275,000 | | $ | 275,000 |
| Lead director | $ | 50,000 | | $ | 50,000 |
| Audit Committee members | $ | 35,000 | | $ | 35,000 |
Management Development & Compensation
Committee members | $ | 25,000 | | $ | 25,000 |
| Governance & Public Affairs Committee members | $ | 10,000 | | $ | 10,000 |
| Special Litigation Committee members;* | $ | 20,000 | |
* | This committee was dissolved in December 2020
|
● | Form of payment. 40% in cash & 60% in deferred stock units (DSUs); directors can elect to defer some or all of the cash portion in additional DSUs
|
● | Time of payment. Quarterly installments
|
● | Multiple committees. If a director serves on more than one committee, the additional compensation applies separately for each committee
|
● | Limit on director compensation. $1,500,000 annually, including cash & equity, but excluding amounts awarded under the Charitable Award Program (which has been closed to new directors)
|
●Form of payment. 40% in cash & 60% in deferred stock units (DSUs); directors can elect to defer some or all of the cash portion in additional DSUs
●Time of payment. Quarterly installments
●Multiple committees. If a director serves on more than one committee, the additional compensation applies separately for each committee
●Limit on director compensation. $1,500,000 annually, including cash & equity, but excluding amounts awarded under the Charitable Award Program (which has been closed to new directors)
HOW DEFERRED STOCK UNITS WORK. Each DSU is equal in value to a share of GE stock and is fully vested upon grant but does not have voting rights. To calculate the number of DSUs to be granted, we divide the target value of the DSUs by the average closing price of GE stock for the 20 days preceding and including the grant date. DSUs accumulate quarterly dividend-equivalent payments, which are reinvested into additional DSUs. The DSUs are paid out in cash beginning one year
after the director leaves the Board. Directors may elect to take their DSU payments as a lump sum or in payments spread out for up to 10 years. In the event of a spin-off transaction, the DSUs are credited with a phantom stock unit in the spun-off entity, similar to the distribution paid to GE shareholders, which would be payable in cash upon retirement on the same terms as the DSUs.
GE 2021 PROXY STATEMENT 55
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OTHER COMPENSATION. Our independent directors may also receive the following benefits:
| ● | Matching Gifts Program. Independent directors may participate in the GE Foundation’s Matching Gifts Program on the same terms as GE employees. Under this program, the GE Foundation matches for each participant up to $5,000 for annual contributions to approved charitable organizations. |
| ● | Charitable Award Program. Each director who joined the Board before 2016 may, upon leaving the Board, designate up to five charitable organizations to share in a $1 million GE contribution. Directors may not choose a private foundation with which they are affiliated. The Board terminated this program for new directors in 2015. |
| ● | Incidental Board Meeting Expenses. The company occasionally provides travel and sponsors activities for spouses or other guests of the directors in connection with Board meetings. No such expenses were incurred during 2020.2021. |
No Additional Director Compensation
Independent directors do not receive any cash incentive compensation, hold deferred compensation balances or receive pension benefits. Since 2003, DSUs have been the only equity incentive compensation awarded to the independent directors;
we ceased granting stock options to directors in 2002, and no independent director had stock options outstanding as of the most recent fiscal year-end. Directors who are company employees do not receive any compensation for their services as directors.
Share Ownership Requirements for Independent Directors
All independent directors are required to hold at least $550,000 (5 times the cash portion of their annual retainer) worth of GE stock and/or DSUs while serving as GE directors. They have five years to meet this ownership threshold. All directors are in compliance with this requirement.
Director and Officer (D&O) Insurance
GE provides liability insurance for its directors and officers. The annual cost of this coverage is approximately $9$9.7 million.
GE 2022 PROXY STATEMENT 51
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Director Compensation Table
This table shows the compensation that each independent director earned for his or her 20202021 Board and committee service. Amounts reflect partial-year Board service for Mr. Carter, who joined the Board in May 2020. Mr. Garden has advised us that, pursuant to his arrangement with Trian, he transfers to Trian, or holds for the benefit of Trian and/or Trian Entities,entities, all director compensation paid to him.
| NAME OF DIRECTOR | | CASH FEES | | STOCK
AWARDS | | TOTAL | | CASH FEES | | STOCK
AWARDS | | MATCHING
GIFTS | | TOTAL |
| Sébastien Bazin | | $ | 0 | | $ | 305,487 | | $ | 305,487 | | $ | 0 | | $ | 310,526 | | $ | 0 | | $ | 310,526 |
| Ashton Carter | | $ | 75,750 | | $ | 111,704 | | $ | 187,454 | | $ | 124,000 | | $ | 186,315 | | $ | 0 | | $ | 310,315 |
| Francisco D’Souza | | $ | 0 | | $ | 330,123 | | $ | 330,123 | | $ | 0 | | $ | 335,568 | | $ | 0 | | $ | 335,568 |
| Edward Garden | | $ | 120,000 | | $ | 177,380 | | $ | 297,380 | | $ | 120,000 | | $ | 180,305 | | $ | 0 | | $ | 300,305 |
| Thomas Horton | | $ | 144,000 | | $ | 212,856 | | $ | 356,856 | | $ | 144,000 | | $ | 216,366 | | $ | 0 | | $ | 360,366 |
| Risa Lavizzo-Mourey | | $ | 122,000 | | $ | 180,336 | | $ | 302,336 | | $ | 114,000 | | $ | 171,290 | | $ | 0 | | $ | 285,290 |
| Catherine Lesjak | | $ | 128,000 | | $ | 189,205 | | $ | 317,205 | | $ | 128,000 | | $ | 192,326 | | $ | 0 | | $ | 320,326 |
| Paula Rosput Reynolds | | $ | 142,000 | | $ | 209,899 | | $ | 351,899 | | $ | 108,875 | | $ | 226,552 | | $ | 0 | | $ | 335,427 |
| Leslie Seidman | | $ | 99,000 | | $ | 228,624 | | $ | 327,624 | | $ | 124,000 | | $ | 186,315 | | $ | 5,000 | | $ | 315,315 |
| James Tisch | | $ | 0 | | $ | 280,851 | | $ | 280,851 | | $ | 0 | | $ | 285,483 | | $ | 0 | | $ | 285,483 |
CASH FEES. Amount of cash compensation earned in 20202021 for Board and committee service.
STOCK AWARDS. Aggregate grant date fair value of DSUs granted in 2020,2021, as calculated in accordance with SEC rules, including amounts that the directors deferred into DSUs in lieu of all or a part of their cash compensation. Grant date fair value is calculated by multiplying
the number of DSUs granted by the closing price of GE stock on the grant date (or the last trading day prior to the grant date), which was $7.94$105.04 for March 31, 20202021 grants, $6.83$107.68 for June 30, 20202021 grants, $6.23$103.03 for September 30, 20202021 grants, and $10.80$94.47 for December 31, 20202021 grants. The table below shows the cash amounts that the directors deferred into DSUs in 20202021 and the number of DSUs accrued as of 20202021 fiscal year-end.
| DIRECTOR | CASH DEFERRED
INTO DSUs IN 2020 | | # DSUs OUTSTANDING
AT 2020 FISCAL
YEAR-END | | CASH DEFERRED
INTO DSUs IN 2021 | | # DSUs OUTSTANDING
AT 2021 FISCAL
YEAR-END |
| Sébastien Bazin | $ | 124,000 | | 120,773 | | $ | 124,000 | | 18,181 |
| Ashton Carter | $ | 0 | | 14,521 | | $ | 0 | | 3,643 |
| Francisco D’Souza | $ | 134,000 | | 161,448 | | $ | 134,000 | | 23,526 |
| Edward Garden | $ | 0 | | 63,283 | | $ | 0 | | 9,699 |
| Thomas Horton | $ | 0 | | 65,584 | | $ | 0 | | 10,340 |
| Risa Lavizzo-Mourey | $ | 0 | | 74,239 | | $ | 0 | | 10,984 |
| Catherine Lesjak | $ | 0 | | 41,231 | | $ | 0 | | 7,051 |
| Paula Rosput Reynolds | $ | 0 | | 50,750 | | $ | 25,125 | | 8,581 |
| Leslie Seidman | $ | 33,000 | | 89,953 | | $ | 0 | | 13,102 |
| James Tisch | $ | 114,000 | | 190,563 | | $ | 114,000 | | 26,688 |
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MANAGEMENT
PROPOSAL NO. 2
Ratification of Deloitte as Independent Auditor for 2021
We are asking shareholders to ratify the selection of Deloitte & Touche LLP (Deloitte) as the independent auditor of our consolidated financial statements and our internal control over financial reporting for 2021.
Why are we asking you to vote? Although ratification is not required by our by-laws or otherwise, the Board is submitting this proposal as a matter of good corporate practice. If the selection is not ratified, the committee will consider whether it is appropriate to select another independent auditor.
Your Board Recommends a Vote for Ratification of the Audit Committee’s Selection of Deloitte as our Independent Auditor for 2021
| | | | |
MANAGEMENT
PROPOSAL NO. 3 Ratification of Deloitte as Independent Auditor for 2022 We are asking shareholders to ratify the selection of Deloitte as our independent auditor for 2022. Why are we asking you to vote? Although ratification is not required by our by-laws or otherwise, the Board is submitting this proposal as a matter of good corporate practice.
Your Board Recommends a Vote for Ratification of the Audit Committee’s Selection of Deloitte as our Independent Auditor for 2022 | | AuditAuditor
Independent Auditor Rotation Selected New Auditor for 2021
Review and Engagement
The Audit Committee is directly responsible for the appointment, compensation (including advance approval of the audit fee), retention and oversight of the independent registered public accounting firm that audits our financial statements and our internal control over financial reporting. Concluded Audit Tender Process. The In accordance with its charter, the Audit Committee commencedhas selected the firm of Deloitte & Touche LLP (Deloitte), an audit tender in 2019, with a thorough and competitive processindependent registered public accounting firm, to select GE’s independent auditorbe our auditors for the year ending December 31, 2021. The committee invited several audit firms to participate in this process, and the firms that submitted responses to the request for proposal undertook an extensive process of reviewing information about GE and its businesses. The tender process also included a variety of meetings with members of the Audit Committee and GE management as part of the evaluation of each firm’s capabilities and global reach, audit quality, industry knowledge and expertise, independence, proposed engagement team, approach to audit innovation and technology and other factors.
Selected Deloitte as New Independent Auditor. Following review of the proposals received in the tender process, the Audit Committee in June 2020 selected Deloitte as GE’s independent auditor for the year ending December 31, 2021. Since June 2020, the Audit Committee and Deloitte have confirmed Deloitte’s independence and commenced the engagement for 2021.2022. The Audit Committee believes that the engagement of Deloitte as independent auditor for 2021this selection is in the best interestinterests of GE and its shareholders and, therefore, recommend to shareholders that they ratify that appointment. Deloitte served in this capacity for the Board recommends that shareholders ratify the Audit Committee’s selectionfirst time in 2021, following their appointment in 2020.
A representative of Deloitte as independent auditor for 2021. Responds to Shareholder Feedback. The Audit Committee’s decisions to launch the audit tender process and, ultimately, to select a new independent auditor were made following significant engagement with GE shareholders since 2018. Shareholders’ positive response to the commencement of the audit tender process resulted in a significant increase in our auditor ratification vote to 89% of the votes cast in favor of ratifying the appointment of KPMG LLP (KPMG) as GE’s independent auditor for 2019 versus 65% support in 2018. In selecting a new independent auditor at the conclusion of the tender process, the Committee also considered GE’s engagement with shareholders over the past several years,
| | including feedback regarding GE’s financial performance, accounting and disclosure matters, the SEC’s investigation of GE that concluded with a settlement in December 2020, KPMG’s tenure since 1909 and performance as independent auditor, personnel changes across the leadership of GE and the costs, complexity and timeline for an audit firm rotation.
Deloitte will have representatives in attendancebe present at the annual meeting. Theymeeting, will have anthe opportunity to make a statement if they wishdesire to do so and will be available to respond to appropriate shareholder questions.
Independent Auditor InformationAudit Committee Report
Additional Information Regarding ChangeROLES AND RESPONSIBILITIES. The Audit Committee reviews GE’s financial reporting process on behalf of Independent Auditor
As reportedthe Board. Management has the primary responsibility for establishing and maintaining adequate internal financial controls, for preparing the financial statements and for the public reporting process. Our company’s independent auditor, Deloitte, is responsible for expressing opinions on GE’s Current Reportthe conformity of the company’s audited financial statements, in all material respects, with generally accepted accounting principles and on Form 8-K, dated June 22, 2020,the company’s internal control over financial reporting.
REQUIRED DISCLOSURES AND DISCUSSIONS. The Audit Committee has reviewed and amended on February 12,discussed with management and Deloitte the audited financial statements for the year ended December 31, 2021 and Deloitte’s evaluation of the company’s internal control over financial reporting. The Audit Committee has also discussed with Deloitte the matters that are required to be discussed under applicable PCAOB and SEC requirements. Deloitte has provided to the Audit Committee approved the engagementwritten disclosures and the PCAOB-required letter regarding its communications with the Audit Committee concerning independence, and the committee has discussed with Deloitte that firm’s independence. The Audit Committee has concluded that Deloitte’s provision of Deloitte as GE’s independent registered public accounting firm foraudit and non-audit services to GE and its affiliates during 2021 was compatible with Deloitte’s independence. AUDIT COMMITTEE RECOMMENDS INCLUDING THE FINANCIAL STATEMENTS IN THE ANNUAL REPORT. Based on the fiscal year ending December 31, 2021. KPMG continued as GE’s independent registered public accounting firmreview and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements for the year endingended December 31, 2020. On February 12, 2021 when GE filed its Annual Reportbe included in our annual report on Form 10-K for the fiscal year ended December 31, 2020,2021 for filing with the SEC, KPMG completed its audit of GE’s consolidated financial statements for such fiscal year, and GE’s retention of KPMG as ourSEC. This report is provided by the following independent registered public accounting firm with respect todirectors, who comprise the audit of GE’s consolidated U.S. GAAP financial statements ended as of that date.committee: | |
| | | | |
| | |  | | ● | |  | |  | |  | |
| | | LESLIE
SEIDMAN | | ASHTON
CARTER | | FRANCISCO
D’SOUZA | | CATHERINE
LESJAK | | PAULA ROSPUT
REYNOLDS | |
| | | (Chair) | | | | | | | | | |
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Fees Paid to Independent Registered Public Accounting Firm
The Audit Committee oversees the audit and non-audit services provided by the independent auditor, participates in the pre-approval of fees with the independent auditor, reviews and approves the audit plan and associated fees, and receives periodic reports on the fees paid.
The Audit Committee in some cases authorizes Deloitte (along with other accounting firms) to provide non-audit services. We understand the need for Deloitte to maintain objectivity and independence as the auditor of our financial statements and our internal control over financial reporting. Accordingly, the Audit Committee has established the following policies and processes related to non-audit services.
WE LIMIT THE NON-AUDIT SERVICES THAT DELOITTE CAN PROVIDE. To minimize relationships that could appear to impair Deloitte’s objectivity, the Audit Committee will only pre-approve permissible, selected types of non-audit services that Deloitte may provide to us (and that otherwise would be permissible under SEC rules) and requires that the company engage Deloitte only when it is best suited for the job. For more detail, see the Audit Committee Charter (see “Helpful Resources” on page 77).
WE HAVE A PRE-APPROVAL PROCESS FOR NON-AUDIT SERVICES. The Audit Committee has adopted policies and procedures for pre-approving all non-audit work that Deloitte performs for us. Specifically, the Audit Committee has pre-approved the use of Deloitte for specific types of services related to: tax compliance, planning and consultations; acquisition/disposition services; consultations regarding accounting and reporting matters; and reviews and consultations on internal control and other related services. The Audit Committee has set a specific annual limit on the amount of non-audit services (audit-related and tax services) that the company can obtain from Deloitte. It has also required management to obtain specific pre-approval from the Audit Committee for any single engagement over $2 million or any types of services that have not been pre-approved. The Audit Committee chair is authorized to pre-approve any audit or non-audit service on behalf of the Audit Committee, provided these decisions are presented to the full committee at its next regularly scheduled meeting. In 2021, the Audit Committee pre-approved all services provided to the company pursuant to the policies and procedures described above.
WE HAVE HIRING RESTRICTIONS FOR DELOITTE EMPLOYEES.To avoid potential conflicts of interest, the Audit Committee has adopted restrictions on our hiring of any Deloitte partner, director, manager, staff member, advising member of the department of professional practice, reviewing actuary, reviewing tax professional and any other individuals responsible for providing audit assurance on any aspect of Deloitte’s audit and review of our financial statements. These restrictions are contained in our Governance Principles (see “Helpful Resources” on page 77).
The following table summarizes the fees for professional audit services provided by (i) Deloitte for audit services provided for, and other services provided in, the year ended December 31, 2021 and (ii) billed by KPMG LLP (KPMG) for audit services provided for, and other services provided in, the year ended December 31, 2020:
TYPES OF FEES
(IN MILLIONS) | | AUDIT | | AUDIT-
RELATED | | TAX | | ALL
OTHER | | TOTAL |
| 2021 (Deloitte) | | $ | 51.6 | | $ | 2.1 | | $ | 0.5 | | $ | 0.3 | | $ | 54.5 |
| 2020 (KPMG) | | $ | 61.6 | | $ | 14.6 | | $ | 0.4 | | $ | 0.0 | | $ | 76.6 |
AUDIT FEES. Fees for the audit of GE’s annual financial statements included in our annual report on Form 10-K; the review of financial statements included in our quarterly reports on Form 10-Q; the audit of our internal control over financial reporting, with the objective of obtaining reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects; and services routinely provided by the auditor in connection with statutory and regulatory filings or engagements.
AUDIT-RELATED FEES. Fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and internal control over financial reporting. The year-over-year fee decrease was primarily attributable to higher costs for carve-out audits in 2020, including the BioPharma business within GE Healthcare.
TAX FEES. Fees related to tax compliance and tax advice and tax planning. Tax compliance involves preparation of original and amended tax returns and claims for refund. Tax planning and tax advice encompass a diverse range of services, including assistance with tax audits and appeals, tax advice related to mergers and acquisitions and employee benefit plans, and requests for rulings or technical advice from taxing authorities.
ALL OTHER FEES. Includes fees for services that are not contained in the above categories and includes permissible advisory services.
Additional Information Regarding Change of Independent Auditor
As reported on GE’s Current Report on Form 8-K, dated June 22, 2020, as amended on February 12, 2021, the Audit Committee approved the engagement of Deloitte as GE’s independent registered public accounting firm for the year ended December 31, 2021. KPMG continued as GE’s independent registered public accounting firm for the year ended December 31, 2020. On February 12, 2021, when GE filed its Annual Report on Form 10-K for the year ended December 31, 2020, with the SEC, KPMG completed its audit of GE’s consolidated financial statements for such fiscal year, and GE’s retention of KPMG as our independent registered public accounting firm with respect to the audit of GE’s consolidated U.S. GAAP financial statements ended as of that date.
| ● | KPMG’s reports on our consolidated financial statements as of and for the fiscal years ended December 31, 2019 and 2020 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. |
| ● | During the fiscal years ended December 31, 2019 and 2020, and the subsequent interim period through February 12, 2021, there were: (i) no disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions between GE and KPMG on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to KPMG’s satisfaction, would have caused KPMG to make reference thereto in their reports; and (ii) no “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation S-K. |
During the years ended December 31, 2019 and 2020 and the subsequent interim period through February 12, 2021, neither GE nor anyone on its behalf has consulted with Deloitte regarding: (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on GE’s financial statements, and neither a written report nor oral advice was provided to GE that Deloitte concluded was an important factor considered by GE in reaching a decision as to any accounting, auditing, or financial reporting issue; (ii) any matter that was the subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions; or (iii) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K.
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MANAGEMENT PROPOSAL NO. 4 Approval of the 2022 Long-Term Incentive Plan What are you voting on?
We are asking shareholders to approve a new long-term incentive plan, which will replace our existing 2007 LTIP and Consultants’ Plan and allow GE to continue granting equity compensation. Why the Board recommends a vote for this proposal:
The purpose of the 2022 LTIP is to attract, retain and motivate current and prospective employees, non-employee directors and other service providers to GE. The stock- and performance-based compensation that will be provided under the 2022 LTIP is designed to align their interests and efforts with those of GE’s shareholders. If approved, the 2022 LTIP will replace the 2007 LTIP and Consultants’ Plan. 
Your Board recommends a vote FOR approval of the 2022 Long-Term Incentive Plan | | 2022 Long-Term Incentive Plan Overview of the
2022 LTIP Proposal | |
| Shareholders are being asked to approve the GE 2022 Long-Term Incentive Plan (the 2022 LTIP), which was approved by the Board on February 11, 2022, subject to shareholder approval. The 2022 LTIP is intended to provide equity awards under our long-term equity compensation program. Equity awards are currently provided under the GE 2007 Long-Term Incentive Plan, as amended (the 2007 LTIP) and the GE Stock-Based Compensation and Incentive Plan for Consultants, Advisors and Independent Contractors (the Consultants’ Plan). If our shareholders approve this proposal, the 2022 LTIP will replace both of these plans, and no further grants will be made under the 2007 LTIP or the Consultants’ Plan after the date that shareholders approve the 2022 LTIP (the Effective Date). | | If the 2022 LTIP is not approved by our shareholders, the 2007 LTIP and the Consultants’ Plan will remain in effect according to their terms, and GE will be unable to continue the use of equity-based compensation following the depletion of the shares remaining available under the 2007 LTIP and the Consultants’ Plan. This could require us to significantly increase the cash component of our compensation programs in order to continue to attract and retain the people and skills needed for GE to navigate this transformational period and execute effectively on our long-term strategic plan. | |
| KEY GOVERNANCE FEATURES OF THE PLAN. The 2022 LTIP contains a number of features designed to protect the interests of shareholders, including: ●Limits on authorized shares — no evergreen provision. The maximum number of shares available for grants of stock options and other stock awards will be 30 million (in addition to shares that remain available for grant under the 2007 LTIP as of the Effective Date, which as of December 31, 2021 was approximately 43 million, and shares subject to outstanding awards forfeited or settled in cash). There is no “evergreen” feature. ●Limits on stock option terms. The maximum term of each stock option and stock appreciation right (SAR) that can be granted is ten years. ●Limits on share counting. There is a fungible share pool, meaning full-value awards such as RSUs and PSUs are counted against the share reserve at a higher rate than stock options and SARs. ●No liberal share recycling. Shares surrendered or withheld for the payment of the exercise price or taxes under an award, and shares repurchased in the open market with the proceeds of an option exercise, may not again be made available for issuance under the Plan. ●Clawback requirements. The 2022 LTIP contains a clawback condition that applies in the event of a participant’s misconduct and regardless of whether there is a financial statement restatement. ●No stock option repricing. The repricing of “underwater” options and SARs, whether by amending an existing award, substituting a new award at a lower price or executing a cash buyout, is prohibited without shareholder approval. ●No discounted stock option grants. The grant of stock options or SARs with an exercise price less than the fair market value of GE stock on the date of grant is prohibited. ●No excise tax gross-ups. The 2022 LTIP does not provide any excise tax gross-ups. | |
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KEY DATA ABOUT OUR GRANT PRACTICES. In determining the appropriate share reserve under the 2022 LTIP, the Board and the Management Development & Compensation Committee considered a number of factors, including our burn rate. Our burn rate is equal to the total number of stock options, RSUs, PSUs and performance shares granted during the applicable fiscal year divided by the weighted average shares of GE common stock outstanding during the fiscal year. Our three-year adjusted average burn rate was approximately 0.7%, which is in line with the 0.7% average of our peer group over the same time period, based on information available as of December 31, 2021. For more information on our peer group, see Peer Group and Benchmarking on page 29. The following table provides detailed information regarding our burn rate.
