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. )
| ☑ | Filed by the Registrant | ☐ | Filed by a party other than the Registrant |
| CHECK THE APPROPRIATE BOX: | ||
| ☐ | Preliminary Proxy Statement | |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| ☑ | Definitive Proxy Statement | |
| ☐ | Definitive Additional Materials | |
| ☐ | Soliciting Material under §240.14a-12 | |
General Electric Company
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| PAYMENT OF FILING FEE (CHECK ALL BOXES THAT APPLY): | ||
| ☑ | No fee required | |
| ☐ | Fee paid previously with preliminary materials | |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 | |
2023
NOTICE OF
ANNUAL MEETING
AND PROXY
STATEMENT
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)22, 2023) in connection with GE’s solicitation of proxies for our 20222023 Annual Meeting.
General Electric Company Executive Offices
5 Necco Street,
Boston, MA 02210
| 61 | Say-On-Frequency Vote | |
 | MANAGEMENT PROPOSAL NO. 3 Advisory Vote on the Frequency of Future Advisory Votes to Approve Our Named Executives’ Compensation | |
| 62 | Independent Auditor | |
| MANAGEMENT PROPOSAL NO. 4 Ratification of Deloitte as Independent Auditor for 2023 | |
| 62 | Audit Committee Report | |
| 64 | Shareholder Proposals | |
| 64 | SHAREHOLDER PROPOSAL NO. 1 Independent Board Chairman | |
| 66 | SHAREHOLDER PROPOSAL NO. 2 Sale of the Company | |
| 67 | SHAREHOLDER PROPOSAL NO. 3 Fiduciary Carbon-Emission Relevance Report | |
| 68 | SHAREHOLDER PROPOSAL NO. 4 Assess Energy-Related Asset Resilience | |
| 70 | Submitting 2024 Proposals | |
| 71 | Voting and Meeting Information | |
| 71 | Voting Standards and Board Recommendations | |
| 71 | Meeting Information | |
| 72 | Voting Information | |
| 74 | Other Information | |
| 75 | Explanation of Non-GAAP Financial Measures and Performance Metrics | |
| 77 | Helpful Resources |
| Index of Frequently Requested Information | |
| 63 | Audit Fees |
| 14 | Board Leadership Structure |
| 15 | Board Self-Evaluation |
| 58 | CEO Pay Ratio |
| 56 | Clawback Policy |
| 20 | Director Attendance |
| 21 | Director Independence |
| 7 | Director Qualifications |
| 7 | Director Tenure and Term Limits |
| 8 | Nominee Biographies |
| 20 | Overboarding Policy |
| 30 | Peer Group |
| 56 | Policies on Compensation Consultant |
| 22 | Related Person Transactions |
| 18 | Risk Oversight |
| 5 | Shareholder Engagement |
| 25 | Stock Ownership for Executives and Directors |
| 57 | Stock Ownership Requirements |
| 18 | Sustainability Oversight |
| Also see Acronyms Used on page 77 for a guide to the acronyms used throughout this proxy statement. | |
Fellow Shareholders,
As 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, thisThe past year marks another yearhas been one of progresshistoric transformation 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, GEit has been working through a turnaroundexecuting its strategic plan 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 createform three industry-leading, global public companiescompanies: GE HealthCare, GE Vernova and GE Aerospace. We reached a major milestone in January 2023, with the successful spin-off of GE HealthCare as the first of the three planned independent companies. Today the GE team remains focused on continuing to strengthen and improve the 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 portionoperations of our timeremaining businesses, as a Board in 2021 considering a rangewe simultaneously work to be ready for the remaining planned spin-off of alternatives. The three future companies will have greater strategic, financial and operational flexibility to realize their full potential. They will also have dedicated boardsGE Vernova, our portfolio of directors with deep domain expertise, and already that is beginning to influence our recruitmentenergy businesses. With the success of new directors. In this proxy, we are nominating Steve Angel, Bella Goren and Tom Mihaljevic as new directors on the GE HealthCare separation as early evidence, the Board and they bring decades of experience across the energy, aviation and healthcare industries. Wecontinues to believe that the planned spin-offsexecuting on this plan will best position each of ourGE’s businesses to deliver long-term growth and create value for all our stakeholders.
SHARPENING OUR FOCUS ON SUSTAINABILITY In this letter, as I have for the past several years, I would like to offer some additional perspective about the Board’s efforts on your behalf.
GE’s businesses are workingEvolving the Board of Directors
As lead director and a member of our Governance & Public Affairs Committee, I have had the opportunity 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 our recruitment of directors who will bring deep domain expertise and dedicated oversight for each of the three independent companies. This has also entailed careful planning for the evolution of the GE Board: we recognize the importance of maintaining an engaged and well-balanced GE Board during this transition period as some of our existing directors move from GE to the new spin-off companies, and as we also add new directors in anticipation of the planned separations. In September, we announced the board of directors for GE HealthCare, and that board serves as a model of how we plan to mix industry-relevant experience and diversity of skills, expertise and perspectives as we look ahead to the planned boards for GE Vernova and GE Aerospace. We wish several departing directors farewell: Risa Lavizzo-Mourey and Tom Mihaljevic, who joined the GE HealthCare board in January, and Frank D’Souza and Leslie Seidman, who are not standing for reelection when their current terms end in May. We also continue to miss our friend and colleague former U.S. Secretary of Defense Ash Carter, who sadly passed away in October. With these significant challengesdepartures, though the individual directors cannot be replaced, we look ahead to the needs of GE Vernova and GE Aerospace in our recruitment efforts. We are pleased to be nominating Darren McDew and Jessica Uhl as new directors in this proxy, who will bring valuable perspectives that are well aligned with broader goalsthe two future companies.
Executing on Our Strategic Priorities
The steady performance and execution by the GE team over the past several years have laid the foundation for the path ahead. GE’s portfolio actions have made it a simpler, stronger, technology-driven industrial company than it was just a few years ago. In 2022, GE retired $11 billion of sustainable development, and GE approaches sustainability with a commitmentdebt, bringing total debt reduction since 2018 to innovation as a central element.over $100 billion. 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 transparencyremain focused on our sustainability approachobjective to create two more investment-grade standalone companies, the Board has been regularly reviewing the company’s financial and capital allocation plans with management. This has involved considering a widening range of options to deploy surplus capital, which has already translated into the commencement of a common stock repurchase program in 2022 and the partial redemption of $3 billion of preferred stock this month. The Board will continue to have an active dialogue with management about capital allocation priorities as we move forward. We also have seen most of GE’s businesses deliver solid operational and to highlightfinancial performances for 2022 in the context of significant global challenges that included supply chain constraints, inflation, the Russian invasion of Ukraine and enduring effects of the COVID-19 pandemic. The Board commends the GE achievementsleadership 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 supportedteams for their sustained and articulates GE’s robust sustainability initiatives.ongoing achievements.
ENGAGING TO STAY CLOSE TO OUR SHAREHOLDERSDelivering for Shareholders
We remain committed to regular, 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 meetingsmatters. The past year was no exception, as we met with shareholders representing overnearly half of ourall outstanding shares, which iswas nearly 80%75% of the shares held by institutional investors. Independent directors led manyI participated in a number of these meetings, which means that fellow Board memberscalls and I have hadalways appreciate the opportunity to speak directly with our large shareholders, answer their questions and hear their feedback. Our governance engagements covered a chance to hear direct feedback and questions from a large portionrange of GE’s shareholder base. We always consider our shareholders’ interests and feedback as part oftopics, including the Board’s deliberationsactivities, executive compensation matters and decision-making. And this year, followingGE’s sustainability priorities and reporting. The overarching and most-common theme, however, was a keen interest in how GE and the say-on-pay voteBoard are navigating these areas of corporate governance with the planned separations in 2021,view. Informed by those shareholder discussions, we have been particularly keen to understand shareholder feedback so that we could take appropriate actions in responseadded specific highlights throughout this year’s proxy where there is key information related to compensation matters. The letter from the Management Development & Compensation Committeestrategic plan and GE’s path forward.
We look forward to 2023 and beyond for continued performance by the compensation section in this proxy provideGE businesses to deliver for our customers, shareholders and other stakeholders. These businesses all have important missions and are working to solve global challenges: GE Aerospace is creating a smarter and more details about those actions.
For 130 years,efficient future of flight; the GE has leveraged innovation to buildVernova businesses are driving electrification and decarbonization through the energy transition; and GE HealthCare, now operating as 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.standalone company, is driving precision care. On behalf of the entireGE Board, I thank you for your continued investment and support of GE through this pivotal phase of the company’s history.GE.
THOMAS W. HORTON
Lead Director
GE 20222023 PROXY STATEMENT1
GE: Delivering Value Now and In the Future
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Position of Strength
Solid Foundation
Strong financial position
| ● | We delivered strong full-year results across most of GE’s businesses in 2022, with total company revenue growth, margin expansion, and $4.8 billion of free cash flow.* Our four reporting segments in 2022 are listed below. |
| ● | We strengthened our foundation, retiring an additional $11 billion of debt, bringing total debt reduction to over $100 billion since 2018. |
Improved business and operating performance
We delivered solid marginran our operations better, further embedding lean and EPS performance and $5.8 billion of free cash flow*1. We are seeing momentum in GE today including near-term improvementdecentralization in our businesses.
| ● | Lean transformation: Drove sustainable, impactful improvements in safety, quality, delivery, cost and cash management. We are making progress embedding lean practices and tools deeply into how we work, creating a problem-solving culture where problems are embraced, owned, analyzed and fixed. |
| ● | Decentralization: Moved the decision-making center of gravity closer to the customer, resulting in greater accountability, more transparency and better results for our customers. |
Our progress on these priorities has laid the foundation to launch three companies. More than a year after the announcement to form three independent companies from GE’s businesses, especially as Aviation recovers the logic behind—and our end markets strengthen. We expect to deliver between $5.5 billionconviction in—our historic transformation has only strengthened. Along the way, the feedback from our customers, investors, employees and $6.5 billion in free cash flow* in 2022 and more than $7 billion in 2023.other stakeholders has been overwhelmingly positive.
STRONG FINANCIAL POSITION
IMPROVED BUSINESS AND OPERATING PERFORMANCE
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MISSIONProviding customers with engines, components, avionics and systems for commercial, military and business & general aviation aircraft and a global service network to support these offerings UNITS Commercial Engines and Services, Military, Systems & Other INSTALLED BASE CEO H. Lawrence Culp, Jr. EMPLOYEES ~45,000
| MISSION Building a healthier future and | has no limits UNITS Healthcare Systems, Pharmaceutical Diagnostics INSTALLED BASE 4M+ CEO Peter Arduini EMPLOYEES ~49,000
Note: GE HealthCare refers to our reporting segment prior to the spin-off in January 2023, and | |||||||||||
| RENEWABLE ENERGY |  |  | POWER |  |  | ||||||||
MISSIONMaking 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, INSTALLED BASE 400+ GW of renewable energy equipment CEO Scott Strazik EMPLOYEES ~36,000
| MISSIONPowering lives and making electricity more affordable, reliable, accessible, and more sustainable UNITS Gas Power, Steam Power, Power Conversion, & Other INSTALLED BASE CEO Scott Strazik EMPLOYEES ~32,000
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| * | Non-GAAP Financial Measure. For information on how these metrics are calculated, see |
| Including GE and its joint venture partners. |
2 GE 20222023 PROXY STATEMENT
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GE isHealthCare already completed, we believe the remaining GE businesses are positioned to continue to lead in three importanttwo critical growth sectors—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.transition.
Future of Flight Centered around our mission to create a smarter and more
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● We are also developing a new flight test program for a hydrogen combustion engine and an open fan flight test demonstration, both with Airbus, as well as working with NASA and Boeing to develop hybrid electric engines. ● The quality of our come. | ● | ● The planned spin-off of ● For our Power business, global gas generation and utilization continues to grow, with strength in Europe and ● For our Renewable Energy business, the U.S. Inflation Reduction Act is game-changing. It provides the certainty and stability our customers need to make long-term investments, especially in Onshore Wind.● While we work on breakthrough technologies for tomorrow, we continue to build and deliver state-of-the-art equipment the world needs today to decarbonize the energy sector while building resilience in more than | |||||
GE 20222023 PROXY STATEMENT 3
Notice of 2023 Annual Meeting
Logistics
DATE AND TIME
May 3, 2023, at 10:00 a.m.
Eastern Time
LOCATION
Live Webcast at:
www.virtualshareholdermeeting
.com/GE2023
RECORD DATE
Shareholders of record at the close of business on March 7, 2023, are entitled to attend and vote at the Annual Meeting. On that date, there were 1,090,282,930 shares of common stock of General Electric Company (GE) outstanding and entitled vote.
You are invited to participate in GE’s 2023 Annual Meeting. If you were a GE shareholder at the close of business on March 7, 2023, you are entitled to vote at the Annual Meeting. Even if you plan to attend the live webcast, we encourage you to submit your vote as soon as possible through one of the methods available to you.
Cordially,
MICHAEL HOLSTON,
SECRETARY
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| If you are a beneficial owner and received a voting instruction form, please follow the instructions provided by your bank or broker to vote your shares. | ||
We have created an Annual Meeting website at https://www.ge.com/annualmeeting to make it easy to access our 20222023 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” Information on page 64.71.
4GE 20222023 PROXY STATEMENT
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 detailedhighlighted 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.
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| 74% | Engaged with shareholders representing approximately 74% of outstanding shares held by institutional investors |  | 53% | Represents approximately 53% of total outstanding shares | ||
| Regular Outreach to Engage with Shareholders |
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| STRATEGY | See Page  | BOARD OF DIRECTORS | See Page | ||||
● ● Our Path Forward. Based on shareholders’ interest, we have highlighted sections in this year’s proxy statement detailing key progress, actions and expectations related to the | ● | ||||||
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| EXECUTIVE COMPENSATION | See Pages 26 & 27 | SUSTAINABILITY | See Page 18 | ||||
● Compensation decisions for NEOs. Again this year, annual bonuses for our named executives were formulaic and based only on predetermined performance targets for our businesses. ● New design for PSU awards. In response to periods, modified by a three-year relative TSR. ● Enhanced disclosure. In addition to executive compensation highlights related to the spin-offs, this year’s proxy statement features a variety of disclosure enhancements informed by shareholder feedback, including a redesigned Compensation Discussion & Analysis (CD&A) section. | ● Continued to | supply chain. ● | |||||
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GE 20222023 PROXY STATEMENT 5
6 GE 2023 PROXY STATEMENT
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.
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6 GE 2022 PROXY STATEMENT
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| TENURE | AGE | ||||||||
| 3.4 years average tenure | 61.8 years average age | ||||||||
| Our Board term limit is 15 years | Our Board age limit is 75 years | ||||||||
| 2 New (<1 year) | 6 Medium-tenured (1-5 years) | 2 Longer-tenured (≥6 years) | 2 <60 years | 6 60-65 years | 2 >65 years | ||||
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DIVERSITY 2 of 4 Board leadership positions are held by women | INDEPENDENCE All independent except for the CEO All director nominees except our CEO are independent and meet heightened independence standards for our audit, compensation and governance committees | ||||||||
| 4 Female (40%) | 1 Ethnically diverse (10%) | 3 Born outside U.S. (30%) | 9 Independent | 1 Not Independent | |||||
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DIVERSITY 2 of 4 Board leadership positions are held by womenOur policy is to build a cognitively diverse board representing a range of backgrounds | INDEPENDENCE All independent except for the CEOAll director nominees except our CEO are independent and meet heightened independence standards for our audit, compensation and governance committees | |||||
| 5 Female | 2 Ethnically diverse | 5 Born outside U.S. | 12 Independent | 1 Not Independent | ||
| (38%) | (15%) | (38%) | ||||
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The committee memberships indicate the anticipated composition of the committees of the Board following the Annual Meeting, if each nominee is elected. For a description of committees as of the date of this proxy.proxy and committee activities during 2022, see Board Committees on page 17. Our director nominees’ primary qualifications and attributes are highlighted in the following matrix. The matrix is intended as a high-level summary and not an exhaustive list of each director’s skills or contributions to the Board.
| PRIMARY QUALIFICATIONS AND ATTRIBUTES | |||||||||||||
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| Stephen Angel |   |   |   |   |  |  |  | ||||||
| Sébastien Bazin | | |   | | | |  |  | | ||||
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| ATTENDANCE | QUALIFICATIONS AND ATTRIBUTES | COMMITTEES | ||||||
| All director nominees attended at least 75% of the meetings of the Board and committees on which they served in |   | Industry & Operations |   | Risk Management | A | Audit Committee | | Member |
  | Finance & Accounting |   | C | Compensation Committee | | Chair | ||
  | Investor |   | and Ethnic Diversity | G | Governance Committee |  | Financial Expert | |
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Financial acumen. The Board has determined that each of Mses. Goren, Lesjak, Reynolds and Uhl are “audit committee financial experts” (per SEC rules), and each of these directors is “financially literate” (per NYSE rules).
Key Corporate Governance Practices
● 9 out of 10 director nominees are independent
● Annual election of all directors by majority vote
● No supermajority vote provisions in governing documents
● Annual review of Board leadership structure
● Annual Board and committee self-evaluations
● Board-level oversight of ESG matters
● Strong lead director with clearly delineated duties
● Dual-pronged Board refreshment mechanisms (age & term limits)
● Regular executive sessions of independent directors
● Board and committees may hire outside advisors independently of management
● Proactive year-round shareholder engagement program
● Clawback policy that applies to all cash and equity incentive awards
● Prohibition on hedging & pledging
● Strong stock ownership guidelines and retention provisions
● “Overboarding” limits for directors
● No poison pill or dual-class shares
● Shareholder right to call special meetings (at 10%)
● Proxy access by-law provisions on market terms
GE 20222023 PROXY STATEMENT 7
Board Leadership | ||||||||
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CHAIRMAN  H. Lawrence Director Since: 2018 Age: 59 Birthplace: United States Chairman and CEO, General Electric, Boston, MA | LEAD DIRECTOR  Thomas Director Since: 2018 Age: 61 Birthplace: INDEPENDENT Partner, Global Infrastructure Partners, an infrastructure | |||||||
PRIOR BUSINESS EXPERIENCE ● ● CURRENT PUBLIC COMPANY BOARDS
PAST PUBLIC COMPANY BOARDS ● ● ● OTHER POSITIONS ● EDUCATION ● | GE ● PRIOR BUSINESS EXPERIENCE ● ● ● ● ● ● ● CURRENT PUBLIC COMPANY BOARDS ● PAST PUBLIC COMPANY BOARDS ● OTHER POSITIONS
EDUCATION ● | |||||||
8GE 20222023 PROXY STATEMENT
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CHAIR: Audit |   |
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Director Since: Age:
Former Chief Financial Officer of American Airlines and AMR Corporation, a global airline, Fort Worth, TX(2010-2013) |
CHAIR: Compensation Committee  Stephen Director Since:
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GE 2022 PROXY STATEMENT 9
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CHAIR: Governance & Public Affairs Committee  Paula Rosput Director Since: 2018 Age: 66 Birthplace: INDEPENDENT President and CEO, PreferWest LLC, a business advisory firm, Seattle, WA (since 2009) | |||||||
GE COMMITTEE MEMBERSHIP ●Audit (Chair)* PRIOR BUSINESS EXPERIENCE ●CFO, American Airlines and AMR Corporation (2010-2013) ●Senior Vice President, Customer Relationship Marketing, American Airlines and AMR Corporation (2006-2010) ●Vice President, American Airlines (1998-2006) ●President, AMR Services (1996-1998) ●Previously served in various management positions at American Airlines (1986-1996) ●Chemical Engineer, Dupont (1983-1985) CURRENT PUBLIC COMPANY BOARDS ●General Electric ●Marriott International PAST PUBLIC COMPANY BOARDS ●Gap ●LyondellBasell Industries OTHER POSITIONS ●Director, MassMutual ●Director, National Association of Corporate Directors, North Texas ●Member of the Advisory Board, The University of Texas at Austin, Cockrell School of Engineering ●Member of the Executive Board, Lyle School of Engineering, Southern Methodist University EDUCATION ●University of Texas at Austin ●MBA, Southern Methodist University * Upon reelection to the Board, Ms. Goren will become Chair of the Audit Committee | GE COMMITTEE MEMBERSHIP ●Compensation (Chair) PRIOR BUSINESS EXPERIENCE ●CEO, Linde (2018-2022) ●President & CEO, Praxair (subsequently Linde) (2007-2018) ●President & COO, 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 ●General Electric ●Linde (Chair) ●PPG Industries PAST PUBLIC COMPANY BOARDS ●Praxair (Chair) EDUCATION ●North Carolina State University ●MBA, Loyola College | GE COMMITTEE MEMBERSHIP ●Audit ●Governance (Chair) 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 EDUCATION ●Wellesley College |
GE 2023 PROXY STATEMENT 9
 Sébastien Director Since: 2016 Age: 61 Birthplace: INDEPENDENT Chairman and CEO, AccorHotels, a global hotel company, Paris, France (since 2013) | |||||||
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10 GE 2022 PROXY STATEMENT
Director Since: Age: |  |
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| Chief Investment Officer and Founding Partner, Trian Fund Management, L.P., an investment management firm, New York, NY (since 2005) |  Catherine Director Since: 2019 Age: 64 Birthplace: INDEPENDENT Former Chief Financial Officer, | ||||||
GE ● Compensation Governance●
● 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 ●
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PAST PUBLIC COMPANY BOARDS ●
● Banyan Tree HoldingOTHER POSITIONS ●Vice Chairman, Supervisory Board, Gustave Roussy Foundation, cancer research funding ● EDUCATION ●Sorbonne University ●
| GE ● Compensation
● Vice Chairman and Director, Triarc Companies (subsequently The Wendy’s Company and previously Wendy’s/Arby’s Group) (2004–2007) and Executive Vice President (2003–2004)● Managing Director, Credit Suisse First Boston (1999–2003)● Managing Director, BT Alex Brown (1994–1999)
● General Electric● Janus Henderson Group
● Invesco● Legg Mason● The Bank of New York Mellon● The Wendy’s Company● Family Dollar Stores● Pentair
● Harvard College |
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GE 2022 PROXY STATEMENT 11
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● Interim CEO, Hewlett Packard (2010)● Senior Vice President and Treasurer, HP(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)
● General Electric● ● GE HealthCarePAST PUBLIC COMPANY BOARDS ●SunPower (Chair, Audit Committee)
● Board, Haas School of Business, University of California, Berkeley
● Stanford University● MBA, University of California, Berkeley |
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12 10GE 20222023 PROXY STATEMENT
 Darren Director Since: 2023 Age: 62 Birthplace: INDEPENDENT Retired Four-Star General, United States Air Force, and Former Commander of U.S. Transportation Command, Scott Air Force Base, Illinois (2015 - 2018) |  Jessica Uhl New Director Nominee Age: 55 Birthplace: INDEPENDENT Former Chief Financial Officer, Shell plc, a global energy and petrochemical company, London, England (2017-2022) | |||
GE COMMITTEE MEMBERSHIP ●Governance PRIOR GOVERNMENT EXPERIENCE ●Four-star general who served for 36 years in the United States military before retiring in October 2018. ●Commander, U. S. Transportation Command, the single manager for global air, land and sea transportation for the U.S. Department of Defense from 2015 to 2018. ●Held various leadership roles across the U. S. Military, including Vice Director for Strategic Plans and Policy for the Joint Chiefs of Staff, Military Aide to the President, Director of Air Force Public Affairs, and Chief of Air Force Senate Liaison Division CURRENT PUBLIC COMPANY BOARDS ●General Electric ●Abbott Laboratories ●Parsons Corporation OTHER POSITIONS ●Director, United Services Automobile Association (USAA) ●Director, Boys & Girls Club of America ●Advisor, U. S. Innovative Technology EDUCATION ●Virginia Military Institute ●MS, Aviation Management, Embry-Riddle Aeronautical University | GE COMMITTEE MEMBERSHIP ●Audit* PRIOR BUSINESS EXPERIENCE ●CFO, Shell plc (2017-2022) ●Executive Vice President, Finance, Integrated Gas, Shell plc (2016-2017) ●Executive Vice President, Finance, Upstream Americas, Shell plc (2014-2015) ●Vice President, Finance, ●Vice President, Controller, Upstream and Projects and Technology, Shell plc (2010-2012) ●Vice President, Finance, Shell Lubricants, Shell plc (2009-2010) ●Head of External Reporting, Shell plc (2007-2009) ●Vice President, Business Development, Shell Renewables, Hydrogen & C02, Shell plc (2005-2006) ●Finance Manager, Shell Solar, Shell plc (2004-2005) CURRENT PUBLIC COMPANY BOARDS ●Goldman Sachs PAST PUBLIC COMPANY BOARDS ●Shell plc OTHER POSITIONS ●Vice Chair, Mission Possible Partnership ●Strategic Advisor, Breakthrough Energy ●Advisory Board, Columbia Center for Global Energy Policy ●Trustee, Rocky Mountain Institute EDUCATION ●University of California, Berkeley ●MBA, INSEAD, France * Upon election to the Board, Ms. Uhl will be appointed to the Audit Committee |
GE 2023 PROXY STATEMENT 11
Board Composition
The Governance & Public Affairs Committee (Governance Committee) is charged with reviewing the composition of the Board and refreshing it as appropriate. With this in mind, the Governance Committee continuously reviews potential candidates and recommends nominees to the Board for approval. The Board takes a thoughtful approach to its composition to maintain alignment with the company’s evolving corporate strategy.