GRANT INFORMATION
(# IN THOUSANDS)* | | 2021 | | 2020 | | 2019 |
| Stock Options Granted | | 494 | | 4,468 | | 4,303 |
| RSUs Granted | | 2,972 | | 5,802 | | 1,975 |
| PSUs Granted | | 915 | | 797 | | 678 |
| PSUs Earned | | 69** | | 0 | | 0 |
| Performance Shares Granted | | 0 | | 1,162 | | 0 |
| Performance Shares Earned | | 0 | | 0 | | 0 |
Weighted Average GE
Common Stock Outstanding | | 1,097,527 | | 1,094,067 | | 1,090,517 |
| Annualized Burn Rate | | 0.4% | | 1.1% | | 0.6% |
| * | GE conducted a 1-for-8 reverse stock split on July 30, 2021. Data is presented on a post-split basis. |
| ** | PSUs were earned by a former executive officer, based upon performance metrics that differ from the annual PSU grants. |
On December 31, 2021, the market price per share of GE common stock was $94.47, based on the closing price on the New York Stock Exchange on such date. As of December 31, 2021:
●42,951 thousand shares of GE common stock remained available for grant under the 2007 LTIP and 461 thousand shares of GE common stock remained available for grant under the Consultants’ Plan;
●38,407 thousand shares of GE common stock were subject to outstanding options under the 2007 LTIP with a weighted average exercise price of $144.97 and average remaining term of 4.2 years, and 7,153 shares of GE common stock were subject to outstanding options under the Consultants’ Plan with a weighted average exercise price of $182.16 and average remaining term of 1.5 years;
●11,272 thousand shares of GE common stock were subject to outstanding RSUs, PSUs (assuming achievement of target performance levels) and performance shares (assuming achievement of target performance levels) under the 2007 LTIP and no shares of GE common stock were subject to outstanding RSUs under the Consultants’ Plan; and
●1,098,961 thousand shares of GE common stock were outstanding.
HOW LONG WE EXPECT THE SHARE RESERVE TO LAST. Based on a review of our historical and projected grant practices, we estimate that the shares reserved for issuance under the 2022 LTIP should meet GE’s equity grant needs for approximately 6 years; however, it may last longer or shorter than this depending on currently unknown factors, such as the number of grant recipients, future grant practices and the market price of GE common stock. Regardless of actual 2022 LTIP usage, as a matter of good corporate governance, we intend to ask shareholders to reapprove the plan no later than the 2027 annual meeting, consistent with our historical practice seeking shareholder approval for the plan every five years.
Description of the 2022 LTIP
The following is a summary of the material features of the 2022 LTIP. This summary does not purport to be complete and is qualified in its entirety by reference to the full text of the 2022 LTIP, which is included as Annex A to this proxy statement.
SHARE RESERVE. The aggregate number of shares of GE common stock issuable under the 2022 LTIP is equal to (i) 30 million shares of GE common stock, plus (ii) any shares of GE common stock that remain available for grant under the 2007 LTIP as of the Effective Date, plus (iii) any shares of GE common stock subject to awards previously granted under the 2007 LTIP that are canceled, terminated, expire unexercised, forfeited or settled in cash following the Effective Date (excluding such shares that have been retained or withheld by GE in payment or satisfaction of the exercise price, purchase price or tax withholding obligation of such award). The aggregate number of shares of GE common stock issuable under the 2022 LTIP pursuant to the exercise of stock options that are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Code (ISOs) is equal to 30 million. The number of shares described in this paragraph are subject to adjustment in the event of certain capitalization events.
For purposes of determining the aggregate number of shares of GE common stock issued under the 2022 LTIP, the following share counting rules will apply:
●Shares of GE common stock issued pursuant to a stock option or SAR will be counted against the limit described above as one share;
●Shares of GE common stock issued pursuant to any award other than a stock option or SAR will be counted against the limit described above as 2.21 shares; and
●Shares subject to awards that have been canceled, terminated, expire unexercised, forfeited or settled in cash will not be counted against the limit described above; however, shares subject to awards that have been retained or withheld by GE in payment or satisfaction of the exercise price, purchase price or tax withholding obligation of an award and shares repurchased on the open market with the proceeds of a stock option exercise will be counted against the limit described above.
In addition, shares subject to awards granted in assumption of, or in substitution or exchange for, awards previously granted by an acquired company (Substitute Awards) will not be counted against the limit described above. Shares of GE common stock issued under the 2022 LTIP may be authorized and unissued shares or shares that were reacquired by GE, including shares purchased in the open market or in private transactions.
DIRECTOR COMPENSATION LIMITS. The aggregate dollar value of equity-based and cash compensation granted under the 2022 LTIP or otherwise to any non-employee director will not exceed $1 million during any calendar year.
ADMINISTRATION. The Management Development & Compensation Committee administers the 2022 LTIP; however, the Governance Committee administers the 2022 LTIP with respect to awards granted to non-employee directors (as applicable, the Administrator). The Administrator may delegate its authority under the 2022 LTIP in accordance with applicable laws. The Administrator is authorized and empowered under the 2022 LTIP to do all things that it determines to be necessary or appropriate in connection with the administration of the 2022 LTIP. All decisions, determinations and interpretations by the Administrator regarding the 2022 LTIP will be final and binding on all participants and others with rights under the 2022 LTIP or any award thereunder.
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ELIGIBILITY. Current and prospective employees, offers, non-employee directors and other service providers of GE or any of its affiliates are eligible to be granted awards under the 2022 LTIP, as determined by the Administrator. As of December 31, 2021, there were approximately 181,000 employees, and 10 non-employee directors who would be eligible to participate in the 2022 LTIP.
Award Types
The 2022 LTIP permits the grant of stock options, SARs, restricted stock, RSUs, performance awards and other stock-based awards.
STOCK OPTIONS. The Administrator may grant options to purchase GE common stock that qualify as ISOs, options that do not qualify as ISOs or a combination thereof. The terms and conditions of stock option grants, including the quantity, exercise price, vesting periods, exercise periods and other conditions on exercise, will be determined by the Administrator.
Subject to limited exceptions for Substitute Awards, the exercise price may not be less than 100% of the fair market value of a share of GE common stock on the date of grant, and the exercise period may not exceed 10 years. In the case of ISOs granted to a holder of more than 10% of the total voting power of GE on the date of grant, the exercise price may not be less than 110% of the fair market value of a share of GE common stock on the date of grant, and the exercise period may not exceed five years. The exercise period of a stock option (other than an ISO) will be automatically extended if the holder is prohibited by law or GE’s insider trading policy from exercising the stock option at the time of its scheduled expiration until the date that is 30 days following the lapse of such prohibition. No dividends or dividend equivalent rights may be paid or granted with respect to stock options.
The exercise price of a stock option may be paid by such methods as determined by the Administrator, including by cash in U.S. dollars, an irrevocable commitment to use the proceeds from a sale of shares issuable under the stock option, delivery of previously owned shares of GE common stock or withholding of shares otherwise deliverable upon exercise of the stock option.
STOCK APPRECIATION RIGHTS. The Administrator may grant SARs, which entitle the participant to receive, upon exercise, a payment equal to (i) the excess of the fair market value of a share of GE common stock on the exercise date over the exercise price, times (ii) the number of shares of GE common stock with respect to which the SAR is exercised. Subject to limited exceptions for Substitute Awards, the exercise price for a SAR will be determined by the Administrator in its discretion on the date of grant, but may not be less than 100% of the fair market value of a share of GE common stock on the date of grant. Upon exercise of a SAR, payment may be made in cash, shares of GE common stock or a combination of cash and shares. SARs must be exercised within a period fixed by the Administrator that may not exceed ten years from the date of grant. No dividends or dividend equivalent rights may be paid or granted with respect to SARs.
RESTRICTED STOCK AND RESTRICTED STOCK UNITS. The Administrator may award restricted stock—shares of GE common stock subject to specified restrictions. Restricted stock is subject to forfeiture if the participant does not meet certain conditions such as continued employment and/or satisfaction of performance conditions. The Administrator also may grant RSUs representing the right to receive shares of GE common stock (or a cash payment in lieu thereof) following the satisfaction of certain conditions, such as continued employment and/or satisfaction of performance conditions. The terms and conditions of restricted stock and RSUs are determined by the Administrator.
Any dividends or other distributions paid with respect to restricted stock will be subject to the same restrictions on transferability and vesting conditions as the underlying restricted stock. Shares underlying RSUs may be entitled to dividend equivalents only to the extent provided by the Administrator, and any such dividend equivalents will be subject to the same vesting conditions as the underlying RSUs.
PERFORMANCE AWARDS. The Administrator may establish performance criteria and the level of achievement versus such criteria that determines the amount of cash or the number of shares of GE common stock, stock options, SARs, restricted stock or RSUs to be granted, retained, vested, issued or paid pursuant to a performance award.
OTHER STOCK-BASED AWARDS. The Administrator may grant other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, the value of GE common stock. The terms and conditions of such other stock-based awards are determined by the Administrator. Shares underlying other stock-based awards may be entitled to dividend equivalents only to the extent provided by the Administrator, and any such dividend equivalents will be subject to the same vesting conditions as the underlying other stock-based award.
Other Information About the 2022 LTIP
NO REPRICING AND NO RELOAD GRANTS. Other than in connection with a change in GE’s capitalization, as described below, the Administrator may not, without shareholder approval, reduce the exercise price of any previously awarded stock option or SAR or cancel and re-grant or exchange any underwater stock option or SAR for cash or a new award with a lower (or no) exercise price. In addition, no stock options may be granted under the 2022 LTIP in consideration for the delivery of shares of GE common stock to GE in payment of the exercise price or tax withholding obligations of any other employee stock options.
TRANSFERABILITY OF AWARDS. Awards under the 2022 LTIP may not be sold, transferred for value, pledged, assigned or otherwise alienated or hypothecated by a participant, and each option and SAR will be exercisable only by the participant during his or her lifetime. However, if permitted by the Administrator, a participant may transfer or assign an award as a gift to a family member (as such term is defined for purposes of the Registration Statement on Form S-8) or designate a beneficiary with respect to an award in the event of the participant’s death.
CHANGE IN CONTROL. In the event of a change in control (as defined in the 2022 LTIP), the Administrator has discretion to take a number of actions with respect to outstanding awards, including to accelerate vesting or exercisability of awards, to redeem or cash-out awards based on the change in control price (less any applicable exercise price), to cash-out any dividend equivalents, and to make adjustments to awards as it deems appropriate, such as providing for the substitution, assumption or continuation of such awards by any successor or parent company. However, in the event awards are not assumed, continued or substituted in connection with a change in control, such awards will become fully vested and exercisable.
No provision of the 2022 LTIP or any award agreement will provide a gross-up payment or other compensation for any taxes imposed by Section 4999 of the Code or otherwise.
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● | During the fiscal years ended December 31, 2019 and 2020 and the subsequent interim period through February 12, 2021, neither GE nor anyone on its behalf has consulted with Deloitte regarding: (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on GE’s financial statements, and neither a written report nor oral advice was provided to GE that Deloitte concluded was an important factor considered by GE in reaching a decision as to any accounting, auditing, or financial reporting issue; (ii) any matter that was the subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions; or (iii) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K. |
FeesNON-US AWARDS. For Participants employed or performing services outside the United States, the Management Development & Compensation Committee may modify the provisions of the 2022 LTIP or an award (or create sub-plans) as they pertain to such individual to comply with applicable foreign law or to recognize differences in local law, currency or tax policy.
ADJUSTMENTS. In the event of any corporate event or transaction that results in a change in our capital structure, such as a merger, consolidation, reorganization, recapitalization, liquidation, stock dividend, stock split, reverse stock split or other distribution of stock or property of GE, the Administrator will make such equitable adjustments with respect to awards and the 2022 LTIP, including any adjustments in the maximum number of shares of GE common stock subject to the 2022 LTIP, the number of shares subject to awards, and the purchase price or exercise price of outstanding awards, without any requirement that adjustments need to be uniform between different awards.
AMENDMENT AND TERMINATION. The Board or its designee may amend, alter, suspend or terminate the 2022 LTIP at any time; however, without shareholder approval, such amendment may not increase the number of shares of GE common stock that may be granted under the 2022 LTIP, reprice outstanding options or SARs or permit the grant of such awards with exercise prices below 100% of the fair market value of a share of GE common stock on the date of grant, extend the term of the 2022 LTIP, change the class of eligible participants, increase the non-employee director compensation limit or otherwise include any amendment requiring shareholder approval by laws or the rules of any applicable stock exchange.
Unless earlier terminated, the 2022 LTIP will remain available for 2020 and 2019
The committee oversees the audit and non-audit services providedgrant of awards until the 10th anniversary of the Effective Date, with no ISOs granted under the 2022 LTIP after February 11, 2032.
CLAWBACK AND RECOUPMENT. If a participant is terminated for cause or has engaged in conduct that breaches an agreement with GE, results in (or has the potential to cause) material harm financially, reputationally, or otherwise to GE or would have given rise to a termination for cause, as determined by the independent auditor, participates inManagement Development & Compensation Committee, such participant will forfeit their right to any unvested or unexercised awards under the pre-approval2022 LTIP and may be required to repay any cash, shares or other property received pursuant to vested and exercised awards under the 2022 LTIP, to the extent recovery is permitted by law.
Federal Income Tax Consequences
The following is a brief summary of fees with the independent auditor, reviews and approvesU.S. federal income tax consequences applicable to awards granted under the audit plan and associated fees, and receives periodic reports2022 LTIP based on the fees paid.
With our audit firm rotation, we will begin reporting fees paidfederal income tax laws in effect on the date of this proxy statement. This summary is not intended to Deloitte in next year’s proxy statement for our 2022 annual meeting.be exhaustive and does not address all matters relevant to a particular participant based on their specific circumstances. The aggregate fees billed by KPMG, our former independent auditor, in 2020 and 2019 for its services were:
| TYPES OF FEES (IN MILLIONS) | | AUDIT | | AUDIT-RELATED | | TAX | | ALL OTHER | | TOTAL |
| 2020 | | $61.6 | | $14.6 | | $0.4 | | $0.0 | | $76.6 |
| 2019 | | $61.1 | | $13.9 | | $4.1 | | $0.0 | | $79.1 |
These amounts dosummary expressly does not include fees billed by KPMG for servicesdiscuss the income tax laws of any state, municipality, or non-U.S. taxing jurisdiction, or the gift, estate, excise (including the rules applicable to Baker Hughes Company, which GE consolidated until September 16, 2019. Previously, when Baker Hughes Company was consolidated as part of GE’s financial statements and covered by the GE audit, we had reported fees billed by KPMG for services to Baker Hughes Company.
AUDIT. Fees for the audit of GE’s annual financial statements included in our annual report on Form 10-K; the review of financial statements included in our quarterly reports on Form 10-Q; the audit of our internal control over financial reporting, with the objective of obtaining reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects; and services routinely provided by the auditor in connection with statutory and regulatory filings or engagements. A majority of these audit fees related to KPMG’s conduct of approximately 1,000 statutory audits in more than 100 countries.
AUDIT-RELATED. Fees for assurance and related services that are reasonably related to the performancedeferred compensation under Section 409A of the auditCode), or review of our financial statements and internal control over financial reporting. The year-over-year fee increase was primarily attributable to higher costs for carve-out audits in 2020, including the BioPharma business within GE Healthcare.
TAX. Fees related toother tax compliance and tax advice/planning, including in 2019 in connection with U.S. tax reform and transactions.
ALL OTHER. GE did not engage KPMG in 2019 or 2020 for any serviceslaws other than those described above.
TOTAL. Total fees paidU.S. federal income tax law. Because individual circumstances may vary, we advise all participants to KPMG decreased from 2019 to 2020 primarily due to lower fees related toconsult their own tax compliance and planning in 2020.
How We Control and Monitoradvisor concerning the Non-Audit Services Provided by Deloitte
The Audit Committee in some cases authorizes Deloitte (along with other accounting firms) to provide non-audit services. We understandtax implications of awards granted under the need for Deloitte to maintain objectivity and independence as the auditor of our financial statements and our internal control over financial reporting. Accordingly, the committee has established the following policies and processes related to non-audit services.2022 LTIP.
WE LIMIT THE NON-AUDIT SERVICES THAT DELOITTE CAN PROVIDE.
STOCK OPTIONS AND SARS. To minimize relationships that could appear to impair Deloitte’s objectivity,The grant of a stock option or SAR generally creates no tax consequences for the Audit Committee will only pre-approve permissible, selected typesparticipant or GE. A participant generally has no taxable income upon exercise of non-audit services that Deloitte may provide to us (and that otherwise would be permissible under SEC rules) and requiresan ISO, except that the company engage Deloittealternative minimum tax may apply. Upon exercise of a stock option other than an ISO, a participant generally must recognize ordinary income equal to the fair market value of the shares acquired minus the exercise price. Upon exercise of a SAR, a participant generally must recognize ordinary income equal to the fair market value of the amount received.
When disposing of shares acquired by exercise of an ISO before the end of the applicable ISO holding periods (two years after the date of grant and one year after the exercise of the ISO), the participant generally must recognize ordinary income equal to the lesser of (i) the fair market value of the shares at the date of exercise minus the exercise price or (ii) the amount realized upon the disposition of the shares minus the exercise price. Otherwise, a participant’s disposition of shares acquired upon the exercise of a stock option (including an ISO for which the requisite holding periods are met) generally will result in only capital gain or loss.
OTHER AWARDS. Awards of restricted stock, RSUs, performance shares and other stock-based awards under the 2022 LTIP generally will result in ordinary income to the participant at the later of the time of delivery of cash, shares, or other awards, or the time that either the risk of forfeiture or restriction on transferability lapses on previously delivered cash, shares or other awards.
LIMITATIONS ON DEDUCTIBILITY BY THE COMPANY. Section 162(m) of the Code limits the deductibility for federal income tax purposes of certain compensation paid to any “covered employee” in excess of $1 million. For purposes of Section 162(m), the term “covered employee” includes any individual who serves as chief executive officer, chief financial officer or one of the other three most highly compensated executive officers for 2017 or any subsequent calendar year. It is expected that compensation deductions for any covered employee with respect to awards under the 2022 LTIP will be subject to the $1 million annual deduction limitation. The Administrator may grant awards under the 2022 LTIP or otherwise that are or may become non-deductible when it believes doing so is in the best suitedinterests of the GE and our shareholders.
Additional Equity Compensation Plan Information
For information regarding outstanding equity awards and shares available for the job. For more detail,future issuance under all of GE’s equity plans as of December 31, 2021, see the Audit Committee Charter (see “Helpful Resources” on page 73).
WE HAVE A PRE-APPROVAL PROCESS FOR NON-AUDIT SERVICES.
The Audit Committee has adopted policies and procedures for pre- approving all non-audit work that Deloitte performs for us. Specifically, the committee has pre-approved the use of Deloitte for specific types of services related to: tax compliance, planning and consultations; acquisition/disposition services; consultations regarding accounting and reporting matters; and reviews and consultations on internal control and other related services. The committee has set a specific annual limit on the amount of non-audit services (audit-related and tax services) that the company can obtain from Deloitte. It has also required management to obtain specific pre-approval from the committee for any single engagement over $2 million or any types of services that have not been pre-approved. The committee chair is authorized to pre-approve any audit or non-audit service on behalf of the committee, provided these decisions are presented to the full committee at its next regularly scheduled meeting.
We Have Hiring Restrictions for Deloitte Employees
To avoid potential conflicts of interest, the Audit Committee has adopted restrictions on our hiring of any Deloitte partner, director, manager, staff member, advising member of the department of professional practice, reviewing actuary, reviewing tax professional and any other individuals responsible for providing audit assurance on any aspect of Deloitte’s audit and review of our financial statements. These restrictions are contained in our Governance Principles (see “Helpful Resources”Equity Compensation Plan Information” on page 73).41.
New Plan Benefits
As of the date of this proxy statement, no awards have been granted under the 2022 LTIP. Awards under the 2022 LTIP may be made at the discretion of the Administrator, and any awards that may be made and any benefits and amounts that may be received or allocated under the 2022 LTIP in the future are not determinable at this time. As such, the future plan benefits, as well as information regarding the number of awards that may be received under the 2022 LTIP in the future, have been omitted.
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Audit Committee Report
ROLES AND RESPONSIBILITIES. The Audit Committee reviews GE’s financial reporting process on behalf of the Board. Management has the primary responsibility for establishing and maintaining adequate internal financial controls, for preparing the financial statements and for the public reporting process. Our company’s independent auditor (KPMG for 2020 and prior years, and Deloitte beginning in 2021) is responsible for expressing opinions on the conformity of the company’s audited financial statements, in all material respects, with generally accepted accounting principles and on the company’s internal control over financial reporting.
REQUIRED DISCLOSURES AND DISCUSSIONS. The committee has reviewed and discussed with management and KPMG the audited financial statements for the year ended December 31, 2020 and KPMG’s evaluation of the company’s internal control over financial reporting. The committee has also discussed with KPMG the matters
that are required to be discussed under PCAOB standards. KPMG has provided to the committee the written disclosures and the PCAOB- required letter regarding its communications with the Audit Committee concerning independence, and the committee has discussed with KPMG that firm’s independence. The committee has concluded that KPMG’s provision of audit and non-audit services to GE and its affiliates during 2020 was compatible with KPMG’s independence.
COMMITTEE RECOMMENDS INCLUDING THE FINANCIAL STATEMENTS IN THE ANNUAL REPORT. Based on the review and discussions referred to above, the committee recommended to the Board that the audited financial statements for the year ended December 31, 2020 be included in our annual report on Form 10-K for 2020 for filing with the SEC. This report is provided by the following independent directors, who comprise the committee:
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Shareholder Proposals LESLIE SEIDMANWhat are you voting on?
The following shareholder proposals will be voted on at the Annual Meeting only if properly presented by or on behalf of the shareholder proponent. In accordance with the applicable proxy regulations, the text of the shareholder proposals and supporting statements, for which we accept no responsibility, are set forth below. How to find more information about the proponents To obtain the addresses of any of the shareholder proponents, or their GE stock holdings, email shareholder.proposals@ ge.com or write to Corporate Secretary, GE, at the address listed on the inside front cover of this proxy statement, and you will receive this information promptly.  (Chairman)Your Board recommends a vote AGAINST shareholder proposals 1, 2 and 3 for the reasons that we provide following each proposal | ASHTON
CARTER | FRANCISCO
D’SOUZA | CATHERINE
LESJAK | PAULA ROSPUT
REYNOLDS |
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MANAGEMENT PROPOSAL NO. 3
Approval of a Reverse Stock Split and Reduction in our Authorized Stock and Par Value
Why the Board recommends a vote FOR the Reverse Stock Split.
The purposes of the reverse stock split are to:
● | Decrease the number of shares outstanding to a number more typical of companies with comparable market capitalization; |
● | Increase the per share trading price of our Common Stock to a price range more typical of companies with comparable market capitalization; |
Failure to obtain shareholder approval of the reverse stock split and corresponding reduction in our authorized stock may limit our ability to achieve these objectives.
Your Board recommends a vote FOR approval of a reverse stock split, a corresponding reduction in our authorized stock and a reduction in par value
Reverse Stock Split
Reverse Stock Split and Reduction in Authorized Stock and Par ValueShareholder Proposals
The Board of Directors has approved, subject to approval by GE shareholders, an amendment of our certificate of incorporation to effect, at the discretion of the Board, at any time prior to the one-year anniversary of the 2021 Annual Meeting, a reverse stock split at a ratio of 1-for-8 (referred to as the Reverse Stock Split), and contemporaneously with the Reverse Stock Split, a corresponding proportionate reduction in the number of shares of Common Stock authorized for issuance under our certificate of incorporation and a reduction in the par value of our Common Stock to $0.01 per share. The Reverse Stock Split, the corresponding reduction in the number of authorized shares, and the reduction in par value are collectively referred to as the Reverse Stock Split Amendment, the form of which is set forth in Appendix A.
Background and Rationale
The purpose of the Reverse Stock Split is to reduce the number of our outstanding shares of Common Stock to a number that is more typical for a company with GE’s market capitalization, and to increase the per share trading price of our stock to levels more typical for a company with GE’s market capitalization. GE has approximately 8.8 billion shares of Common Stock outstanding. Of companies in the S&P 500 with a market capitalization between $50 million and $250 billion as of December 31, 2020, GE is the only company with more than 7.5 billion shares outstanding, only two companies have 5 to 7.5 billion shares outstanding, and 66% of companies have less than 1 billion shares outstanding. The proposed amendment, if effected, will effect a reverse stock split of the issued and outstanding shares of common stock of the company, at a ratio of 1-for-8, and reduce the number of shares of Common Stock outstanding to approximately 1.1 billion shares, with a par value of $0.01 per share.
Over the past several years, GE has undergone a significant transformation, divesting most of GE Capital, as well as GE Appliances, GE Water, GE Transportation, Industrial Solutions, Distributed Power, GE Lighting and Current, the BioPharma business in GE Healthcare and other non-core assets. GE also plans to combine its GE Capital Aviation Services business with AerCap Holdings N.V. and continues to monetize its equity interest in Baker Hughes Company, as previously announced. Carrying out the Reverse Stock Split will adjust our shares outstanding to more closely reflect the scale of GE’s operations following these transactions. Refer to the Forward-Looking
| | Statements Information page on our Investor Relations website (see “Helpful Resources” on page 73) as well as the Risk Factors described in our 2020 Annual Report on Form 10-K for the risks and uncertainties in connection with future transactions.
In addition, in connection with the Reverse Stock Split, we believe that the number of authorized shares of our Common Stock should be decreased proportionately from 13.2 billion authorized shares to 1.65 billion authorized shares. If the Reverse Stock Split is effectuated, we do not anticipate needing 13.2 billion authorized shares of Common Stock in the foreseeable future.
Implementation of the Reverse Stock Split
OTHER CONSIDERATIONS. Shareholders should recognize that, if the Reverse Stock Split is effected, they will own a lower number of shares than they currently own. Except for minor adjustments that may result from the treatment of fractional shares as described below, the Reverse Stock Split will not have any dilutive effect on our shareholders since each shareholder will hold the same percentage of our Common Stock outstanding immediately following the Reverse Stock Split as such shareholder held immediately prior to the Reverse Stock Split. While we expect that the Reverse Stock Split will result in an increase in the per share price of our Common Stock, the Reverse Stock Split may not increase the per share price of our Common Stock in proportion to the reduction in the number of shares of our Common Stock outstanding or result in a permanent increase in the per share price (which depends on many factors, including our performance, prospects, market conditions and other factors that may be unrelated to the number of shares outstanding).
If a Reverse Stock Split is effected and the per share price of our Common Stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of a Reverse Stock Split. In addition, the Reverse Stock Split will likely increase the number of shareholders who own odd lots (less than 100 shares). Shareholders who hold odd lots typically will experience an increase in the cost of selling their shares, as well as possible greater difficulty in effecting such sales. Accordingly, a Reverse Stock Split may not achieve all of the desired results that have been outlined above.
The Board considered all of the foregoing factors and determined that seeking shareholder approval for the Reverse Stock Split Amendment is in the best interests of the company and its shareholders.
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As noted below, even if shareholders approve the Reverse Stock Split Amendment, the Board reserves the right not to effect the Reverse Stock Split Amendment if the Board does not deem it to be in the best interests of the company or its shareholders at the time.
ANTICIPATED IMPACT ON DIVIDEND. The Board does not currently anticipate that the Reverse Stock Split will result in a change to the total value of the quarterly dividend that shareholders receive. Although the Board reserves the right to change the company’s dividend policy in the future, we currently anticipate that the per share dividend paid will be proportionately adjusted to reflect the Reverse Stock Split.
EFFECTS OF THE REVERSE STOCK SPLIT. If the Reverse Stock Split Amendment is approved, there will be no impact on shareholders until the Board (or an authorized committee of the Board) determines to implement the Reverse Stock Split. The Reverse Stock Split, once implemented, would affect all the company’s shareholders uniformly and would not affect any shareholder’s percentage ownership interest or proportionate voting power, except for the cash out of fractional shares of Common Stock.
The principal effects of the Reverse Stock Split Amendment, which is set forth in Appendix A, would be that:
● | the shares of Common Stock owned by a shareholder will be combined into one share of Common Stock for every 8 shares owned immediately before the Reverse Stock Split, with any fractional shares being treated as addressed below; |
● | the total number of outstanding shares of Common Stock would be decreased based on the Reverse Stock Split ratio; |
● | the number of authorized shares of our Common Stock will contemporaneously and correspondingly be reduced based upon the Reverse Stock Split ratio; and |
● | the par value of our Common Stock would be reduced to $0.01 per share. |
EFFECT ON EQUITY COMPENSATION ARRANGEMENTS
● | The per share exercise price of any outstanding stock options would be increased proportionately, and the number of shares issuable under outstanding stock options, restricted stock units, performance share units and all other outstanding equity-based awards would be reduced proportionately; |
● | the number of shares of Common Stock authorized for future issuance under our equity plans would be proportionately reduced and other similar adjustments would be made under the equity plans to reflect the Reverse Stock Split; and |
● | the exercise, exchange or conversion price of all other outstanding securities that are exercisable or exchangeable for or convertible into shares of our Common Stock would be proportionately adjusted and the number of shares of Common Stock issuable upon such exercise, exchange or conversion would be proportionately adjusted. |
Additional effects of the Reverse Stock Split Amendment are discussed below.
FRACTIONAL SHARES. We do not plan to issue fractional shares in connection with the Reverse Stock Split. Shareholders who would otherwise hold fractional shares because the number of shares of Common Stock they hold before the Reverse Stock Split is not evenly divisible by the reverse split ratio will be entitled to receive cash (without interest, and subject to any required tax withholding applicable to a holder) in lieu of such fractional shares. The cash amount payable (without interest) would be equal to, as the Board (or a committee thereof) shall determine, either (i) such shareholder’s
proportionate interest in the proceeds, net of selling costs not paid and satisfied by the company, from the aggregation and sale of the fractional shares by the transfer agent of the company, or (ii) the closing price of our Common Stock as reported on the NYSE on the trading day immediately preceding the date that the Reverse Stock Split Amendment becomes effective, as adjusted by the Reverse Stock Split ratio, multiplied by the applicable fraction of a share. Shareholders will not be entitled to receive interest for the period of time between the Effective Time (as defined below) and the date payment is received.
In the event we elect to aggregate and sell fractional shares, the transfer agent will aggregate such fractional shares into whole shares and sell the whole shares in the open market at prevailing trading prices. The transfer agent will then distribute the cash proceeds of the sale pro rata to the shareholders otherwise entitled to receive a fractional share. The transfer agent will in its sole discretion, without any influence by the company, determine when, how, through which broker-dealers and at what price to sell the aggregated fractional shares.
CONTINUED SEC REPORTING REQUIREMENTS AND STOCK LISTING. After the Effective Time, the company would continue to be subject to periodic reporting and other requirements of the Exchange Act, and the Common Stock would continue to be listed on the NYSE under the symbol “GE.”
NEW CUSIP NUMBER. After the Effective Time (as defined below), the post-Reverse Stock Split shares of the company’s Common Stock would have a new CUSIP number, which is a number used to identify the company’s equity securities. Stock certificates issued before the Reverse Stock Split will reflect the older CUSIP number and should be returned to the company’s transfer agent by following the procedures described below under “Holders of Certificated Shares of Common Stock”.
HOLDERS OF CERTIFICATED SHARES OF COMMON STOCK. If any of a shareholder’s shares of Common Stock are held in certificate form, that shareholder will receive a transmittal letter from the company’s transfer agent as soon as practicable after the Effective Time of the Reverse Stock Split. The transmittal letter will be accompanied by instructions specifying how the shareholder may exchange their certificates representing the pre-Reverse Stock Split shares of Common Stock for a statement of holding. When that shareholder submits their certificates representing the pre-Reverse Stock Split shares of Common Stock, the post-Reverse Stock Split shares of Common Stock will be held electronically in book-entry form. This means that, instead of receiving a new stock certificate, that shareholder will receive a statement of holding that indicates the number of post-Reverse Stock Split shares of Common Stock held in book-entry form. The company will no longer issue physical stock certificates. If a shareholder is entitled to a payment in lieu of any fractional share interest, the payment will be made as described above under “Fractional Shares.” Beginning at the Effective Time, each certificate representing pre-Reverse Stock Split shares will be deemed to evidence ownership of post-Reverse Stock Split shares. Shareholders will need to exchange their old certificates in order to effect transfers of shares. If an old certificate bears a restrictive legend, the registered shares in book-entry form will bear the same restrictive legend. The company may seek a waiver from the SEC permitting us to automate the conversion of physical certificates to a statement of holding in book-entry form for shareholders with certificates representing shares below a specified amount. Such a waiver would alleviate the need for certain shareholders to submit their stock certificates with the transmittal letter. If such a waiver is granted, we will communicate that to shareholders.
Shareholders should not destroy any stock certificate(s) and should not submit any stock certificate(s) until requested to do so.
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EFFECT ON REGISTERED AND BENEFICIAL HOLDERS OF COMMON STOCK. After the Effective Time, shares of our Common Stock held by shareholders that hold their shares through a broker or other nominee will be treated in the same manner as shares held by registered shareholders that hold their shares in their names. Brokers and other nominees that hold shares of our Common Stock will be instructed to effect the Reverse Stock Split for the beneficial owners of such shares. However, those brokers or other nominees may implement different procedures than those to be followed by registered shareholders for processing the Reverse Stock Split, particularly with respect to the treatment of fractional shares. Shareholders whose shares of our Common Stock are held in the name of a broker or other nominee are encouraged to contact their broker or other nominee with any questions regarding the procedure of implementing the Reverse Stock Split with respect to their shares.
EFFECT ON REGISTERED “BOOK-ENTRY” HOLDERS OF OUR COMMON STOCK. Registered holders of shares of our Common Stock may hold some or all of their shares electronically in book-entry form under the direct registration system for the securities. Those shareholders will not have stock certificates evidencing their ownership of shares of our Common Stock, but generally have a statement reflecting the number of shares registered in their accounts.
Shareholders that hold registered shares of our Common Stock in book-entry form do not need to take any action to receive post-Reverse Stock Split shares. Any such shareholder that is entitled to post-Reverse Stock Split shares will automatically receive, at the shareholder’s address of record, a transaction statement indicating the number of post-Reverse Stock Split shares held following the implementation of the Reverse Stock Split.
NO IMPACT ON PREFERRED STOCK. The Reverse Stock Split does not change the number of authorized shares of our Preferred Stock, $1.00 par value.
PAR VALUE AND ACCOUNTING CONSEQUENCES. Pursuant to the Reverse Stock Split Amendment, the par value of our Common Stock will be reduced from $0.06 per share to $0.01 per share. As a result of the Reverse Stock Split, at the Effective Time, the stated capital on our balance sheet attributable to our Common Stock will be reduced to $0.01 per share, and the additional paid-in capital account will be credited with the amount by which the stated capital is reduced. Our shareholders’ equity, in the aggregate, will remain unchanged. Reported per share net earnings or loss and other per share of Common Stock amounts will increase because there will be fewer shares of Common Stock outstanding. In future financial statements, per share net earnings or loss and other per share of Common Stock amounts for periods ending before the Effective Time will be adjusted to give retroactive effect to the Reverse Stock Split. The purpose of the reduction in par value is to simplify our administrative procedures and to bring our par value in line with that of many other companies (including several other large industrial companies such as 3M, Danaher, ITW and Johnson Controls). The reduction in par value will have no impact on the market value of our stock or the rights of our shareholders.
HOW LONG THE AUTHORIZATION TO EFFECTUATE A REVERSE STOCK SPLIT WILL LAST. Upon receiving shareholder approval of the Reverse Stock Split Amendment, the Board (or an authorized committee of the Board) will have the authority, but not the obligation, at any time prior to the one-year anniversary of the 2021 Annual Meeting, to elect whether to effect the Reverse Stock Split Amendment.
The Board (or an authorized committee thereof) reserves the right to elect to abandon the Reverse Stock Split Amendment, even if shareholder approval has been obtained, if it determines in its discretion that the Reverse Stock Split is no longer in the best interest of the company and its shareholders. By voting in favor of the approval of the Reverse Stock Split Amendment, each shareholder is expressly also authorizing the Board (or an authorized committee of the Board) to determine not to proceed with and to abandon the Reverse Stock Split Amendment if it should so decide.
IMPLEMENTATION OF THE REVERSE STOCK SPLIT AMENDMENT.
Assuming that shareholder approval of the Reverse Stock Split Amendment is obtained, the Board retains the discretion to effect the Reverse Stock Split at any other time prior to the one-year anniversary of the 2021 Annual Meeting or not at all. The Reverse Stock Split Amendment would be implemented by filing with the New York State Department of State an amendment to our restated certificate of incorporation, as amended, setting forth the Reverse Stock Split Amendment, which would be effective immediately or at such time as the company may specify at the time of filing (the “Effective Time”). If a certificate of amendment effecting the Reverse Stock Split Amendment has not been filed with the New York State Department of State prior to the one-year anniversary of the 2021 Annual Meeting, then the Reverse Stock Split Amendment will be automatically abandoned.
The Reverse Stock Split is not intended to be a first step in a series of steps leading to a “going private transaction” pursuant to Rule 13e-3 under the Exchange Act. Implementing the Reverse Stock Split would not reasonably likely result in, and would not have a purpose to, produce a “going private” effect.
NO APPRAISAL OR DISSENTERS’ RIGHTS. Under New York law, holders of our Common Stock will not be entitled to dissenter’s rights or appraisal rights with respect to the Reverse Stock Split Amendment.
INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS. Certain of our officers and directors have an interest in this proposal as a result of their ownership of shares of our Common Stock. However, we do not believe that our officers or directors have interests in this proposal that are different than or greater than those of any of our other shareholders.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT.
The following is a summary of material U.S. federal income tax consequences of the Reverse Stock Split to holders of our Common Stock. This summary is based on the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations, administrative rulings and judicial decisions, all as in effect on the date hereof, and all of which are subject to change or differing interpretations, possibly with retroactive effect. Any such change or differing interpretation could affect the tax consequences described below.
We have not sought and will not seek an opinion of counsel or ruling from the Internal Revenue Service (the “IRS”) with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS or a court will agree with such statements and conclusions.
This summary is limited to holders of our Common Stock that are U.S. holders, as defined below, and that hold our Common Stock as a capital asset (generally, property held for investment).
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This summary is for general information only and does not address all U.S. federal income tax considerations that may be applicable to a holder’s particular circumstances or to holders that may be subject to special tax rules, such as, for example, brokers and dealers in securities, currencies or commodities, banks and financial institutions, regulated investment companies, real estate investment trusts, expatriates, tax-exempt entities, governmental organizations, traders in securities that elect to use a mark-to-market method of accounting for their securities, certain former citizens or long-term residents of the United States, insurance companies, persons holding shares of our Common Stock as part of a hedging, integrated, or conversion transaction or a straddle or persons deemed to sell shares of our Common Stock under the constructive sale provisions of the Code, persons that hold more than 5% of our Common Stock, persons that hold our Common Stock in an individual retirement account, 401(k) plan or similar tax-favored account, or partnerships or other pass-through entities for U.S. federal income tax purposes and investors in such entities. This summary does not address any U.S. federal tax consequences other than U.S. federal income tax consequences (such as estate or gift tax consequences), the Medicare tax on net investment income, the alternative minimum tax or any U.S. state, local or foreign tax consequences.
For purposes of this summary, a “U.S. holder” means a beneficial owner of our Common Stock that is, for U.S. federal income tax purposes:
● | an individual who is a citizen or resident of the United States; |
● | a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia; |
● | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
● | a trust if (1) it is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (2) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. |
If an entity (or arrangement) classified as a partnership for U.S. federal income tax purposes holds shares of our Common Stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. If a holder of our Common Stock is a partner of a partnership holding shares of our Common Stock, such holder should consult his or her own tax advisor.
This summary of certain U.S. federal income tax consequences is for general information only and is not tax advice. Holders of our Common Stock are urged to consult their own tax advisor with respect to the application of United States federal income tax laws to their particular situation as well as any tax considerations arising under other United States federal tax laws (such as the estate or gift tax laws) or under the laws of any state, local, foreign or other taxing jurisdiction or under any applicable tax treaty.
The Reverse Stock Split is intended to be treated as a recapitalization for U.S. federal income tax purposes. Assuming the Reverse Stock Split qualifies as a recapitalization, except as described below with respect to cash received in lieu of a fractional share, a U.S. holder will not recognize any gain or loss for U.S. federal income tax purposes upon the Reverse Stock Split. In the aggregate, a U.S. holder’s tax basis in the Common Stock received pursuant to the Reverse Stock Split (excluding the portion of the tax basis that is allocable to any fractional share) will equal the U.S. holder’s tax basis in its Common Stock surrendered in the Reverse Stock Split in exchange therefor, and the holding period of the U.S. holder’s Common Stock received pursuant to the Reverse Stock Split will include the holding period of the Common Stock surrendered in the Reverse Stock Split in exchange therefor.
In general, a U.S. holder who receives a cash payment in lieu of a fractional share will recognize capital gain or loss equal to the difference between the amount of cash received in lieu of the fractional share and the portion of the U.S. holder’s tax basis of the Common Stock surrendered in the Reverse Stock Split that is allocable to the fractional share. Such gain or loss generally will be long-term capital gain or loss if the U.S. holder’s holding period in its Common Stock surrendered in the Reverse Stock Split is more than one year as of the date of the Reverse Stock Split. The deductibility of net capital losses by individuals and corporations is subject to limitations.
U.S. holders that have acquired different blocks of our Common Stock at different times or at different prices are urged to consult their own tax advisors regarding the allocation of their aggregated adjusted basis among, and the holding period of, our Common Stock.
Information returns generally will be required to be filed with the IRS with respect to the payment of cash in lieu of a fractional share made pursuant to the Reverse Stock Split unless such U.S. holder is an exempt recipient and timely and properly establishes the exemption. In addition, payments of cash in lieu of a fractional share made pursuant to the Reverse Stock Split may, under certain circumstances, be subject to backup withholding, unless a U.S. holder timely provides proof of an applicable exemption or a correct taxpayer identification number, and otherwise complies with the applicable requirements of the backup withholding rules. Any amounts withheld under the backup withholding rules are not additional tax and may be refunded or credited against the U.S. holder’s U.S. federal income tax liability, provided that the U.S. holder timely furnishes the required information to the IRS. U.S. holders should consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption.
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SHAREHOLDER PROPOSALS
What are you voting on?
The following shareholder proposals will be voted on at the annual meeting only if properly presented by or on behalf of the shareholder proponent. In accordance with the applicable proxy regulations, the text of the shareholder proposals and supporting statements and any graphics, for which we accept no responsibility, are set forth below.
How to find more information about the proponents
To obtain the addresses of any of the shareholder proponents, or their GE stock holdings, email shareowner.proposals@ge.com or write to Corporate Secretary, GE, at the address listed on the inside front cover of this proxy statement, and you will receive this information promptly.
Your Board recommends a vote AGAINST proposals 1 and 2, and FOR proposal 3, for the reasons that we provide following each proposal
Shareholder Proposal No. 1 —
Multiple Candidate Elections Cessation of Stock Option and Bonus Programs | |
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Martin Harangozo has notified us that he intends to submit the following proposal at this year’s meeting: Whereas: General Electric had lost nearlyThe Board of Directors are requested to consider voting a cessation of all its valuationExecutive Stock Option Programs, and Bonus Programs. Rewards via a bona fide salary program are a necessity. Salary increases to deserving Executives will reward only those who productively enhance the Company’s Business. Only if and when profit increases are published and compiled annually, and verified by a Certified Accounting Firm a realistic salary increase commensurate with the increase in the last two decades, duringCompany’s Business can be
| | considered. Should there be no increase in the Company’s Business, or a time whendecline in Corporate Business is published and compiled annually, and verified by a Certified Accounting Firm, no salary increase(s) will be forthcoming. Rewards via the stock market popular Sabove measurements will suffice, and P 500 performance nearly tripledremove the bonus and Executive Stock Option Program(s) permanently. The above shareholder proposal has been in valuation. The dividend is all but gone and less than when Mr. Jack Welch became CEO in 1981. Promised benefits to retirees have been broken. Rolling heads around as Mr. John Flannery replacing Mr. Jeffrey Immelt, or Mr. Lawrence Culp Jr. replacing Flannery has had no substantial positive effect in restoring the company valuation, or growing it to the broader market. | | It is clear that a new approach is needed to drive the General Electric Company soproxy statement many times.
Please vote for cessation of all Executive Stock Option Program, and Bonus Programs. | |
| Your Board recommends a vote AGAINST this proposal. EQUITY AWARDS AND ANNUAL CASH BONUSES ARE IMPORTANT COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM. Our Board believes that it performsGE’s executive compensation program is structured to achieve the objectives of driving accountability and performance, incentivizing short- and long-term performance, attracting and retaining top talent, and discouraging excessive risk taking. Equity incentive awards are an integral component of our compensation program because they vest over an extended period of time and therefore incentivize performance over a multi-year period and align our leaders with long-term shareholder interests (for example, stock options, RSUs and PSUs generally vest over a three-year period) and provide strong performance incentives that are closely aligned with shareholder interests (for example, PSUs are earned based on achievement of specified performance measures). Annual bonuses are important because they give the Management Development & Compensation Committee the opportunity to consider not only the recent overall performance of GE, but also the performance of a particular business the executive leads or a particular role the executive serves, enabling the committee to factor in accomplishments during the year that contribute to long-term performance in addition to financial results (for example, the inclusion of safety metrics in the annual bonus program). THE PROPOSAL WOULD IMPOSE ARBITRARY LIMITS ON THE COMPENSATION COMMITTEE AND PUT GE AT A COMPETITIVE DISADVANTAGE COMPARED TO PEERS. We believe that imposing arbitrary limitations on the Management Development & Compensation Committee’s judgment in structuring GE’s executive compensation program, as the proposal seeks to do by requesting the elimination of executive stock options and annual bonuses, would undermine the committee’s ability to achieve appropriate compensation objectives. The Management Development & Compensation Committee seeks to create an effective and competitive structure for the shareholders consistentcompensation program and exercises careful judgment in making all compensation decisions, taking into account GE’s performance, compensation practices at 20+ peer companies in our peer group and investor feedback and evaluating each executive’s performance during the year against established goals, leadership qualities, operational performance, business responsibilities, current compensation arrangements, and long-term potential to enhance shareholder value. Virtually any company that GE competes with general stock market performance. Electing board directors where each board seatfor talent has only one option, is a laughable circusthe ability to pay executive bonuses and has no performance merit as demonstratedequity compensation. Implementing the changes requested by the General Electric stock price. A presidential election for example, with only one candidate,proposal would be unimaginable, laughable,place GE at a competitive disadvantage by limiting the committee’s ability to structure an effective and void of any election merit where voters have a legitimate voice.competitive compensation program that can attract, retain and appropriately incentivize highly qualified and effective executives. Resolved: This proposal recommendsFor the proxy features at minimum two candidates for each available board seat.
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Yourforegoing reasons, the Board recommends a vote AGAINST this proposal. | |
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The Governance Committee of the Board currently employs a rigorous and thorough process for selecting the candidates that it nominates to serve on the Board, as described in this proxy statement under “Election of Directors” on page 6. It carefully evaluates all individuals recommended as candidates to the Board, including individuals suggested by shareholders, in light of multiple factors including each such individual’s industry and operations experience, finance and accounting experience, investor experience, technology experience, risk management experience, government and regulatory experience, global business experience and experience in the industries in which we participate. The Governance Committee and Board endeavor to
| | have an experienced, qualified Board with high personal integrity and character, diversity of thought and expertise in areas relevant to GE. The Governance Committee selects candidates that it believes will complement each other, with each candidate bringing his or her own strengths and areas of expertise to the Board. In contrast, the unique approach suggested in this proposal of requiring that our company present two candidates for each open seat, which approach is not utilized by any company in the S&P 500, may result in individual nominees being considered in isolation and, thus may produce a board of directors that fails to represent a diversity of experiences and viewpoints.
For the foregoing reasons, the Board recommends a vote AGAINST this proposal.
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Shareholder Proposal No. 2 —
Ratification of Termination Pay SOC Investment Group has notified us that it intends to submit the following proposal at this year’s meeting:
RESOLVED: Shareholders request that the Board of General Electric Company (GE) seek shareholder approval of any senior manager’s new or renewed pay package that provides for severance or termination payments with an estimated value exceeding 2.99 times the sum of the executive’s base salary plus target short-term bonus.
“Severance or termination payments” include cash, equity or other compensation that is paid out or vests due to a senior executive’s termination for any reason. Payments include those provided under employment agreements, severance plans, and change-in-control clauses in long-term equity plans, but not life insurance, pension benefits, or deferred compensation earned and vested prior to termination.
“Estimated total value” includes: lump-sum payments; payments offsetting tax liabilities; perquisites or benefits not vested under a plan generally available to management employees; post-employment consulting fees or office expense; and equity awards if vesting is accelerated, or a performance condition waived, due to termination.
The Board shall retain the option to seek shareholder approval after material terms are agreed upon.
Supporting Statement
While we are only proposing that this policy cover new and renewed executive severance approvals, we note that shareholders overwhelmingly rejected GE’s Say-on-Pay proposal at the last annual meeting after the Board, in August 2020, significantly lowered goals for CEO Larry Culp’s Leadership Performance Share Award that was awarded when he joined the company. This award was contingent on at least a 50% increase in the stock price, at which time the award would be worth $46.5 million.
In less than two years, however, the stock price dropped by nearly half. The board responded by revising Mr. Culp’s contract to make it easier for him to earn that $46.5 million payout. Given how GE’s share price has risen since then, Mr. Culp could receive a windfall despite a negligible increase in the stock price during his tenure.