| OUR PATH FORWARD | In connection with the spin-off of GE HealthCare in January 2023, a new board of directors assumed their roles at that company as it began operating independently. Current GE directors H. Lawrence Culp, Jr. and Catherine Lesjak also serve on the GE HealthCare board, and former GE directors Risa Lavizzo-Mourey and Tomislav Mihaljevic transitioned from the GE Board to the GE HealthCare board at the time of the spin-off. They were joined by GE HealthCare’s CEO Peter Arduini and five new independent directors as GE HealthCare became a public company. The director recruitment efforts continue as we look ahead to the planned separation of GE Vernova and GE Aerospace into independent companies. At the upcoming GE Annual Meeting, shareholders will have the opportunity to elect for the first time two new directors who bring decades of experience relevant to the future companies: Darren McDew and Jessica Uhl. They were recommended as directors by a search firm and by management, respectively. |
Director Selection Process
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. The following describes the Board’s selection process:
| 1 | SUCCESSION PLANNING | |
| The Governance Committee prioritizes experiences and attributes to support the current and long-term needs of the company, within the context of the current Board structure, diversity, and mix of skills and experience. | ||
| 2 | IDENTIFICATION OF CANDIDATES | |
| The Governance Committee engages in a search process to identify qualified director candidates, which process may include the use of an independent search firm, and assesses candidates’ skills, experience and background and their alignment with the company’s portfolio and strategy. | ||
| 3 | INTERVIEWING CANDIDATES | |
| Qualified director candidates are typically interviewed by the Chairman and CEO, Governance Committee chair, lead director and other members of the Governance Committee, as well as other members of the Board and management, as necessary. | ||
| 4 | DECISION AND NOMINATION | |
| After determining that the director candidates meet the priorities established by the Governance Committee and will serve in the best interests of the company and its shareholders, the Governance Committee recommends, and the full Board approves, director candidates for appointment to the Board and election by shareholders. | ||
| 5 | ELECTION | |
| The shareholders consider the nominees and elect directors by majority vote to serve one-year terms. | ||
| 6 | ONGOING ASSESSMENT | |
| The Governance Committee regularly assesses the composition of the Board to maintain alignment with the company’s strategy, and in connection with the Board’s nomination of a slate of directors the Governance Committee reviews considerations including past contributions by each director; the skills, experiences and diversity represented on the Board; and the results of previous shareholder votes. | ||
Director Recruitment Priorities
RECRUITMENT PRIORITIES GOING FORWARD
| ● | Domain expertise aligned with the planned spin-offs | |
| ● | Operational experience | |
| ● | Capital allocation / finance | |
| ● | Government / regulatory | |
| ● | Technology / digital | |
| ● | Diversity |
DIRECTOR “MUST- HAVES”
| ● | Leadership experience | |
| ● | Highest personal & professional ethics | |
| ● | Integrity & values | |
| ● | A passion for learning | |
| ● | Inquisitive & objective perspective | |
| ● | A sense of priorities & balance | |
| ● | Talent development experience |
HOW YOU CAN RECOMMEND A CANDIDATE
Write to the Governance Committee, c/o Corporate Secretary, GE, at the address listed on the inside front cover of this proxy statement and include all information that our by-laws require for director nominations.
HOW WE REFRESH THE BOARD
| ● | Board evaluation. Each year, the Board assesses its effectiveness through a thorough evaluation at the Board and committee levels to assess the effectiveness of the directors and their ability to work as a team in the long-term interest of the company. See How We Evaluate the Board’s Effectiveness on page 16. | |
| ● | Term limits. The Board has a 15-year term limit for independent directors. | |
| ● | Age limits. With limited exceptions, directors may not be renominated to the Board after their 75th birthday. |
See the Board’s Governance Principles (see Helpful Resources on page 77) for more information on these policies.
12 GE 2023 PROXY STATEMENT
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 seeks directors who possess extraordinary leadership qualities and demonstrate a practical understanding of organizations, processes, people, strategy, risk management and how to drive change and growth. Additionally, we believe directors should have experience in identifying and developing talent, given the Board’s role in human capital management and succession planning. In addition to these threshold qualities, we seek directors who bring to the Board specific types of experience relevant to GE and the company’s strategy.
Enhancing the Board’s diversity of background.
For decades, GE has been committed to building a cognitively diverse Board comprised of individuals from different backgrounds and with a range of experiences and viewpoints. Specifically, under the Board’s diversity policy, the Governance Committee considers attributes such as race, ethnicity, gender, cultural background and professional experience when reviewing candidates for the Board and in assessing the Board’s overall composition. The Board is committed to using refreshment opportunities to strengthen its cognitive diversity. Additionally, the Governance Committee is committed to considering the candidacy of women and racially and ethnically diverse candidates for future vacancies on the Board. To accomplish this, the Governance Committee will continue to require that search firms engaged by GE include a robust selection of women and racially and ethnically diverse candidates in all prospective director candidate pools. The Governance Committee reviews its effectiveness in balancing these considerations when assessing the composition of the Board.
Complying with regulatory requirements and the Board’s independence guidelines.
The Governance Committee considers regulatory requirements affecting directors, including potential competitive restrictions. It also looks at other positions the director has held or holds (including other board memberships), and the Board reviews director independence.
How We Assess Board Size
The Governance Committee takes a fresh look at Board size each year, consistent with the Board’s Governance Principles (see Helpful Resources on page 77). Based on the Board’s recent self-evaluations, assessment of trends with peer companies, and taking into account investor feedback, the Board anticipates it will continue to maintain approximately its current size. However, the Board may add additional directors in connection with our planned spin-offs.
| Board Skills and Experience | |
 9/10 | INDUSTRY & OPERATIONS EXPERIENCE We have sought directors with management and operational experience in the industries in which we compete. For example, in the last two years we have added directors with power, aviation and technology expertise. |
9/10 | FINANCE & ACCOUNTING EXPERIENCE GE uses a broad set of financial metrics to measure its performance, and accurate financial reporting and robust auditing are critical to our success. We have added a number of directors who qualify as audit committee financial experts, and we expect all of our directors to have an understanding of finance and financial reporting processes. |
4/10 | INVESTOR EXPERIENCE To promote strong alignment with our investors, we have added directors who have experience overseeing investments and investment decisions. We believe that these directors can help focus management and the Board on the most critical value drivers for the company, including with respect to setting executive compensation targets and objectives. |
 4/10 | TECHNOLOGY EXPERIENCE As a 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. |
 10/10 | RISK MANAGEMENT EXPERIENCE In light of the Board’s role in overseeing risk management and understanding the most significant risks facing the company, including strategic, operational, financial, legal and compliance and reputational risks, we seek directors with experience in risk management and oversight. |
 10/10 | 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 2022, 57% of our revenue was attributable to activities outside the United States. |
GE 2023 PROXY STATEMENT 13
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. In addition, the Board believes that combining the roles of Chairman and CEO is important to provide clarity on decision-making and accountability as we execute on our strategic transformation into three independent companies, and any potential conflicts that might result from combining the roles can be effectively mitigated through the duties of our lead director. The Board will continue to review the appropriateness of this structure and consider shareholder feedback from our ongoing engagements.
HOW WE SELECT THE LEAD DIRECTOR. The Governance & Public Affairs Committee (the Governance Committee)reviews potential candidates’ qualifications and attributes, including leadership and previous public company experience, and considers feedback from the current lead director, our other Board members and the Chairman, andChairman. The Governance Committee then makes a recommendation to the Board’s independent directors. The independent directors, who after review, elect the lead director, taking into account the recommendation of the Governance Committee.director. 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 | |
| ● | Board agenda, schedule & information | |
| ● | Leadership of independent director meetings | |
| ● | Chairman-independent director liaison | |
| ● | Shareholder communications | |
| ● | Board governance processes | |
| ● | Board leadership structure review | |
| ● | Committee chair selection |
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GE 2022 PROXY STATEMENT 13
How We Are Changing the Board
The Governance Committee is charged with reviewing the composition of the Board and refreshing it as appropriate. With this in mind, the Governance Committee continuously reviews potential candidates and recommends nominees to the Board for approval.
The Board takes a thoughtful approach to its composition to maintain alignment with the company’s evolving corporate strategy. We believe our board composition strikes a balanced approach to director tenure and allows the Board to 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.
In 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:
 | LEAD DIRECTOR elected solely by | |||
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CHAIRS The chairs of our Audit, | ||||
Considerations THOMAS HORTON | |||
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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 independent directors’ decision to select Mr. Horton as lead director took into account the tenures and capabilities of each independent director, along with a potential candidate’s willingness and ability to serve as lead director, understanding that the position entails significant responsibility and time commitment. The Board considered that Mr. Horton also serves as lead independent director for Walmart. However, in reviewing Mr. Horton’s time commitment at Walmart, the independent directors noted that Walmart has three separate positions for CEO, chairman, and lead independent director, which mitigated concerns about Mr. Horton’s ability to dedicate sufficient time to the role as GE’s lead director under the circumstances.
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14 GE 20222023 PROXY STATEMENT
Important Factors in Assessing Board CompositionGovernance Practices
The Governance Committee strivesOur Board seeks to maintain anoperate 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 with broadcomposition and diverse experiencerecruitment, director engagement, and judgment that is committedaccountability to representing the long-term interestsshareholders. Our Board and committee evaluation process allows for annual assessment 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 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 GEpractices and the company’s evolving corporate strategy.opportunity to identify areas for improvement.
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.
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GE 2022 PROXY STATEMENT 15
How We Assess Director Independence
BOARD MEMBERS. The Board’s Governance Principles require all non-management directors to be independent. All of our director nominees (shown under “Election of Directors” on page 6) other than Mr. Culp are independent.
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COMMITTEE MEMBERS. All members of the Audit Committee, Management Development & Compensation Committee, and Governance Committee must be independent, as defined by the Board’s Governance Principles. Committee members must also meet additional committee-specific standards:
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 IndependenceThe Board considered the following relationships and transactions in making its determination that all director nominees, other than Mr. Culp, are independent.
16 GE 2022 PROXY STATEMENT
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 | How We Evaluate the Board’s Effectiveness | ||||
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| 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 | |||||
| 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. | |||||
| INDIVIDUAL INTERVIEWS | |||||
| The | |||||
| ● | 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. | ||||
| DISCUSSION OF RESULTS | |||||
| The | |||||
| USE OF FEEDBACK | |||||
| The Board and each of its committees developed plans to take actions based on the results, as appropriate. | |||||
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GE 20222023 PROXY STATEMENT 1715
Full Board
16 meetings in 2021 (including10 special strategy reviews and3 independent director meetings) Operations
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*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.
2021 AREAS OF FOCUS
●Long-term strategy and business portfolio strategic transformation ● Strategy for the energy transition and climate change● | ● Business operating and performance reviews● Sustainability, including external reporting● Management succession planning● Aviation sector recovery, and current industry dynamics ● Enterprise risk management |
A TYPICALTypical GE BOARD MEETINGBoard Meeting
During 2021,2022, the Board held 6seven regularly scheduled meetings, plus 10five special meetings. Due to the COVID-19 pandemic, someFive regularly scheduled meetings were held in-person and two regularly scheduled 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.All special meetings were held virtually.
| 1 | BEFORE THEMEETING |
| Board committee chairs: | Management: |
| 2 | THURSDAY (DAY 1) |
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| 3 | (DAY 2) | Early morning: | Daytime: | |
| 4 | Management: | |||
Full Board 12 meetings in 2022 | ||||
Chairman | Lead Director | |||
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Independent The independent directors meet regularly in executive sessions at scheduled Board meetings. They may have other special meetings throughout the year. These executive sessions are designed to promote candor and discussion of matters in a setting that is independent of the Chairman and CEO. The lead director chairs each of these executive sessions. | ||||
The GE Board in Action: 20212022 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 Engagement with shareholders included Thomas Horton (lead director) DIRECTOR EDUCATION Ongoing Functional Deep Dives Periodic sessions with insurance and
Full orientation program for new directors | ENGAGEMENT WITH THE
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
|   | BUSINESS AND STRATEGY REVIEW SESSIONS ● Director participation at strategy sessions for GE Aerospace (September) | |
● Director participation at strategy reviews for GE Vernova (October)SITE VISITS BY DIRECTORS ● GE Global Research Center in Niskayuna, NY ● GE Gas Power in Schenectady, NY ● GE Gas Power in Greenville, SC ● GE Aerospace in Evendale, OH ● GE HealthCare in Waukesha, WI GE LEADERSHIP MEETINGS ●Director participation in | ||||
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COMMITTEE 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. | |||||||||
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COMMITTEE Each committee meets periodically throughout the year, reports its actions to the Board, receives reports from senior management, annually evaluates its performance and can retain outside advisors. Formal meetings are typically supplemented with additional calls and sessions. COMMITTEE RESPONSIBILITIES The key responsibilities of each committee are listed to the right. For more detail, see the Governance Principles and committee charters (see Helpful Resources on page 77). | Audit | Governance & Public Affairs | Management Development & Compensation | ||||||
| 10 meetings in 2022 | 6 meetings in 2022 | 9 meetings in 2022 | |||||||
Chair Other Members |  | Chair Other Members |  | Chair Other Members |  | ||||
| Recent Activities and Key Focus Areas | |||||||||
● Overseeing the simplification of the company’s financial reporting● Overseeing● Conducting cross-functional reviews with internal audit staff, tax, cyber/IT and compliance ● Overseeingrisk assessment measures ● Overseeing material litigation strategy and | ● Overseeing the development of the company’s sustainability and environmental, social and governance (ESG) commitments and strategies and enhancements todisclosure ● ● Identifying and recruiting new directors● Overseeing the company’s safety programs and performance ●Overseeing management of environmental remediation efforts | ● 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 | |||||||
| Our Path Forward | |||||||||
| ● Leading the director recruitment efforts in connection with the planned formation of | ● Overseeing talent recruitment, development and placement/ retention in connection with the planned business separations and transition to | |||||||
| 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 Board’s governance processes, including all significant governance policies and procedures● Oversees company policies and strategies related to climate change management, political spending & lobbying, human rights, and environment, health & safety● Oversees external reporting on sustainability matters in coordination with the Audit Committee● Reviews and makes recommendations to the Board with respect to director independence●Reviews Board composition and compensation in connection with long-term strategy and identifies new directors for GE ● Oversees Board and committee self-evaluations● Reviews conflicts of interest, as applicable | ● Oversees GE’s executive compensation policies, practices and programs● Reviews material elements of executive compensation, including equity awards, deferred compensation, severance and perquisites●Oversees and approves goals and objectives for performance-based equity awards and evaluates performance against those goals ● Evaluates and approves compensation of the CEO● Reviews risk assessment of compensation policies and practices● Oversees development of executive succession plans, including recruitment, development and retention efforts for all employees● Oversees strategies and policies related to human capital management, including matters such as diversity, equity and inclusion, workplace environment and culture, and talent recruitment, development, engagement and retention | |||||||
GE 20222023 PROXY STATEMENT 1917
Strategy The Board has oversight responsibility for management’s establishment and execution of corporate 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 | ||
OUR PATH | In 2021, the full Board conducted a rigorous portfolio and business strategy review over several months, culminating in the announcement of | employees with the planned launch of GE Vernova and GE Aerospace as standalone companies with a second spin-off. |
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.
GE’s Chief Risk Officer coordinates the company’s enterprise risk management framework and reports periodicallyregularly to the Audit Committee and the full Board on risk topics. During 2021,2022, reviews with the Audit Committee or Board have included discussions of top enterprise risks, risk management processes at the GE business-level, delegations of authority for significant transactions and expenditures, and risks related to the company’s strategic planning and priorities. Additionally, during 2022, the Audit Committee spent significant time reviewing key risks and standalone readiness related to the GE HealthCare spin-off.
We typically organize enterprise risks into the broad categories of strategic, operational, financial, or legal and compliance, risk.and reputational risks. Risks identified through our risk management processes are prioritized and, depending on the probability and severity of the risk as well as the immediacy of the risk assessed, escalated as appropriate. Senior management discusses these risks regularly with the risk owners within the businesses or at the Corporatecorporate level. Risk leaders within the businesses and corporate functions are responsible for identifying key risks and presenting risk assessments and key risks to senior management and, when appropriate, to the full Board or the relevant committee of the Board.Board committee. For example, each GE business discusses its top enterprise risks during quarterly operating reviews, as well as risk mitigation strategies and other related considerations. In addition, at regularly scheduled Board meetings, GE business leaders 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. ReferThe GE business leaders also present periodically to the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2021 forfull Board. For a discussion of key risks that could have a material adverse effect on our business, reputation, financial position and results of operations.operations, please refer to the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2022.
Sustainability
GE is rising to the challenge of building a world that works, with a focus on opportunities for our technology in the future of smarter and more efficient flight precision healthcare that personalizes diagnoses and treatments and the energy transition to drive decarbonization. In connection with the planned spin-offs, we have worked across GE to ensure that the independent companies we are creating will operate with sustainability at their core on day one. We are fully seizing the opportunity to focus on the critical global needs in energy and aviation, merging the legacy of GE’s technology and culture and the best-in-class expertise of modern sustainability programs.
We recognize the importance of these topics to our shareholders and other stakeholders, and sustainability is a driving force behind the work we do and the company’s long-term value. More information that may be of interest to a variety of stakeholders about GE’s sustainability approach, priorities and performance, including about safety, greenhouse gas emission reductions for our own operations and for our products, including Scope 3 emissions from use of sold products, environmental stewardship, diversity and inclusion (as also discussed further below), supply chain and human rights and other matters, can be found in our Sustainability Report. Among other things, the Sustainability Report includes our ambition to be a net zero company by 2050, targets for reducing Scope 1 and Scope 2 emissions, Scope 3 reporting for use of sold products and TCFD-aligned reporting on climate-related risks.
Sustainability is an integrated aspect of how we think about strategy and risk. Our Board 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 level, these topics often span multiple functional categories and areas of oversight, and therefore oftentimes involve discussion at the full Board level rather than individual committees. In addition, our Governance Committee has oversight responsibility for GE’s priorities and external reporting related to sustainability matters, and our Audit Committee also plays a role in the oversight of such external reporting, including reporting on these matters in SEC filings and data quality related to this reporting.
| For additional reporting on sustainability and ESG matters, see our ESG webpages, our |
 | |||||
 | ENERGY TRANSITION 1/3 of the world’s electricity generated with the help of our technology |   |
|  | FUTURE OF FLIGHT 3 out of 4 commercial
|
20 18GE 20222023 PROXY STATEMENT
Board Oversight
Key Areas Related to Strategy, Risk & Sustainability
| FULL BOARD | AUDIT COMMITTEE | |||
● Long-term strategy ● Most significant risks facing GE ● Reviews with each business ● Financial performance ● Energy transition and climate change | ● Financial statements, systems & reporting ● Regulatory, compliance and litigation risks ● Cybersecurity ● Enterprise risk management framework ● Auditors (internal and external) | |||
| GOVERNANCE & PUBLIC AFFAIRS COMMITTEE | MANAGEMENT DEVELOPMENT & COMPENSATION COMMITTEE | |||
●Corporate governance ● ●Environmental, health and safety matters ●Support of full Board’s oversight on climate change ● External reporting related to sustainability/ESG matters | ●Human capital management, including diversity and pay equity ●Talent development ●Succession planning ●Executive compensation | |||
Key Governance Processes
Management Level
|
| |||||||
OPERATING |  |
| |
| |
|  | PROCESS |
Quarterly GE CEO reviews with each business on their operating priorities, execution against plan and top risks | Annual GE CEO review dedicated to organization and critical talent strategy to drive business results, including action plans related to cultural transformation and diversity | Annual long-range review of business strategy, technology roadmap and competitive position, including investment requirements to deliver sustainable growth | Annual budget planning process, designed to focus |
Enterprise Risk Management Framework
Risk | Risk | Risk | Compliance Risk | Risk |
GE 20222023 PROXY STATEMENT 2119
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.Annual Meeting.
BOARD/COMMITTEE MEETINGS. In 2021,2022, each of our current directors attended at least 75% of the meetings held by the Board and committees on which the member served during the period the member was on the Board or committee. Average attendance by our current directors for these meetings was 95% during 2021.2022.
ANNUAL SHAREHOLDERS MEETING. All 11 of our director nominees for 2021then-serving directors attended the 20212022 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” Resources on page 77).
CONFLICTS OF INTEREST. All directors are required to recuse themselves from any discussion or decision affecting their personal, business or professional interests. If an actual or potential conflict of interest arises, the director is required to promptly inform the chairman/CEO and the 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 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.
| PERMITTED # OF PUBLIC COMPANY BOARDS (INCLUDING GE) | ||
| Public company executives | 2* | |
| Other directors | 4 | |
| PERMITTED # OF PUBLIC COMPANY AUDIT COMMITTEES (INCLUDING GE) | ||
| Audit Committee member | ||
| OTHER RESTRICTIONS | ||
| Lead Director |
| * | Service on the board of a public company for which a director serves as an executive, together with service on the board of any public company subsidiary or public affiliates as part of the director’s executive responsibilities, shall count as one board for purposes of this limit. |
| ** | Unless the member is a retired certified public accountant, CFO, controller or has similar experience in which case the limit for such member shall be four public company audit committees (including GE) if the Board affirmatively determines that such service does not impair service on GE’s Audit Committee. |
HOW WELIMITS WERE APPLIED TO HORTON. In appointing Mr. Horton as lead director, the Boardindependent directors considered the fact that Mr. Horton is also the lead director for Walmart. In reviewing Mr. Horton’s time commitment at Walmart, the Boardindependent directors noted that Walmart separates the roles of Chairmanhas three separate positions for CEO, chairman and CEO,lead independent director, mitigating the potential time commitment of the lead director. The Board determined that Mr. Horton could serve in both roles under the circumstances.
HOW YOU CAN FIND MORE INFORMATION ABOUT OUR GOVERNANCE PRACTICES Each year we review GE’s governance documents and | 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 |
22 20GE 20222023 PROXY STATEMENT
How We Assess Director Independence
BOARD MEMBERS. The Board’s Governance Principles require all non-management directors to be independent. All of our director nominees (shown under Election of Directors on page 6) other than Mr. Culp are independent. In addition, Mr. D’Souza and Ms. Seidman, who are not standing for reelection at the Annual Meeting, Drs. Lavizzo-Mourey and Mihaljevic, who served on the Board until January 2023, Mr. Carter, who served on the Board until October 2022, and James Tisch, who served on the Board until May 2022, were each determined to be independent during the period they served on the Board.
| ● | The Board’s 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 77), the Board considers all relevant facts and circumstances when making an independence determination. |
| ● | Applying the guidelines in 2022. In assessing director independence for 2022, the Board considered relevant transactions, relationships and arrangements, including relationships among Board members, their family members and the company, as described below. |
COMMITTEE MEMBERS. All members of the Audit Committee, Management Development & Compensation Committee, and Governance Committee must be independent, as defined by the Board’s Governance Principles. Committee members must also meet additional committee-specific standards:
| ● | Heightened standards for Audit Committee members. Under a separate SEC independence requirement, Audit Committee members may not accept any consulting, advisory or other fees from GE or any of its subsidiaries, except compensation for Board service. |
| ● | Heightened standards for members of the Management Development & Compensation and Governance Committees. As a policy matter, the Board also applies a separate, heightened independence standard to members of the Management Development & Compensation and Governance Committees: no member of either committee may be a partner, member or principal of a law firm, accounting firm or investment banking firm that accepts consulting or advisory fees from GE or a subsidiary. In addition, in determining that Management Development & Compensation Committee members are independent, NYSE rules require the Board to consider their sources of compensation, including any consulting, advisory or other compensation paid by GE or a subsidiary. |
The Board has determined that all members of the Audit, Management Development & Compensation and Governance Committees are independent and also satisfy applicable committee-specific independence requirements.
Relationships and Transactions Considered for Director Independence
The Board considered the following relationships and transactions in making its determination that all director nominees and all directors that served since the 2022 Annual Meeting, other than Mr. Culp, are independent.
2022 TRANSACTIONS CONSIDERED FOR DIRECTOR INDEPENDENCE
| 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 | |||||||
| * | Mr. Tisch served as our director until our 2022 Annual Meeting on May 4, 2022, at which he did not stand for reelection. |
GE 2023 PROXY STATEMENT 21
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” Resources on page 77), in the course of reviewing and approving a disclosable related person transaction, the Governance Committee considers the factors in the boxdescribed below. As SEC rules require, we disclose in thisour proxy statement all such transactions that are determined to be directly or indirectly material to a related person. During 2021,2022, there were no related person transactions meetingthat met the requirements for disclosure in this proxy statement.
| FACTORS USED IN ASSESSING RELATED PERSONTRANSACTIONS | ||
| ● | Nature of related person’s interest in transaction | |
| ● | Material transaction terms, including amount involved and type of transaction | |
| ● | Importance of transaction to related person and GE | |
| ● | Whether transaction would impair a director or executive officer’s judgment to act in GE’s best interest | |
| ● | Any other matters the committee deems appropriate, including any third-party fairness opinions or other expert reviews obtained in connection with the transaction | |
For a description of shareholder derivative lawsuits involving certain current and former GE executives and members of the Board, refer to Note 22.24. Commitments, Guarantees, Product Warranties and Other Loss Contingencies in GE’s financial statements in our 2021 Annual Report on Form 10-K.10-K for 2022.
Independent Oversight of
Political Spending
The Governance Committee, composed solely of independent directors, oversees the company’s political spending and lobbying. This includes political and campaign contributions as well as any contributions to trade associations and other tax-exempt and similar organizations that 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 |
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, organizations, beginning with contributions made in 2018. GE’s political spending has declined in recent years, and in 20212022 GE did not contribute any corporate funds to political campaigns, committees or candidates for public office.
22GE 20222023 PROXY STATEMENT23
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 includes all GE stock-based holdings, as of December 31, 2021,below. There are no additional meeting fees. The lead director and members of our directorsBoard committees receive additional compensation due to the workload and nominees, named executives, directors, nomineesbroad responsibilities of these positions.
| All independent directors | $ | 275,000 |
| Lead director | $ | 50,000 |
| Audit Committee members | $ | 35,000 |
| Management Development & Compensation Committee members | $ | 25,000 |
| Governance & Public Affairs Committee members | $ | 10,000 |
| ● | Form of payment. 40% in cash and 60% in awards of deferred stock units (DSUs); directors can elect to defer some or all of the cash portion and instead receive additional DSUs |
| ● | Time of payment. Quarterly installments in arrears |
| ● | Multiple committees. If a director serves on more than one committee, the additional compensation applies separately for each committee |
| ● | Limit on director compensation. $1,000,000 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 executivesis 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 group, and beneficial owners of more than 5% of our common stock.lump sum or in payments spread out for up to 10 years.
| 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 | |||
FORWARD | ||
OTHER COMPENSATION. Our independent directors may also receive the following benefits:
| ● | Matching Gifts Program. Independent directors may participate in the GE Foundations 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 |
| ● | Incidental Board Meeting Expenses. The company occasionally provides travel and sponsors activities for spouses or other guests of |
No Additional Director Compensation
Independent directors do not receive any cash incentive compensation, hold deferred compensation balances (other than DSUs) or receive pension benefits. Since 2003, DSUs have been the only equity incentive compensation awarded to the independent
directors; we ceased granting stock options to directors in 2002, and no independent director had stock options outstanding as of the most recent fiscal year-end. Directors who are company employees do not receive any compensation for their services as directors.
Share Ownership Requirements for Independent Directors
STOCK OWNERSHIP REQUIREMENTS 5Xfor independent directors |
All independent directors are required to hold at least $550,000 (which is five times the cash portion of their annual retainer, or $110,000) worth of GE stock and/or DSUs while serving as GE directors. A director has five years from joining the Board to meet this ownership threshold. All directors are in compliance with this requirement.
GE 2023 PROXY STATEMENT 23
Director Compensation Table
This table shows the compensation that each independent director earned for his or her 2022 Board and committee service. 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, all director compensation paid to him.
| NAME OF DIRECTOR | CASH FEES | STOCK AWARDS | MATCHING GIFTS | TOTAL | ||||||||||||
| Stephen Angel | $ | 7,639 | $ | 219,545 | $ | 0 | $ | 227,184 | ||||||||
| Sébastien Bazin | $ | 0 | $ | 296,667 | $ | 0 | $ | 296,667 | ||||||||
| Ashton Carter* | $ | 101,087 | $ | 143,055 | $ | 0 | $ | 244,142 | ||||||||
| Francisco D’Souza | $ | 0 | $ | 320,591 | $ | 0 | $ | 320,591 | ||||||||
| Edward Garden | $ | 120,000 | $ | 172,258 | $ | 0 | $ | 292,258 | ||||||||
| Isabella Goren | $ | 97,716 | $ | 139,368 | $ | 5,000 | $ | 242,084 | ||||||||
| Thomas Horton | $ | 141,500 | $ | 202,897 | $ | 0 | $ | 344,397 | ||||||||
| Risa Lavizzo-Mourey | $ | 114,000 | $ | 163,645 | $ | 5,000 | $ | 282,645 | ||||||||
| Catherine Lesjak | $ | 128,000 | $ | 183,742 | $ | 0 | $ | 311,742 | ||||||||
| Tomislav Mihaljevic | $ | 81,643 | $ | 116,115 | $ | 0 | $ | 197,758 | ||||||||
| Paula Rosput Reynolds | $ | 100,500 | $ | 224,414 | $ | 0 | $ | 324,914 | ||||||||
| Leslie Seidman | $ | 124,000 | $ | 178,000 | $ | 5,000 | $ | 307,000 | ||||||||
| James Tisch* | $ | 0 | $ | 94,046 | $ | 0 | $ | 94,046 | ||||||||
| * | Mr. Carter passed away on October 24, 2022, and Mr. |
CASH FEES. Amount of cash compensation earned in 2022 for Board and committee service.
STOCK AWARDS. Aggregate grant date fair value of DSUs granted in 2022, as calculated in accordance with SEC rules, including amounts that the directors deferred into DSUs in lieu of all or a part of their cash compensation. Grant date fair value is calculated by multiplying the number of DSUs granted by the closing price of GE stock on the grant date (or the last trading day prior to the grant date), which was $91.50 for March 31, 2022 grants, $63.67 for June 30, 2022 grants, $61.91 for September 30, 2022 grants, and $83.79 for December 31, 2022 grants. The table below shows the cash amounts that the directors deferred into DSUs in 2022 and the number of DSUs accrued as of 2022 fiscal year-end.
| DIRECTOR | CASH DEFERRED INTO DSUs IN 2022 | # DSUs ACCRUED AT 2022 FISCAL YEAR-END* | |||||
| Stephen Angel | $ | 87,912 | 3,138 | ||||
| Sébastien Bazin | $ | 124,000 | 22,285 | ||||
| Ashton Carter | $ | 0 | 5,658 | ||||
| Francisco D’Souza | $ | 134,000 | 27,977 | ||||
| Edward Garden | $ | 0 | 12,078 | ||||
| Isabella Goren | $ | 0 | 1,976 | ||||
| Thomas Horton | $ | 0 | 13,144 | ||||
| Risa Lavizzo-Mourey | $ | 0 | 13,252 | ||||
| Catherine Lesjak | $ | 0 | 9,575 | ||||
| Tomislav Mihaljevic | $ | 0 | 1,678 | ||||
| Paula Rosput Reynolds | $ | 33,500 | 11,665 | ||||
| Leslie Seidman | $ | 0 | 15,573 | ||||
| James Tisch | $ | 38,835 | 27,938 | ||||
| * | Amounts do not take into account the treatment of |
24 GE 2023 PROXY STATEMENT
COMMON STOCK. Table of ContentsThis column
Stock Ownership Information
Beneficial Ownership Table
The following table shows beneficial ownership of our common stock as calculated under SEC rules.rules, as of December 31, 2022, for (i) our directors and nominees, (ii) our named executives, (iii) our current directors and executives as a group, and (iv) beneficial owners of more than 5% of our common stock. Except to the extent noted below, everyone included in the table has sole voting and investment power over the shares reported. None of the shares are pledged as security by the named person, although standard brokerage accounts may include non-negotiable provisions regarding set-offs or similar rights.(1) This table does not take into account the treatment of outstanding equity in 2023 as a result of the GE HealthCare spin-off. See Treatment of Outstanding Equity Awards with GE HealthCare Spin-Off on page 38 for additional details.
| DIRECTORS & NOMINEES | NUMBER OF SHARES | PERCENT OF CLASS | ||||||
| Stephen Angel | 11,098 | * | ** | |||||
| Sébastien Bazin | 0 | * | ** | |||||
| Francisco D’Souza | 18,937 | * | ** | |||||
| Edward Garden | 4,016,414 | * | ** | |||||
| Isabella Goren | 0 | * | ** | |||||
| Thomas Horton | 6,906 | * | ** | |||||
| Catherine Lesjak | 0 | * | ** | |||||
| Darren McDew | 0 | ** | ||||||
| Paula Rosput Reynolds | 6,100 | * | ** | |||||
| Leslie Seidman | 1,812 | * | ** | |||||
| Jessica Uhl | 0 | ** | ||||||
| Total | 4,061,267 | ** | ||||||
| NAMED EXECUTIVES | ||||||||
| H. Lawrence Culp, Jr. | 1,955,661 | ** | ||||||
| Carolina Dybeck Happe | 52,362 | ** | ||||||
| Peter Arduini | 0 | ** | ||||||
| John Slattery | 101,414 | ** | ||||||
| Russell Stokes | 292,185 | ** | ||||||
| Total | 2,401,622 | ** | ||||||
| CURRENT DIRECTORS & EXECUTIVES | ||||||||
| Current directors & executives as a group (18 people) | 7,263,141 | ** | ||||||
| 5% BENEFICIAL OWNERS | ||||||||
| Capital Research Group Global Investors, 333 S. Hope St., 55th Fl., Los Angeles, CA 90071 | 102,093,162 | 9.4 | % | |||||
| The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355 | 86,785,547 | 8.0 | % | |||||
| BlackRock, Inc., 55 East 52nd Street, New York, NY 10055 | 67,872,032 | 6.2 | % | |||||
| Fidelity Management & Research, 245 Summer Street, Boston, MA 02210 | 60,332,310 | 5.5 | % | |||||
| Total | 317,083,051 | 29.1 | % |
| * | Our independent directors receive quarterly installments of deferred stock units (DSUs), which are not paid out until one year after the director leaves the Board, and therefore are not included in this table. See Director Compensation Table on page 24 for the number of DSUs each director has accrued. |
| ** | Less than 1%. No director or named executive owns more than one-tenth of 1% of the total outstanding shares of GE common stock, other than Mr. Garden, who may be deemed to indirectly beneficially own 0.4% of our outstanding shares as a result of his affiliation with Trian and Mr. Culp, who has sole voting but not investment power over 0.2% of our outstanding shares. |
For the directors, nominees & named executives, the Stock sub-columntable includes non-voting interests that may be converted into shares of GE common stock within 60 days, including RSUs. This column also includes(1) shares that may be acquired under stock options that are currently exercisable or will become exercisable within 60 days (seedays: Dybeck Happe (43,678), Slattery (88,193) and Stokes (242,072), (2) RSUs that will vest in 60 days: Dybeck Happe (5,257), Slattery (6,308) and Stokes (3,680), and (3) shares over which the Options sub-column)named individual has shared voting and investment power through family trusts or other accounts: Angel (5,960), Culp (212,783), Garden (4,016,414)(1), Horton (6,903), Reynolds (537).
For Mr. Culp, this column also includes 1,742,878 performance shares over which he has sole voting but no investment power.
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,For our current 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 officersexecutives as a group. This row includes:group, the table includes (1) 1,016,7231,033,579 shares that may be acquired under stock options that are or will become exercisable within 60 days, (2) 5,29228,914 RSUs that will vest withinin 60 days, (3) 4,648,1724,272,040 shares over which there is shared voting and investment power, and (4) 1,742,878 shares over which there is sole voting power but no investment power. 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 |
DELINQUENT SECTION 16(a) REPORTS. For our 5% beneficial ownersBased upon a review of reports, the table includes:
| (# OF SHARES) | CAPITAL RESEARCH | VANGUARD | BLACKROCK | FIDELITY | ||||
| Sole voting power | 102,084,780 | 0 | 60,539,451 | 51,806,970 | ||||
| Shared voting power | 0 | 1,460,923 | 0 | 0 | ||||
| Sole investment power | 102,093,162 | 82,472,260 | 67,872,032 | 60,332,310 | ||||
| Shared investment power | 0 | 4,313,287 | 0 | 0 |
The foregoing information is based solely on Schedule 13G filed by Capital Research Global Investors on February 13, 2023, and 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 fileSchedules 13G/A filed by Vanguard, BlackRock and Fidelity 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.February 9, 2023, February 7, 2023, and February 9, 2023, respectively.
24
GE 20222023 PROXY STATEMENT25
26GE 20222023 PROXY STATEMENT25
Shareholder Engagement on Executive Compensation We value the 2021 Say-on-Pay Vote
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In 2021,ongoing feedback that we received approximately 42% support forreceive from our shareholders on executive compensation matters, including the feedback reflected in our annual say-on-pay proposal. The Management Development & Compensation Committee and entire Board take the outcomevotes. With support for say-on-pay of this vote seriously and have been highly focused on understanding and responding to our shareholders’ feedback reflected66% in this vote. Through the company’s engagement efforts,2022, the committee soughthas continued to elicit and consider a full range ofprioritize seeking shareholders’ perspectives related to GE’s executive compensation program, program design elementsabout specific areas of concern and specific actions, to inform appropriate responses topotential improvements.
During the say-on-pay vote.
The shareholder feedback we received and reviewed with the committee reviewed shareholder feedback, which representedrepresents a spectrumrange of views from different shareholders. As partIt was clear that a majority of these engagements,investors were supportive of our actions and commitments in response to the 2021 say-on-pay vote that did not receive majority support, and that many shareholders 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 aspectswere supportive of our compensation program design, but voted against say-on-payand actions as reflected in the improvement in voting results from 2021 based on specificto 2022. We strive to continuously improve our compensation actions taken for 2020.program to drive strong alignment with company performance and with our shareholders’ expectations. The following table provides an overview of the twothree main areas of concernthemes related to executive compensation that shareholders expressed as underlying last year’sraised following the 2022 say-on-pay vote, and actions the committee has takenis taking in response to those concerns.
response.