We cite this example because it illustrates how GE’s board has been extremely generous in executive compensation, contrary to basic “pay for performance” principles. This largesse also exists with respect to severance packages. According to last year’s proxy statement, a change in control could have netted Mr. Culp over $100 million worth of performance shares.
It is in the best interest of GE shareholders to be protected from potential windfall payments that can arise from, among other things, lowering goals and subsequently receiving unduly large payouts upon a “without cause” termination, which is a very real possibility at GE particularly considering the recently announced spinoff of its Healthcare and Renewable Energy & Power businesses. Such spinoffs can be accompanied by executive terminations.
Please vote yes: Shareholder Ratification of Termination Pay
6460 GE 20212022 PROXY STATEMENT
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Shareholder Proposal No. 2 — Independent Board ChairmanYour Board recommends a vote AGAINST this proposal.The Board believes that this proposal is not in the best interests of GE shareholders. The overly broad proposal does not permit adequate flexibility to be competitive in the marketplace for new hires and to retain key talent, particularly at this time of unprecedented competition and demand in the overall labor market and with additional pressures on GE’s workforce in connection with our plans to form three independent companies. Moreover, GE has an existing policy for shareholder approval of termination pay that we believe strikes the right balance among shareholder rights, the Board’s exercise of its fiduciary duties and retaining the necessary flexibility to attract and retain talent. THE BROAD APPROACH THIS PROPOSAL SUGGESTS WOULD PLACE GE AT A COMPETITIVE DISADVANTAGE BY LIMITING GE’S ABILITY TO ATTRACT AND RETAIN KEY LEADERS. The Board believes the proposal would adversely affect GE’s ability to attract senior-level executive talent, for which we compete globally with other companies. The sort of severance benefits that would be covered by the policy this proposal requests often arise in the context of negotiating an employment agreement with an external hire for a senior leadership position, particularly when a sign-on or similar one-time equity award is part of the overall compensation package necessary to induce the individual to leave a successful and well-compensated role at another company. As a result, implementing the proposal may interfere with GE’s ability to make binding offers of employment, including for roles that can have significant impact on GE’s performance and results. Requiring sign-on packages for “any senior manager” to be approved by shareholders would not allow us to be nimble and competitive in the recruiting process, and candidates would not be willing to have their hiring be subject to a subsequent shareholder approval. Similar dynamics can exist in developing packages to retain employees. The delay, uncertainty and expense of seeking shareholder approval in such circumstances demonstrate the impracticality of this proposal. Unsurprising given the undue limitations and negative consequences that could accompany the policy requested by this proposal, none of the other companies in GE’s compensation peer group disclose having this policy. Adopting the broad approach this proposal suggests would disadvantage GE relative to peers in its ability to recruit and retain the best available executive talent. THE NEED FOR GE TO REMAIN COMPETITIVE IN THE MARKET FOR TALENT IS EVEN MORE IMPORTANT IN THE CONTEXT OF OUR PLAN TO FORM THREE INDEPENDENT COMPANIES FROM OUR EXISTING BUSINESSES. The misalignment between this proposal and the best interests of GE and its shareholders is even more evident today in a context where GE is working through a transformational period to establish three industry-leading independent companies with strong leadership teams at each. The need to retain competitive and flexible tools in the market for talent extends not just to the one GE that exists today but to all three future companies. In addition, the Board believes it is important to retain the flexibility to provide appropriate retention and possible future severance benefits for employees who are helping to drive this transformation but may face job insecurity following the two planned spin-offs of (i) our Healthcare business in early 2023, and (ii) our combined Renewable Energy, Power and Digital businesses in early 2024, following which GE will be an aviation-focused company. For example, some employees who are currently part of GE’s Corporate staff will be key to executing these separations but may not assume positions with any of the three future companies. The proposal would potentially eliminate the ability to take retention actions that the Board views as appropriate and necessary for individuals whose roles and leadership are critical to navigating this transitional period and executing on the strategic plan to maximize value for our shareholders. GE ALREADY HAS A CAREFULLY TAILORED POLICY TO SEEK SHAREHOLDER APPROVAL OF TERMINATION PAY IN APPROPRIATE CIRCUMSTANCES. GE has a longstanding policy, reflected in our Governance Principles, to obtain shareholder approval before paying certain types of severance benefits that would exceed 2.99 times the sum of the executive’s base salary and bonus—the very same ratio that the shareholder proposal contemplates. The Board believes that GE’s existing policy, which is more carefully tailored than the overly broad proposal, strikes the right balance between shareholder rights and being able to be competitive in the market for talent. The existing policy includes the following specific features: (i) it applies to termination prior to retirement for performance reasons (as opposed to termination “for any reason,” as contemplated by the proposal), (ii) it allows certain exclusions to the types of compensation subject to the policy, such as payments of salary or bonus amounts that had accrued at the time of termination, and (iii) it applies to a clearly defined set of GE officers whose compensation is already disclosed to shareholders under SEC rules (as opposed to “any senior manager,” an undefined and potentially very broad population of employees, as contemplated by the proposal). As a result, the current policy enables GE to offer applicable post-termination benefits in situations we believe are appropriate, such as permitting equity vesting in the event of retirement after attaining retirement eligibility, or upon termination of GE employment in connection with GE transferring a business operation to a successor employer. Both of those are scenarios where we believe acceleration of equity vesting is appropriate and should not be subject to specific shareholder approval beyond the general say-on-pay advisory vote that we hold annually. The policy requested by the proposal would represent a significant broadening of an existing GE policy that we believe is already appropriately constructed, and that was itself the product of prior engagement with a shareholder proponent. Furthermore, we engage regularly with many of our largest shareholders, and the shareholders we have met with in recent years have not raised concerns about our existing policy. For the foregoing reasons, the Board recommends a vote AGAINST this proposal. |
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Kenneth Steiner has notified us that he intends to submit the following proposal at this year’s meeting:
PROPOSAL 2 – INDEPENDENT BOARD CHAIRMAN
Shareholders request that our Board of Directors adopt a policy, and amend our governing documents as necessary to require that the Chairman of the Board of Directors to be an independent member of the Board whenever possible including the next Chairman of the Board transition.
If the Board determines that a Chairman who was independent when selected is no longer independent, the Board shall select a new Chairman who satisfies the requirements of the policy within a reasonable amount of time. This policy is not intended to violate any employment contract but recognizes that the Board has broad power to renegotiate an employment contract.
This proposal topic won impressive 41%-support at the 2018 General Electric annual meeting even though it was not a fair election. GE management put is hand on the scale and spent shareholder money on advertisements to oppose this proposal topic.
Support for proposals to appoint an independent board chair received 17% higher support at U.S. companies in 2020. Two such proposals received majority support due to management oversight failings. These two companies were Boeing, which fired its CEO after two 100% fatality crashes of factory fresh Boeing 737 MAX airliners which in turn grounded the entire worldwide fleet of 737 MAX airliners for more than 18-months and Baxter International, which had to restate its financial results in 2019.
Since management performance setbacks often result in higher support for this proposal topic, the mere submission of this
| | proposal will be an incentive for the Chairman of the Board to perform better leading up to the 2021 annual meeting.
It is also important to have an independent board chairman to help make up for the 2020 the widespread use of online shareholder meetings which can easily be a transparency wasteland.
With tightly controlled online meetings everything is optional. For instance company status reporting is optional. Also answers to questions are optional even if management misleadingly asks for questions.
Goodyear management even hit the mute button right in the middle of the Securities and Exchange Commission mandated shareholder proposal presentation at its 2020 online shareholder meeting to bar constructive criticism.
Plus AT&T management would not even allow any sponsors of shareholder proposals to read their proposals by telephone at the 2020 AT&T online shareholder meeting during the pandemic. Please see: AT&T investors denied a dial-in as annual meeting goes online https://whbl.com/2020/04/17/att-investors-denied-a-dial-in-as-annual-meeting-goes-online/1007928/
Online meetings also give management a blank check to make false statements. For instance management at scores of 2020 online annual meetings falsely stated that there were no more shareholder questions. Online shareholders were powerless to point out that their questions were not answered.
Please see:
Schwartz-Ziv, Miriam, How Shifting from In-Person to Virtual Shareholder Meetings Affects Shareholders’ Voice (August 16, 2020). Available at SSRN: https://ssrn.com/abstract=3674998 or http:// dx.doi.org/10.2139/ssrn.3674998
Please vote yes:
Independent Board Chairman – Proposal 2
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Your Board recommends a vote AGAINST this proposal. |
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THE INTERESTS OF GE AND ITS SHAREHOLDERS ARE BEST SERVED WHEN LEADERSHIP CHOICES ARE MADE ON A CASE-BY-CASE BASIS. Our Board believes that providing strong, independent and objective oversight of the company is central to its role and to good governance. But by dictating a policy on the structure of company leadership, regardless of the circumstances or the individuals involved, this proposal could limit the Board’s ability to pursue the governance strategy that is in the best interests of the company and its shareholders at a particular point in time. Because circumstances may change over time, we believe it is important for our directors to maintain flexibility to select the most appropriate Board leadership structure. For example, according to the 2020 Spencer Stuart Board Index, only 34% of companies in the S&P 500 currently have an independent board chairman. The Board will continue to monitor the appropriateness of its leadership structure, and adapt from time to time, as it does with all governance issues.
THE BOARD DECIDED DURING ITS RECENT CEO TRANSITION TO MAINTAIN ITS CURRENT LEADERSHIP STRUCTURE. At the time of the most recent CEO transition in September 2018, the Board considered appointing a director from among its members as independent Chairman and promoting an internal candidate or hiring an outside candidate as CEO. After deliberation, the independent directors determined that appointing Mr. Culp, one of our existing directors, to serve as CEO, and simultaneously appointing him as Chairman, was in the best interests of the company and its shareholders. The independent directors determined that Mr. Culp was the best candidate to drive the strategy for the company and the Board’s agenda as Chairman, while also leading the execution of that strategy as CEO. The independent directors concluded that combining these roles was important to provide clarity on decision-making and accountability, particularly at a time of considerable change for the company, and that they could effectively mitigate any potential conflicts that might result from combining the roles primarily through the duties of the lead director, as described
| | below. We believe that the successful and swift execution on our strategic plan since Mr. Culp’s appointment has been assisted considerably by his holding the roles of both CEO and Chairman.
INDEPENDENT LEADERSHIP IS PROVIDED BY OUR LEAD DIRECTOR. Our Board is committed to exercising independent oversight of management, regardless of our leadership structure. The lead director role at GE is designed to empower the independent directors to serve as a check on management, and we believe that the effectiveness of this structure is consistently demonstrated, including at the time of our most recent CEO transition. Our lead director, Tom Horton, the former Chairman and CEO of American Airlines, leads meetings of the independent directors and regularly meets with the Chairman for discussion of matters arising from these meetings. He also calls additional meetings of the independent directors or the entire Board as deemed appropriate, serves as a liaison on Board-related issues between the Chairman and the independent directors, and performs such other functions as the Board may direct. As described in the Board’s Governance Principles, these other functions include (1) advising the Governance Committee on the selection of committee chairs, (2) approving the agenda, schedule and information sent to the directors for Board meetings, (3) working with the Chairman to propose an annual schedule of major discussion items for the Board’s approval, (4) guiding the Board’s governance processes, including the annual Board self-evaluation, succession planning and other governance-related matters, (5) leading the annual Chairman evaluation, and (6) providing leadership to the Board if circumstances arise in which the role of the Chairman may be, or may be perceived to be, in conflict, and otherwise act as chairman of Board meetings when the Chairman is not in attendance. The lead director oversees the Board’s periodic review of its leadership structure to evaluate whether it remains appropriate for the company. The lead director also frequently meets with our largest shareholders.
For the foregoing reasons, the Board recommends a vote AGAINST this proposal.
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GE 20212022 PROXY STATEMENT 6561
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Shareholder Proposal No. 3 —
Employee Representative Director Shareholder Proposal No. 3 — Report on Net Zero Indicator |
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As You Sow has notified us that it intends to submit the following proposal at this year’s meeting on behalf of Long View Funds and Putney School Inc Endowment Inv Mgr (S), with co-filer School Sisters of Notre Dame Cooperative Investment Fund:
Whereas: The increasing rate and number of climate-related disasters affecting society is causing alarms to be raised within the executive, legislative1 and judicial2 branches of government, making the corporate sector’s contribution to climate mitigation a significant policy issue;
The Commodity Futures Trading Commission’s Climate Related Risk Subcommittee recently issued a report3 finding that climate change poses a significant risk to, and could impair the productive capacity of, the U.S. economy;
Shareholders are increasingly concerned about material climate risk to both their companies and their portfolios and seek clear and consistent disclosures from the companies in which they invest;
In response to material climate risk, the steering committee of the Climate Action 100+ initiative (CA100+), a coalition of more than 500 investors with over $47 trillion in assets, issued a Net Zero Company Benchmark (Benchmark) calling on the largest carbon emitting companies – including our Company – to work toward reducing greenhouse gas (GHG) emissions to net zero, improving climate governance, and providing specific climate related financial disclosures;4
A failure to comply with Benchmark goals and disclosures is likely to pose a material risk to our Company and its shareholders, in particular the failure to clearly disclose whether the Company has adopted net zero greenhouse gas reduction goals across its full range of emissions;
| | Failure to address such a critical climate issue may have a negative effect on our Company’s cost of capital and shareholders’ financial returns. BlackRock notes that investment flows into “sustainable” and climate aligned assets will drive long term outperformance relative to companies perceived as having weaker sustainability characteristics;5,6
A core indicator of company alignment with the Paris Agreement is Indicator 1, titled “Net Zero GHG emissions by 2050 (or sooner) ambition,” which seeks disclosure on whether the company has set an ambition to achieve net zero GHG emissions by 2050 or sooner and whether any such emissions ambition statement explicitly includes scope 1, 2, and, when applicable, the most relevant scope 3 emissions (Net Zero Indicator);
While GE has committed to achieve carbon neutrality for its facilities and operations by 2030 (Scope 1 & 2),7 it has not reported an ambition to reduce the largest component of its GHG emissions -- its scope 3 product emissions – an important gauge of whether and how it is reducing climate risk and capitalizing on low carbon opportunities.
Resolved: Shareholders request the Board of Directors issue a report, at reasonable expense and excluding confidential information, evaluating and disclosing if and how the company has met the criteria of the Net Zero Indicator, or whether it intends to revise its policies to be fully responsive to such Indicator.
Supporting Statement: Proponents suggest, at Company discretion, the report also include any rationale for a decision not to set and disclose goals in line with the Net Zero Indicator.
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Alexandra A. Brown has notified us that she intends to submit the following proposal at this year’s meeting:
RESOLVED, shareholders of General Electric Company (“GE” or “the Company”) request that the Board nominate an Employee Representative Director for election to the Board by shareholders at GE’s 2023 annual meeting of shareholders. The Employee Representative Director shall be a current non-executive GE employee who consents to serve on the Board. Current employees shall be given the opportunity to suggest persons to serve as the Employee Representative Director to the Nominating and Corporate Governance Committee, which will recommend a candidate for nomination by the full Board. If the Employee Representative Director ceases to be a non-executive employee of GE during his or her term, the Board should appoint a replacement who satisfies the criteria set forth above.
Supporting Statement
GE employees create a great deal of value for the Company and its shareholders. In GE’s 2020 annual report, CEO Larry Culp acknowledges “I often have witnessed our employees’ battle-tested commitment and grit over the past two-plus years. Nowhere was this clearer than in the face of the pandemic, and I am profoundly thankful to them.”
Yet GE has for years prioritized Wall Street’s appetite for growth through risky acquisitions rather than ensuring the sustainability of its core businesses, leaving the company in a profoundly weakened state. To cut costs and grow profits, the company has also hollowed out its US workforce – from 277,000 workers in 1989 to just 70,000 today – even while relying on $2.2 billion in federal and state subsidies and serving as a major federal contractor.1
An employee representative on GE’s Board would add knowledge and insight on issues critical to the success of the Company, beyond that currently present on the Board, and may result in more informed decision making. Moreover, employees have a sincere interest in the ongoing viability of the company, aligning their interests with those of long-term shareholders. This perspective is needed on the GE board now more than ever, to ensure the proposed spinoffs of GE’s divisions into publicly traded companies is only undertaken if it can be done in a manner that protects the integrity and viability of the component parts, including the expertise of the GE workforce.
GE has long described its culture as a competitive advantage, helping it attract and retain top talent. GE should act to protect and strengthen its human capital, particularly given the uncertainty presented by its impending corporate restructuring. We strongly believe the Employee Representative Director would promote GE’s continued success.
We urge shareholders to vote for this proposal.
(1)1 | https://www. govtrack.us/congress/bills/subjects/climate_change_and_greenhouse_gases/6040#sort=-introduced_date |
(2) | https://www. nature.com/articles/d41586-020-00175-5 |
(3) | https://www. cftc. gov/sites/default/files/2020-09/9-9-20%20Report%20of%20the%20Subcommittee%20on%20Climate-Related%20Market%20Risk%20-%20Managing%20Climate%20Risk%20in%20the%20U. S.%20Financial%20System%20for%20posting.pdf |
(4) | Climate Action 100+ Net Zero Company Benchmark, Addressed to the CEO and Chair of each CA100+ Company, https://climateaction100.wpcomstaging.com/wp-content/uploads/2020/11/FINAL-CA100-Master-Indicators.pdf |
(5) | https://www. blackrock.com/corporate/literature/whitepaper/bii-portfolio-perspectives-february-2020.pdf |
(6) | https://www. morningstar.com/articles/994219/sustainable-funds-continue-to-rake-in-assets-during-the-secondquarter |
(7) | https://www. ge.com/sites/default/files/GE_2030_Carbon_Neutral_Infographic_r1.pdftime.com/6114004/general-electric-workforce-public-subsidies/ |
Your Board recommends a vote AGAINST this proposal.
66 GGE HAS A ROBUST AND EFFECTIVE PROCESS FOR IDENTIFYING AND RECRUITING QUALIFIED, INDEPENDENT AND DIVERSE DIRECTORS. E 2021The Governance Committee and Board endeavor to have an experienced, qualified Board with high personal integrity and character, diversity of thought and expertise in areas relevant to GE. In this regard, the Governance Committee, which is comprised wholly of independent directors, employs a rigorous and thorough process for identifying, vetting and selecting the candidates that it nominates to serve on the Board, as described in this proxy statement under “Election of Directors” on page 6. It carefully evaluates all individuals recommended as candidates to the Board, including individuals suggested by shareholders (including employees), in light of multiple factors including each individual’s global business and operations experience, experience in the industries in which we compete, specific professional expertise (including finance and accounting, investment, technology, risk management, government and regulatory), diversity of background, including with respect to gender and ethnic diversity, and ability to satisfy applicable regulatory requirements such as independence. In addition, our by-laws allow shareholders who satisfy specific requirements to include director candidates directly in our proxy materials for consideration by all shareholders.
THE PROPOSAL WOULD UNDERMINE THE GOVERNANCE COMMITTEE’S JUDGMENT TO NOMINATE THE INDIVIDUALS IT BELIEVES WOULD BEST SERVE ALL SHAREHOLDERS AS DIRECTORS. We believe that all director candidates, whether recommended by employees, shareholders or other groups, should be evaluated using the same criteria and standards. The proposal would require us to deviate from the rigor of our existing nomination processes and could undermine the role of our Governance Committee and the Board. Furthermore, in selecting director nominees, the Governance Committee exercises its judgment in selecting the best possible nominees that will complement each other and work well together, to serve the interests of all of our stakeholders rather than just one constituency or faction. In light of the Board’s qualifications, independence and diversity, and the need for ongoing alignment with the company’s future strategy and industry focus, we see no reason to change the current nomination process or to restrict the criteria for Board service by requiring the Governance Committee to select one director nominee from the ranks of GE’s non-executive employees.
For the foregoing reasons, the Board recommends a vote AGAINST this proposal.
62 GE 2022 PROXY STATEMENT
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Your Board recommends a vote FOR this proposal. |
GE SUPPORTS THE GOALS OF THE PARIS AGREEMENT, AND WE ARE TAKING SIGNIFICANT ACTIONS TO HELP ACHIEVE THOSE GOALS. We believe that climate change is an urgent priority, and GE is actively engaged in helping solve the challenges of the global energy transition with technology that can decarbonize key sectors of the economy. This is a primary strategic focus for the company, with governance oversight by the Board and an Energy Transition Steering Committee that includes our CEO, our energy business CEOs and other GE leaders. We have also taken significant actions over the last year. For example, we announced a new goal of achieving carbon neutrality for our own operations by 2030. With over 1,000 facilities across the globe, including factories, test sites, warehouses and offices, the scale of our industrial manufacturing footprint means that achieving our new goal will represent a significant reduction of greenhouse gas emissions. We also announced that we are planning an exit from the new build coal power market—another important shift given the share of greenhouse gas emissions attributable to coal power globally, and the opportunities to reduce those emissions with increased deployment of renewables, natural gas or other power generation sources.
SOLVING THE CHALLENGES OF THE ENERGY TRANSITION WILL REQUIRE SIGNIFICANT TECHNOLOGICAL INNOVATION, AND GE’S TECHNOLOGY WILL CONTINUE TO PLAY A CENTRAL ROLE. The world needs to make rapid progress toward a net zero greenhouse gas emissions future, while at the same time addressing the growing needs for reliable, affordable power. Almost a billion people lack access to reliable electricity today, and the International Energy Agency (IEA) projects that electricity demand will rise globally by nearly 50% through 2040. Addressing these needs simultaneously will require a broad array of technologies, and significant advances in technology. This is where we see GE’s most important contribution to addressing the challenges of the energy transition over the near term and longer term. GE through its products, engineering expertise and global reach will continue to help the world meet its decarbonization goals. That includes both providing diverse, efficient solutions that have meaningful impact today, and innovating to help solve tomorrow’s challenges as the energy transition advances further. Over the years, we have designed a diverse portfolio of some of the most advanced products to enable emissions reductions, including:
●our Haliade-X, the world’s most powerful offshore wind turbine in operation;
●our suite of GE onshore wind turbines, with more than 49,000 turbines installed globally and an industry leading 53% of new wind turbines installed in the U.S. in 2020;
●our highly efficient gas turbines, which have been a force multiplier for reducing power sector emissions and growing renewable energy, and we have more than 70 gas turbines worldwide with experience using hydrogen and associated fuels that show how gas power generation can be more deeply decarbonized over time;
| | ●our digital grid solutions to enable electrical grid hardening and resiliency, particularly with rapid renewables growth;
●our small modular nuclear reactors (BWRX-300 and Natrium), which could be deployed to fully decarbonize the grid as a zero emissions solution; and
●our GE9X engine, the world’s largest and most powerful aircraft engine that is also the most efficient engine we have ever built and is designed to deliver 10% greater fuel efficiency than its predecessor.
WE RECOGNIZE SHAREHOLDERS’ INTEREST IN COMPANIES’ ACTIONS AND REPORTING RELATED TO CLIMATE CHANGE.In our ongoing shareholder engagements, we see how many of our shareholders are keenly interested in the ways GE and other companies are addressing climate change. This shareholder proposal requests a report on whether GE has set a particular type of greenhouse gas emissions goal—namely, one that sets an ambition for GE to achieve net zero greenhouse gas emissions by 2050 or sooner, including Scope 1, 2 and, when applicable, the most relevant Scope 3 emissions—or whether the company intends to revise its policies to address that goal. As noted above, GE recently announced a goal of carbon neutrality by 2030 for greenhouse gas emissions from GE’s own operations, which are known as Scope 1 and 2 emissions. Scope 3 is a more expansive category of other indirect emissions associated with a company’s operations. The concept encompasses emissions across a company’s entire value chain, including emissions from customers’ use of products that the company sells. We evaluate our greenhouse gas emissions reporting and goals on an ongoing basis, and GE has not to date set a goal that encompasses Scope 3 greenhouse gas emissions or that meets the criteria of the “Net Zero Indicator” as defined in this proposal. GE has been working toward the publication of a sustainability report later this year that will include discussion of GE’s approach to greenhouse gas emissions reductions, and in response to this proposal will include the requested reporting about whether the company intends to set the specific type of goal that this proposal defines and the company’s rationale. The reason why we have not set this type of goal to date is that we would want any specific goals that GE sets to be credible and well-founded. While, as discussed above, GE’s technology and innovation are helping to enable decarbonization globally, an exercise of setting specific greenhouse gas emissions reduction goals that include activities outside of GE’s operations depends on the range of potential pathways for decarbonization, the timelines for deployment of technologies over a long time horizon, the speed of research and innovation efforts, the impacts of government policies and other factors that could significantly affect GE’s approach and are not yet known. As a technology provider to the power and aviation sectors, we are particularly aware of the engineering challenges still to be solved to make the ambition of net zero a reality, and those challenges are key strategic opportunities for the solutions and ongoing innovation that GE can provide.