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| How We are Responding | |||||||||
| TOPIC | FEEDBACK | ACTIONS | |||||||
| No changes to predetermined performance targets | Shareholders were supportive of the | |  | ||||||
| PSU design | We discussed long-term incentive design with nearly all shareholders that we met with. While not an area of significant concern for many investors, the feedback centered on two areas of the 2021 PSU design: ● For some investors, the use of a one-year financial targets with a three-year relative TSR modifier for the performance period. While many investors expressed a general preference for multi-year financial targets in ● To a lesser extent, concern about the use of free cash flow as a metric for | | We modified the design of our PSUs to address the primary area of concern in this feedback. Grants of PSUs in 2023 will To provide greater clarity on the committee’s choices about specific performance metrics and targets, we added additional disclosure in the | ||||||
| Disclosure | With the scope of GE’s operations across diverse industries, and with the company in a significant period of transition working toward the planned separation into three independent companies, we sought shareholders’ feedback on how our proxy disclosure could be improved. We received many helpful suggestions, and one overarching area of shareholder interest was to hear about how executive compensation is evolving through the planned separation into three independent companies. | | We have included a variety of proxy disclosure enhancements informed by the various shareholder feedback. Those include highlighted sections detailing key progress, actions and expectations related to the spin-offs (see the “Our Path Forward” call-out boxes), as well as a redesigned Compensation Discussion & Analysis section and new disclosure about the choice of metrics and targets in the compensation program. | ||||||
| * | Grants of PSUs in 2022 had already been made at the time of last year’s proxy filing, and the 2022 PSUs have the same design as the 2021 PSUs; however, the 2022 PSUs have been cancelled and will |
See the letter fromGE 2023 PROXY STATEMENT 27
Compensation Discussion & Analysis
This Compensation Discussion & Analysis section provides a description of actions taken by the Management Development & Compensation Committee on page 25(the committee) with respect to GE’s executive compensation philosophy, and programs and more specifically, discusses the process in determining the 2022 compensation for more information about our say-on-pay response.named executive officers (named executives or NEOs) who were determined in accordance with SEC rules.
| Section | Begins on Page... | |||||||
Overview of Our Executive Compensation Program ● Compensation philosophy ● Key compensation program elements ● Peer group |  | 29 | ||||||
Key Elements of Compensation for Our Named Executives ● Target compensation structure ● Base salaries ● Annual Executive Incentive Plan ● Long-term incentive compensation ● Plans to use longer performance periods following spin-off | | 30 | ||||||
Compensation Actions for 2022 ● Compensation decisions for our CEO ● Compensation decisions for our other named executives | | 39 | ||||||
Summary Compensation ● Summary Compensation Table | | 42 | ||||||
Incentive Compensation ● Grants of Plan-Based Awards Table ● Outstanding Equity Awards Table ● Options Exercised and Stock Vested Table ● Equity Compensation Plan Information Table | | 44 | ||||||
Deferred Compensation ● Description of nonqualified deferred compensation plans ● Nonqualified Deferred Compensation Table | | 47 | ||||||
Pension Benefits ● Description of pension plans ● Pension Benefits Table | | 49 | ||||||
Potential Termination Payments ● Description of employment agreements, offer letters & severance plan ● Policy on shareholder approval of severance & death benefits ● Potential Benefits Upon Termination or Change of Control Tables | | 51 | ||||||
Other Executive Compensation Policies & Practices ● Roles and responsibilities ● Use of compensation consultants ● Clawback policy ● Compensation risk assessment ● Stock ownership & equity grant policies | | 56 | ||||||
Management Development & Compensation Committee Report ● Report by the committee | | 57 | ||||||
26 28GE 20222023 PROXY STATEMENT
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.
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GE 2022 PROXY STATEMENT 27
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 factors the Management Development & Compensation Committeecommittee considers when designing pay programs and making compensation decisions.
| OBJECTIVE | HOW OUR COMPENSATION PROGRAM SUPPORTS THIS PHILOSOPHY | |
| Drive Accountability and Performance | ● Our incentive programs are designed to drive accountability for executing our strategy.● Annual bonuses are tied to business unit● 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 compensationelements balancing short-term and long-term considerations. ● Cash payments reward achievement of short-term goals while equity awards encourage our named executives to deliver sustained strong results over multi-year performance periods.● The committee continues to increase the portion of our executive compensation delivered in the form of long-term equity incentive compensation, rather than cash, to further align our executives with investors’ interests. | |
| Attract and Retain Top Talent | ● ● | |
| No Excessive Risk Taking | ● Our equity awards have specific holding and retention requirements for senior executives, which discourage excessive risk taking by keeping long-term compensation aligned with our share price performance even after it is earned.● The committee retains discretion to adjust compensation for quality of performance and lack of adherence to company values, and in cases of detrimental misconduct pursuant to our clawback policy. |
2021Key Compensation Program ComponentsElements
The table below sets forth the primarykey components of our executive compensation program framework.
| Fixed | Performance-Based / At-Risk | |||||
| Short-Term Incentive | Long-Term Equity-Based Incentive (generally 3-year vesting) | |||||
| Component | SALARY | ANNUAL BONUS | OPTIONS | |||
| Link to Shareholder Value | Provide base pay level aligned with roles, responsibilities and individual performance to attract and retain top talent | Deliver on annual investor framework Serves as key compensation vehicle for differentiating performance each year | Focus 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
PSU awards provide a significant stake in the long-term financial success of GE that is aligned with shareholder interests and promote employee retention | Reward stock price performance over time | Provide for long-term employee retention | |
Performance-Based Compensation Structure
 |  |
28 GE 20222023 PROXY STATEMENT29
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 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 |
| ||
| 3M | Honeywell | ||
| Abbott Laboratories | HP | ||
| Boeing | IBM | ||
| Caterpillar | Intel | ||
| Chevron | Johnson Controls | ||
| Cisco | Johnson & Johnson | ||
| Deere | Lockheed Martin | ||
| DuPont | Medtronic | ||
| Exxon Mobil | Northrup Grumman | ||
| Ford | Raytheon | ||
| General Dynamics | Technologies | ||
| General Motors | United Parcel Service | ||
HOW WE USE THE PEER GROUP. The committee uses the peer group to assess the pay level of our executives, pay mix, compensation program design and pay practices. The peer group is also used as a reference point when assessing individual pay, although compensation decisions are also supplemented by input from the company’s independent compensation consultant and are impacted by principles of internal equity, retention considerations, succession planning and other internal GE dynamics.
| OUR PATH FORWARD | CHANGES TO THE 2023 PEER GROUP. In 2022, Exxon and Chevron were removed from the peer group for 2023 because their size and market capitalization are no longer comparable to |
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Key Elements of Compensation for Our Incentive Compensation PlansNamed Executives
This section provides an overview of the elements of GE’s incentiveexecutive compensation plansprogram for our 2022 named executives, who were determined in accordance with SEC rules: Mr. Culp, Ms. Dybeck Happe, Mr. Arduini, Mr. Slattery and how GE performed against the goals established under its 2021 annual bonus program and 2019 PSUs.Mr. Stokes. See “Compensation Actions for 2021” 2022 on page 3339 for specific details about 2021the compensation for each of these named executives.
Target Compensation Structure for Our CEO and Other Named Executives
GE’s executive compensation program is designed to strengthen the link between pay and performance by having a significant portion of total executive compensation tied to the achievement of predetermined performance targets directly related to our business goals and strategies. Our pay mix is as follows:
 | | |
| CEO TARGET COMPENSATION | AVERAGE 2022 TARGET COMPENSATION FOR OTHER NEOs | |
 |  |
Mr. Culp’s target compensation as depicted above includes an annual equity grant of performance stock units with a grant date fair value of $15 million, in accordance with his employment agreement. As previously reported, in 2022 Mr. Culp received a PSU award with a grant date fair value of $5 million. The average target compensation for other NEOs depicted above is based on year-end salary and target short- and long-term incentive awards for 2022.
30 GE 2023 PROXY STATEMENT
Base Salaries
The table below shows the annual base salaries as of January 1, 2022, for our named executives.executives set by the committee, which were determined based on the scope of their responsibilities, their leadership skills and values, and their performance and length of service. There were no changes to the annual base salaries of any of our named executives from their 2021 levels.
| 2022 NAMED EXECUTIVES | 2022 BASE SALARY | ||
| H. Lawrence Culp, Jr., Chairman and Chief Executive Officer, GE and Chief Executive Officer, GE Aerospace | $ | 2,500,000 | |
| Carolina Dybeck Happe, Senior Vice President and Chief Financial Officer, GE | $ | 1,500,000 | |
| Peter Arduini, President and Chief Executive Officer, GE HealthCare* | $ | 1,250,000 | |
| John Slattery, Executive Vice President and Chief Commercial Officer, GE Aerospace | $ | 1,250,000 | |
| Russell Stokes, President and Chief Executive Officer, Commercial Engines and Services, GE Aerospace | $ | 1,400,000 | |
| * | Following the spin-off of GE HealthCare on January 3, 2023 that separated GE HealthCare Technologies Inc. from GE, Mr. Arduini is no longer employed by GE. |
Annual BonusesExecutive Incentive Plan
We provide annual cash incentive opportunities to our named executives under GE’s Annual Executive Incentive Plan (AEIP). The financial performance metrics and targets for awards under the AEIP are designed to drive company and business unit performance, based on our financial and operational priorities. When determining
How We Determined 2022 AEIP Bonuses for Our Named Executives
All employees at the annual incentiveexecutive-band level and above within GE are eligible to participate in the AEIP. Individual bonuses are based on an employee’s employment within Corporate or a business unit. For our named executives, individual target award payable to each executive officer,percentages are typically set between 100-150% of base salary, based on their respective position and alignment with peer compensation practices.
Each year, the committee considersevaluates and sets AEIP performance achieved relative to these pre-establishedmetrics and targets for Corporate (based on total company performance) and business units during the first quarter of the performance year. Following the conclusion of the performance year, the committee assesses total company and business unit performance against applicable performance metrics for the performance year to determine the AEIP pool fundingbonus payouts. The CEO may also provide perspective to the committee about business or individual performance for Corporatethe year, although the CEO has no role in the committee’s determination of his own compensation.
For 2022, bonuses under the AEIP paid to our named executives were determined quantitively based on the named executive’s base salary, target award percentage, achievement of applicable total company or business unit financial performance targets and each relevant GE business.a safety modifier. While the committee has the ability under the AEIP to apply discretion at the business andor individual levels when appropriate, we have engagedno discretion was used in determining the 2022 bonuses for our named executives.
| NAMED EXECUTIVE 2022 BONUS DETERMINATIONS | ||||||||||
| BASE SALARY |  | TARGET AWARD PERCENTAGE | | FINANCIAL PERFORMANCE |  | SAFETY MODIFIER (+/-10%) | ||||
GE 2023 PROXY STATEMENT 31
How We Selected Metrics for the 2022 AEIP
The committee selects performance metrics for the AEIP that are aligned with shareholdersfurthering the company’s and have heardbusiness units’ goals for the concerns some of them have expressed aboutyear. For 2022, as in recent years, the use of this discretionselected financial metrics were based upon total company results for bonuses in 2020. In the 2021 bonusesour Corporate named executives, and upon business unit results for named executives as described below, no discretion was used.
METRICS FOR THE ANNUAL BONUS POOL. who lead individual businesses. The committee sets the performance goalsmetrics for the 2022 AEIP and their respective weightings for Corporate and business unit bonus pools. For 2021, financial metrics for the annual bonus program were free cash flow, organic margin expansion and organic revenue growth. named executives, are listed below.
2022 AEIP PERFORMANCE METRICS AND WEIGHTING
| ORGANIC REVENUE GROWTH* | PROFIT | ORGANIC MARGIN EXPANSION* | FREE CASH FLOW* | SAFETY MODIFIER | ||||||
| Corporate | 25% | 25%** | 25% | 25% | +/- 10% | |||||
| Aerospace | 25% | 25% | 25% | 25% | +/- 10% | |||||
| HealthCare | 50% | 12.5% | 12.5% | 25% | +/- 10% | |||||
| Renewable Energy | 50% | 50% | +/- 10% | |||||||
| Power | 50% | 50% | +/- 10% |
| * | Non-GAAP Financial Measure. For information on how these metrics are calculated, see Explanation of Non-GAAP Financial Measures and Performance Metrics on page 75. |
| ** | For Corporate, we used total company adjusted profit, a non-GAAP Financial Measure. |
The committee selected these metrics and weighted them to incentivize strong performance across key drivers of long-term value creation, and these metrics also to reflect how the businessesbusiness units are managed internally. managed. In 2022, the committee introduced profit as an AEIP metric for business-unit employees and adjusted profit as an AEIP metric for Corporate employees to incentivize profitable growth as we transition to three independent companies. The selection of metrics, the determination of the business units to which they applied, and the relative weighting of each, were a function of the unique context for the company and each business unit.
The committee selected these metrics to incentivize performance in a manner consistent with how management measures and reports the company’s operating results. Accordingly, the AEIP uses the same non-GAAP financial measures that management uses to report the company’s financial results each quarter and when providing an annual financial outlook for the year. The committee believes the use of these measures in compensation program design is appropriate and promotes consistency with metrics that many investors use to evaluate the company’s financial performance. See page 75 for additional discussion on the reasons we use these non-GAAP financial measures and how these measures are calculated.
In addition, to further align the AEIP with GE’s overarching operational priority of safety, the committee for the first time in 2021 appliedselected a performance modifier tothat can increase or decrease awards by up to 10% based on achievement of defined safety metrics. The safetySafety performance modifier wasis determined based on an assessment for eachof Corporate (based on total company) and business ofunit performance against the following safety metrics relative to targets set at the beginning of the performance year: injury and illness rates; serious incidents; fatalities; and overall safety culture and progress since the prior year. Targets for each business are established to achieve year-over-year improvements across the aforementioned safety metrics, recognizing the differences in the nature of the working environments and safety risk profiles across our businesses.
For 2021, the bonus pool2023 AEIP the committee selected the following financial performance metrics: free cash flow (40% weighting), organic revenue growth (20% weighting), and profit or adjusted profit (as applicable) (40% weighting) for each of Corporate (based on total company) and the business units. The committee believes this further simplified set of financial metrics continuedwill focus management on driving performance aligned with shareholders’ interests and will better align with peers. The committee also maintained the safety modifier to increase or decrease the award by up to 10%.
How We Selected Targets for the 2022 AEIP
The committee establishes targets and performance levels which are designed to be based upon company-wide resultsrigorous but realistic and informed by our annual financial performance goals and external guidance.
The target, threshold and maximum performance levels for each performance measure are set with reference to annual budgets for the total company and business units that our CorporateCEO, CFO and business unit CEOs establish, and the committee approves the performance levels for compensation purposes. Failure to achieve threshold on any one metric would result in no payout for that metric; and failure to achieve threshold on all metrics would result in no payout for the AEIP bonus. Awards are also subject to a 10% safety modifier. For the 2022 AEIP, named executives could receive between 0% and upon business unit results for named executives who lead an individual business.150% of their target award.
HOW THE BONUS PROGRAM WORKS. 32 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. The CEO also leads an assessment of each named executive’s performance against relevant business and personal priorities, and makes recommendations to the committee related to compensation for each executive. In doing so, he receives input and data from our Chief Human Resources Officer. The Chief 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.
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GE 20222023 PROXY STATEMENT29
How We Performed Against Annual Bonus Targets for 20212022
The chart below setsfollowing charts set forth how Corporate (based on total company) and each of the business units performedresults for named executives relative to thetheir respective targets under the AEIP for the 2021 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 20212022. These results are formulaic and based solelyonly on the relevant performance metrics with no use of discretion.predetermined targets for Corporate and the businesses listed.
CORPORATE. For our Corporate named executives—executives — Mr. Culp and Ms. Dybeck Happe —bonuses— bonuses were evaluated based upon the achievement of performance goalstargets for the company as a whole.
| AEIP FINANCIAL PERFORMANCE METRICS | THRESHOLD (50%) | TARGET (100%) | MAXIMUM (150%) | RESULT | WEIGHT | SAFETY PERFORMANCE MODIFIER (+/- 10%) | COMBINED RESULT | |||||||||
| Total Company Organic Revenue Growth* |  | 56% |  | |||||||||||||
| Total Company Adjusted Profit ($M)* |  | 0% |  | |||||||||||||
| Corporate | 0% | 14% | ||||||||||||||
| Total Company Organic Margin Expansion (bps)* |  | 0% |  | |||||||||||||
| Total Company Free Cash Flow ($M)* |  | 0% |  | |||||||||||||
| AEIP POOL FINANCIAL PERFORMANCE METRICS | THRESHOLD (50%) | TARGET (100%) | MAXIMUM (150%) | WEIGHT | RESULT | SAFETY PERFORMANCE MODIFIER (+/- 10%) | BONUS POOL PAYOUT | |||||||
| GE Corporate | Free Cash Flow ($M)* |  |  | 150% | -5% | 112% | ||||||||
| Organic Margin Expansion (bps)* |  |  | 117% | |||||||||||
| Organic Revenue Growth* |  |  | 56% | |||||||||||
AEIP metrics for Corporate were set and are reported here using our prior three-column financial statement metrics of GE Industrial free cash flow, GE Industrial adjusted organic profit margin expansion and GE Industrial organic revenue growth. Refer to our Annual Report on Form 10-K for 2021 results on the current one-column reporting basis.
AVIATION. AEROSPACE. Mr. Slattery’s bonus was based upon the achievement of performance goalstargets for the AviationAerospace business, for which he isserved as the CEO.CEO until June 2022 and as Chief Commercial Officer thereafter.
| AEIP POOL FINANCIAL PERFORMANCE METRICS | THRESHOLD (50%) | TARGET (100%) | MAXIMUM (150%) | WEIGHT | RESULT | SAFETY PERFORMANCE MODIFIER (+/- 10%) | BONUS POOL PAYOUT | |||||||
| Aviation | Free Cash Flow ($M)* |  |  | 150% | -5% | 107% | ||||||||
| Organic Margin Expansion (bps)* |  |  | 150% | |||||||||||
| Organic Revenue Growth* |  |  | 0% | |||||||||||
AVIATION SERVICES. Mr. Stokes’s bonus was based upon the achievement of performance goals for the Aviation Services business, for which he is the CEO.
| AEIP POOL FINANCIAL PERFORMANCE METRICS | THRESHOLD (50%) | TARGET (100%) | MAXIMUM (150%) | WEIGHT | RESULT | SAFETY PERFORMANCE MODIFIER (+/- 10%) | BONUS POOL PAYOUT | |||||||
| Aviation Services | Free Cash Flow ($M)* |  |  | 150% | -5% | 104% | ||||||||
| Organic Margin Expansion (bps)* |  |  | 51% | |||||||||||
| Organic Revenue Growth* |  |  | 87% | |||||||||||
| AEIP FINANCIAL PERFORMANCE METRICS | THRESHOLD (50%) | TARGET (100%) | MAXIMUM (150%) | RESULT | WEIGHT | SAFETY PERFORMANCE MODIFIER (+/- 10%) | COMBINED RESULT | |||||||||
| Aerospace Organic Revenue Growth* |  | 0% |  | |||||||||||||
| Aerospace Profit ($M) |  | 149% |  | |||||||||||||
| Aerospace | +5% | 117% | ||||||||||||||
| Aerospace Organic Margin Expansion (bps)* |  | 150% |  | |||||||||||||
| Aerospace Free Cash Flow ($M)* |  | 150% |  | |||||||||||||
| * | Non-GAAP Financial Measure. For information on how these metrics are calculated, see |
30 GE 20222023 PROXY STATEMENT33
HEALTHCARE. COMMERCIAL ENGINES & SERVICES, AEROSPACE. As CEO of the Commercial Engines & Services business, Mr. Murphy’sStokes’s bonus was based upon50% on Commercial Engine Operations’ performance targets and 50% on Aviation Services’ performance targets; these are sub-businesses within the achievementAerospace business that Mr. Stokes led during 2022. As shown below, the performance metrics for Mr. Stokes included a combination of performance goalsboth Commercial Engine Operations and Aviation Services free cash flow targets as well as a free cash flow target for the HealthcareAerospace business overall to incentivize performance within each of those sub-businesses and horizontally across related functions for which he wasAerospace overall. This reflects the CEO untilsame weighting for the endfree cash flow metric (25%) as within the AEIP for the Aerospace business overall, but with more specific tailoring to align with Mr. Stokes’ areas of 2021.
| AEIP POOL FINANCIAL PERFORMANCE METRICS | THRESHOLD (50%) | TARGET (100%) | MAXIMUM (150%) | WEIGHT | RESULT | SAFETY PERFORMANCE MODIFIER (+/- 10%) | BONUS POOL PAYOUT | ||||||||||||
| Healthcare | Free Cash Flow ($M)* |  | 131% | ||||||||||||||||
| Organic Margin Expansion (bps)* |  | 104% | +5% | 100% | |||||||||||||||
| Organic Revenue Growth* |  | 61% | |||||||||||||||||
| AEIP POOL FINANCIAL PERFORMANCE METRICS | THRESHOLD (50%) | TARGET (100%) | MAXIMUM (150%) | WEIGHT | RESULT | SAFETY PERFORMANCE MODIFIER (+/- 10%) | BONUS POOL PAYOUT | |||||||||||
Renewable | Free Cash Flow ($M)* |  | 0% | |||||||||||||||
| Organic Margin Expansion (bps)* |  | 0% | -10% | No Payout | ||||||||||||||
| Organic Revenue Growth* |  | 0% | ||||||||||||||||
| AEIP POOL FINANCIAL PERFORMANCE METRICS** | THRESHOLD (50%) | TARGET (100%) | MAXIMUM (150%) | WEIGHT | RESULT | SAFETY PERFORMANCE MODIFIER (+/- 10%) | BONUS POOL PAYOUT | |||||||||||
Gas Power | Free Cash Flow ($M)* |  | 150% | |||||||||||||||
| Organic Margin Expansion (bps)* |  | 60% | -5% | 122% | ||||||||||||||
| Organic Revenue Growth* |  | 150% | ||||||||||||||||
| Steam, Power Conversion and Nuclear | Free Cash Flow ($M)* |  | 136% | |||||||||||||||
| Organic Margin Expansion (bps)* |  | 50% | +5% | 107% | ||||||||||||||
| Organic Revenue Growth* |  | 88% | ||||||||||||||||
responsibility.
| AEIP FINANCIAL PERFORMANCE METRICS | THRESHOLD (50%) | TARGET (100%) | MAXIMUM (150%) | RESULT | WEIGHT | SAFETY PERFORMANCE MODIFIER (+/- 10%) | COMBINED RESULT | |||||||||
| Commercial Engine Organic Revenue Growth* |  | 0% |  | |||||||||||||
| Commercial Engine Profit ($M) |  | 150% |  | |||||||||||||
| Commercial Engine Operations | Commercial Engine Organic Margin Expansion (bps)* |  | 146% |  | +5% | |||||||||||
| Commercial Engine Free Cash Flow ($M)* |  | 150% |  | |||||||||||||
| Aerospace Free Cash Flow ($M)* |  | 150% |  | |||||||||||||
| 118% | ||||||||||||||||
| Aviation Services Organic Revenue Growth* |  | 105% |  | |||||||||||||
| Aviation Services Profit ($M) |  | 106% |  | |||||||||||||
| Aviation Services | Aviation Services Organic Margin Expansion (bps)* |  | 100% |  | +5% | |||||||||||
| Aviation Services Free Cash Flow ($M)* |  | 138% |  | |||||||||||||
| Aerospace Free Cash Flow ($M)* |  | 150% |  | |||||||||||||
| * | Non-GAAP Financial Measure. For information on how these metrics are calculated, see |
| ** | The company does not report |
34 GE 20222023 PROXY STATEMENT31
OverviewHEALTHCARE. Mr. Arduini’s bonus was based upon performance targets for the HealthCare business, of which he was the CEO during 2022 before the spin-off of that business in January 2023.
| AEIP FINANCIAL PERFORMANCE METRICS | THRESHOLD (50%) | TARGET (100%) | MAXIMUM (150%) | RESULT | WEIGHT | SAFETY PERFORMANCE MODIFIER (+/- 10%) | COMBINED RESULT | |||||||||
| HealthCare Organic Revenue Growth* |  | 104% |  | |||||||||||||
| HealthCare Profit ($M) |  | 0% |  | |||||||||||||
| HealthCare | +5% | 57% | ||||||||||||||
| HealthCare Organic Margin Expansion (bps)* |  | 0% |  | |||||||||||||
| HealthCare Free Cash Flow ($M)* |  | 0% |  | |||||||||||||
RENEWABLE ENERGY. There were no named executives from the Renewable Energy business for 2022.
| AEIP FINANCIAL PERFORMANCE METRICS | THRESHOLD (50%) | TARGET (100%) | MAXIMUM (150%) | RESULT | WEIGHT | SAFETY PERFORMANCE MODIFIER (+/- 10%) | COMBINED RESULT | |||||||||
| Renewable Energy Profit ($M) |  | 0% |  | |||||||||||||
| Renewable Energy | 0% | 0% | ||||||||||||||
| Renewable Energy Free Cash Flow ($M)* |  | 0% |  | |||||||||||||
POWER. There were no named executives from the Power business for 2022.
| AEIP FINANCIAL PERFORMANCE METRICS | THRESHOLD (50%) | TARGET (100%) | MAXIMUM (150%) | RESULT | WEIGHT | SAFETY PERFORMANCE MODIFIER (+/- 10%) | COMBINED RESULT | |||||||||
| Power Profit ($M) |  | 56% |  | |||||||||||||
| Power | +5% | 108% | ||||||||||||||
| Power Free Cash Flow ($M)* |  | 150% |  | |||||||||||||
| * | Non-GAAP Financial Measure. For information on how these metrics are calculated, see Explanation of Non-GAAP Financial Measures and Performance Metrics on page 75. |
GE 2023 PROXY STATEMENT 35
Long-Term Incentive Compensation
As part of our annual compensation program, we use a mix of long-term incentive compensation awards: Performance Stock Units (PSUs), Restricted Stock Units (RSUs)PSUs, RSUs and stock options.
HOW WE DETERMINE AWARD MIX AND AMOUNTS. In determining award mix and amounts, the committee evaluates each executive’s overall compensation relative to the market for similar talent, the mix of cash versus equity as a percentage of the executive’s overall compensation, the executive’s expected future contribution to the success of the company and the retentive value of such awards. In 2021,2022, our annual equity incentive awards for seniornamed executives other than Mr. Culp (who only received PSUs) were weighted approximately 50% as PSUs, 30% as stock options and 20% as RSUs.
WE USE PSUs TO ALIGN PAY WITH PERFORMANCE. We see PSUs 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 have formulaically determined payouts that are earned only if the company achieves specified performance goals. PSUs 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 performance-based equity, as agreed in his employment agreement.equity. By granting Mr. Culp solely performance-based equity, the committee has put more oftied Mr. Culp’s compensation at risk, providing himto long-term shareholder value creation.
Performance Stock Units
HOW OUR ANNUAL PSUs WORK.
PSU awards are designed to focus our named executives on long-term financial and operating goals for the company overall. Our PSU awards have formulaically determined payouts that are earned only if the company achieves specified performance levels over the relevant performance period. In the first quarter of each year, the committee selects the performance metrics for our PSU awards to be granted that year. The committee chooses performance metrics that it believes align with increased incentivethe company’s long-term strategic objectives and contribute to drive longer-term improvementsthe creation of long-term shareholder value. The committee then monitors company performance against the performance metrics over the applicable performance period, and the committee certifies the final levels of achievement. The certified achievement levels determine the percentage of the target number of PSUs under the award that a named executive will earn.
HOW WE SELECTED METRICS AND TARGETS FOR THE 2022 PSUs.
The performance metrics and targets our 2022 PSUs were approved by the committee in February 2022, prior to the publication of last year’s proxy statement. See Shareholder Feedback on PSU Design on page 36 for a description of the changes we made to our 2023 PSUs is response to subsequent feedback from our shareholders.
The annual PSU awards granted to the named executives in 2022 had a three-year period, based on 2022 adjusted earnings per share (50% weighting) and free cash flow (50% weighting) performance against target levels and subject to modification of +/- 20% based on three-year relative TSR performance versus the S&P 500 Industrials Index, with results interpolated for performance between threshold, target and maximum levels. The committee chose adjusted earnings per share and free cash flow as metrics to incentivize and focus management on both profitability and cash generation, which continue to be important financial priorities for GE. These are total company financial metrics that help align all company leaders that receive the PSUs with the same performance target, in contrast to the metrics used in our AEIP that for business unit employees are based on business-level performance.
The committee establishes targets and performance levels that are designed to be rigorous but realistic and informed by our annual financial performance goals and external guidance. The target, threshold and maximum performance levels for each performance measure are set with reference to annual budgets for the total company that our CEO and CFO establish. In 2022, company performance was below the threshold level for adjusted earnings per share and free cash flow in the 2022 PSU awards, resulting in no PSUs being earned. Accordingly, the 2022 PSU awards were cancelled in February 2023 with no payout.
SHAREHOLDER FEEDBACK ON OUR PSU DESIGN.
In response to shareholder feedback, we adopted a new design for the PSU awards granted to named executives in 2023. These awards will vest over a three-year performance period with performance measured as the average of three consecutive one-year performance periods (2023, 2024 and 2025) against adjusted earnings per share (50% weighting) and free cash flow (50% weighting) targets, subject to modification of +/- 20% based on three-year relative TSR versus the S&P 500 Industrials Index, with results interpolated for performance between threshold, target and maximum. The committee believes this approach to average three consecutive performance years is responsive to shareholder feedback about the length of the PSU performance period and appropriate during the transitional period for the company today. The PSUs continue to use the total company performance metrics of adjusted earnings per share and free cash flow, which continue to be important measures for the company’s performance and, as total company metrics, are differentiated from the metrics applicable to business-level employees under the AEIP.
| OUR PATH FORWARD | PLANS TO USE LONGER PERFORMANCE PERIODS FOLLOWING SPIN-OFF. It has been a challenge to set long-term financial targets while we have been in the midst of significant transformation into three independent public companies. After completion of the planned business separations, GE (which will be GE Aerospace at that time) plans to develop long-term incentive awards that include multi-year financial targets. We also anticipate that GE HealthCare and GE Vernova as standalone companies will do so as well, as ultimately will be determined by the compensation committees for those companies |
36 GE 2023 PROXY STATEMENT
How Our PSU Awards Performed Against Targets
2020. The annual PSU awards granted to the named executives in 2020 used a three-year performance period based on GE’s relative TSR performance versus the S&P 500 Industrials Index, with results interpolated for performance between threshold, target and maximum.
| PERFORMANCE GOAL | THRESHOLD EARN 25% | TARGET EARN 100% | MAXIMUM EARN 175% | WEIGHTING | STATUS | ||||||
| Relative TSR |  |  | 2020 PSUs HAD NO PAYOUT. The company did not achieve the threshold level of performance for the payout of these awards, and accordingly, in February 2023 the committee cancelled all 2020 PSUs with no payout. | ||||||||
2021. The annual PSU awards granted to the named executives in 2021 used a three-year performance period based on GE’s 2021 adjusted earnings per share and total company free cash flow performance against target levels and subject to modification of +/- 20% based on three-year relative TSR versus the S&P 500 Industrials Index, with results interpolated for performance between threshold, target and maximum.
| PERFORMANCE GOAL | THRESHOLD EARN 25% | TARGET EARN 100% | MAXIMUM EARN 175% | WEIGHTING | STATUS | ||||||
| Adjusted Earnings per Share* |  |  | 2021 PSUs REMAIN SUBJECT TO THREE-YEAR RELATIVE TSR. | ||||||||
| Total Company Free Cash Flow ($M)* |  |  | The 2021 PSUs performed above the maximum level for the adjusted earnings per share and free cash flow performance metrics. The awards remain subject to the three-year relative TSR modifier, which will determine the number of shares earned. | ||||||||
| Relative TSR |  | +/- 20% modifier | Results will be certified by the committee in February 2024. | ||||||||
PSU metrics for 2021 were set and reported here using our prior three-column financial statement metrics of GE Industrial earnings per share and GE Industrial free cash flow.
2022. The annual PSU awards granted to the named executives in 2022 used a three-year performance period based on GE’s 2022 adjusted earnings per share and total company free cash flow performance against target levels and subject to modification of +/- 20% based on three-year relative TSR versus the S&P 500 Industrials Index, with results interpolated for performance between threshold, target and maximum.
| PERFORMANCE GOAL | THRESHOLD EARN 25% | TARGET EARN 100% | MAXIMUM EARN 175% | WEIGHTING | STATUS | ||||||
| Adjusted Earnings per Share* |  |  | 2022 PSUs HAD NO PAYOUT. The company did not achieve the threshold level of performance for either of the performance metrics for the payout of these awards, and accordingly in February 2023 the committee cancelled all 2022 PSUs with no payout. | ||||||||
| Total Company Free Cash Flow ($M)* |  |  | |||||||||
| Relative TSR |  | +/- 20% modifier | |||||||||
| * | Non-GAAP Financial Measure. For information on how these metrics are calculated, see Explanation of Non-GAAP Financial Measures and Performance Metrics on page 75. |
GE 2023 PROXY STATEMENT 37
OTHER PERFORMANCE STOCK UNIT AWARD.
On January 3, 2022, Mr. Arduini became President and Chief Executive Officer of GE HealthCare, after joining GE as an employee in December 2021. In connection with becoming Chief Executive Officer of GE HealthCare, in February 2022, he received a PSU award (New Hire PSU Award). Mr. Arduini’s New Hire PSU Award is eligible to vest on March 1, 2025, in an amount between 0% and 150% of the target number of PSUs, based on the final average achievement of annual performance objectives set for each of 2022, 2023 and 2024. For 2022, the committee chose annual performance metrics, which consisted of HealthCare free cash flow (25% weighting), organic margin expansion (12.5% weighting), organic revenue growth (50% weighting) and profit (12.5% weighting), in each case with respect to the HealthCare business, subject to modification of +/- 10% for safety performance. The performance metrics and targets established for the 2022 performance year reflected GE HealthCare's status as a business within GE, rather than a standalone public company, and therefore aligned with GE's established metrics and targets for that business. GE HealthCare, as a standalone company, will determine performance metrics and targets for the remaining performance years. In January 2023, Mr. Arduini’s New Hire PSU Award was converted into GE HealthCare PSUs and remains subject to the performance conditions.
RESTRICTED STOCK UNITS AND STOCK OPTIONS.
WHY WE USE STOCK OPTIONS AND RSUs. RSUs TO FOCUS ON LONG-TERM VALUE CREATION. We believe that awards of stock options and RSUs effectively focus our named executives on delivering long-term value to our shareholders. OptionsStock options have value only to the extent that the price of GE stock rises between thean award’s grant date and theits exercise date. RSUsRSU awards reward and retain the named executives by offering them the opportunity to receive GE stock if they are stillremain employed by the company on the date thethat an award’s 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. 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 annual PSUs granted to the 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. 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.
OUR POLICY ON DIVIDEND EQUIVALENTS.
Our awards of PSUs, performance shares and RSUs are entitled to receive dividend equivalents or dividends, as applicable, and such dividend equivalents or dividends are only paid out on the shares actually received by our named executives under the terms of such awards. Stock options are not entitled to receive any dividend equivalents or dividends.
| OUR PATH FORWARD | |||
TREATMENT OF OUTSTANDING EQUITY AWARDS WITH GE HEALTHCARE SPIN-OFF. In the GE HealthCare (GEHC) spin-off in January 2023, GE shareholders received a distribution of one share of GE HealthCare common stock for every three shares of GE common stock held. Because unvested equity awards held by GE employees were not eligible to receive a distribution of GEHC shares, the company made equitable adjustments designed to preserve the pre-spin-off value of those awards following the reduction in parent company stock price that occurs when a significant business is distributed to shareholders in a spin-off. In advance of the spin-off, the committee established conversion ratios to govern the adjustments that, depending on the type of award, either were based on a comparison of the pre-spin-off GE stock price to the post-spin-off GE and GEHC stock prices or were the same as the ratio used to establish the number of GEHC shares distributed to GE shareholders in the spin-off. The approach for these equitable adjustments was to align employees with their business assignments and roles relative to the spin-off: GEHC employees’ awards converted into GEHC awards; business-level GE employees continued to hold GE awards; and Corporate employees at GE received a combination of GE and GEHC awards, aligned with how GE shareholders received GEHC shares as a distribution on their existing GE shares in the spin-off. In each case, the approach was designed to preserve the pre-spin-off value of the relevant employee equity awards. The post-spin-off equity awards reflecting these equitable adjustments are generally subject to the same vesting conditions and other terms prior to the spin-off, except that (i) the annual 2021 PSU awards now held by GE employees will measure GE’s relative TSR for the remainder of the performance period by adding together the pre-spin-off and post-spin-off GE relative TSR as two discrete periods, and (ii) the annual 2021 PSU awards that converted to GEHC awards following the spin-off will vest at the end of the performance period based on the GE relative TSR performance up to the time of the spin-off. There were no changes to the terms of Mr. Culp’s Leadership Performance Shares granted on August 18, 2020, and Ms. Dybeck Happe’s Leadership PSUs granted on September 3, 2020, in connection with the spin-off, and pursuant to the terms of those awards the performance level achieved will be based on a weighted average of the GE and GEHC stock prices. | |||
32 38GE 20222023 PROXY STATEMENT
Compensation Actions for 2021
| |||||
CURRENT AND PRIOR ROLES Chairman & CEO, GE (since September 2018) and CEO, GE Aerospace (since June 2022); former senior lecturer, Harvard Business School (2015-2018); former Senior Advisor, Bain Capital Private Equity (2017-2018); former CEO & President, Danaher (2001-2014) | |||||
2022 Performance Highlights As Chairman & CEO, Mr. Culp plays a central role in shaping the company’s strategy, establishing the framework against which performance is measured and delivering on that performance. Performance highlights during ● ● Continuing to lead GE’s enterprise-wide focus on operational improvement and execution by more deeply embedding lean and decentralization across the ● Assuming an expanded leadership role beginning in June 2022 as the CEO of
| H. Lawrence Culp, Jr. CHAIRMAN & CEO
Age: 59 Education: Washington College; MBA, Harvard Business School GE Tenure: 4 Years | ||||
 | |||||
Response to In response to prior shareholder feedback, the committee and Mr. Culp agreed to reduce his annual equity incentive grant for 2022 from a grant date fair value of $15 million to $5 million. | |||||
Annual CEO Pay Structure
| ● | Salary. Upon his appointment as CEO, Mr. Culp’s salary was set at $2,500,000 under his 2018 employment agreement and (other than certain forfeitures of his salary in 2020 in connection with the COVID-19 pandemic) |
| ● | Bonus. Mr. Culp’s bonus target is set at 150% of salary and has not changed since his appointment as CEO. |
| ● | Annual equity awards. |
|
GE 20222023 PROXY STATEMENT 3339
Compensation for Our Other Named Executives
| |||||
CURRENT AND PRIOR ROLES Senior Vice President & CFO, GE (since March 2020); former CFO and Executive committee member, A.P. Moller-Maersk A/S (2019-2020); former Executive Vice-President and CFO, Assa Abloy AB (2012-2018) | |||||
2022 Performance Highlights As CFO, Ms. Dybeck Happe leads the company’s Finance organization and ● ● Surpassing $100 billion of gross debt reduction ●
| Carolina Dybeck
Age: 50 Education: Uppsala University, Sweden GE Tenure: 3 Years | ||||
 |
|
CURRENT AND PRIOR ROLES President and CEO, GE HealthCare (since January 2022); 2022 Performance Highlights As CEO of the HealthCare business, Mr. Arduini led the successful spin-off of GE HealthCare. Performance highlights during 2022 included: ● Successfully leading the HealthCare business in its preparations to separate from the company, including recruitment and selection of GE HealthCare’s senior leadership team with balance of prior public company experience and legacy customer, market, and product knowledge ● Driving strong operational and financial performance in 2022 for the HealthCare business, including increased annual revenues and cash flow conversion ● Delivering new products and technology to healthcare customers globally, and partnering with industry peers to develop products and services that advance precision care
| Peter Arduini
Age: 58 Education: Northwestern University’s GE Tenure: 1 Years | |||
40 GE 2023 PROXY STATEMENT
CURRENT AND PRIOR ROLES Executive Vice President and Chief Commercial Officer, GE | |||||
2022 Performance Highlights Mr. Slattery served as CEO of GE Aerospace until June 2022, when he transitioned to Executive Vice President and Chief Commercial Officer to focus on leading the ● Leading the● ● Delivering strong orders and focusing on customer support in the
| John Slattery
Age: 54 Education: University of GE Tenure: 3 Years | ||||
 |
34 GE 2022 PROXY STATEMENT
| ||||
Changes for 2023 Compensation: Consistent with the change in his job responsibilities during 2022, the committee approved an annual equity grant in 2023 for Mr. Slattery of $3.0 million. | ||||
CURRENT AND PRIOR ROLES President and CEO, GE Commercial Engines & Services, GE Aerospace (since July 2022); former President and CEO, GE Aviation Services | |||||
2022 Performance Highlights As CEO of the ● ● Implementing lean●
| Russell Stokes
Age: 51 Education: Cleveland State University GE Tenure: 26 Years | ||||
 |
| |||||
| |||||
| |||||
 | |||||
GE 20222023 PROXY STATEMENT 3541
Summary Compensation Table
| 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 | |||||||||
| NAME & PRINCIPAL POSITION | YEAR | SALARY | BONUS* | STOCK AWARDS | STOCK OPTION | NON-EQUITY INCENTIVE PLAN COMP. | CHANGE IN PENSION VALUE & DEFERRED COMP. | ALL OTHER COMP | SEC TOTAL | |||||||||||||||||||||||||||
| H. Lawrence Culp, Jr. Chairman & CEO, GE and CEO, GE Aerospace | 2022 | $ | 2,500,000 | $ | 0 | $ | 5,000,021 | $ | 0 | $ | 525,000 | $ | 151,653 | $ | 21,350 | $ | 8,198,024 | |||||||||||||||||||
| 2021 | $ | 2,500,000 | $ | 4,200,000 | $ | 14,999,996 | $ | 0 | $ | 0 | $ | 943,153 | $ | 20,300 | $ | 22,663,449 | ||||||||||||||||||||
| 2020 | $ | 653,409 | 0 | $ | 72,054,874 | $ | 0 | $ | 0 | $ | 463,799 | $ | 19,950 | $ | 73,192,032 | |||||||||||||||||||||
| Carolina Dybeck Happe SVP & CFO | 2022 | $ | 1,500,000 | $ | 0 | $ | 3,354,008 | $ | 1,500,016 | $ | 262,500 | $ | 0 | $ | 3,124,668 | $ | 9,741,192 | |||||||||||||||||||
| 2021 | $ | 1,500,000 | $ | 2,100,000 | $ | 3,602,609 | $ | 1,499,998 | $ | 0 | $ | 351,465 | $ | 1,415,986 | $ | 10,470,058 | ||||||||||||||||||||
| 2020 | $ | 1,250,000 | $ | 1,325,000 | $ | 10,415,106 | $ | 9,500,003 | $ | 0 | $ | 246,010 | $ | 1,032,906 | $ | 23,769,025 | ||||||||||||||||||||
| Peter Arduini SVP, GE and CEO, HealthCare | ||||||||||||||||||||||||||||||||||||
| 2022 | $ | 1,250,000 | $ | 0 | $ | 6,135,961 | $ | 2,099,996 | $ | 890,625 | $ | 0 | $ | 120,520 | $ | 10,497,102 | ||||||||||||||||||||
| John Slattery EVP & CCO Aerospace | 2022 | $ | 1,250,000 | $ | 0 | $ | 4,024,812 | $ | 1,800,006 | $ | 1,462,500 | $ | 105,114 | $ | 138,843 | $ | 8,781,275 | |||||||||||||||||||
| 2021 | $ | 1,250,000 | $ | 1,337,500 | $ | 4,323,123 | $ | 1,799,998 | $ | 0 | $ | 292,217 | $ | 451,616 | $ | 9,454,454 | ||||||||||||||||||||
| 2020 | $ | 588,768 | $ | 1,375,000 | ** | $ | 2,097,221 | $ | 2,399,998 | $ | 0 | $ | 87,815 | $ | 4,685,336 | $ | 11,234,138 | |||||||||||||||||||
| Russell Stokes SVP, GE & CEO Commercial Engines & Services | 2022 | $ | 1,400,000 | $ | 0 | $ | 2,549,063 | $ | 1,140,001 | $ | 1,652,000 | $ | 3,217 | $ | 113,422 | $ | 6,857,703 | |||||||||||||||||||
| 2021 | $ | 1,400,000 | $ | 1,456,000 | $ | 2,521,819 | $ | 1,050,001 | $ | 0 | $ | 2,733 | $ | 89,211 | $ | 6,519,764 | ||||||||||||||||||||
| 2020 | $ | 1,400,000 | $ | 1,300,000 | $ | 7,267,127 | $ | 1,050,002 | $ | 0 | $ | 5,919,977 | $ | 89,573 | $ | 17,026,679 | ||||||||||||||||||||
| * | |
| ** | Includes $1.0 million signing bonus for Mr. Slattery, pursuant to his offer letter agreement. |
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.executives. Each of the named executives other than Mr. Murphy, contributed a portion of his or her salary to the GE Retirement Savings Plan (GE RSP), the company’s 401(k) savings plan. Mr. Culp voluntarily forfeited 74% of his salary for 2020, in light of the business challenges resulting from the COVID-19 pandemic. See Base Salaries on page 31 for more information.