For the foregoing reasons, the Board recommends a vote FOR this proposal.
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GE 2021 PROXY STATEMENT 67
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Submitting 20222023 Proposals
The table below summarizes the requirements for shareholders who wish to submit proposals, including director nominations, for next year’s annual meeting.Annual Meeting. Shareholders are encouraged to consult SEC Rule 14a-8 or our by-laws, as applicable, to see all applicable requirements.
| | PROPOSALS FOR INCLUSION IN
20222023 PROXY | | DIRECTOR NOMINEES FOR INCLUSION
IN 20222023 PROXY (PROXY ACCESS) | | OTHER PROPOSALS/NOMINEES TO BE
PRESENTED AT 20222023 MEETING** |
| Type of proposal | | SEC rules permit shareholders to submit proposals for inclusion in our proxy statement by satisfying the requirements specified in SEC Rule 14a-8 | | A shareholder (or a group of up to 20 shareholders) owning at least 3% of GE stock for at least 3 years may submit director nominees (up to 20% of the Board) for inclusion in our proxy statement by satisfying the requirement specified in Article VII, Section F of our by-laws | | Shareholders may present proposals or director nominations directly at the annual meetingAnnual Meeting (and not for inclusion in our proxy statement) by satisfying the requirements specified in Article VII, Section D of our by-laws |
When proposal must be
received by GE | | No later than close of business (6(5 p.m. ET) on November 23, 202124, 2022 | | No earlier than October 24, 202125, 2022 and no later than close of business (6(5 p.m. ET) on November 23, 202124, 2022 |
| Where to send | | By mail: Corporate Secretary, at the address set forth on the inside front cover of this proxy statement
By email:shareowner. shareholder. proposals@ge.com |
| What to include | | The information required by SEC Rule 14a-8 | | The information required by our by-laws* |
| * | Our by-laws are available on GE’s website (see “Helpful Resources” on page 73)77). |
| ** | With respect to proposals not submitted pursuant to SEC Rule 14a-8 and nominees presented directly at the 2022 annual meeting,2023 Annual Meeting, SEC rules permit management to vote proxies in its discretion in certain cases if the shareholder does not comply with this deadline or, if this deadline does not apply, a deadline of the close of business (6 p.m.(5 p. m. ET) on February 6, 2022,7, 2023, and in certain other cases notwithstanding the shareholder’s compliance with these deadlines. In addition, SEC rules require shareholders to provide notice under SEC Rule 14a-19 of the intent to solicit proxies in support of director nominees (other than the company’s nominees) by notifying the company no later than the close of business (5 p.m. ET) on March 6, 2023. |
GE 2022 PROXY STATEMENT 63
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Voting and Meeting Information
Voting Standards and Board Recommendations
The following table summarizes the Board’s voting recommendations for each proposal, the vote required for each proposal to pass and the effect of abstentions and broker non-votes on each proposal.
| VOTING ITEM | BOARD
RECOMMENDATION | VOTING STANDARDS | TREATMENT OF ABSTENTIONS & BROKER NON-VOTES |
| Election of Directors | FOR | Majority of Votes Cast | Not counted as votes cast and therefore no effect |
| Say-on-Pay |
| Auditor Ratification | Discretionary voting by brokers permitted |
| Long-Term Incentive Plan | Not counted as votes cast and therefore no effect |
| Shareholder Proposal No. 1 | AGAINST | Not counted as votes cast and therefore no effect |
| Shareholder Proposal No. 2 |
| Shareholder Proposal No. 3 |
68WE HAVE A MAJORITY VOTING STANDARD FOR DIRECTOR ELECTIONS. Each director nominee who receives a majority of the votes cast will be elected. Any current director who does not meet this standard is subject to the Board’s policy regarding resignations by directors who do not receive a majority of “For” votes, which is described in the Board’s Governance Principles (see “Helpful Resources” on page 77). All other matters are approved if supported by a majority of votes cast.
Meeting Information
We have adopted a virtual format for the Annual Meeting this year to provide for a safe, consistent and convenient experience for all shareholders.
HOW DO I ATTEND THE VIRTUAL ANNUAL MEETING? To participate in the meeting, you must have your 16-Digit Control Number that is shown on your Notice of Internet Availability of Proxy Materials (Notice) or, if you received a printed copy of the proxy materials, on your proxy card or the voting instruction form that accompanied your proxy materials. If the Notice or voting instruction form that you received does not indicate that you may vote your shares through the http://www.proxyvote.com website, you should contact your bank, broker or other nominee (preferably at least 5 days before the Annual Meeting) and obtain a “legal proxy” (which will contain a 16-digit control number that will allow you to attend, participate in or vote at the meeting). You may access the Annual Meeting by visiting www.virtualshareholdermeeting.com/GE2022. If you encounter any difficulties accessing the virtual Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual Annual Meeting log-in page. Technical support will be available starting 15 minutes prior to the meeting. The virtual meeting format for the Annual Meeting enables full and equal participation by all of our shareholders from any place in the world at little to no cost.
CAN I ASK A QUESTION AT THE VIRTUAL ANNUAL MEETING? Shareholders of record will be able to submit questions either before (by going to www.proxyvote.com) or during the virtual meeting (by going to the Annual Meeting Website) by typing the question into the “Ask a Question” field and clicking “Submit.” We will answer questions that comply with the meeting rules of conduct during the Annual Meeting, subject to time constraints. If we receive substantially similar questions, we may group such questions together. Questions related to personal matters, that are not pertinent to Annual Meeting matters, or that
contain derogatory references to individuals, use offensive language, or are otherwise out of order or not suitable for the conduct of the Annual Meeting will not be addressed during the meeting. If there are questions pertinent to Annual Meeting matters that cannot be answered during the Annual Meeting due to time constraints, management will post answers to such questions at www.ge.com/investor-relations.
WHAT DO I DO IF I NEED TECHNICAL ASSISTANCE DURING THE MEETING?
If you encounter any difficulties accessing the meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual shareholder meeting log-in page.
Voting Information
WHO IS ENTITLED TO VOTE?
Shareholders of record at the close of business on March 8, 2022 are eligible to vote at the meeting. Our voting securities consist of our $0.01 par value common stock (our preferred stock is not entitled to vote at the annual meeting), and there were 1,101,751,355 shares outstanding on the record date.
HOW DO I VOTE MY SHARES IF I AM A RECORD HOLDER?
If your name is registered on GE’s shareholder records as the owner of shares, you are the “record holder.” If you hold shares as a record holder, there are four ways that you can vote your shares.
| ● | Over the Internet. Vote at www.proxyvote.com. The internet voting system is available 24 hours a day until 11:59 p.m. Eastern Time on Tuesday, May 3, 2022. Once you enter the internet voting system, you can record and confirm (or change) your voting instructions. |
| ● | You will need the 16-digit number included on your proxy card (if you received a paper copy of the proxy materials) to obtain your records and to vote. |
| ● | By telephone. You can vote by calling 1-800-454-VOTE. The telephone voting system is available 24 hours a day in the United States until 11:59 p.m. Eastern Time on Tuesday, May 3, 2022. Once you enter the telephone voting system, a series of prompts will tell you how to record and confirm (or change) your voting instructions. |
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| ● | You will need the 16-digit number included on your Notice or your proxy card (if you received a paper copy of the proxy materials) in order to vote by telephone. |
| ● | By mail. If you received a paper copy of the proxy materials, mark your voting instructions on the proxy card and sign, date and return it in the postage-paid envelope provided. If you received only a Notice but want to vote by mail, the Notice includes instructions on how to request a paper proxy card. For your mailed proxy card to be counted, we must receive it before 11:59 p.m. Eastern Time on Tuesday, May 3, 2022. |
| ● | Online at the Annual Meeting. You may vote and submit questions while attending the Annual Meeting online via live audio webcast. Shares held in your name as the shareholder may be voted by you, while the polls remain open, at www.virtualshareholdermeeting.com/GE2022 during the meeting. |
| ● | You will need the 16-digit number included on your Notice or your proxy card (if you received a paper copy of the proxy materials) in order to be able to vote and enter the meeting. |
| ● | Even if you plan to attend the Annual Meeting online, we encourage you to vote in advance by internet, telephone or mail so that your vote will be counted even if you later decide not to attend the Annual Meeting. |
HOW DO I VOTE MY SHARES IF MY SHARES ARE HELD BY A BROKER, BANK OR OTHER NOMINEE?
For those shareholders whose shares are held by a broker, bank or other nominee, you must complete and return the voting instruction form provided by your broker, bank or nominee in order to instruct your broker, bank or nominee on how to vote. Unless you provide voting instructions, your shares may not be voted on any matter except for ratifying the appointment of our independent auditors. To ensure that your shares are counted in the other proposals to come before the Annual Meeting, we encourage you to provide instructions on how to vote your shares. Please refer to information from your bank, broker or other nominee on how to submit voting instructions.
In addition, if you attend the virtual Annual Meeting and have a 16-digit control number, you will be able to cast your vote via the online meeting platform during a designated portion of the meeting. Have your Notice, proxy card or proxy form with the 16-digit control number available when you access the virtual Annual Meeting.
WHAT SHARES ARE INCLUDED ON THE PROXY FORM?
If you are a shareholder of record, you will receive only one Notice or proxy form for all the shares of common stock you hold in certificate form, in book-entry form and in any company benefit plan.
Please vote proxies for all accounts to ensure that all of your shares are voted. If you wish to consolidate multiple registered accounts, contact EQ Shareowner Services at 1-800-579-1639 or at www.shareowneronline.com.
HOW DO I VOTE FOR SHARES HELD IN THE GE RETIREMENT SAVINGS PLAN?
If you are a RSP participant, the trustees of the RSP trust will vote the shares allocable to your RSP account as of March 7, 2022 as you instruct (you should consider this date the “record date” for purposes of the shares allocable to your RSP account). You may give instructions via telephone or the internet or by mailing the proxy form. If your valid proxy form is received by May 1, 2022 and it does not specify a choice, the trustee will vote the shares as the Board recommends. If your proxy form is not received by May 1, 2022 and you did not submit a vote via telephone or the internet by that date, shares allocable to your RSP account will not be voted. You may revoke a previously delivered proxy by either notifying the inspector of election in writing that you wish to
revoke or by delivering a subsequent proxy by May 1, 2022. The address for the inspector of election is First Coast Results, Inc., 200 Business Park Circle, Suite 112, Saint Augustine, FL 32095. For more information about the voting process, you can call the GE RSP Service Center at 1-877-55-GERSP (1-877-554-3777).
WHAT IS NOTICE AND ACCESS?
The SEC’s notice and access rule allows companies to deliver a Notice to shareholders in lieu of a paper copy of the proxy statement and annual report. The Notice provides instructions as to how shareholders can access the proxy statement and the annual report online, contains a listing of matters to be considered at the Annual Meeting and sets forth instructions as to how shares can be voted. Instructions for requesting a paper copy of the proxy statement and the annual report are set forth on the Notice.
Shares must be voted by internet, by phone or by completing and returning a proxy form. Shares cannot be voted by marking, writing on and/or returning the Notice. Any Notices that are returned will not be counted as votes.
WHAT IF I AM A SHAREHOLDER OF RECORD AND DO NOT SPECIFY A CHOICE FOR A MATTER WHEN RETURNING A PROXY FORM?
Shareholders should specify their choice for each matter on the proxy form. If no specific instructions are given, proxies which are signed and returned will be voted in accordance with the Board’s recommendations.
CAN I CHANGE MY VOTE?
You may change your vote by revoking your proxy at any time before it is exercised, which can be done by voting electronically during the meeting, by delivering a new proxy or by notifying the inspector of election in writing. If your GE shares are held for you in a brokerage, bank or other institutional account, you must contact that institution to revoke a previously authorized proxy. The address for the inspector of election is First Coast Results, Inc., 200 Business Park Circle, Suite 112, Saint Augustine, FL 32095.
HOW ARE VOTES COUNTED?
Each share counts as one vote.
WHAT ARE BROKER NON-VOTES?
Broker non-votes occur on a matter up for vote when a broker, bank or other holder of shares you own in “street name” is not permitted to vote on that particular matter without instructions from you, you do not give such instructions and the broker, bank or other nominee indicates on its proxy form, or otherwise notifies us, that it does not have authority to vote its shares on that matter. Whether a broker has authority to vote its shares on uninstructed matters is determined by NYSE rules.
IS MY VOTE CONFIDENTIAL?
Individual votes of shareholders are kept private, except as necessary to meet legal requirements. Only the independent inspector and certain employees of GE and its agents have access to proxies and other individual shareholder voting records, and they must acknowledge in writing their responsibility to comply with this confidentiality policy.
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Other Information
Proxy Solicitation & Document Request InformationWHO IS SOLICITING MY PROXY AND WHO PAYS THE EXPENSE OF SUCH SOLICITATIONS?
How We Will Solicit Proxies
Proxies will beYour proxy is being solicited on behalf of the BoardBoard.
Proxies will be solicited by mail, telephone, other electronic means or in person, and we will pay the solicitation costs. Copies of proxy materials will be supplied to brokers, dealers, banks and voting trustees, or their nominees, to solicit proxies from beneficial owners, and we will reimburse these institutions for their reasonable expenses. Morrow Sodali, LLC has been retained to assist in soliciting proxies for a fee of $45,000 plus distribution costs and other expenses.
How We Use the Internet to Distribute Proxy Materials
Since 2014, we have distributed proxy materials to some of our shareholders over the Internet by sending them a Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”) that explains how to access our proxy materials and vote online.
HOW GE SHAREHOLDERS BENEFIT FROM E-PROXY. WHAT IS “HOUSEHOLDING”?
This “e-proxy” process, which was approved by the SEC in 2007, expedites our shareholders’ receipt of these materials, lowers the costs of proxy solicitation and reduces the environmental impact of our annual meeting.
HOW TO OBTAIN A PRINTED COPY OF OUR PROXY MATERIALS. If you receivedShareholders sharing a Notice of Internet Availability and would like us to send you a printedsingle address may receive only one copy of ourthe proxy materials, please followstatement and annual report or the instructions onNotice, unless the notice.
How Documents Will Be Delivered to Beneficial Owners Who Share an Address
If you are the beneficial owner, but not the record holder, of shares of GE stock, and you share an address with other beneficial owners, yourtransfer agent, broker, bank or other institutionnominee has received contrary instructions from any owner at that address. This practice, known as householding, is permitteddesigned to deliver a single copy of this proxy statementreduce printing and our annual report for all shareholders at your address (unless one of them has already asked for separate copies).mailing costs.
TO RECEIVE SEPARATE COPIES. To request an individual copy of this proxy statement and our annual report, or the materials for future meetings, write to sendmaterial@ proxyvote.com with the control number from your Notice of Internet Availability in the subject line, or call 800-579-1639. We will promptly deliver them to you.
TO STOP RECEIVING SEPARATE COPIES.| ● | To receive separate copies. To request an individual copy of this proxy statement and our annual report, or the materials for future meetings, write to sendmaterial@proxyvote.com with the control number from your Notice in the subject line, or call 800-579-1639. We will promptly deliver them to you. |
| ● | To stop receiving separate copies. If you currently receive separate copies of these materials and wish to receive a single copy in the future, you will need to contact your broker, bank or other institution where you hold your shares. |
HOW YOU CAN OBTAIN MORE INFORMATION?
If you have any questions about the proxy voting process, please contact the broker, bank or other institution where you hold your shares. The SEC also has a website (see
Voting Information“Helpful Resources”
Who Is Entitled to Vote
Shareholders of record aton page 77) with more information about your rights as a shareholder. Additionally, you may contact our Investor Relations team by following the close of businessinstructions on March 8, 2021 are eligible to vote at the meeting. Our voting securities consist of our $0.06 par value common stock (our preferred stock is not entitled to vote at the annual meeting), and there were 8,784,651,293 shares outstanding Investor Relations website (see “Helpful Resources” on the record date. Each share outstanding on the record date is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on. Treasury shares are not voted.page 77).
HOW YOU CAN ACCESS THE PROXY MATERIALS ELECTRONICALLY OR SIGN UP FOR ELECTRONIC DELIVERY ... AND DONATE TO AMERICAN FORESTS
Important Notice Regarding the Availability of GE’s Proxy Materials for the 20212022 Annual Meeting:
This proxy statement and our annual report may be viewed online at GE’s annual reportAnnual Meeting website (see “Helpful Resources” on page 73)77). Shareholders can also sign up to receive proxy materials electronically by following the instructions below. GE will make a $1.00 donation to American Forests to help restore national forests throughout the United States for every shareholder who signs up for electronic delivery.
If you hold your GE shares directly with the company and you would like to receive future proxy materials electronically, please visit our annual report website or the Shareholder Services page of our Investor Relations website (see “Helpful Resources” on page 73)77) and follow the instructions there. If you choose this option, you will receive an email with links to access the materials and vote your shares, and your choice will remain in effect until you notify us that you wish to resume mail delivery of these documents.
If you hold your GE shares through a bank, broker or other holder of record and you would like to receive future proxy materials electronically, please refer to the information provided by that entity for instructions on how to elect this option.
HOW RECORD SHAREHOLDERS AND RSP PARTICIPANTS CAN REQUEST COPIES OF OUR ANNUAL REPORT
If you hold your shares directly with us and previously elected not to receive an annual report for a specific account, you may request a copy by:
●Calling800-579-1639
●Going onlineto www.proxyvote.com
●Emailing sendmaterial@proxyvote.com with the control number from your Notice of Internet Availability in the subject line
In addition, participants in the RSP may request copies of our annual report by calling the GE RSP Service Center at 877.554.3777.877-554-3777.
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Appendix A
GE 2022 Long-Term Incentive Plan
Effective [insert date of shareholder approval]
Section I. Purpose
The purpose of this GE 2022 Long-Term Incentive Plan is to attract, retain and motivate current and prospective employees, officers, non-employee directors and other service providers of General Electric Company. Stock- and performance-based compensation provided under this Plan is designed to align such individuals’ interests and efforts with those of General Electric Company’s shareholders.
Section II. Definitions
As used in the Plan, the following terms shall have the meanings set forth below:
(a) “Act” means the Securities Exchange Act of 1934.
(b) “Affiliate” means any company or business entity under the direct or indirect control of the Company, and any company or business entity in which the Company has a 50% or more interest, in each case, as determined by the Committee.
(c) “Award” means an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award or Other Stock-Based Award, or any combination of these, granted to a Participant pursuant to the provisions of the Plan.
(d) “Award Agreement” means a written or electronic agreement or other instrument implementing the grant of each Award. An Award Agreement may be in the form of an agreement to be executed by the Participant (or both the Participant and an authorized representative of the Company), or in the form of certificates, notices or similar instruments as approved by the Committee and designated as such.
(e) “Board” means the Board of Directors of the Company.
(f) “Cause” means, except as otherwise provided in an Award Agreement, as determined in the sole discretion of the Committee, the Participant’s:
(i) breach of the Employee Innovation and Proprietary Information Agreement or any other confidentiality, non-solicitation or non-competition agreement with the Company or any Affiliate, or breach of a material term of any other agreement between the Participant and the Company or any Affiliate;
(ii) engagement in conduct that results in, or has the potential to cause, material harm financially, reputationally, or otherwise to the Company or any Affiliate;
(iii) commission of an act of dishonesty, fraud, embezzlement or theft;
(iv) conviction of, or plea of guilty or no contest to a felony or crime involving moral turpitude; or
(v) failure to comply with the Company’s or any Affiliate’s policies and procedures, including but not limited to The Spirit and Letter.
A Participant’s employment or service will be deemed to have been terminated for Cause if the Committee determines subsequent to such termination that Cause existed at the time of such termination.
(g) “Change in Control” means, except as otherwise provided in an Award Agreement, the occurrence of any one of the following events:
(i) a transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby a Person directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of 50% or more of either (A) the then-outstanding shares of Common Stock (the “Outstanding Shares”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Voting Securities”);
(ii) the consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the Company’s assets (a “Business Combination”), unless following such Business Combination all or substantially all of the beneficial owners of the Outstanding Shares or Outstanding Voting Securities immediately prior to the Business Combination beneficially own (directly or indirectly) more than 50% of the then-outstanding shares of common stock or combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors of the entity resulting from the business combination (including an entity that as a result of the Business Combination owns (directly or indirectly) the Company or all or substantially all of the Company’s assets in substantially the same proportions as their ownership immediately prior to the Business Combination.
For the avoidance of doubt, a public offering, internal restructuring or transfer of Common Stock or assets to any Affiliate will not be treated as a Change in Control.
(h) “Change in Control Price” means the amount determined by the Committee in its sole discretion based on the following clauses, whichever the Committee determines is applicable, as follows: (i) the price per share offered to holders of Common Stock in any merger or consolidation, tender offer or exchange offer whereby a Change in Control takes place (ii) the per share Fair Market Value of the Common Stock immediately before the Change in Control, without regard to assets sold in the Change in Control and assuming the Company has received the consideration paid therefor, or (iii) the value per share of the Common Stock that may otherwise be obtained with respect to such Awards or to which such Awards track, as determined by the Committee as of the date of cancellation and surrender of such Awards. In the event that the consideration offered to shareholders of the Company in a Change in Control consists of anything other than cash, the Committee shall determine in its sole discretion the fair cash equivalent of such non-cash consideration.
(i) “Code” means the Internal Revenue Code of 1986.
(j) “Committee” means the Management Development and Compensation Committee of the Board (or its successor) or such other committee as designated by the Board to administer the Plan; provided, however, that with respect to Awards granted to non-employee directors, “Committee” means the Governance and Public Affairs Committee of the Board (or its successor) or such other committee as designated by the Board to administer the Plan with respect to such Awards.
(k) “Common Stock” means the common stock of the Company, $0.01 par value per share, or such other class or kind of shares or other securities as may be applicable under Section XV.
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(l) “Company” means General Electric Company (a New York corporation) and, except as utilized in the definition of Change in Control, any successor corporation.
(m) “Disability” means, except as otherwise provided in an Award Agreement, the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. A determination of Disability shall be made by the Committee on the basis of such medical evidence as the Committee deems warranted under the circumstances, and in this respect, Participants shall submit to an examination by a physician upon request by the Committee.
(n) “Dividend Equivalent” means an amount payable in cash or Common Stock, as determined by the Committee, equal to the dividends that would have been paid to the Participant if the share of Common Stock with respect to which the Dividend Equivalent relates had been owned by the Participant.
(o) “Eligible Person” means any current or prospective employee, officer, non-employee director or other service provider of the Company or any of its Affiliates; provided, however, that Incentive Stock Options may only be granted to employees of the Company or any of its “subsidiary corporations” within the meaning of Section 424 of the Code.
(p) “FASB ASC Topic 718” means the Financial Accounting Standards Board Accounting Standards Codification Topic 718 or any successor accounting standard.
(q) “Fair Market Value” means as of any date, (i) the closing sales price of a share of Common Stock as quoted on the New York Stock Exchange or such other source as the Committee deems reliable (or, if no sale of Common Stock is reported for such date, on the next preceding date on which any sale is reported), or (ii) in the absence of an established market for the Common Stock, the value determined in good faith by the Committee by the reasonable application of a reasonable valuation method, taking into account factors consistent with Treasury Department regulation 1.409A-1(b)(5)(iv)(B) as the Committee deems appropriate.
(r) “Good Reason” means, except as otherwise provided in an Award Agreement, any of the following, in each case, without the Participant’s consent: (i) a material reduction in the Participant’s base salary, (ii) a material breach by the Company or its Affiliate of any material provision of any agreement between the Participant and the Company or its Affiliate, or (iii) a material diminution in the Participant’s title, authority, duties, responsibilities or reporting relationships; provided, however, that the Termination of Employment or Separation from Service shall not be for Good Reason unless: (A) the Participant has provided written notice to the Chief Human Resources Officer of the Company of the existence of the circumstances providing grounds for termination for Good Reason within 30 calendar days of the date the Participant first becomes aware of such circumstances, (B) the Company or its Affiliate has been given at least 30 calendar days from the date on which such notice is provided to cure such circumstances (the “cure period”), and (C) the Termination of Employment or Separation from Service occurs within 30 calendar days following the Company’s or Affiliate’s failure to cure such circumstances within the cure period. For the avoidance of doubt, the sale, disposition or spin-off of any one or more businesses of the Company or its Affiliates, or any transaction following which the Company’s (or its successor’s) common equity is not publicly traded on a nationally recognized securities exchange or through a national market quotation service, shall not be deemed a material reduction in the Participant’s title, authority, duties, responsibilities or reporting relationships.