BONUS. Amounts earned under our annual cash bonus program.the AEIP in 2020 and 2021. For amounts earned under the AEIP in 2022, see Non-Equity Incentive Plan Compensation. See “Overview of OurAnnual Executive Incentive Compensation Plans” Planon page 2931 for additional information on the bonusAEIP 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 “2019 PSUs Had No Payout” on page 32,37, the 20192020 and 2022 PSU grants were cancelled by the committee and as a result, none of our named executives received a payout for these awards. Although theWhen PSUs wereawards are cancelled, GE does not adjust the related amounts previously reported as compensation in the year of the PSU award to reflect the cancellation. In accordance with SEC rules, the aggregate grant date fair value of the 20212022 PSUs and the 2022 portion of Mr. Arduini’s New Hire PSU Award is calculated based on the most probable outcome of the performance conditions as of the grant date, which was less than maximum performance. If the most probable outcome of the performance conditions on the grant date had been maximum performance, then the grant date fair value of the 20212022 PSUs would have been as follows: Culp ($23,119,639)7,818,428), Dybeck Happe ($3,853,348)3,887,734), Arduini ($7,603,440), Slattery ($4,623,946)4,665,328), and Stokes ($2,697,407)2,954,684) and Murphy ($3,853,348).the grant date fair value of the New Hire PSU Award would have been $2,160,517. Portions of Mr. Arduini’s New Hire PSU Award are tied to performance goals for 2023 and 2024 that were not set at the time of the grant, and in accordance with SEC rules, no value was estimable for those portions at the time of the grant. A fair value for those portions will be disclosed in future years once the targets are known and the value is estimable. See the 2022 Grants of Plan-Based Awards Table on page 3844 for 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.10-K for 2022. See the 20212022 Grants of Plan-Based Awards Table on page 3844 for additional information on 20212022 grants.
NON-EQUITY INCENTIVE PLAN COMPENSATION. Amounts earned under the AEIP for 2022. See the 2022 Grants of Plan-Based Awards Table on page 44 and Annual Executive Incentive Plan on page 31 for additional information.
CHANGE IN PENSION VALUE & DEFERRED COMP. Sum of the change in pension value and above-market earnings on nonqualified deferred compensation, which break down as shown in the following table.
| NAME | CHANGE IN PENSION VALUE | ABOVE MARKET EARNINGS | CHANGE IN PENSION VALUE | ABOVE MARKET EARNINGS | ||||||||||
| Culp | $ | 943,153 | $ | 0 | $ | 151,653 | $ | 0 | ||||||
| Dybeck Happe | $ | 351,465 | $ | 0 | $ | 0 | $ | 0 | ||||||
| Arduini | $ | 0 | $ | 0 | ||||||||||
| Slattery | $ | 292,217 | $ | 0 | $ | 105,114 | $ | 0 | ||||||
| Stokes | $ | 0 | $ | 2,733 | $ | 0 | $ | 3,217 | ||||||
| Murphy | $ | 166,364 | $ | 0 | ||||||||||
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.any additional service and compensation (as applicable by plan). See “Pension Benefits” Benefits on page 4349 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 2021.2022. See “Deferred Compensation” Compensation on page 4147 for additional information.
36 42 GE 20222023 PROXY STATEMENT
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 2021,2022, minus any reimbursements by the named executives, are shown in the table below.
| NAME | LIFE INSURANCE PREMIUMS | COMPANY CONTRIBUTIONS TO SAVINGS PLANS | FINANCIAL AND TAX PLANNING | RELOCATION AND EXPATRIATE BENEFITS | RELOCATION AND EXPATRIATE TAX BENEFITS | OTHER | TOTAL | LIFE INSURANCE PREMIUMS | COMPANY CONTRIBUTIONS TO SAVINGS PLANS | COMPANY CREDITS TO RESTORATION PLAN | RELOCATION AND EXPATRIATE BENEFITS | RELOCATION AND EXPATRIATE TAX BENEFITS | OTHER | TOTAL | |||||||||||||||||||||||||||||||||||
| Culp | $ | 0 | $ | 20,300 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 20,300 | $ | 0 | $ | 21,350 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 21,350 | |||||||||||||||||||||
| Dybeck Happe | $ | 0 | $ | 8,700 | $ | 0 | $ | 467,563 | $ | 865,322 | $ | 74,401 | $ | 1,415,986 | $ | 0 | $ | 9,150 | $ | 0 | $ | 429,913 | $ | 2,664,677 | $ | 20,928 | $ | 3,124,668 | |||||||||||||||||||||
| Arduini | $ | 0 | $ | 21,350 | $ | 74,970 | $ | 0 | $ | 0 | $ | 24,200 | $ | 120,520 | |||||||||||||||||||||||||||||||||||
| Slattery | $ | 0 | $ | 20,300 | $ | 0 | $ | 70,909 | $ | 335,488 | $ | 24,919 | $ | 451,616 | $ | 0 | $ | 21,350 | $ | 0 | $ | 69,164 | $ | 44,651 | $ | 3,678 | $ | 138,843 | |||||||||||||||||||||
| Stokes | $ | 67,665 | $ | 18,850 | $ | 0 | $ | 0 | $ | 0 | $ | 2,696 | $ | 89,211 | $ | 83,521 | $ | 19,825 | $ | 0 | $ | 0 | $ | 0 | $ | 10,076 | $ | 113,422 | |||||||||||||||||||||
| Murphy | $ | 54,632 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 24,449 | $ | 79,081 | |||||||||||||||||||||||||||||||||||
LIFE INSURANCE PREMIUMS. 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, Arduini and Ms. Dybeck Happe.
COMPANY CONTRIBUTIONS TO SAVINGS PLANS. Company Contributions to Savings Plans. Represents contributions under the GE RSP. For Messrs. Culp, Slattery and Stokes and Ms. Dybeck Happe, represents GE’s matching contributions to the named executives’ RSP accounts equaling up to 4% of eligible pay, and automatic contributions equaling 3% of eligible pay, up to the caps imposed under IRS rules. The GE RSP was split into two plans effective January 1, 2023 – one maintained by GE HealthCare, and one maintained by GE. Mr. Murphy is based outsideArduini’s RSP benefits were allocated to the United StatesGE HealthCare Retirement Savings Plan and is ineligible for this plan.the other named executives remained in the GE RSP. We anticipate splitting the GE RSP again in anticipation of the planned spin-off of GE Vernova.
FINANCIAL AND TAX PLANNING. Company Credits to Restoration Plan. Expenses forRepresents GE’s accrued credits to the usenamed executives’ Restoration Plan accounts equaling 7% of advisors for financial, estatetheir annual earnings, which include base salary and tax preparationup to one-half of eligible bonus payments, that exceed the IRS-prescribed limit.
Relocation and planning, and investment analysis and advice.
support for his children ($17,649)69,164). Relocation and international assignment benefits, such as those provided to Ms. Dybeck Happe and Mr. Slattery, allow us to recruit the best executives from all over the world, regardless of where they are based.
RELOCATION AND EXPATRIATE TAX BENEFITS. Relocation and Expatriate Tax gross-ups and equalizationBenefits. Tax benefits provided in connection with new hire relocations and international assignments. For Ms. Dybeck Happe, these benefits are pursuant to her employment agreement, and in 2022, include the following: (1) tax equalization payments ($1,525,298 ) intended to ensure that Ms. Dybeck Happe is not put in a disadvantaged tax position as a result of her position with GE in the United States, (2) taxes paid in connection with relocation benefits ($334,185), and (3) tax gross-up payments related to the tax benefits ($805,194). Tax benefits were higher in 2022 for Ms. Dybeck Happe partially because they related to multiple tax years. Benefits for Mr. Slattery included taxes paid in connection with relocation benefits ($44,651).
OTHER. 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).executive. 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 their invited guests’ attendance at sporting events; (3) transition credits related to participation in the GE Pension Plan; (4) annual physical examinations; (5) legal and (4)professional fees and (6) incremental costs associated with personal use of aircraft and travel by guests accompanying the executive on business travel on a company-leased aircraft, such as for catering. Our named executives are permitted to use an aircraft that is leased by the company for personal use, but, to the extent the named executives engaged in such use during 2021,2022, 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. In addition, the company engages in certain sponsorships and purchases tickets to sporting events in advance for the purposes of customer entertainment. Occasionally, tickets from sponsorship agreements or unused 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 the company. For Mr. Murphy, this amount includes a monthly car allowance, totaling $18,168 in 2021.
SEC TOTAL. Total. Total compensation, as determined under SEC rules.
GE 20222023 PROXY STATEMENT 3743
Incentive CompensationLong-Term
In recent years, we have used a mix of short-term incentive compensation under the AEIP and long-term incentive compensation awards: PSUs, Performance Shares,performance shares, RSUs, and stock options. In 2021,2022, we granted Annual Equity Awardsannual equity awards in March.
20212022 Grants of Plan-Based Awards Table
The following table shows bonuses under our AEIP, and awards of RSUs, PSUs RSUs and stock options granted to our named executives in 2021. Each of these2022. These awards waswere approved under the GE 2007 Long-Term Incentive Plan, a plan that shareholders approved in 2007, 2012 and 2017.2017 (the 2007 LTIP). In 2022, our shareholders approved the GE 2022 Long-Term Incentive Plan (the 2022 LTIP), which replaced the 2007 LTIP. For more information on each of the award types, see “Overview of Long-Term Incentive Compensation” Compensation on page 32. Where applicable,36. This table includes PSU awards granted in 2022, which were cancelled without payout as a result of below-threshold performance. This table does not take into account the treatment of outstanding equity awards in 2023 in connection with the GE HealthCare spin-off. See Treatment of Outstanding Equity Awards with GE HealthCare Spin-Off on page 38 for additional details.
| ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS | ESTIMATED FUTURE PAYOUTS UNDER PSUs | RESTRICTED STOCK UNITS (#) | STOCK OPTIONS (#) | OPTION EXERCISE PRICE | GRANT DATE FAIR VALUE OF AWARDS | |||||||||||||||||||||||||||||||||||||||||
| NAME | GRANT DATE | APPROVAL DATE | AWARD TYPE | THRESHOLD ($) | TARGET ($) | MAXIMUM ($) | THRESHOLD (#) | TARGET (#) | MAXIMUM (#) | |||||||||||||||||||||||||||||||||||||
| Culp | AEIP | $ | 93,750 | $ | 3,750,000 | $ | 5,625,000 | |||||||||||||||||||||||||||||||||||||||
| 3/21/2022 | 3/6/2022 | Annual Equity | 5,542 | 55,424 | 96,992 | $ | 5,000,021 | |||||||||||||||||||||||||||||||||||||||
| Dybeck Happe | AEIP | $ | 46,875 | $ | 1,875,000 | $ | 2,812,500 | |||||||||||||||||||||||||||||||||||||||
| 3/1/2022 | 2/23/2022 | Annual Equity | 2,824 | 28,238 | 49,417 | $ | 2,499,967 | |||||||||||||||||||||||||||||||||||||||
| 3/1/2022 | 2/11/2022 | Annual Equity | 10,317 | $ | 854,041 | |||||||||||||||||||||||||||||||||||||||||
| 3/1/2022 | 2/11/2022 | Annual Equity | 45,032 | $ | 92.33 | $ | 1,500,016 | |||||||||||||||||||||||||||||||||||||||
| Arduini | AEIP | $ | 0 | $ | 1,562,500 | $ | 2,343,750 | |||||||||||||||||||||||||||||||||||||||
| 2/23/2022 | 2/23/2022 | New Hire | 0 | 17,316 | 25,974 | $ | 1,440,345 | |||||||||||||||||||||||||||||||||||||||
| 3/1/2022 | 2/23/2022 | Annual Equity | 3,953 | 39,534 | 69,185 | $ | 3,500,024 | |||||||||||||||||||||||||||||||||||||||
| 3/1/2022 | 2/11/2022 | Annual Equity | 14,443 | $ | 1,195,592 | |||||||||||||||||||||||||||||||||||||||||
| 3/1/2022 | 2/11/2022 | Annual Equity | 63,044 | $ | 92.33 | $ | 2,099,996 | |||||||||||||||||||||||||||||||||||||||
| Slattery | AEIP | $ | 31,250 | $ | 1,250,000 | $ | 1,875,000 | |||||||||||||||||||||||||||||||||||||||
| 3/1/2022 | 2/23/2022 | Annual Equity | 3,389 | 33,886 | 59,301 | $ | 2,999,995 | |||||||||||||||||||||||||||||||||||||||
| 3/1/2022 | 2/11/2022 | Annual Equity | 12,380 | $ | 1,024,816 | |||||||||||||||||||||||||||||||||||||||||
| 3/1/2022 | 2/11/2022 | Annual Equity | 54,038 | $ | 92.33 | $ | 1,800,006 | |||||||||||||||||||||||||||||||||||||||
| Stokes | AEIP | $ | 35,000 | $ | 1,400,000 | $ | 2,100,000 | |||||||||||||||||||||||||||||||||||||||
| 3/1/2022 | 2/23/2022 | Annual Equity | 2,146 | 21,461 | 37,557 | $ | 1,899,985 | |||||||||||||||||||||||||||||||||||||||
| 3/1/2022 | 2/11/2022 | Annual Equity | 7,841 | $ | 649,078 | |||||||||||||||||||||||||||||||||||||||||
| 3/1/2022 | 2/11/2022 | Annual Equity | 34,224 | $ | 92.33 | $ | 1,140,001 | |||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
Amounts shown are the threshold, target and maximum potential payouts under the AEIP for 2022. The payout under the 2022 AEIP can range from zero for below threshold performance against all financial performance measures to a maximum of 150% of target, based on the maximum level of achievement of all financial performance measures. The actual 2022 AEIP payouts for our named executives are reported in the Summary Compensation Table in the Non-Equity Incentive Plan Compensation column. For more information on the AEIP, see Annual Executive Incentive Plan on page 31.
Estimated Future Payouts Under PSUs
Amounts shown are the threshold, target and maximum number of securitiesPSUs that could be earned under awards granted in 2022. The payout of the 2022 PSU awards can range from zero for below threshold performance against both performance measures to a maximum of 175% of target, based on the maximum level of achievement of both performance measures. The payout of Mr. Arduini’s New Hire PSU Award can range from zero for below threshold performance against all performance measures to a maximum of 150% of target, based on the maximum level of achievement of all performance measures. For more information on 2022 PSU awards and option exercise prices reported in this table have been adjusted to reflect the one-for-eight reverse stock split effective July 30, 2021.Mr. Arduini’s New Hire PSU Award, see pages 36 and 38, respectively.
| 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 of an award is the amount that the company expects to expense in its financial statements over the award’s vesting schedule.
| ● | For stock |
| ● | For |
| ● | For |
38 44 GE 20222023 PROXY STATEMENT
20212022 Outstanding Equity Awards at Fiscal Year-End Table
The following table shows the named executives’ stock and option grants as of year-end. It includes unexercised stock options awards (vested and unvested), RSUs, Performance Sharesperformance shares and PSUs for which vesting conditions were not yet satisfied as of December 31, 2021. Where applicable,2022. The table does not include PSU awards granted in 2020 and 2022, which were cancelled without payout as a result of below-threshold performance.
This table does not take into account the numbertreatment of securities and option exercise prices reportedoutstanding equity awards in this table have been adjusted to reflect2023 in connection with the one-for-eight reverse stock split effective July 30, 2021.
| OUTSTANDING EQUITY AWARDS TABLE | ||||||||||||||||||
| NAME OF EXECUTIVE | GRANT DATE | AWARD TYPE | NUMBER OUTSTANDING | PORTION EXERCISABLE | EXERCISE PRICE | EXPIRATION DATE | MARKET VALUE | VESTING SCHEDULE | ||||||||||
| Culp | 3/19/2019 | PSUs | 46,875 | $ | 4,428,281 | 100% in 2022, subject to performance | ||||||||||||
| 3/2/2020 | PSUs | 41,392 | $ | 3,910,302 | 100% in 2023, subject to performance | |||||||||||||
| 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 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 | 620,554 | 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 2022HealthCare spin-off. See Treatment of Outstanding Equity Awards with GE HealthCare Spin-Off on page 38 for additional details.
| NAME OF EXECUTIVE | GRANT DATE | AWARD TYPE | NUMBER OUTSTANDING | PORTION EXERCISABLE | EXERCISE PRICE | EXPIRATION DATE | MARKET VALUE | VESTING SCHEDULE | ||||||||||||||||
| Culp | 8/18/2020 | Performance Shares | 1,742,879 | $ | 146,035,831 | 100% in 2024, subject to performance | ||||||||||||||||||
| 3/1/2021 | PSUs | 256,429 | $ | 21,486,186 | 100% in 2024, subject to performance | |||||||||||||||||||
| Dybeck Happe | 3/2/2020 | Options | 51,090 | 25,545 | $ | 89.68 | 3/2/2030 | $ | 0 | 100% in 2023 | ||||||||||||||
| 3/2/2020 | Options | 257,732 | 0 | $ | 89.68 | 3/2/2030 | $ | 0 | 100% in 2024 | |||||||||||||||
| 3/2/2020 | RSUs | 5,102 | $ | 427,497 | 100% in 2023 | |||||||||||||||||||
| 9/3/2020 | PSUs | 205,110 | $ | 17,186,167 | 100% in 2025, subject to performance | |||||||||||||||||||
| 3/1/2021 | Options | 36,266 | 0 | $ | 104.88 | 3/1/2031 | $ | 0 | 50% in 2023 and 2024 | |||||||||||||||
| 3/1/2021 | PSUs | 42,739 | $ | 3,581,101 | 100% in 2024, subject to performance | |||||||||||||||||||
| 3/1/2021 | RSUs | 10,513 | $ | 880,884 | 50% in 2023 and 2024 | |||||||||||||||||||
| 3/1/2022 | Options | 45,032 | 0 | $ | 92.33 | 3/1/2032 | $ | 0 | 50% in 2024 and 2025 | |||||||||||||||
| 3/1/2022 | RSUs | 10,317 | $ | 864,461 | 50% in 2024 and 2025 | |||||||||||||||||||
| Arduini | 2/23/2022 | PSUs | 17,316 | $ | 1,450,908 | 100% in 2025, subject to performance | ||||||||||||||||||
| 3/1/2022 | Options | 63,044 | 0 | $ | 92.33 | 3/1/2032 | $ | 0 | 50% in 2024 and 2025 | |||||||||||||||
| 3/1/2022 | RSUs | 14,443 | $ | 1,210,179 | 50% in 2024 and 2025 | |||||||||||||||||||
| Slattery | 7/13/2020 | Options | 67,446 | 44,964 | $ | 53.60 | 7/13/2030 | $ | 2,036,195 | 100% in 2023 | ||||||||||||||
| 9/2/2020 | Options | 42,938 | 21,469 | $ | 51.52 | 9/2/2030 | $ | 1,385,609 | 100% in 2023 | |||||||||||||||
| 9/2/2020 | RSUs | 5,796 | $ | 485,647 | 100% in 2023 | |||||||||||||||||||
| 3/1/2021 | Options | 43,520 | 0 | $ | 104.88 | 3/1/2031 | $ | 0 | 50% in 2023 and 2024 | |||||||||||||||
| 3/1/2021 | PSUs | 51,286 | $ | 4,297,254 | 100% in 2024, subject to performance | |||||||||||||||||||
| 3/1/2021 | RSUs | 12,616 | $ | 1,057,095 | 50% in 2023 and 2024 | |||||||||||||||||||
| 3/1/2022 | Options | 54,038 | 0 | $ | 92.33 | 3/1/2032 | $ | 0 | 50% in 2024 and 2025 | |||||||||||||||
| 3/1/2022 | RSUs | 12,380 | $ | 1,037,320 | 50% in 2024 and 2025 | |||||||||||||||||||
| Stokes | 9/13/2013 | Options | 16,256 | 16,256 | $ | 182.88 | 9/13/2023 | $ | 0 | Fully Vested | ||||||||||||||
| 9/05/2014 | Options | 32,512 | 32,512 | $ | 200.72 | 9/5/2024 | $ | 0 | Fully Vested | |||||||||||||||
| 9/11/2015 | Options | 15,216 | 15,216 | $ | 191.92 | 9/11/2025 | $ | 0 | Fully Vested | |||||||||||||||
| 9/9/2016 | Options | 19,508 | 19,508 | $ | 231.60 | 9/9/2026 | $ | 0 | Fully Vested | |||||||||||||||
| 9/6/2017 | Options | 26,010 | 26,010 | $ | 191.68 | 9/6/2027 | $ | 0 | Fully Vested | |||||||||||||||
| 1/29/2018 | Options | 65,024 | 65,024 | $ | 125.20 | 1/29/2028 | $ | 0 | Fully Vested | |||||||||||||||
| 3/19/2019 | Options | 36,972 | 36,972 | $ | 81.52 | 3/19/2029 | $ | 83,926 | Fully Vested | |||||||||||||||
| 3/2/2020 | Options | 35,763 | 17,881 | $ | 89.68 | 3/2/2030 | $ | 0 | 100% in 2023 | |||||||||||||||
| 3/2/2020 | RSUs | 3,571 | $ | 299,214 | 100% in 2023 | |||||||||||||||||||
| 9/3/2020 | RSUs | 96,451 | $ | 8,081,629 | 50% in 2023 and 2024 | |||||||||||||||||||
| 3/1/2021 | Options | 25,386 | 0 | $ | 104.88 | 3/1/2031 | $ | 0 | 50% in 2023 and 2024 | |||||||||||||||
| 3/1/2021 | PSUs | 29,918 | $ | 2,506,829 | 100% in 2024, subject to performance | |||||||||||||||||||
| 3/1/2021 | RSUs | 7,360 | $ | 616,694 | 50% in 2023 and 2024 | |||||||||||||||||||
| 3/1/2022 | Options | 34,224 | 0 | $ | 92.33 | 3/1/2032 | $ | 0 | 50% in 2024 and 2025 | |||||||||||||||
| 3/1/2022 | RSUs | 7,841 | $ | 656,997 | 50% in 2024 and 2025 | |||||||||||||||||||
GE 2023 PROXY STATEMENT 3945
| 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 awards of RSUs, Performance Sharesperformance shares and PSUs is calculated by multiplying the closing price of GE stock as of December 31, 20212022 ($94.47)83.79) (the last trading day for the year) by the number of shares underlying each award. With respect to the Leadership Performance Shares granted to Mr. Culp on August 18, 2020, and the Leadership PSUs granted to Ms. Dybeck Happe on September 3, 2020, this value assumes satisfaction of the maximum-level payout for the awards, representing the achievement of goals delivering significant shareholder returns.awards. With respect to the 2019 PSUs (which were cancelled without any payouts) and the other 2020 PSUs granted,2021 PSU awards, this value assumes satisfaction of the threshold-levelmaximum-level payout for the awards, and withawards. With respect to the 2021 PSUs,Mr. Arduini’s New Hire PSU Award, this value assumes satisfaction of the maximum-levelreflects target-level payout for the awards. For options, the market value is calculated by multiplying the number of shares underlying each award by the spread between the award’sawards exercise price and the closing price of GE stock as of December 31, 2021.2022.
VESTING SCHEDULE.
Options vest on the anniversary of the grant date in the years shown in the table. See “Potential Termination Payments” Payments on page 4551 regarding other vesting events.
RSUs vest on the anniversary of the grant date in the years shown in the table. See “Potential Termination Payments” Payments on page 4551 regarding other vesting events.events which may result in acceleration of unvested RSUs.
Leadership Performance Shares and Leadership PSUs vest on the anniversary of the grant date in the years shown in the table, solely to the extent that the performance conditions have been achieved. Theachieved at a level to be paid out, as certified by the committee. See Potential Termination Payments on page 51 for additional details regarding events which may result in acceleration of the Leadership Performance Shares and Leadership PSUs 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.PSUs.
Other PSUs vest at the beginning of the year indicated when the committee certifies thatthe level at which the performance conditionsmetrics 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” Compensation on page 32.36. See Potential Termination Payments on page 51 regarding events which may result in earlier service-based vesting for the 2021 PSU awards and Mr. Arduini’s New Hire PSU Award, subject to satisfaction of performance conditions.
Option Exercises and Stock Vested Table
The following table shows the number of shares the named executives acquired and the values they realized upon the vesting of RSUsRSU awards during 2021.2022. During the year, none of the named executives exercised stock options and none of them had PSU or performance share awards that were earned, and onlyall of the named executives, other than Messrs. StokesCulp and MurphyArduini, had RSUsRSU awards that vested. Values are shown before payment of any applicable withholding taxes or brokerage commissions.
Executives that remain employed by GE are required to hold the stock that they receive following the exercise of stock options (less those shares that are withheld to satisfy the exercise price and pay taxes) for at least a year following exercise. Similarly, continuingexercise, regardless of whether their stock ownership requirements have been met. Continuing executives also cannot sell any stock they receive as the result of the vesting of awards of RSUs or PSUs (less those shares that are withheld to pay taxes) until they have satisfied their stock ownership requirement. See “Stock Ownership and Equity Grant Policies” Policies on page 49.57. The 20202021 PSU grants (other than the Leadership PSUs granted to Ms. Dybeck Happe) and the 2021 PSU2022 RSU grants are also subject to a one-year holding requirement following settlement, regardless of whether the executive has met his or her stock ownership requirements.
| OPTION AWARDS | PSUs & RSUs* | |||||||||||
| NAME | NUMBER OF SHARES ACQUIRED ON EXERCISE | VALUE REALIZED ON EXERCISE | NUMBER OF SHARES ACQUIRED ON VESTING | VALUE REALIZED ON VESTING | ||||||||
| Culp | 0 | $ | 0 | 0 | $ | 0 | ||||||
| Dybeck Happe | 0 | $ | 0 | 0 | $ | 0 | ||||||
| Slattery | 0 | $ | 0 | 0 | $ | 0 | ||||||
| Stokes | 0 | $ | 0 | 11,723 | $ | 1,198,294 | ||||||
| Murphy | 0 | $ | 0 | 10,774 | $ | 1,110,410 | ||||||
| OPTION AWARDS | PSUs & RSUs* | |||||||||||||||
| NAME | NUMBER OF SHARES ACQUIRED ON EXERCISE | VALUE REALIZED ON EXERCISE | NUMBER OF SHARES ACQUIRED ON VESTING | VALUE REALIZED ON VESTING | ||||||||||||
| Culp | 0 | $ | 0 | 0 | $ | 0 | ||||||||||
| Dybeck Happe | 0 | $ | 0 | 5,103 | $ | 479,784 | ||||||||||
| Arduini | 0 | $ | 0 | 0 | $ | 0 | ||||||||||
| Slattery | 0 | $ | 0 | 5,796 | $ | 424,441 | ||||||||||
| Stokes | 0 | $ | 0 | 9,717 | $ | 908,389 | ||||||||||
| * | Subject to stock ownership requirement for continuing executives; dollar amount represents pre-tax value realized on vesting. |
40 46 GE 20222023 PROXY STATEMENT
Equity Compensation Plan Information
The following table provides information regarding outstanding equity awards and shares available for future issuance under all of GE’s equity plans. The number of shares available for future issuance increased compared to the prior year, primarily due to the expiration
of unexercised stock options that had an exercise price above our stock price in recent years, and the forfeiture of unvested equity awards upon employee departures, each of which were returned to the pool. Where applicable,This table does not take into account the numbertreatment of shares and weighted average exercise prices reportedoutstanding equity awards or GE’s equity plans in this table have been adjusted to reflect2023 in connection with the one-for-eight reverse stock split effective July 30, 2021.GE HealthCare spin-off. See Treatment of Outstanding Equity Awards with GE HealthCare Spin-Off on page 38 for additional details.
| (IN THOUSANDS EXCEPT PER SHARE $ AMOUNTS, AS OF 12/31/2021) | SHARES TO BE ISSUED UPON EXERCISE OR SETTLEMENT | WEIGHTED AVERAGE EXERCISE PRICE | SHARES AVAILABLE FOR FUTURE ISSUANCE | ||||||||
| Plans approved by shareholders (2007 LTIP) | |||||||||||
| Options | 38,407 | $ | 144.97 | (a) | |||||||
| RSUs | 8,057 | (b) | (a) | ||||||||
| PSUs | 2,053 | (b) | (a) | ||||||||
| Performance Shares | 1,162 | ||||||||||
| Plans not approved by shareholders (Consultants’ Plan) | |||||||||||
| Options | 7 | $ | 182.16 | (c) | |||||||
| RSUs | - | (b) | (c) | ||||||||
| Total | 49,686 | $ | 144.97 | 43,412 | |||||||
| (IN THOUSANDS EXCEPT PER SHARE $ AMOUNTS, AS OF 12/31/2022) | SHARES TO BE ISSUED UPON EXERCISE OR SETTLEMENT | WEIGHTED AVERAGE EXERCISE PRICE | SHARES AVAILABLE FOR FUTURE ISSUANCE | ||||||||
| Plans approved by shareholders (2007 LTIP and 2022 LTIP) | |||||||||||
| Options | 31,016 | $ | 142.68 | (a) | |||||||
| RSUs | 9,687 | (b) | (a) | ||||||||
| PSUs | 2,505 | (b) | (a) | ||||||||
| Performance Shares | 1,162 | ||||||||||
| Plans not approved by shareholders (Consultants Plan) | |||||||||||
| Options | 7 | $ | 182.16 | (c) | |||||||
| RSUs | — | (b) | (c) | ||||||||
| PSUs | — | (b) | (c) | ||||||||
| Total | 44,377 | $ | 142.68 | 74,106 | |||||||
| (a) | Total shares available for future issuance under the |
| (b) | Not applicable. |
| (c) | Following approval of the 2022 LTIP, no |
| |
|
We offer certain deferred compensation programs and arrangements for executives.
Bonus Deferrals
ELIGIBILITY AND DEFERRAL OPTIONS. For 2022 and prior performance years, U.S. employees in our executive band and above, including the named executives, cancould elect to defer all or a portion of their annual bonus payment and be credited
with earnings (or losses) on those deferrals under the options shown below. Participants may change their earnings option up to four times per year. The company makes all decisions regarding the earnings options that are offered and the measures for calculating earnings under those options.
TIME AND FORM OF PAYMENT. Participants can elect to receive their deferred amounts upon separation from service either in a lump sum or in 10 to 20 annual installments. Participants may not withdraw any deferred amounts prior to separating from service.
| EARNINGS OPTION | TYPE OF EARNINGS | ACCOUNT BALANCE FOR EARNINGS CALCULATION | EARNINGS AMOUNT* | WHEN EARNINGS CREDITED | ||||
GE Stock Units (based on GE stock value) S&P 500 Index Units (based on S&P 500) | Dividend-equivalent income | Units in account on NYSE ex-dividend date | Quarterly dividend declared for GE stock or the S&P 500, as applicable | Quarterly | ||||
| Deferred Cash Units (cash units) | Interest income | Daily outstanding account balance | Prior calendar months average yield for U.S. Treasury Notes and Bonds issued with maturities of 10 years and 20 years | Monthly |
| * | None of the bonus deferral options provide for |
Salary Deferrals
ELIGIBILITY. In prior years, we periodically offered eligible employees in our executive band and above the opportunity to defer their salary payments (the last such plan was offered in 2010 for 2011 salary). Individuals who were named executives at the time a deferred salary program was offered were not eligible to participate. Among our named executives, only Mr. Stokes has participated in our salary deferral program.programs.
INTEREST INCOME. These programs provide accrued interest on deferred amounts (including an above-market interest rate as defined by the SEC) ranging from 6% to 14% compounded annually.
TIME AND FORM OF PAYMENT. Our deferred salary programs have required participants to elect before the salary was deferred, to receive deferred amounts either in a lump sum or in 10 to 20 annual installments. Participants may not withdraw any deferred amount prior to separating from service.
GE 20222023 PROXY STATEMENT41 47
GE Restoration Plan
ELIGIBILITY. U.S. employees who become U.S. executives on or after January 1, 2021, accrue benefits under the GE Restoration Plan, instead of any benefits under the GE Supplementary Pension Plan (including the Executive Retirement Benefit) (see “Pension Benefits”Benefits on page 4349 for information regarding the GE Supplementary Pension Plan). As of December 31, 2021 none of our named executives received2022, only Mr. Arduini accrued benefits under the GE Restoration Plan. (See Impact of GE HealthCare Spin-Off on Deferred Compensation Programs, below, for information regarding the impact of the GE HealthCare Spin-Off on Mr. Arduini’s benefit under the GE Restoration Plan.)
BENEFIT FORMULA. GE Restoration Plan participants are credited with 7% of their annual earnings, which include base salary and up to one-half of eligible bonus payments, thatwhich exceed the IRS-prescribed limit applicable to tax-qualified plans ($290,000305,000 for 2021)2022).
EARNINGS OPTIONS AND VESTING. The annual credits are notionally invested as elected by the participant in earnings options that generally mirror the investment options available under the broad-based tax qualified GE RSP. Participants may change their election up to 12 times per quarter. The company makes all decisions regarding the earnings options that are offered and the measures for calculating earnings under those options. Earnings are currently credited daily. Participants generally vest in their GE Restoration Plan accounts after 3three years of service.
TIME AND FORM OF PAYMENT. Vested amounts under the GE Restoration Plan are paid in a lump sum, generally in July of the year following the year of thea participant’s separation from service.
Nonqualified Deferred Compensation Table
The table below shows amounts credited to the named executives’ accounts under nonqualified deferred compensation plans and plan balances as of December 31, 2021.2022. No withdrawals or distributions from these plans were made in 2021.2022.
| EXECUTIVE CONTRIBUTIONS IN 2021 | AGGREGATE EARNINGS IN LAST FISCAL YEAR | AGGREGATE EARNINGS AT LAST FISCAL YEAR-END | ||||||||||||||||||
| NAME | DEFERRED BONUS PROGRAM | DEFERRED SALARY PROGRAM | DEFERRED BONUS PROGRAM | DEFERRED SALARY PROGRAM | ||||||||||||||||
| Culp | $ | 0 | $ | 460,728 | N/A | $ | 2,069,900 | N/A | ||||||||||||
| Dybeck Happe | $ | 0 | $ | 0 | N/A | $ | 0 | N/A | ||||||||||||
| Slattery | $ | 0 | $ | 0 | N/A | $ | 0 | N/A | ||||||||||||
| Stokes | $ | 0 | $ | 59 | $ | 7,567 | $ | 3,610 | $ | 96,589 | ||||||||||
| Murphy | $ | 0 | $ | 0 | N/A | $ | 0 | N/A | ||||||||||||
| AGGREGATE EARNINGS IN LAST FISCAL YEAR | AGGREGATE BALANCE AT LAST FISCAL YEAR-END | |||||||||||||||||||||||||||||
| NAME | EXECUTIVE CONTRIBUTIONS IN 2022 | COMPANY CREDITS IN 2022 | DEFERRED BONUS PROGRAM | DEFERRED SALARY PROGRAM | GE RESTORATION PLAN | DEFERRED BONUS PROGRAM | DEFERRED SALARY PROGRAM | GE RESTORATION PLAN | ||||||||||||||||||||||
| Culp | $0 | N/A | –$ | 376,275 | N/A | N/A | $ | 1,693,625 | N/A | N/A | ||||||||||||||||||||
| Dybeck Happe | $0 | N/A | $ | 0 | N/A | N/A | $ | 0 | N/A | N/A | ||||||||||||||||||||
| Arduini | $0 | $ | 74,970 | $ | 0 | N/A | $ | 0 | $ | 0 | N/A | $ | 74,970 | |||||||||||||||||
| Slattery | $0 | N/A | $ | 0 | N/A | N/A | $ | 0 | N/A | N/A | ||||||||||||||||||||
| Stokes | $0 | N/A | $ | 107 | $ | 8,210 | N/A | $ | 3,716 | $ | 104,799 | N/A | ||||||||||||||||||
EXECUTIVE CONTRIBUTIONS IN 2021. 2022. Amounts represent compensation deferred during 2021. This column does not reflect any 2021 compensation2022.
COMPANY CREDITS IN 2022. Amounts represent accrued company credits in the Summary Compensation Table on page 36 which was credited to the named executive’s deferred account, if any,GE Restoration Plan in 2022.
AGGREGATE EARNINGS IN 2021. 2022. Reflects earnings on each type of deferred compensation listed in this section that were credited to the named executive’sexecutives’ deferred compensation account during 2021.2022. The earnings may be positive or negative, depending on the named executive’s investment choice, and are calculated based on:on the account balance attributable to each earnings option as of December 31, 2021;2022; minus that amount as of December 31, 2020;
2021; minus any contributions during the year. See the Summary Compensation Tableon page 3642 for the above-market portion of these earnings in 2021.2022.
AGGREGATE BALANCE AT DECEMBER 31, 2021. 2022. The fiscal year-end balance reported in the table above includes $1.4$2.1 million for deferred bonus for Mr. Culp that was previously reported in the Summary Compensation Table as 2019 compensation; $2,519and $3,610 for deferred bonus and $96,589 for deferred salary for Mr. Stokes that was notwere previously reported in the Summary Compensation TableTable.
Impact of GE HealthCare Spin-Off on Deferred Compensation Programs
In anticipation of the spin-off of GE HealthCare, each of the deferred bonus and salary plans were split into three continuing mirror plans, effective January 1, 2023, to be maintained by GE Aerospace, GE Vernova, and GE HealthCare, respectively. Mr. Culp and Mr. Stokes’ deferred salary and bonus plan benefits, as 2020 compensation;applicable, were allocated to plans to be maintained by GE Aerospace after the planned GE Vernova spin-off.
Similarly, the Restoration Plan was split into two plans effective January 1, 2023 – one maintained by GE HealthCare, and $2,322 forone maintained by GE. Mr. Stokes that was previously reported onArduini’s Restoration Plan benefits were allocated to the Summary Compensation Table as 2019 compensation.
42 GE 2022HealthCare Restoration Plan. We anticipate splitting the GE Restoration Plan again in anticipation of the planned spin-off of GE Vernova.
48 GE 2023 PROXY STATEMENT
Pension Benefits
The company provides retirement benefits to certain named executives based in the United States under the same GE Pension Plan and GE Supplementary Pension Plan in which other eligible U.S. employees participate. The GE Pension Plan is a funded, tax-qualified plan. The Supplementary Pension Plan is an unfunded, unsecured obligation of the company and is not qualified for tax purposes. 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). Effective January 1, 2023, the plan has been renamed the GE Aerospace Pension Plan. Employees who began working at GE after the plan was closed, including Messrs. Culp and Slattery and Ms. Dybeck Happe, are not eligible for this plan. Those employees who are eligible generally vest in the plan after five years of qualifying service. The plan also requires employee contributions, which vest immediately. Effective January 1, 2021, participants with salaried benefits stopped accruing benefits (and making contributions) under this plan and became eligible for the automatic contributions available to new hires under the GE RSP equalingequalling 3% of eligible pay (up to the caps imposed under IRS rules), plus two years of transition credits equalingequalling 2% of eligible pay per year. Mr. Arduini was previously employed by GE from 1990 to 2005, and accrued benefits under the GE Pension Plan during that time.
BENEFIT FORMULA. For Mr.Messrs. Stokes and Arduini, the plan provides benefits based primarily on a formula that takes into account histheir earnings for each fiscal year (through 2020). during which they were employed by GE. Since 1989, this formula has provided an annual benefit accrual equal to 1.45% of a named executive’s earnings for the year up to covered compensation and 1.9% of his or her earnings for the year in excess of covered compensation. “Covered compensation”Covered compensation was $60,000 for 2020 and has varied over the years based in part on changes in the Social Security taxable wage base. For purposes of the formula, annual earnings include base salary and up to one-half of bonus payments, but may not exceed an IRS-prescribed limit applicable to tax-qualified plans ($285,000 for 2020). As a result, the maximum incremental annual benefit a named executive could have earned for service in 2020 was $5,145, and in 2021 wasand subsequent years is $0 due to the stoppage of accruals. Over the years, we have made special one-time adjustments to this plan that increased eligible participants’participants pensions, but no adjustment was made in 2021.2022.