(s) “Incentive Stock Option” means an Option that is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.
(t) “Nonqualified Stock Option” means an Option that is not intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.
(u) “Option” means a right to purchase a number of shares of Common Stock at such exercise price, at such times and on such other terms and conditions as are specified in or determined pursuant to an Award Agreement. Options granted pursuant to the Plan may be Incentive Stock Options or Nonqualified Stock Options.
(v) “Other Stock-Based Award” means an Award granted to an Eligible Person as described in Section XI.
(w) “Participant” means any Eligible Person to whom Awards have been granted by the Committee and, if applicable, the authorized transferee of such individual.
(x) “Performance Award” means an Award described in Section XII pursuant to which a Participant may become entitled to receive an amount based on satisfaction of such performance criteria established for such performance period as specified in the Award Agreement.
(y) “Person” shall have the meaning given in Section 3(a)(9) of the Act, as modified and used in Sections 14(d) and 15(d) thereof, except that such term shall not include (i) the Company or any Affiliate, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Affiliate, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(z) “Plan” means this GE 2022 Long-Term Incentive Plan.
(aa) “Prior Plan” means the GE 2007 Long-Term Incentive Plan.
(bb) “Restricted Stock” means an Award or issuance of Common Stock the vesting and/or transferability of which is subject during specified periods of time to such terms and conditions (including continued employment or engagement or performance conditions) as the Committee determines.
(cc) “Restricted Stock Unit” means an Award denominated in units of Common Stock under which the issuance of shares of Common Stock (or cash payment in lieu thereof) is subject to such terms and conditions (including continued employment or engagement or performance conditions) as the Committee determines.
(dd) “Retirement” means, except as otherwise provided in an Award Agreement, attainment of age 60 and completion of five years of continuous employment with the Company and its Affiliates.
(ee) “Separation from Service” or “Separates from Service” means a Termination of Employment or other cessation of service that constitutes a “separation from service” within the meaning of Section 409A of the Code.
(ff) “Stock Appreciation Right” or “SAR” means a right that entitles the Participant to receive, in cash or Common Stock or a combination thereof, as determined by the Committee, value equal to the excess of (i) the Fair Market Value of a specified number of shares of Common Stock at the time of exercise over (ii) the exercise price of the right, as established by the Committee on the date of grant.
(gg) “Substitute Awards” means Awards granted or Common Stock issued by the Company in assumption of, or in substitution or exchange for, awards previously granted (or the right or obligation to make future awards) by a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines.
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(hh) “Termination of Employment” means, except as otherwise provided in an Award Agreement or as otherwise determined by the Committee, ceasing to serve as an employee of the Company and its Affiliates or, with respect to a non-employee director or other service provider, ceasing to serve as such for the Company and its Affiliates; provided, however, that with respect to all or any Awards held by a Participant, the Committee may determine that (i) a leave of absence (including as a result of a Participant’s short-term or long-term disability or other medical leave) or employment on a less than full-time basis is considered a “Termination of Employment,” (ii) service as a member of the Board or other service provider to the Company or an Affiliate shall constitute continued employment with respect to Awards granted to a Participant while he or she served as an employee of the Company or an Affiliate, or (iii) service as an employee of the Company or an Affiliate shall constitute continued service/employment with respect to Awards granted to a Participant while he or she served as a member of the Board or other service provider to the Company or an Affiliate. The Committee shall determine whether any corporate transaction, such as a sale or spin-off of a division or Affiliate that employs or engages a Participant, shall be deemed to result in a Termination of Employment with the Company and its Affiliates for purposes of any affected Participant’s Awards, and the Committee’s decision shall be final and binding. With respect to any Award that is subject to Section 409A of the Code, a Termination of Employment shall not be deemed to occur until such Participant’s Separation from Service.
Section III. Eligibility
Any Eligible Person is eligible for selection by the Committee to receive an Award.
Section IV. Effective Date and Termination of Plan
This Plan became effective on [insert date] (the “Effective Date”). The Plan shall remain available for the grant of Awards until the 10th anniversary of the Effective Date; provided, however, that no Incentive Stock Option may be granted under this Plan after February 11, 2032. Notwithstanding the foregoing, the Plan may be terminated at such earlier time as the Board may determine. Termination of the Plan will not affect the rights and obligations of the Participants and the Company arising under Awards granted prior to such termination.
Section V. Shares Subject to the Plan and to Awards
(a) Aggregate Limits. The aggregate number of shares of Common Stock issuable under the Plan shall be equal to 30 million shares of Common Stock plus (i) any shares of Common Stock that remain available for grant under the Prior Plan as of the date of shareholder approval of this Plan and (ii) any shares of Common Stock that become available for issuance under the Plan pursuant to Section V(c). The aggregate number of shares of Common Stock available for grant under this Plan and the number of shares of Common Stock subject to Awards outstanding at the time of any event described in Section XV shall be subject to adjustment as provided in Section XV. The shares of Common Stock issued under this Plan may be shares that are authorized and unissued or shares that were reacquired by the Company, including shares purchased in the open market or in private transactions.
(b) Issuance of Shares; Fungible Ratio. For purposes of Section V(a), the aggregate number of shares of Common Stock issued under this Plan at any time shall equal only the number of shares of Common Stock actually issued upon exercise or settlement of an Award; provided that each share issued pursuant to an Award of Options or Stock Appreciation Rights shall be counted against the limit in Section V(a) as one share and each share issued pursuant to any other Award type shall be counted against such limit as 2.21 shares. The aggregate number of shares available for issuance under this Plan at any time shall not be reduced by shares subject to Awards that have been canceled, terminated, expired unexercised, forfeited or settled in
cash; provided, however, that (i) shares subject to Awards that have been retained or withheld by the Company in payment or satisfaction of the exercise price, purchase price or tax withholding obligation of an Award (including shares that were subject to an Award but were not issued or delivered as a result of the net settlement or net exercise of such Award) and (ii) shares repurchased on the open market with the proceeds of an Option exercise, in each case, shall not be available for issuance under this Plan.
(c) Prior Plan Awards. Shares of Common Stock subject to awards granted under the Prior Plan that are canceled, terminated, expired unexercised, forfeited or settled in cash following the Effective Date shall become available for issuance under this Plan on a one-for-one basis; provided, however, that shares of Common Stock subject to awards granted under the Prior Plan that have been retained or withheld by the Company in payment or satisfaction of the exercise price, purchase price or tax withholding obligation of such award shall not become available for issuance under this Plan.
(d) Substitute Awards. Substitute Awards shall not reduce the shares of Common Stock authorized for issuance under the Plan. Additionally, in the event that a company acquired by the Company or any Affiliate, or with which the Company or any Affiliate combines, has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the shares of Common Stock authorized for issuance under the Plan; provided that Awards using such available shares (i) shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, (ii) shall only be made to individuals who were not employees or service providers of the Company or its Affiliates at the time of such acquisition or combination, and (iii) shall comply with the requirements of any stock exchange, market or quotation system on which the Common Stock is traded, listed or quoted.
(e) Tax Code Limits. The aggregate number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options granted under this Plan shall be equal to 30 million, which number shall be calculated and adjusted pursuant to Section XV only to the extent that such calculation or adjustment will not affect the status of any Option intended to qualify as an Incentive Stock Option under Section 422 of the Code.
(f) Limits on Non-Employee Director Compensation. The aggregate dollar value of equity-based and cash compensation granted under this Plan or otherwise to any non-employee director (determined at the grant date and, for equity-based Awards, in accordance with FASB ASC Topic 718) shall not exceed $1 million (U.S. dollars) during any calendar year.
Section VI. Administration of the Plan
(a) Administrator of the Plan. The Plan shall be administered by the Committee. To the maximum extent permissible under applicable law, the Committee (or any successor) may by resolution delegate any or all of its authority to one or more subcommittees composed of one or more directors or officers of the Company (with the power to re-delegate such authority), and any such subcommittee (or its delegate) shall be treated as the Committee for all purposes under this Plan; provided, however, that no Award may be granted to an Eligible Person who is then subject to Section 16 of the Act in respect of the Company by any such subcommittee unless such subcommittee is composed solely of two or more “non-employee directors” within the meaning of Rule 16b-3(b)(3) promulgated under the Act. The Committee may
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How You Can Vote Before the Meeting
We encourage shareholdersdesignate and delegate to submit their votes in advanceone or more officers or employees of the meeting. To submit your votesCompany or any Affiliate, and/or one or more agents, authority to assist the Committee in any or all aspects of the day-to-day administration of the Plan and/or of Awards granted under the Plan.
(b) Powers of Committee. Subject to the express provisions of this Plan, the Committee shall be authorized and empowered to do all things that it determines to be necessary or appropriate in connection with the administration of this Plan, including:
(i) to prescribe, amend and rescind rules and regulations relating to this Plan and to define terms not otherwise defined herein;
(ii) to determine the Eligible Persons to which Awards shall be granted, if any, hereunder and the timing of any such Awards;
(iii) to prescribe and amend the terms of the Award Agreements, to grant Awards and to determine the terms and conditions thereof;
(iv) to establish and verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, vesting, exercise or settlement of any Award;
(v) to prescribe and amend the terms or form of any document or notice required to be delivered to the Company or the applicable Affiliate by Internet, followParticipants under this Plan;
(vi) to determine the instructions on your proxy card, voting instruction form or Noticeextent to which adjustments are required pursuant to Section XV;
(vii) to interpret and construe this Plan, any rules and regulations under this Plan and the terms and conditions of Internet Availability of Proxy Materials. If you received your materials by mail, you can also vote by telephone or simply completeany Award granted hereunder, and returnto make exceptions to any such provisions if the proxy or voting instruction formCommittee, in good faith, determines that it is appropriate to do so;
(viii) to approve corrections in the envelope provided. If you votedocumentation or administration of any Award; and
(ix) to make all other determinations it deems necessary or advisable for the administration of this Plan. The Committee may, in advance using oneits sole and absolute discretion, without amendment to the Plan but subject to the limitations otherwise set forth in Section XIX: (i) waive or amend the operation of these methods, you are still welcome to attend the live webcastPlan provisions respecting vesting, exercise or settlement in connection with a Termination of Employment or Separation from Service, and/or (ii) waive, settle or adjust any of the annual meeting.terms of any Award so as to avoid unanticipated consequences or address unanticipated events (including any temporary closure of an applicable stock exchange, disruption of communications or natural catastrophe).
(c) Determinations by the Committee. All decisions, determinations and interpretations by the Committee regarding the Plan, any rules and regulations under the Plan and the terms and conditions of (or operation of) any Award granted hereunder, shall be final and binding on all Participants, beneficiaries, heirs, assigns or other persons holding or claiming rights under the Plan or any Award. The Committee shall consider such factors as it deems relevant, in its sole and absolute discretion, to making such decisions, determinations and interpretations, including the recommendations or advice of any officer or other employee of the Company and such attorneys, consultants and accountants as it may select.
How You Can Vote During(d) Indemnification. Subject to requirements of applicable law, each individual who is or shall have been a member of the Meeting
ShareholdersBoard, the Committee or an officer or manager of recordthe Company to whom authority was delegated in accordance with Section VI shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may vote during the virtual meetingbe imposed upon or reasonably incurred by logging into the meeting websitehim or her in connection with or resulting from any claim, action, suit or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under this Plan and following the instructions provided on the website. Shareholders who hold shares through a brokerage firm, bank, trust or other similar organization (in street name) should refer to the voting instructions provided with these proxy materials.against and from any and all amounts paid by
How You Can Change Your Vote
Youhim or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit or proceeding against him or her; provided, that he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf, unless such loss, cost, liability or expense is a result of his or her own willful misconduct or except as expressly provided by statute. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may change your votebe entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
Section VII. Plan Awards
(a) Terms Set Forth in Award Agreement. Awards may be granted to Eligible Persons as determined by revoking your proxythe Committee at any time, before it is exercised, which can be done by voting electronically duringand from time to time, prior to the meeting, by delivering a new proxy or by notifying the inspector of election in writing. If your GE shares are held for you in a brokerage, bank or other institutional account, you must contact that institution to revoke a previously authorized proxy. The address for the inspector of election is First Coast Results, Inc., 200 Business Park Circle, Suite 112, Saint Augustine, FL 32095.
We Have a Confidential Voting Policy
Individual votes of shareholders are kept private, except as necessary to meet legal requirements. Only the independent inspector and certain employees of GE and its agents have access to proxies and other individual shareholder voting records, and they must acknowledge in writing their responsibility to comply with this confidentiality policy.
Voting Standards and Board Recommendations
VOTING ITEM | | BOARD
RECOMMENDATION | | VOTING STANDARDS | | TREATMENT OF ABSTENTIONS & BROKER NON-VOTES |
Election of Directors | | FOR | | | | |
Say-on-pay | | FOR | | Majority of Votes Cast | | Not counted as votes cast and therefore no effect |
Auditor Ratification | | FOR | | | | |
Reverse Stock Split | | FOR | | Majority of Shares Outstanding | | Same effect as a vote AGAINST |
Shareholder Proposal No.1 | | AGAINST | | | | |
Shareholder Proposal No. 2 | | AGAINST | | Majority of Votes Cast | | Not counted as votes cast and therefore no effect |
Shareholder Proposal No. 3 | | FOR | | | | |
WE HAVE A MAJORITY VOTING STANDARD FOR DIRECTOR ELECTIONS. Each director nominee who receives a majoritytermination of the votes cast will be elected. Any current director whoPlan. Receipt of an Award does not meet this standard is subjectobligate the Committee to provide future Awards to an Eligible Person. The terms and conditions of each Award shall be set forth in an Award Agreement that includes (other than for Restricted Stock) the Board’s policy regarding resignations by directors who do not receive a majority of “For” votes,time or times at or within which is described in the Board’s Governance Principles (see “Helpful Resources” on page 73). All other matters are approved if supported by a majority of votes cast.
How Proxies Will Be Voted
PROXIES WILL BE VOTED AS YOU SPECIFY OR, IF YOU DON’T SPECIFY, AS RECOMMENDED BY THE BOARD. The shares represented by all valid proxies that are received on time will be voted as specified. When a valid proxy form is received and it does not indicate specific choices, the shares represented byof Common Stock or cash, as applicable, may be acquired from the Company and the consideration, if any, that proxy willmust be voted in accordance with the Board’s recommendations.
WHAT HAPPENS IF OTHER MATTERS ARE PROPERLY PRESENTED AT THE MEETING. If any matter notpaid. Such Award Agreement may contain, incorporate or reference such applicable terms and conditions described in this proxy statement is properly presented for a vote atPlan and/or such other terms and conditions determined by the meeting,Committee consistent with its authority under this Plan. The terms of Awards may vary among Participants, and the persons named onPlan does not impose upon the proxy will vote in accordance with their judgment.
WHAT HAPPENS IF A DIRECTOR NOMINEE IS UNABLE TO SERVE.We do not know ofCommittee any reason why any nominee would be unablerequirement to serve as a director. If any nominee is unablemake Awards subject to serve, the Board can either nominate a differentuniform terms or interpretations. Accordingly, individual or reduce the Board’s size. If it nominates a different individual, the shares represented by all valid proxies will be voted for that nominee.Award Agreements may vary.
Important Voting Information for Beneficial Owners(b)
If your GE shares are held for you in a brokerage firm, bank, trust or other similar organization, you are considered the beneficial ownerTermination of those shares, but not the record holder. This means that you vote by providing instructions to your broker rather than directlyEmployment. Subject to the company. Unless you provide specific voting instructions, your broker is not permitted to vote your shares on your behalf, except on the proposal to ratify Deloitte. For your vote on any other matters to
be counted, you will need to communicate your voting decisions to your broker, bank or other institution before the dateexpress provisions of the annual meeting usingPlan, the voting instruction form thatCommittee shall specify before, at, or after the institution provides to you. If you would like to vote your shares duringtime of grant of an Award the meeting, you must obtainprovisions governing the effect(s) upon an Award of a proxyParticipant’s Termination of Employment or Separation from your financial institution.
Important Voting Information for GE Retirement Savings Plan Participants
If you are a RSP participant, the trustee of the RSP trust will vote the shares allocable to your RSP account as of March 5, 2021 as you instruct (you should consider this date the “record date” for purposes of the shares allocable to your RSP account). You may give instructions via telephone or the Internet or by mailing the proxy form. If your valid proxy form is received by April 30, 2021 and it does not specify a choice, the trustee will vote the shares as the Board recommends. If your proxy form is not received by April 30, 2021 and you did not submit a vote via telephone or the Internet by that date, shares allocable to your RSP account will not be voted. You may revoke a previously delivered proxy by either notifying the inspector of election in writing that you wish to revoke or by delivering a subsequent proxy by April 30, 2021. The address for the inspector of election is First Coast Results, Inc., 200 Business Park Circle, Suite 112, Saint Augustine, FL 32095. For more information about the voting process, you can call the GE RSP Service Center at 1-877-55-GERSP (1-877-554-3777).Service.
How You Can Obtain More Information(c)
If youRights of a Shareholder. Except as otherwise set forth in the applicable Award Agreement, a Participant shall have any questions about the proxy voting process, please contact the broker, bank or other institution where you hold your shares. The SEC also has a website (see “Helpful Resources” on page 73) with more information about yourno rights as a shareholder. Additionally, youshareholder (including voting rights) with respect to shares of Common Stock covered by an Award, other than Restricted Stock, until the date the Participant becomes the holder of record of such shares of Common Stock. No adjustment shall be made for dividends or other rights for which the record date is prior to such date, except as provided in Sections X(b), XI(b), XII or XV of this Plan or as otherwise provided by the Committee.
(d) Fractional Shares. The Committee, in its sole discretion, shall determine whether fractional shares of Common Stock may contact our Investor Relations teambe issued pursuant to an Award or in settlement thereof and shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares. In addition, the Committee shall determine whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
Section VIII. Options
(a) Grant, Term and Price. The grant, issuance, vesting, exercise or settlement of any Option shall occur at such time and be subject to such terms and conditions as determined by the Committee or under criteria established by the Committee, which may include conditions based on continued employment or engagement, passage of time, attainment of age and/or service requirements, and/or satisfaction of performance conditions. The term of an Option shall in no event be greater than 10 years, except that the term of an Option (other than an Incentive Stock Option) shall be automatically extended if the Participant holding such Option is prohibited by law or the Company’s insider trading policy from exercising the Option at the time of its scheduled expiration, in which case the Option shall expire on the 30th day following the instructions on our Investor Relations website (see “Helpful Resources” on page 73).date such prohibition no longer applies. The Committee will establish the price at which
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Meeting Information
VIRTUAL MEETING FORMAT. The GovernorCommon Stock may be purchased upon exercise of an Option, which may not be less than the Fair Market Value of such shares on the date of grant unless (i) such Option is granted as a Substitute Award and (ii) such exercise price is based on a formula set forth in the terms of the Stateoriginal option agreement or the applicable merger or acquisition agreement that satisfies the requirements of New York has issued several temporary executive orders permitting New York corporations to hold virtual only shareholder meetings in lightSection 424(a) of the COVID-19 pandemic. In addition,Code if such options are Incentive Stock Options and Section 409A of the New York State Legislature has approved amendments to New York law, which,Code if signedsuch options are Nonqualified Stock Options. The exercise price of any Option may be paid by such methods as determined by the Governor, would permit New York corporationsCommittee, including by cash in U.S. dollars, by an irrevocable commitment to hold virtual-onlyuse the proceeds from a sale of shares of Common Stock issuable under an Option, by delivery of previously owned shares of Common Stock or by withholding of shares of Common Stock otherwise deliverable upon exercise.
(b) No Repricing without Shareholder Approval. Other than in connection with a change in the Company’s capitalization (as described in Section XV), the Committee shall not, without shareholder meetingsapproval: (i) reduce the exercise price of a previously awarded Option or (ii) at any time when the exercise price of a previously awarded Option is above the Fair Market Value of a share of Common Stock, cancel and re-grant or exchange such Option for cash or a new Award with a lower (or no) exercise price.
(c) No Reload Grants. Options shall not be granted under the Plan in consideration for, and shall not be conditioned upon the delivery of, shares of Common Stock to the Company in payment of the exercise price and/or tax withholding obligation under any other employee stock option.
(d) Incentive Stock Options. Notwithstanding anything to the contrary in this year. If permittedSection VIII, in the case of the grant of an Incentive Stock Option, if the Participant owns stock possessing more than 10% of the combined voting power of all classes of stock of the Company, the exercise price of such Option must be at least 110% of the Fair Market Value of the shares of Common Stock on the date of grant and the Option must expire within a period of not more than five years from the date of grant. Further notwithstanding anything to the contrary in this Section VIII, Options designated as Incentive Stock Options shall not be eligible for treatment under the Code as Incentive Stock Options (and will be deemed Nonqualified Stock Options) to the extent that either (i) the aggregate Fair Market Value of shares of Common Stock (determined as of the time of grant) with respect to which such Options are exercisable for the first time by New Yorkthe Participant during any calendar year (under all plans of the Company and any of its “subsidiary corporations” within the meaning of Section 424 of the Code) exceeds $100,000, taking Options into account in the order in which they were granted, or (ii) such Options otherwise remain exercisable but are not exercised within three months (or such other period of time provided in Section 422 of the Code) of separation of service (as determined in accordance with Section 3401(c) of the Code).
(e) No Shareholder Rights. Participants shall have no voting rights and will have no rights to receive dividends or Dividend Equivalents in respect of an Option or any shares of Common Stock subject to an Option until the Participant has become the holder of record of such shares.
Section IX. Stock Appreciation Rights
(a) General Terms. The grant, issuance, vesting, exercise or settlement of any Stock Appreciation Right shall occur at such time and be subject to such terms and conditions as determined by the Committee or under criteria established by the Committee, which may include conditions based on continued employment or engagement, passage of time, attainment of age and/or service requirements, and/or satisfaction of performance conditions. The term of a Stock Appreciation Right shall in no event be greater than 10 years, except that the term of a Stock Appreciation Right shall be automatically extended if the Participant holding such Stock Appreciation Right is prohibited by law or executive orderthe Company’s insider trading policy from exercising the Stock Appreciation Right at the time of its scheduled expiration, in which case the Stock
Appreciation Right shall expire on the 30th day following the date such prohibition no longer applies. Stock Appreciation Rights may be granted to Participants from time to time either in tandem with or as
a component of
Options granted under the Plan (“tandem SARs”) or not in conjunction with other Awards (“freestanding SARs”). Upon exercise of a tandem SAR as to some or all of the shares covered by the grant, the related Option shall be canceled automatically to the extent of the number of shares covered by such exercise. Conversely, if the related Option is exercised as to some or all of the shares covered by the grant, the related tandem SAR shall be canceled automatically to the extent of the number of shares covered by such exercise. Any Stock Appreciation Right granted in tandem with an Option may be granted at the same time such Option is granted or at any time thereafter before exercise or expiration of such Option, provided that the Fair Market Value of Common Stock on the date of the
Annual Meeting, we intend to hold the Annual Meeting solely by means of remote communications with no in-person location.In the event a solely virtual meetingSAR’s grant is not permitted as of such date, we may provide a venue for an in-person annual meeting, in addition to virtual participation. In that case, we would notify our shareholders in advance on our website and by issuing a press release and filing it as additional proxy materials withgreater than the SEC. Attendance at an in-person meeting would include additional safety precautions in lightexercise price of the COVID-19 pandemic.
We have designedrelated Option. All freestanding SARs shall be granted subject to the format of the 2021 Annual Meeting so that shareholderssame terms and conditions applicable to Options as set forth in Section VIII and all tandem SARs shall have the same exercise price as the Option to which they relate. Subject to the provisions of Section VIII and the immediately preceding sentence, the Committee may impose such other conditions or restrictions on any Stock Appreciation Right as it shall deem appropriate. Stock Appreciation Rights may be settled in Common Stock, cash, Restricted Stock or a combination thereof, as determined by the Committee and set forth in the applicable Award Agreement.
(b) No Repricing without Shareholder Approval. Other than in connection with a change in the Company’s capitalization (as described in Section XV), the Committee shall not, without shareholder approval, reduce the exercise price of a previously awarded Stock Appreciation Right, and at any time when the exercise price of a previously awarded Stock Appreciation Right is above the Fair Market Value of a share of Common Stock, the Committee shall not, without shareholder approval, cancel and re-grant or exchange such Stock Appreciation Right for cash or a new Award with a lower (or no) exercise price.
(c) No Shareholder Rights. Participants shall have no voting rights and opportunities as they wouldwill have atno rights to receive dividends or Dividend Equivalents in respect of a physical meeting. Shareholders will be ableStock Appreciation Right or any shares of Common Stock subject to submit questions duringa Stock Appreciation Right until the meeting using online tools, providing our shareholders withParticipant has become the opportunity for meaningful engagement with the company.
Shareholders of record as of the close of business on March 8, 2021, the record date, are entitled to participate in and vote at the 2021 Annual Meeting. To participate in the Annual Meeting, including to vote, ask questions, and view the list of registered shareholders as of the record date during the meeting, shareholders of record should go to the meeting website at www.virtualshareholdermeeting.com/GE2021, enter the 16-digit control number found on your proxy card or Notice of Internet Availability, and follow the instructions on the website. If your shares are held in street name and your voting instruction form or Notice of Internet
Availability indicates that you may vote those shares through the http://www.proxyvote.com website, then you may access, participate in, and vote at the annual meeting with the 16-digit access code indicated on that voting instruction form or Notice of Internet Availability. Otherwise, shareholders who hold their shares in street name should contact their bank, broker or other holder of record (preferablyof such shares.
Section X. Restricted Stock and Restricted Stock Units
(a) Vesting and Performance Criteria. The grant, issuance, vesting or settlement of any Restricted Stock or Restricted Stock Units shall occur at least 5 days beforesuch time and be subject to such terms and conditions as determined by the Annual Meeting)Committee or under criteria established by the Committee, which may include conditions based on continued employment or engagement, passage of time, attainment of age and/or service requirements, and/or satisfaction of performance conditions. In addition, the Committee shall have the right to grant Restricted Stock or Restricted Stock Unit Awards as the form of payment for grants or rights earned or due under other compensation plans or arrangements of the Company.
(b) Dividends and obtain a “legal proxy”Distributions. Participants in orderwhose name Restricted Stock is granted shall be entitled to be ablereceive all dividends and other distributions paid with respect to attend, participate in or vote atthose shares of Common Stock, unless determined otherwise by the annual meeting.Additional information regarding the rulesCommittee; provided, however, that such dividends and procedures for participating in the Annual Meetingother distributions will be set forth in our meeting rules of conduct, which shareholders can view during the meeting or priorsubject to the meeting at www.proxyvote.comsame restrictions on transferability and at www.ge.com/proxy.
Asvesting conditions as the Restricted Stock with our past in-person annual meetings, we are making the virtual meeting availablerespect to which they were distributed. The Committee will determine whether any such dividends or distributions will be automatically reinvested in additional shares of Restricted Stock or paid in cash. Shares underlying Restricted Stock Units shall be entitled to Dividend Equivalents only to the public to listen live. Anyone wishing to do so may go to www.virtualshareholdermeeting.com/GE2021 and enter as a guest.
You may log intoextent provided by the 2021 Annual Meeting beginning at 9:45 a.m. Eastern Time on May 4, 2021 and the Annual Meeting will begin promptly at 10:00 a.m. Eastern Time.
SUBMITTING QUESTIONS DURING THE MEETING. Shareholders of recordCommittee; provided, however, that such Dividend Equivalents will be able to submit questions either before (by going to www.proxyvote.com) or during the virtual meeting (by goingsubject to the Annual Meeting Website) by typingsame vesting conditions as the question into the “Ask a Question” field and clicking “Submit.” We will answer questions that comply with the meeting rules of conduct during the Annual Meeting, subject to time constraints. If we receive substantially similar questions, we may group such questions together. Questions related to personal matters, that are not pertinent to Annual Meeting matters, or that contain derogatory references to individuals, use offensive language, or are otherwise out of order or not suitable for the conduct of the Annual Meeting will not be addressed during the meeting. If there are questions pertinent to Annual Meeting matters that cannot be answered during the Annual Meeting due to time constraints, management will post answers to such questions at www.ge.com/investor-relations.underlying Restricted Stock Units.
TECHNICAL ASSISTANCE DURING THE MEETING. If you encounter any difficulties accessing the meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual shareholder meeting log-in page.
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Section XI. Other Stock-Based Awards
(a) General Terms. Subject to limitations under applicable law, the Committee is authorized to grant to Eligible Persons such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, the value of Common Stock, as deemed by the Committee to be consistent with the purposes of the Plan. The Committee shall determine the terms and conditions of such Other Stock-Based Awards. Common Stock delivered pursuant to an Other Stock-Based Award in the nature of a purchase right granted under this Section XI shall be purchased for such consideration and paid for at such times, by such methods and in such forms (including cash, Common Stock, other Awards or other property) as the Committee shall determine.
Appendix A(b) Dividends and Distributions. Shares underlying Other Stock-Based Awards shall be entitled to Dividend Equivalents only to the extent provided by the Committee; provided, however, that such Dividend Equivalents will be subject to the same vesting conditions as the underlying Other Stock-Based Award.
Reverse(c) Director Deferred Stock Split FormUnits. For the avoidance of Charter Amendmentdoubt, cash-settled deferred stock units granted after the Effective Date to non-employee directors under the Company’s 2003 Non-Employee Director Compensation Plan (the “2003 Plan”) shall be considered Other Stock-Based Awards under the Plan and shall be subject to the provisions hereof, including Section VI; provided, however, that in the event of any conflict between the Plan and the 2003 Plan, the 2003 Plan shall control.
Section XII. Performance Awards
The subjectCommittee may establish performance criteria and level of this amendment by General Electric Company is to effect a combinationachievement versus such criteria that shall determine the amount of itscash or the number of shares of Common Stock, $0.06 par value (the “Common Stock”) which isOptions, SARs, Restricted Stock or Restricted Stock Units to be effectedgranted, retained, vested, issued or paid pursuant to a Performance Award. A Performance Award may be identified as “Performance Share,” “Performance Equity,” “Performance Unit” or other such term as chosen by meansthe Committee. Participants shall have no voting rights and will have no rights to receive dividends or Dividend Equivalents in respect of a one-share-for-eight-shares combinationPerformance Award that is an Option or Stock Appreciation Right or any shares of Common Stock subject to such Option or Stock Appreciation Right until the Participant has become the holder of record of such shares. Shares underlying other Performance Awards shall be entitled to Dividend Equivalents only to the extent provided by the Committee; provided, however, that such Dividend Equivalents will be subject to the same vesting conditions as the underlying Performance Award.
Section XIII. Deferral of Payment
The Committee may, in an Award Agreement or otherwise, provide for the deferred delivery of Common Stock or cash upon vesting or other events with respect to Restricted Stock Units or Other Stock-Based Awards. Notwithstanding any provision of the Plan to the contrary, (i) no Award shall provide for deferral of compensation that does not comply with Section 409A of the Code and (ii) in no event will any election to defer the delivery of Common Stock or any other payment with respect to any Award be allowed if the Committee determines, in its sole discretion, that the deferral would result in the imposition of additional tax under Section 409A of the Code. None of the Company, its Affiliates, the Board, the Committee or any delegates thereof shall have any liability for its actions or otherwise to a Participant or any other party if an Award that is intended to be exempt from or compliant with Section 409A of the Code is not so exempt or compliant.
Section XIV. Conditions and Restrictions Upon Securities Subject to Awards
The Committee may provide that the Common Stock subject to or issued upon exercise or settlement of an Award shall be subject to such further agreements, restrictions, conditions or limitations as the
Committee in its discretion may specify prior to the grant, issuance, vesting, exercise or settlement of such Award. Without limiting the foregoing, such restrictions may address the timing and manner of any resales or other transfers by the Participant of any shares of Common Stock issued under an Award, including (a) restrictions under an insider trading policy, a stock ownership policy or pursuant to applicable law, (b) restrictions designed to delay and/or coordinate the timing and outstandingmanner of sales by the Participant and holders of other Company equity compensation arrangements, (c) restrictions as to the use of a specified brokerage firm for such resales or heldother transfers and (d) provisions requiring Common Stock be sold on the open market or to the Company in treasury, by reducingorder to satisfy tax withholding or other obligations.
Section XV. Adjustment of and Changes in the same proportion its authorizedStock
(a) The number and kind of shares of Common Stock from 13,200,000,000 authorizedavailable for issuance under this Plan (including under any Awards then outstanding) shall be equitably adjusted by the Committee to reflect any reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend or distribution of securities, property or cash (other than regular, quarterly cash dividends), or any other event or transaction that affects the number or kind of shares of Common Stock outstanding. Such adjustment may be designed to (i) comply with Section 424 of the Code, (ii) treat the shares of Common Stock available under the Plan and subject to Awards as if they were all outstanding on the record date for such event or transaction, and/or (iii) increase the number of such shares of Common Stock to 1,650,000,000 authorizedreflect a deemed reinvestment in shares of Common Stock and by reducing the par value from $0.06 to $0.01. There is no impact on the number of the 50,000,000 authorized shares of preferred stock of the par value of $1.00 each.
In order to give effectamount distributed to the foregoing combinationCompany’s shareholders. The terms of the Common Stock, as of the time that this Certificate of Amendment to the Certificate of Incorporation becomes effective pursuant to the New York Business Corporation Law, clause A. of Section 3 of the Certificate of Incorporation is hereby replaced in its entirety with the following:
“The aggregate number of shares which the corporation is authorized to issue is 1,700,000,000 shares, consisting of:
1. | 1,650,000,000 shares of common stock having a par value of $0.01 per share; and |
2. | 50,000,000 shares of preferred stock having a par value of $1 per share.” |
Every eight shares of Common Stock issued andany outstanding or heldAward shall also be equitably adjusted by the Corporation in treasury immediately priorCommittee as to the time that this Certificateprice, number or kind of Amendment of the Certificate of Incorporation becomes effective pursuant to the New York Business Corporation Law shall be, effective as of the effectiveness of this Certificate of Amendment, automatically and without any action on the part of the Corporation or the respective holders thereof, combined and changed into one issued, fully paid and nonassessable shareshares of Common Stock subject to such Award, vesting, performance criteria, and other terms to reflect the treatmentforegoing events, which adjustments need not be uniform as between different Awards or different types of fractional share interests described below.Awards. No fractional shares will be issued in connection with the combination of shares of Common Stock. In lieu of any fractional share which a
shareholder would otherwise be entitled to receive as a result of the combination of shares of Common Stock shall be issued or issuable pursuant to such shareholder will be entitled to receive a cash amount (without interest) equal to, asan adjustment.
(b) In the Corporation shall determine, either (i) each such shareholder’s proportionate interestevent there is any other change in the proceeds, netnumber or kind of selling costs not paid and satisfied by the Corporation, from the aggregation and sale of the fractional shares by the transfer agent of the Corporation or (ii) the closing price of our Common Stock as reported on the New York Stock Exchange on the trading day immediately preceding the date that this Certificate of Amendment of the Certificate of Incorporation becomes effective, as adjusted by the ratio of one share of Common Stock for every eightoutstanding shares of Common Stock multiplied(or other securities into which such Common Stock is changed or for which it is exchanged) by reason of a Change in Control, other merger, consolidation or otherwise, then the Committee shall determine the appropriate and equitable adjustment to be effected, which adjustments need not be uniform between different Awards or different types of Awards. In addition, in such event, the Committee may (i) accelerate the time or times at which any Award may be exercised or settled, consistent with and as otherwise permitted under Section 409A of the Code, and/or (ii) provide for cancellation of such accelerated Awards that are not exercised within a time prescribed by the applicable fractionCommittee in its sole discretion.
(c) In the event of a share.Change in Control, the Committee, acting in its sole discretion without the consent or approval of any Participant, may take one or more of the following actions, which may vary among individual Participants and/or among Awards held by any individual Participant:
Immediately prior(i) accelerate vesting or waive any forfeiture conditions;
(ii) accelerate the time of exercisability of an Award so that such Award may be exercised in full or in part for a limited period of time on or before a date specified by the Committee, after which specified date all unexercised Awards and all rights of Participants thereunder shall terminate;
(iii) redeem in whole or in part outstanding Awards by requiring the mandatory surrender to the
effectivenessCompany of
this Certificatesome or all of
Amendment, the
Corporation had issued [ ] sharesoutstanding Awards held by a Participant (irrespective of
Common Stock, $0.06 par value, including [ ] treasury shares. Immediately priorwhether such Awards are then vested or exercisable) as of a date specified by the Committee, in which event the Committee shall thereupon cancel such Awards and pay to
effectivenesseach Participant an amount of
this Certificate of Amendment, the number of unissued shares of Common Stock, $0.06 par value, was [ ].At the effectiveness of this Certificate of Amendment, and disregarding the elimination of fractional shares, there will be [ ] issued shares of Common Stock, $0.01 par value, including [ ] treasury shares. At the effectiveness of this Certificate of Amendment, subjectcash or other consideration per Award equal to the elimination of fractional shares, there will be [ ] unissued shares of Common Stock, $0.01 par value.
As a result of the combination of shares of Common Stock, the stated capital of the Corporation will be reducedChange in proportion to the ratio of one share of Common Stock for every eight shares of Common Stock, and the Corporation’s additional paid-in capital will be credited with the amount by which stated capital is reduced. The stated capital of the Corporation pursuant to the New York Business Corporation Law immediately prior to the effectiveness of this Certificate of Amendment is $[ ] and the stated capital of the Corporation pursuant to the New York Business Corporation Law at the effectiveness of this Certificate of Amendment will be $[ ].
72 GE 2022 PROXY STATEMENT
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Control Price (less the exercise price with respect to an Option or SAR with an exercise price that is less than or equal to the Change in Control Price) or no consideration if the exercise price of an Option or SAR exceeds the Change in Control Price;
(iv) separately require the mandatory surrender of Dividend Equivalents in exchange for such cash or other consideration (if any) determined by the Committee in is sole discretion; or
(v) make such adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Change in Control or other such event (including the substitution, assumption, or continuation of Awards by the successor company or a parent or subsidiary thereof).
Notwithstanding anything herein to the contrary, in the event of a Change in Control in which the acquiring or surviving company in the transaction (or any parent or subsidiary thereof) does not assume or continue outstanding Awards or issue substitute awards upon the Change in Control in a manner determined by the Committee, in its sole discretion, pursuant to this Section XV(c), all Awards that are not assumed, continued or substituted for shall be treated as follows effective immediately prior to the Change in Control: (A) in the case of an Option or Stock Appreciation Right, the Participant shall have the ability to exercise such Option or Stock Appreciation Right, including any portion of the Option or Stock Appreciation Right not previously exercisable, (B) in the case of any Performance Award, all conditions to the grant, issuance, vesting or settlement of (or any other restrictions applicable to) such Award shall immediately lapse and the Participant shall have the right to receive a payment based on target level achievement or actual performance through a date determined by the Committee, as determined by the Committee, and (C) in the case of outstanding Restricted Stock, Restricted Stock Units or Other Stock-Based Awards (other than a Performance Award), all conditions to the grant, issuance, vesting or settlement of (or any other restrictions applicable to) such Award shall immediately lapse. In no event shall any action be taken pursuant to this Section XV(c) that would change the payment or settlement date of an Award in a manner that would result in the imposition of any additional taxes or penalties pursuant to Section 409A of the Code.
(d) For the avoidance of doubt, no provision of the Plan or any Award Agreement shall provide to any Participant a gross-up payment or other compensation for any taxes imposed by Section 4999 of the Code or otherwise.
Section XVI. Transferability
Each Award may not be sold, transferred for value, pledged, assigned, or otherwise alienated or hypothecated by a Participant, and each Option or Stock Appreciation Right shall be exercisable only by the Participant during his or her lifetime. Notwithstanding the foregoing, as permitted by the Committee under procedures it establishes, a Participant may (i) transfer or assign an Award as a gift to any “family member” (as such term is defined for purposes of the Registration Statement on Form S-8) who may be entitled to exercise any assigned Options or Stock Appreciation Rights only during the lifetime of the assigning Participant and (ii) designate one or more beneficiaries with respect to Awards in the event of a Participant’s death who may be entitled to exercise any Options or Stock Appreciation rights as provided by the Committee. In such case, such family member or beneficiary shall not further sell, pledge, transfer, assign or otherwise alienate or hypothecate such Award, and the Participant’s estate will be deemed the beneficiary in the absence of a beneficiary designation.
Section XVII. Compliance with Laws and Regulations
(a) This Plan, the grant, issuance, vesting, exercise and settlement of Awards hereunder, and the obligation of the Company to sell, issue or deliver shares of Common Stock under such Awards, shall be subject to all applicable foreign, federal, state and local laws, governmental
and regulatory approvals, and stock exchange rules and regulations. The Company shall not be required to register in a Participant’s name or deliver Common Stock prior to the completion of any registration or qualification of such shares which the Committee shall determine to be necessary or advisable. To the extent the Company is unable to (or the Committee deems it infeasible to) obtain approval from any regulatory body deemed by the Company’s counsel to be advisable to the lawful issuance and sale of any shares of Common Stock hereunder, the Company, its Affiliates, the Board, the Committee and any delegates thereof shall be relieved of any liability with respect to the failure to issue or sell such shares of Common Stock.
(b) In the event an Award is granted to or held by a Participant who is employed or providing services outside the United States, the Committee may (in its sole discretion) modify the provisions of the Plan or such Award (or create sub-plans) as they pertain to such individual to comply with applicable foreign law or to recognize differences in local law, currency or tax policy. The Committee may also impose conditions on the grant, issuance, vesting, exercise or settlement of Awards in order to comply with such foreign law and/or to minimize the Company’s obligations with respect to tax equalization for Participants employed outside their home country.
Section XVIII. Withholding
To the extent required by applicable foreign, federal, state or local law, a Participant shall (and the Committee may) make arrangements acceptable to the Company for the satisfaction of any tax withholding obligations that arise with respect to any Award or the issuance or sale of any shares of Common Stock. The Company shall not be required to recognize any Participant’s rights, issue shares of Common Stock, or recognize the disposition of shares of Common Stock, under an Award until such obligations are satisfied. To the extent permitted or required by the Committee, these obligations may or shall be satisfied by (i) the Company withholding cash from any compensation otherwise payable to or for the benefit of a Participant, (ii) the Company withholding a portion of the shares of Common Stock that otherwise would be issued to a Participant under such Award or any other Award held by the Participant, or (iii) the Participant tendering to the Company cash or shares of Common Stock. None of the Company, its Affiliates, the Board, the Committee or any delegates thereof shall be liable to a Participant or any other person as to any tax consequence expected but not realized (or unexpected and realized) due to the grant, issuance, vesting, exercise or settlement of any Award.
Section XIX. Amendment of the Plan or Awards
The Board or its designee may amend, alter, suspend or terminate the Plan at any time and for any reason, and the Committee or its designee may amend or alter any Award Agreement or other document evidencing an Award made under this Plan. Notwithstanding the foregoing and except as provided in Section XV, no such amendment shall, without the approval of the shareholders of the Company:
(a) increase the maximum number of shares of Common Stock for which Awards may be granted under this Plan;
(b) reduce the price at which Options may be granted below the price provided in Section VIII(a);
(c) reprice outstanding Options or SARs as described in Sections VIII(b) and IX(b);
(d) extend the term of this Plan;
(e) change the class of Eligible Persons;
(f) increase the individual maximum limits in Section V(f); or
(g) otherwise amend the Plan in any manner requiring shareholder approval by law or the rules of any stock exchange, market or quotation system on which the Common Stock is traded, listed or quoted.
GE 2022 PROXY STATEMENT 73
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Except as otherwise provided in any Award Agreement, no amendment or alteration to the Plan, an Award or an Award Agreement shall be made which would materially impair the rights of the Award holder without the Award holder’s consent. Notwithstanding the foregoing, no such consent shall be required to the extent the Committee determines, in its sole discretion and prior to the date of any applicable Change in Control, that such amendment or alteration either (i) is required or advisable in order for the Company, the Plan or the Award to satisfy any law or accounting standard (or to avoid adverse financial accounting consequences) or (ii) is not reasonably likely to significantly diminish the benefits provided under such Award (or has been adequately compensated).
Section XX. Other
a. Non-Exclusivity of Plan
Neither the adoption of this Plan by the Board nor the submission of this Plan to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board or the Committee to adopt such other incentive arrangements as either may deem desirable, including the granting of equity awards otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.
b. Governing Law
This Plan and any Award Agreements or other documents hereunder shall be interpreted and construed in accordance with the laws of the State of New York and applicable federal law, including securities laws. All references in this Plan or an Award Agreement or similar document to laws, rules, regulations, contracts, agreements and instruments refer to (i) all rules, regulations and administrative guidance promulgated thereunder, (ii) such items as they may be amended from time to time and (iii) any successor law, rule or regulation of similar effect or applicability.
c. No Right to Employment, Reelection or Continued Service
Nothing in this Plan or related to any Award shall itself (i) constitute an employment contract with the Company or its Affiliate, (ii) confer upon any Participant any right to continue employment or service for any specified period of time or (iii) limit in any way the right of the Company or its Affiliates to terminate any Participant’s employment, service on the Board or other service at any time and for any reason not prohibited by law. Subject to Sections IV and XIX, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Board without giving rise to any liability on the part of the Company, its Affiliates, the Board, the Committee or any delegates thereof.
d. Specified Employee Delay
If, upon Separation from Service, a Participant is a “specified employee” within the meaning of Section 409A of the Code, any payment under this Plan that is subject to Section 409A of the Code and would otherwise be paid within six months after the Participant’s Separation from Service will instead be paid in the seventh month following the Participant’s Separation from Service.
e. Severability
If any provision of the Plan or any Award shall be held unlawful or otherwise invalid or unenforceable in whole or in part, the unlawfulness, invalidity, or unenforceability shall not affect any other provision of the Plan or any Award, each of which shall remain in full force and effect. Likewise, if the Committee determines that any provision would disqualify the Plan or any Award under any law, rule or regulation it deems applicable, such provision shall be construed or deemed amended to conform with the applicable law, rule or regulation, as determined by the Committee.
f. Unfunded Plan
The Plan is intended to be an unfunded plan, and Participants are general creditors of the Company with respect to their Awards. If the Committee or the Company chooses to set aside funds in a trust or otherwise for the payment of Awards under the Plan, such funds shall at all times be subject to the Company’s creditors.
g. Interpretation
Headings are used within the Plan, Award Agreements and other related documents solely as a convenience shall not be deemed in any way material or relevant to the construction or interpretation of any provision of the Plan. The use of the word “including” following any general statement in the Plan, Award Agreements or any related documents shall not be construed to limit the scope of such statement, regardless of whether it is accompanied by non-limiting language (such as “without limitation”).
Section XXI. Clawback/Recoupment
If a Participant’s Termination of Employment or Separation from Service is for Cause or if the Committee determines in its sole discretion that a Participant has engaged in conduct that (a) constitutes a breach of an agreement with the Company or its Affiliate, (b) results in (or has the potential to cause) material harm financially, reputationally, or otherwise to the Company or its Affiliate or (c) occurred prior to the Participant’s Termination of Employment or Separation from Service and would give rise to a termination for Cause (regardless of whether such conduct is discovered before, during or after the Participant’s Termination of Employment or Separation from Service), the Participant shall forfeit the Participant’s right to any unvested or unexercised Awards and may be required to repay any cash, Common Stock or other property received pursuant to vested and exercised Awards to the extent recovery is permitted by law. The remedy under this Section XXI is not exclusive and shall not limit any right of the Company under applicable law, including a remedy under (i) Section 10D of the Act, (ii) any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which shares of the Company may be traded, and/or (iii) any Company policy adopted with respect to compensation recoupment.
In addition, the Committee may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Committee determines necessary or appropriate, including a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of misconduct. No recovery of compensation described in this Section XXI will give rise to a right to resign for “good reason” or a “constructive termination” as such terms (or any similar term) are used in any agreement between any Participant and the Company or its Affiliate.
74 GE 2022 PROXY STATEMENT
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Explanation of Non-GAAP Financial Measures and Performance Metrics
The reasons we use non-GAAP financial measures in this proxy statement, and the reconciliations to their most directly comparable GAAP financial measures follow.
GE Industrial Free Cash Flows (FCF)
We believe these measures will better allow management and investors to evaluate the capacity of our industrial operations to generate free cash flows without the effects of cash used for taxes related to business sales, and the factoring program discontinuation. A reconciliation to the most directly comparable GAAP measure is set forth below.
2021 FREE CASH FLOWS (FCF) (Non-GAAP)
| (DOLLARS IN MILLIONS) | | AVIATION | | HEALTHCARE | | RENEWABLES | | GE INDUSTRIAL |
| CFOA (GAAP) | | $ | 2,815 | | | $ | 1,471 | | | $ | (1,576 | ) | | $ | 1,530 | |
| Add: gross additions to property, plant and equipment(a) | | | (445 | ) | | | (242 | ) | | | (349 | ) | | | (1,250 | ) |
| Add: gross additions to internal-use software(a) | | | (61 | ) | | | (6 | ) | | | (9 | ) | | | (107 | ) |
| Less: CFOA impact from factoring programs discontinued in 2021 | | | (2,006 | ) | | | (1,481 | ) | | | (539 | ) | | | (5,108 | ) |
| Less: taxes related to business sales | | | — | | | | — | | | | — | | | | 189 | |
| Free cash flows (Non-GAAP) | | $ | 4,315 | | | $ | 2,705 | | | $ | (1,395 | ) | | $ | 5,092 | |
| Less: prior period CFOA impact from factoring programs discontinued in 2021(b) | | | (314 | ) | | | — | | | | (195 | ) | | | (739 | ) |
| Free cash flows excluding discontinued factoring (Non-GAAP) | | $ | 4,629 | | | $ | 2,705 | | | $ | (1,200 | ) | | $ | 5,831 | |
| Add: Adjustment related to budget assumptions for discontinued factoring at Healthcare | | | N/A | | | | 144 | | | | N/A | | | | N/A | |
| Pro forma Free cash flows (Non-GAAP) | | $ | 4,629 | | | $ | 2,849 | | | $ | (1,200 | ) | | $ | 5,831 | |
| (a) | Included in Gross CAPEX |
| (b) | Represents the CFOA impact from cash that GE would have otherwise collected had customer receivables not been previously sold in factoring programs that have now been discontinued. |
GE Industrial Adjusted Profit & Profit Margin
We believe that adjusting profit to exclude the effects of items that are not closely associated with ongoing operations provides management and investors with a meaningful measure that increases the period-to-period comparability. Gains (losses) and restructuring and other items are impacted by the timing and magnitude of gains associated with dispositions, and the timing and magnitude of costs associated with restructuring and other activities. A reconciliation to the most directly comparable GAAP measure is set forth below.
GE INDUSTRIAL ADJUSTED PROFIT AND PROFIT MARGIN (EXCLUDING CERTAIN ITEMS) (NON-GAAP)
| (DOLLARS IN MILLIONS) | | 2021 | | 2020 | | V% |
| GE Industrial revenues (GAAP) | | $ | 71,136 | | | $ | 73,100 | | | (3 | )% |
| | | | | | | | | | | | |
| GE Industrial costs and expenses (GAAP) | | $ | 72,118 | | | $ | 77,252 | | | (7 | )% |
| Less: interest and other financial charges | | | 901 | | | | 1,270 | | | | |
| Less: debt extinguishment costs | | | 1,721 | | | | 63 | | | | |
| Less: non-operating benefit costs | | | 1,785 | | | | 2,424 | | | | |
| Less: restructuring & other | | | 387 | | | | 693 | | | | |
| Less: Steam asset impairment | | | — | | | | 363 | | | | |
| Less: SEC settlement charge | | | — | | | | 100 | | | | |
| Less: goodwill impairments | | | — | | | | 728 | | | | |
| Add: noncontrolling interests | | | 28 | | | | (161 | ) | | | |
| GE Industrial adjusted costs (Non-GAAP) | | $ | 67,351 | | | $ | 71,450 | | | (6 | )% |
| | | | | | | | | | | | |
| GE Industrial Other income (GAAP) | | $ | 2,237 | | | $ | 11,444 | | | (80 | )% |
| Less: gains (losses) on equity securities | | | 1,209 | | | | (1,891 | ) | | | |
| Less: restructuring & other | | | 7 | | | | 13 | | | | |
| Less: gains (losses) on purchases and sales of business interests | | | (44 | ) | | | 12,452 | | | | |
| GE Industrial adjusted other income (Non-GAAP) | | $ | 1,064 | | | $ | 871 | | | 22 | % |
| | | | | | | | | | | | |
| GE Industrial profit (loss) (GAAP) | | $ | 1,255 | | | $ | 7,291 | | | (83 | )% |
| GE Industrial profit (loss) margin (GAAP) | | | 1.8 | % | | | 10.0 | % | | (8.2 | )pts |
| | | | | | | | | | | | |
| GE Industrial adjusted profit (loss) (Non-GAAP) | | $ | 4,849 | | | $ | 2,520 | | | 92 | % |
| GE Industrial adjusted profit (loss) margin (Non-GAAP) | | | 6.8 | % | | | 3.4 | % | | 3.4 | pts |
GE 2022 PROXY STATEMENT 75
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GE Industrial Organic Revenues and Profit
We believe these measures provide management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, as these activities can obscure underlying trends. A reconciliation to the most directly comparable GAAP measure is set forth below.
GE INDUSTRIAL ORGANIC REVENUES (NON-GAAP)
| (DOLLARS IN MILLIONS) | | 2021 | | 2020 | | V% |
| GE Industrial revenues (GAAP) | | $ | 71,136 | | | $ | 73,100 | | | (3)% |
| Less: acquisitions | | | 19 | | | | (67 | ) | | |
| Less: business dispositions(a) | | | (33 | ) | | | 1,447 | | | |
| Less: foreign currency effect(b) | | | 964 | | | | — | | | |
| GE Industrial organic revenues (Non-GAAP) | | $ | 70,186 | | | $ | 71,720 | | | (2)% |
| |
| GE INDUSTRIAL ADJUSTED ORGANIC PROFIT (NON-GAAP) |
| |
| (DOLLARS IN MILLIONS) | | 2021 | | 2020 | | V% |
| GE Industrial adjusted profit (loss) (Non-GAAP) | | $ | 4,849 | | | $ | 2,520 | | | 92% |
| Less: acquisitions | | | (29 | ) | | | 15 | | | |
| Less: business dispositions | | | (2 | ) | | | 367 | | | |
| Less: foreign currency effect | | | 16 | | | | — | | | |
| GE Industrial adjusted organic profit (loss) (Non-GAAP) | | $ | 4,865 | | | $ | 2,138 | | | F |
| | | | | | | | | | | |
| GE Industrial adjusted profit (loss) margin (Non-GAAP) | | | 6.8 | % | | | 3.4 | % | | 340bps |
| GE Industrial adjusted organic profit (loss) margin (Non-GAAP) | | | 6.9 | % | | | 3.0 | % | | 390bps |
| (a) | Dispositions impact in 2020 primarily related to our BioPharma business, with revenues of $830 million. |
| (b) | Foreign currency impact in 2021 was primarily driven by U. S. Dollar appreciation against the euro, Chinese renminbi, and British pound. |
Organic Revenues, Profit (Loss) and Profit Margin by Segment
We believe these measures provide management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, as these activities can obscure underlying trends. A reconciliation to the most directly comparable GAAP measure is set forth below.
ORGANIC REVENUES, PROFIT (LOSS) AND PROFIT MARGIN BY SEGMENT (NON-GAAP)
| | REVENUES | | PROFIT (LOSS) | | PROFIT MARGIN |
| (DOLLARS IN MILLIONS) | | 2021 | | 2020 | | V% | | 2021 | | 2020 | | V% | | 2021 | | 2020 | | V PTS |
| Aviation (GAAP) | | $ | 21,310 | | $ | 22,042 | | | (3 | )% | | $ | 2,882 | | | $ | 1,229 | | | F | | | 13.5 | % | | 5.6 | % | | 7.9pts |
| Less: acquisitions | | | — | | | — | | | | | | | — | | | | — | | | | | | | | | | | | |
| Less: business dispositions | | | — | | | 48 | | | | | | | — | | | | (48 | ) | | | | | | | | | | | |
| Less: foreign currency effect | | | 21 | | | — | | | | | | | (18 | ) | | | — | | | | | | | | | | | | |
| Aviation organic (Non-GAAP) | | $ | 21,289 | | $ | 21,994 | | | (3 | )% | | $ | 2,900 | | | $ | 1,277 | | | F | | | 13.6 | % | | 5.8 | % | | 7.8pts |
| Healthcare (GAAP) | | $ | 17,725 | | $ | 18,009 | | | (2 | )% | | $ | 2,966 | | | $ | 3,060 | | | (3 | )% | | 16.7 | % | | 17.0 | % | | (0.3)pts |
| Less: acquisitions | | | 19 | | | (96 | ) | | | | | | (29 | ) | | | (43 | ) | | | | | | | | | | | |
| Less: business dispositions | | | — | | | 911 | | | | | | | — | | | | 373 | | | | | | | | | | | | |
| Less: foreign currency effect | | | 308 | | | — | | | | | | | 114 | | | | — | | | | | | | | | | | | |
| Healthcare organic (Non-GAAP) | | $ | 17,398 | | $ | 17,194 | | | 1 | % | | $ | 2,881 | | | $ | 2,729 | | | 6 | % | | 16.6 | % | | 15.9 | % | | 0.7pts |
| Renewable Energy (GAAP) | | $ | 15,697 | | $ | 15,666 | | | — | % | | $ | (795 | ) | | $ | (715 | ) | | (11 | )% | | (5.1 | )% | | (4.6 | )% | | (0.5)pts |
| Less: acquisitions | | | — | | | — | | | | | | | — | | | | — | | | | | | | | | | | | |
| Less: business dispositions | | | — | | | 33 | | | | | | | — | | | | (4 | ) | | | | | | | | | | | |
| Less: foreign currency effect | | | 414 | | | — | | | | | | | (39 | ) | | | — | | | | | | | | | | | | |
| Renewable Energy organic (Non-GAAP) | | $ | 15,283 | | $ | 15,633 | | | (2 | )% | | $ | (756 | ) | | $ | (711 | ) | | (6 | )% | | (4.9 | )% | | (4.5 | )% | | (0.4)pts |
| Power (GAAP) | | $ | 16,903 | | $ | 17,589 | | | (4 | )% | | $ | 726 | | | $ | 274 | | | F | | | 4.3 | % | | 1.6 | % | | 2.7pts |
| Less: acquisitions | | | — | | | — | | | | | | | — | | | | — | | | | | | | | | | | | |
| Less: business dispositions | | | 26 | | | 220 | | | | | | | (2 | ) | | | 7 | | | | | | | | | | | | |
| Less: foreign currency effect | | | 203 | | | — | | | | | | | (59 | ) | | | — | | | | | | | | | | | | |
| Power organic (Non-GAAP) | | $ | 16,674 | | $ | 17,370 | | | (4 | )% | | $ | 788 | | | $ | 267 | | | F | | | 4.7 | % | | 1.5 | % | | 3.2pts |
76 GE 2022 PROXY STATEMENT
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Helpful Resources
| ANNUAL MEETING | | |
Proxy & supplemental materialsAnnual Meeting website | | www.ge.com/proxyannualmeeting |
Online voting for registered holders &
and RSP participants | | www.proxyvote.comwww.proxyvote. com |
| Online voting for beneficial owners | | www.proxyvote.comwww.proxyvote. com |
| Questions regarding admission | | www.ge.com/proxyannualmeeting |
| Webcast | | www.virtualshareholdermeeting.com/GE2021GE2022 |
| SEC website on proxy matters | | www.sec.gov/www.sec. gov/spotlight/proxymatters. shtml |
Electronic delivery of future
proxy materials | | www.ge.com/investor-relations/shareholder-services |
Information for GE RSP Participants | | www.oneHR.ge.comwww.oneHR. ge.com |
| | | |
| BOARD OF DIRECTORS | | |
GE Board and Governance
Documents | | www.ge.com/investor-relations/governance |
Board committees | | |
Audit Committee Charter | | |
Compensation Committee Charter | | |
Governance Committee Charter | | |
Communicating concerns to directors | | |
Director independence | | |
|
| FINANCIAL REPORTING | | |
| Annual report | | www.ge.com/investor-relations/annual-report |
Events & financial reports | | www.ge.com/investor-relations/events-reports |
| Forward-looking statements | | www.ge.com/investor-relations/important-forward-looking-statement-information |
| | | |
| GE | | |
| Corporate website | | www.ge.com |
| Leadership | | www.ge.com/about-us/leadership/executives |
| Investor Relations | | www.ge.com/investor-relations |
| Ombudsperson process | | https://www.ge.com/sites/default/files/16-0020_GE_SPIRIT_LETTER-2_r10v3_11x8.5_PRINT_ENGLISH.pdfS&L_Booklet_English_0. pdf |
| ESG/Sustainability Information | | www.ge.com/sustainability |
| |
GOVERNANCE DOCUMENTS | | |
By-laws | | www.ge.com/investor-relations/governance |
Certificate of Incorporation | | |
Code of conduct set forth in The Spirit & The Letter | | |
Governance Principles | | |
 | FRONT COVER
Pictured: Gas Power’s Tammy Franklin in Greenville, South Carolina, U.S.A., and Aviation’s Jon Ohman in Victorville, California, U.S.A., rise to the challenge of building a world that works.
|  | BACK COVER
The back cover of this report features GE employees, including:
Logan Toynbee, Renewable Energy Ashley Meaux, GE Digital Lauren Duncan, Aviation Donovan Buckley, GE Research Tammy Franklin, Power Jon Ohman, Aviation Yanmang Zhang, Healthcare Charles McKinney, Power
|
| ACRONYMS USED | | |
| DSUs | | Deferred Stock Units |
| ESG | | Environmental, Social, Governance |
| GAAP | | Generally Accepted Accounting Principles |
| NYSE | | New York Stock Exchange |
| PCAOB | | Public Company Accounting Oversight Board |
| PSUs | | Performance ShareStock Units |
R&DRSP | | Research & DevelopmentRetirement Savings Plan |
| RSUs | | Restricted Stock Units |
| S&P | | Standard & Poor’s |
| SEC | | Securities and Exchange Commission |
| TSR | | Total Shareholder Return |
Web links throughout this document are inactive textual references provided for convenience only, and the content on the referenced websites is not incorporated herein by reference and does not constitute a part of this proxy statement.
GE and the GE logo are trademarks and service marks of General Electric Company. Other marks used throughout are trademarks and service marks of their respective owners.
 | FRONT COVER Pictured: Aviation’s Aaron Perry in Ohio, U.S.A, Healthcare’s Juan Lv in Beijing, China, and Gas Power’s Kelvin Aaron in South Carolina, U.S.A., building a world that works for tomorrow. |
| WHERE CAN YOU FIND MORE INFORMATION 
|
 | 20202021 Annual Report
https://www.ge.com/investor-relations/annual-report |
 | 20202021 Diversity Annual Report
https://www.ge.com/about-us/diversity |
 | 20212022 Proxy Statement
https://www.ge.com/proxy |
 | 2021 Sustainability Report To to be published later this year year; 2020 available now
https://www.ge.com/sustainability |
 
The manufacturing facility that produced this report is an EPA GreenPower Partner that is powered by renewable energy generated by GE wind turbines.
GE 2021 PROXY STATEMENT 73
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General Electric Company
5 Necco Street
Boston, MA 02210
www.ge.com
PRELIMINARY PROXY STATEMENT - SUBJECT TO COMPLETION
|
Caution Concerning
Forward-Looking Statements
This document contains “forward-looking statements” — that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain. For details on the uncertainties that may cause our actual future results to be materially different than those expressed in our forward-looking statements, see the Forward-Looking Statements Information page on our Investor Relations website (see “Helpful Resources” on page 77) as well as our annual reports on Form 10-K and quarterly reports on Form 10-Q. We do not undertake to update our forward-looking statements. This document also includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.
GE 2022 PROXY STATEMENT 77
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Table of Contents
GE SHAREOWNER SERVICES
1 RIVER RD, BLDG 5-3W
SCHENECTADY, NY 12345
VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 3, 2021 for shares held directly and by 11:59 p.m. Eastern Time on April 30, 2021 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/GE2021
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 3, 2021 for shares held directly and by 11:59 p.m. Eastern Time on April 30, 2021 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above
Use the internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 3, 2022 for shares held directly and by 11:59 p.m. Eastern Time on May 1, 2022 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/GE2022
You may attend the meeting via the internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 3, 2022 for shares held directly and by 11:59 p.m. Eastern Time on May 1, 2022 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | |
D38090-P52517-Z79493 | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | D73620-P70222-Z82109 | KEEP THIS PORTION FOR YOUR RECORDS | | DETACH AND RETURN THIS PORTION ONLY | | THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
GENERAL ELECTRIC COMPANY The Board of Directors recommends you vote FOR each
of the following director nominees (1a through 1m): | | | | | | | | | 1. | | Election of Directors | | | | | | Nominees: | For | Against | Abstain |
GENERAL ELECTRIC COMPANY
| | 1a. | | Stephen Angel | ☐ | ☐ | ☐ | | | 1b. | The Board of Directors recommends you vote FOR each of the following director nominees (1a through 1k): | | | | | | | | | | | 1. | Election of Directors | | | | | | | | | | | | Nominees: | For | Against | Abstain | | | | | | | | | 1a. | Sébastien Bazin | ☐ | ☐ | ☐ | | | | | | | | | | 1b. | Ashton Carter | ☐ | ☐ | ☐ | | | | | | | | | | 1c. | | Ashton Carter | ☐ | ☐ | ☐ | | | 1d. | | H. Lawrence Culp, Jr. | ☐ | ☐ | ☐ | | | | | | | | | | 1d. | Francisco D'Souza | ☐ | ☐ | ☐ | | | | | | | | | | 1e. | | Francisco D'Souza | ☐ | ☐ | ☐ | | | 1f. | | Edward Garden | ☐ | ☐ | ☐ | | | | | | | | | | 1f. | Thomas Horton | ☐ | ☐ | ☐ | | | | | | | | | | 1g. | | Isabella Goren | ☐ | ☐ | ☐ | | | 1h. | | Thomas Horton | ☐ | ☐ | ☐ | | | 1i. | | Risa Lavizzo-Mourey | ☐ | ☐ | ☐ | | | | | | | | | | 1h. | Catherine Lesjak | ☐ | ☐ | ☐ | | | | | | | | | | 1i. | Paula Rosput Reynolds | ☐ | ☐ | ☐ | | | | | | | | | | 1j. | | Catherine Lesjak | ☐ | ☐ | ☐ | | | 1k. | | Tomislav Mihaljevic | ☐ | ☐ | ☐ | | | 1l. | | Paula Rosput Reynolds | ☐ | ☐ | ☐ | | | 1m. | | Leslie Seidman | ☐ | ☐ | ☐ | | | | | | | | | | 1k. | James Tisch | ☐ | ☐ | ☐ |
| | | | | | | | | | | | | | | | | | | | | | | | | Management Proposals | | | | | | | | | The Board of Directors recommends you vote FOR proposals 2, 3 and 4: | For | Against | Abstain | | | | | | 2. | | Advisory Approval of Our Named Executives' Compensation | ☐ | ☐ | ☐ | | 3. | | Ratification of Deloitte as Independent Auditor for 2022 | ☐ | ☐ | ☐ | | 4. | | Approval of the 2022 Long-Term Incentive Plan | ☐ | ☐ | ☐ | | | Shareholder Proposals | | | | | The Board of Directors recommends you vote AGAINST proposals 5, 6 and 7: | For | Against | Abstain | | 5. | | Require the Cessation of Stock Option and Bonus Programs | ☐ | ☐ | ☐ | | 6. | | Require Shareholder Ratification of Termination Pay | ☐ | ☐ | ☐ | | 7. | | Require the Board Nominate an Employee Representative Director | ☐ | ☐ | ☐ | | | | | | 3. | Ratification of Deloitte as Independent Auditor for 2021 | ☐ | ☐ | ☐ | | | | | | 4. | Approval of Reverse Stock Split and Reduction in our Authorized Stock and Par Value | ☐ | ☐ | ☐ | | | | | | Shareholder Proposals | | | | | | | | The Board of Directors recommends you vote AGAINST proposals 5 and 6: | | | | | | | | 5. | Require Nomination of at Least Two Candidates for Each Board Seat | ☐ | ☐ | ☐ | | | | | | 6. | Require the Chairman of the Board to be Independent | ☐ | ☐ | ☐ | | | | | The Board of Directors recommends you vote FOR proposal 7: | | | | | | | | 7. | Report on Meeting the Criteria of the Net Zero Indicator | ☐ | ☐ | ☐ |
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | | | | | | | | | | | |
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | | Signature [PLEASE SIGN WITHIN BOX] | Date | | Signature (Joint Owners) | Date | | | Signature [PLEASE SIGN WITHIN BOX] | Date | | Signature (Joint Owners) | Date | |
Table of Contents
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
GENERAL ELECTRIC COMPANY
Annual Meeting of Shareholders
May 4, 2021 10:00 AM
This proxy is solicited by the Board of Directors
The shareholder(s) whose signature(s) appear(s) on the reverse side hereby appoint(s) H. Lawrence Culp, Jr. and Michael Holston, or either of them, each with full power of substitution, as proxies, to vote all stock in General Electric Company which the shareholder(s) would be entitled to vote on all matters which may properly come before the 2021 Annual Meeting of Shareholders and any adjournments or postponements thereof. If this proxy is properly executed, the proxies shall vote subject to the directions indicated on the reverse side of this form, and proxies are authorized to vote in their discretion upon other business as may properly come before the meeting and any adjournments or postponements thereof. The proxies will vote as the Board of Directors recommends where a choice is not specified.
SPECIAL INSTRUCTIONS FOR PARTICIPANTS IN THE GE RETIREMENT SAVINGS PLAN
In accordance with the terms of the GE Retirement Savings Plan (RSP), any shares allocable to the participant's RSP account as of March 5, 2021 will be voted by the trustee of the RSP trust in accordance with the instructions of the participant received via telephone or the Internet or indicated on the reverse. IF THIS FORM IS RECEIVED OR A VOTE IS SUBMITTED VIA THE INTERNET ON OR BEFORE APRIL 30, 2021, BUT A CHOICE IS NOT SPECIFIED, THE TRUSTEE WILL VOTE SHARES ALLOCABLE TO THE PARTICIPANT'S RSP ACCOUNT AS THE BOARD OF DIRECTORS RECOMMENDS. IF THIS FORM IS NOT RECEIVED ON OR BEFORE APRIL 30, 2021, AND NO VOTE WAS SUBMITTED VIA TELEPHONE OR THE INTERNET BY THAT DATE, SHARES ALLOCABLE TO THE PARTICIPANT'S RSP ACCOUNT WILL NOT BE VOTED. Participants in the RSP may revoke a previously delivered proxy by delivering a subsequent proxy or by notifying the inspectors of election in writing of such revocation on or before April 30, 2021.| D73621-P70222-Z82109 |
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GENERAL ELECTRIC COMPANY
Annual Meeting of Shareholders
May 4, 2022 10:00 AM
This proxy is solicited by the Board of Directors
The shareholder(s) whose signature(s) appear(s) on the reverse side hereby appoint(s) H. Lawrence Culp, Jr. and Michael Holston, or either of them, each with full power of substitution, as proxies, to vote all stock in General Electric Company which the shareholder(s) would be entitled to vote on all matters which may properly come before the 2022 Annual Meeting of Shareholders and any adjournments or postponements thereof. If this proxy is properly executed, the proxies shall vote subject to the directions indicated on the reverse side of this form, and proxies are authorized to vote in their discretion upon other business as may properly come before the meeting and any adjournments or postponements thereof. The proxies will vote as the Board of Directors recommends where a choice is not specified.
SPECIAL INSTRUCTIONS FOR PARTICIPANTS IN THE GE RETIREMENT SAVINGS PLAN
In accordance with the terms of the GE Retirement Savings Plan (RSP), any shares allocable to the participant's RSP account as of March 7, 2022 will be voted by the trustee of the RSP trust in accordance with the instructions of the participant received via telephone or the Internet or indicated on the reverse. IF THIS FORM IS RECEIVED OR A VOTE IS SUBMITTED VIA THE INTERNET ON OR BEFORE MAY 1, 2022, BUT A CHOICE IS NOT SPECIFIED, THE TRUSTEE WILL VOTE SHARES ALLOCABLE TO THE PARTICIPANT'S RSP ACCOUNT AS THE BOARD OF DIRECTORS RECOMMENDS. IF THIS FORM IS NOT RECEIVED ON OR BEFORE MAY 1, 2022, AND NO VOTE WAS SUBMITTED VIA TELEPHONE OR THE INTERNET BY THAT DATE, SHARES ALLOCABLE TO THE PARTICIPANT'S RSP ACCOUNT WILL NOT BE VOTED. Participants in the RSP may revoke a previously delivered proxy by delivering a subsequent proxy or by notifying the inspectors of election in writing of such revocation on or before May 1, 2022.
Continued and to be signed on reverse side