TIME AND FORM OF PAYMENT. The accumulated benefit an employee earns is payable after retirement on a monthly basis for life with a guaranteed minimum benefit of five years. The normal retirement age as defined in this plan is 65; however, employees who began working at GE prior to 2005, including Mr.Messrs. Stokes and Arduini, may retire at age 60 without any reduction in benefits. In addition, the plan provides for Social Security supplements and spousal joint and survivor annuity options.
TAX CODE LIMITATIONS ON BENEFITS. The tax code limits the benefits payable under the GE Pension Plan. For 2021,2022, the maximum single life annuity a named executive could have received under these limits was $230,000$245,000 per year. This ceiling is actuarially adjusted in accordance with IRS rules to reflect employee contributions, actual forms of distribution and actual retirement dates.
GE Supplementary Pension Plan
ELIGIBILITY AND VESTING. The GE Supplementary Pension Plan is an unfunded and non-tax-qualified retirement program that provides retirement benefits to eligible U.S.-based employees in the executive
band and above, including the named executives. Effective January 1, 2023, the plan has been renamed the GE Aerospace Supplementary Pension Plan. Employees generally must remain continuously employed until age 60 in order to vest in a benefit under the plan. For those who became U.S. executives prior to January 1, 2011, including Mr. Stokes, the plan provides an annuity benefit above amounts available under the GE Pension Plan (a “SupplementarySupplementary Pension benefit”)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 “ExecutiveExecutive Retirement Benefit”)Benefit). Effective January 1, 2021, participants eligible for the Supplementary Pension benefit, including Mr. Stokes, stopped accruing that benefit and began accruing an Executive Retirement Benefit for their future credited service. The Executive Retirement Benefit was also closed to new participants and, effective January 1, 2021, new and rehired U.S. executives, including Mr. Arduini, are instead participating in the GE Restoration Plan (described above). Mr. Arduini forfeited the Supplementary Pension he previously accrued when he left GE in 2005, prior to satisfying the vesting conditions.
Supplementary Pension Benefit
BENEFIT FORMULA. A named executive’s annual Supplementary Pension benefit, when combined with certain amounts payable under the company’s other pension programs and Social Security, will equal 1.75% of his or her “earningsearnings credited for retirement benefits”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 “earningsearnings credited for retirement benefits”benefits are the named executive’s average annual compensation (base salary and bonus) for the highest 36 consecutive months out of the last 120 months prior to retirement (or December 31, 2020, if earlier).
TIME AND FORM OF PAYMENT. The Supplementary Pension benefit would be provided to eligible employees, including Mr. Stokes, after retirement as monthly payments for life (with a guaranteed minimum benefit of five years), and could not be received in a lump sum. The plan also provides for spousal joint and survivor annuity options. The normal retirement age under the plan is 65; however, executives eligible for this benefit who began working at GE prior to 2005, including Mr. Stokes, may retire at age 60 without any reduction in benefits.
Executive Retirement Benefit
BENEFIT FORMULA. A named executive’s Executive Retirement Benefit will equal 18% of his or her earnings credited for retirement benefits for each year of credited service as a GE Officer (as defined in the GE Supplementary Pension Plan), plus 14% of such earnings for each year of credited service as an Executive Director or Senior Executive Director and 10% of such earnings for each year of credited service as an Executive. The “earningsearnings credited for retirement benefits”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 Benefit would be provided to Messrs. Culp and Slattery and Ms. Dybeck Happe after retirement as 10 equal annual installment payments and could not be received in a lump sum. Mr. Stokes also began accruing an Executive Retirement Benefit beginning January 1, 2021, when he stopped accruing additional Supplementary Pension benefits. Executives eligible for this benefit may retire at age 60 but are subject to a reduction in benefits of up to 25% for retirement prior to age 65.
GE 20222023 PROXY STATEMENT 4349
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. Beginning January 1, 2021, no further benefit accruals are permitted for any participants under this plan. Effective January 1, 2023, the plan has been renamed the GE Aerospace Excess Benefits Plan.
BENEFIT FORMULA. Benefits payable under this plan are equal to the amount that would be payable under the terms of the GE Pension Plan disregarding the limitations imposed by certain tax code provisions minus the amount actually payable under the GE Pension Plan taking those limitations into account.
TIME AND FORM OF PAYMENT. Benefits are generally payable at the same time and in the same manner as a 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 (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 contributionpermitted 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.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 £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 2021, this limit was £1,073,100.
The table below shows the present value of the accumulated benefit as of December 31, 20212022, 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 2021.
| 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 | |||||||
| PRESENT VALUE OF ACCUMULATED BENEFIT | |||||||||||||||||||||||
| NAME | NUMBER OF YEARS CREDITED SERVICE | PENSION PLAN | SUPPLEMENTARY PENSION PLAN | EXECUTIVE RETIREMENT BENEFIT | EXCESS BENEFITS PLAN | PAYMENT DURING LAST FISCAL YEAR | |||||||||||||||||
| Culp | 4 | N/A | N/A | $ | 2,614,456 | N/A | $0 | ||||||||||||||||
| Dybeck Happe | 3 | N/A | N/A | $ | 499,591 | N/A | $0 | ||||||||||||||||
| Arduini* | 15 | $ | 488,539 | N/A | N/A | $0 | $0 | ||||||||||||||||
| Slattery | 2 | N/A | N/A | $ | 485,146 | N/A | $0 | ||||||||||||||||
| Stokes** | 24 | $ | 846,376 | $ | 8,150,048 | $ | 409,652 | $0 | $0 | ||||||||||||||
| * | Mr. Arduini’s pension benefits reflect his accrued benefits from his prior employment with GE. Mr. Arduini’s credited service is limited to 15 years under the Pension Plan, from his prior employment with GE before future accruals stopped effective January 1, 2021. Mr. Arduini forfeited the Supplementary Pension he previously accrued when he left GE in 2005, prior to satisfying the vesting conditions. |
| ** | Mr. Stokes’s credited service is limited to 24 years under the Pension Plan and the Supplementary Pension benefit, as no future accruals of those benefits are permitted effective January 1, 2021. For purposes of the Executive Retirement Benefit, Mr. Stokes’s credited service is limited to his service on and after January 1, 2021 |
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, 2021.2022. It also includes the value of contributions made by the named executives throughout their careers. For purposes of calculating the present value, we assume that the named executives will remain in service until the age at which they may retire without any reduction in benefits. For Messrs. Culp Murphy and Slattery and Ms. Dybeck Happe this is age 65, and for Mr. Stokes, this is age 60 for the Pension Plan and the Supplementary Pension benefit and age 65 for the Executive Retirement Benefit.Benefit, and for Mr. Arduini, this is age 60 for the Pension Plan. The present value calculation for Mr. Arduini’s Supplementary Pension does not include the amount he previously accrued and forfeited when he left GE in 2005, prior to satisfying the vesting conditions. We also assume that benefits are payable under the available forms of annuity
consistent with the assumptions described in the Postretirement Benefit Plans notes in GE’s financial statements in our 2021 Annual Report on Form 10-K 2022, including the statutory discount rate assumption of 2.94% in5.53% for the United States.GE Pension Plan and 5.50% for the GE Supplementary Pension Plan and GE Excess Benefits Plan. The postretirement mortality assumption used for present value calculations for U.S. beneficiaries is the Pri-2012 Healthy Retiree mortality table projected to 2016, adjusted for GE’s experience and factoring in projected generational improvements. The assumptions
Impact of GE HealthCare Spin-Off on Pension Plans
In anticipation of the spin-off of GE HealthCare, the GE Pension Plan, the GE Supplementary Pension Plan and the GE Excess Benefits plans were each split into three continuing plans, effective January 1, 2023, to be maintained by GE Aerospace, GE Vernova, and GE HealthCare, respectively. Mr. Arduini’s pension was allocated to the Pension Plan maintained by GE HealthCare. Benefits for U.K. beneficiaries are a discount rateMr. Culp, Ms. Dybeck Happe and Mr. Slattery remained in the Executive Retirement Benefit portion of 1.76%the Supplementary Pension Plan to be maintained by GE Aerospace after the GE Vernova spin-off. Mr. Stokes’s benefits remained in the Pension Plan and a postretirement mortality assumption based uponSupplementary Pension Plan to be maintained by GE Aerospace after the SAPS S2 Normal tables with future generational improvements in line with the CMI 2017 projection model (with a 1.5% improvement trend) at December 31, 2021.
44 planned GE 2022Vernova spin-off.
50 GE 2023 PROXY STATEMENT
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, 2021.2022. For this hypothetical calculation, we have used each named executive’s compensation and service levels as of this date (and, where applicable, GE’s closing stock price on December 31, 2021)2022). Since many factors (e.g., the time of year when the event occurs, GE’s stock price and the named executive’s age) could affect the nature and amount of benefits a named executive could potentially receive, any amounts paid or distributed upon a future termination may be different from those shown in the tables below. The amounts showndescribed below are in addition to benefits generally available to salaried employees, such as distributions under the GE RSP.
EMPLOYMENT AGREEMENTS FOR EMPLOYEES. As we have hired new executive talent from outside the company, we have entered into certain employment agreements with those individuals, generally at their request. Mr. Culp and Ms. Dybeck Happe each entered into employment agreements and Mr. Slattery and Mr. Arduini each entered into an offer letter agreement upon joining GE. Mr. Culp’s employment agreement and Mr. Arduini’s offer letter have subsequently been amended, as described below. The agreements for Messrs. Culp, Slattery, and SlatteryArduini and Ms. Dybeck Happe entitle them to certain post-termination benefits, in each case as further described below. PriorMessrs. Arduini, Slattery and Stokes are also entitled to January 1, 2022, Mr. Murphy was party to an employment agreement, which is typical of our practice for executives at his senioritycertain post-termination benefits as provided in the U.K., but it did not entitle him to any particular benefits upon termination or a change of control. Mr. Murphy entered into a separation agreement and release with the company, dated December 21, 2021, in connection with the previously reported GE Healthcare leadership transition.US Executive Severance Plan below.
EMPLOYMENT AGREEMENT WITH MR. CULP. We entered into an employment agreement with Mr. Culp upon his employment with GE in 2018, which was amended in August 2020 to extend the term to August 17, 2024, or such later date as mutually agreed by the parties up to and through August 17, 2025 (such date is referred to as the Expiration Date). His agreement provides for an annual base salary of $2.5 million, aan annual bonus target at 150% of his salary, and an annual PSU awardsaward with a grant date fair value of $15 million, and was further amended on March 15, 2022, to reduce the 2022 annual grant of PSUs from $15 million to $5 million. His original employment agreement provided for a PSU inducement award, 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 1,161,919 shares.shares (as adjusted for the reverse stock split). Under thehis employment agreement, Mr. Culp receives other benefits given to senior executives of the company. Mr. Culp is also subject to a non-compete agreement, which terminates 24 months after his termination if his employment is terminated on or before the Expiration Date, and which terminates 12 months after termination of his employment if his employment terminates between the Expiration Date and 12 months thereafter. Mr. Culp is not subject to a non-compete agreement if his employment terminates after the date that is 18 months following the Expiration Date. He is also subject to a non-solicitation clause covering the same periods as his non-compete agreement.
Under the terms of this agreement, if Mr. Culp is terminated for any reason other than “cause”cause or due to a resignation without “goodgood 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, 2021,2022, Mr. Culp would not have been entitled to any amount with respect to these benefits. Additionally, if Mr. Culp is terminated without “cause”cause or voluntarily leaves for
“good reason,” he would be entitled to cash severance equal to two times his annual salary plus target bonus, payable in bi-weekly installments over a two-year period, subject to any delay required by tax regulations. Assuming a termination date of December 31, 2021,2022, Mr. Culp would have been entitled to a severance payment in the amount of $12,500,000. This severance would be subject to his providing a release to the company and his ongoing compliance with perpetual confidentiality and non-disparagement provisions and 24-month non-compete and non-solicitation provisions under his employment agreement.
Under the award agreement for Mr. Culp’s one-time Leadership Performance Share Award, Mr. Culp is entitled to accelerated vesting of the performance shares as described below for such events that occur prior to the end of the performance period:
| ● | Retirement on August 17, 2024 (coinciding with the end of his employment agreement): the performance shares for which performance was actually achieved during the portion of the performance period that has already elapsed as of August 17, 2024. |
| ● | Death or |
| ● | Termination without |
| ● | Change in |
See “Equity Awards” Awards on page 4754 regarding the value of the equity treatment.
GE 2023 PROXY STATEMENT 51
Under Mr. Culp’s employment agreement and Leadership Performance Share Award agreement, the following terms have the meanings set forth below:
| ● | |
| ● | Change in |
GE 2022 PROXY STATEMENT 45
| ● | 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 |
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, aan annual bonus target at 125% of her salary, and long-term equity incentive awards with a grant date fair value of $4.9 million for 2020 and with a target grant date fair value of not less than $5.0 million for subsequent years. Upon commencement of her employment, she also received an award of stock options with a grant date fair value of $8.0 million (257,732 options, as adjusted for the reverse stock split) to compensate Ms. Dybeck Happe for value forfeited by her for leaving her prior employer. Ms. Dybeck Happe is subject to a non-compete and non-solicitation agreement, which terminates 12 months after her termination (for whatever reason).
Under the terms of her employment agreement, if Ms. Dybeck Happe is terminated without “cause”cause or voluntarily leaves for “good reason”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)salary, but now consists of 18 months of base salary, as described below). Assuming a termination of employment as of December 31, 2021,2022, the cash portion of this severance amount, excluding any relocation reimbursements, would be $3,375,000. See “Equity Awards” Awards on page 4754 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).Performance Shares.
Under Ms. Dybeck Happe’s employment agreement and Leadership PSU award agreement, the following terms have the meanings set forth below:
| ● | |
| ● | Change in |
| ● | Good |
52 GE 2023 PROXY STATEMENT
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, aan annual bonus target at 100% of his salary, long-term equity incentive awards with a grant date fair value of $3.0 million for 2020 and with a target grant date fair value of not less than $6.0 million for subsequent years. Upon commencement of his employment, he also received a new hire cash bonus of $1.0 million, and an award of stock options with a grant date fair value of $1.5 million (67,446 options, as adjusted for the reverse stock split) to compensate Mr. Slattery for value forfeited by him for leaving his prior employer. He is subject to a non-compete and non-solicitation agreement, which terminates 12 months after his termination (for whatever reason). Upon Mr. Slattery’s termination of employment, he will be eligible to receive the standard severance package provided to similarly situated officers of the company (which as of the signing date consisted of 12 months of base salary)salary, but now consists of 18 months of base salary, as described below).
SEPARATIONOFFER LETTER AGREEMENT WITH MR. MURPHY. ARDUINI. We entered into an offer letter agreement with Mr. Arduini upon the commencement of his employment with GE. The agreement provides for an annual salary of $1.25 million, an annual bonus target at 125% of his salary, and long-term equity incentive awards with a target grant date fair value of $7.0 million beginning with the annual 2022 grant (of which 50% was in PSUs, 30% was in stock options, and 20% was in RSUs). Upon the initial commencement of his employment, he also received an award of PSUs with a grant date fair value of $5.0 million to further incentivize, and align his compensation with, the performance of GE HealthCare. He is subject to a non-compete and non-solicitation agreement, which terminates 12 months after his termination (for whatever reason). Upon Mr. Arduini’s termination of employment (i) by GE HealthCare without cause or by Mr. Arduini for good reason, (ii) due to death or disability, or (iii) in connection with a change in control that does not result in him receiving a comparable offer, he would be eligible to receive the standard severance package provided to similarly situated officers of the company (which as of the signing date consisted of 18 months of his base salary).
Under Mr. Arduini’s offer letter agreement, the following terms have the meanings set forth below:
| ● | Cause generally has the same meaning as described above with respect to Ms. Dybeck Happe’s employment agreement and Leadership Performance Share Award agreement, except the 30-day cure period described for Ms. Dybeck Happe does not apply for Mr. Arduini. |
| ● | Good reason generally means (i) a reduction in Mr. Arduini’s target compensation or any failure to pay compensation when due, (ii) a material breach by the company of any material provision of the offer letter agreement or other agreement with the company, or (iii) a material, adverse change in Mr. Arduini’s title, authority, duties, responsibilities or reporting relationship. |
| ● | Change in control generally means (i) the acquisition of at least 50% of the company’s or GE HealthCare’s stock or voting power by any person, or (ii) the sale of substantially all of the assets of the company or GE HealthCare. The spin-off of GE HealthCare did not constitute a “change in control” for purposes of Mr. Arduini’s offer letter. |
In connection with the previously reported GE Healthcare leadership transition,HealthCare spin-off, Mr. Murphy no longer servesArduini’s offer letter was subsequently amended, effective as President and Chief Executive Officer of January 3, 2023, this amendment did not impact his compensation from GE Healthcare after December 31, 2021. On December 21, 2021, GE and Mr. Murphy entered into a separation agreement pursuant to which Mr. Murphy will remain employed for a period of garden 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 he will receive his regular salary, an annual bonus for the 2021 plan year based on the performance of GE Healthcare and health and life insurance benefits; he will not receive pension contributions, future bonuses or equity awards. Under the separation agreement, Mr. Murphy also granted a release in favor of GE and agreed to certain cooperation, confidential information, non-competition and non-solicitation covenants.
during 2022.
46 GE 2022 PROXY STATEMENT
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,”cause, and who are not offered a “suitablesuitable position,” receive between 6 to 18 months of base salary (based on their career band), which is paid in a lump sum. Outplacement services are also provided for the same period. To receive a benefit under the plan, the executive must enter into a separation agreement and release in a form acceptable to GE, which may also include cooperation, confidential information, non-disparagement, non-competition, non-solicitation and other covenants. With respect to our named executives, Messrs. Slattery and Stokes are eligible to participate under the plan at the 18-month level. Mr. Arduini was also eligible to participate in this plan at the 18-month level, prior to the spin-off of GE HealthCare. Assuming a termination date of December 31, 2022, the amount each eligible named executive would be entitled to receive under the US Executive Severance Plan is: Arduini ($1,875,000), Slattery ($1,875,000) and Stokes ($2,100,000).
Under the Plan,plan, the following terms have the meanings set forth below:
| ● |
|
| |
| ● | Suitable |
GE 2023 PROXY STATEMENT 53
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’sBoards Governance Principles (see “Helpful Resources” Resources on page 77) for the full policies.
Equity Awards
The following table shows the intrinsic value of equity awards that would have vested or become exercisable if the named executive had died, become disabled, retired or separated from the company as of December 31, 2021.2022. Intrinsic value is based upon the company’s stock price (minus the exercise price in the case of stock options). Amounts shown assume the achievement of all applicable performance objectives at the target level. Our named executives generally are not entitled to benefits if they leave voluntarily (without good reason) or are terminated for cause (other than benefits already accrued), unless they satisfy the conditions for retirement eligibility.
| POTENTIAL TERMINATION PAYMENTS TABLE (EQUITY BENEFITS) | ||||||||||||||||||||||
| UPON DEATH | UPON DISABILITY | UPON RETIREMENT | UPON INVOLUNTARY TERMINATION* | UPON CHANGE OF CONTROL** | ||||||||||||||||||
| NAME | STOCK OPTIONS | RSUs/PSUs/ PERFORMANCE AWARDS | STOCK OPTIONS | RSUs/PSUs/ PERFORMANCE AWARDS | STOCK OPTIONS | RSUs/PSUs/ PERFORMANCE AWARDS | STOCK OPTIONS | RSUs/PSUs/ PERFORMANCE AWARDS | STOCK OPTIONS | RSUs/PSUs/ PERFORMANCE AWARDS | ||||||||||||
| Culp | $ | N/A | $ | 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 | N/A | $ | 88,475,369 | N/A | $ | 88,475,369 | N/A | N/A | N/A | $ | 57,680,785 | N/A | $ | 97,357,193 | ||||||||||||||||||||||
| Dybeck Happe | $ | 0 | $ | 14,227,458 | $ | 0 | $ | 14,227,458 | N/A | N/A | $ | 0 | $ | 5,330,049 | $ | 0 | $ | 11,457,445 | ||||||||||||||||||
| Arduini | $ | 0 | $ | 8,251,555 | $ | 0 | $ | 8,251,555 | N/A | N/A | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||
| Slattery | $ | 1,371,536 | $ | 14,689,979 | $ | 1,371,536 | $ | 14,689,979 | N/A | N/A | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||
| Stokes | $ | 0 | $ | 14,503,798 | $ | 0 | $ | 14,503,798 | N/A | N/A | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||
| * | Addresses separation |
| ** | In each case as defined under Mr. Culp’s employment agreement and Ms. Dybeck Happe’s Leadership PSU award agreement, as detailed above. |
DEATH/DISABILITY. Unvested options, RSUs and PSUs/performance shares would generally vest, depending on the award terms. Vested options would generally remain exercisable until their expiration date, and PSUs (other than Mr. Arduini’s New Hire PSU Award) and performance shares would remain subject to the achievement of the performance objectives. InMr. Arduini’s New Hire PSU Award would vest based on the caseaverage of disability,target performance for uncompleted years of the award must generally have been heldperformance period and actual performance for at least one year in order to be vested.any completed years of the performance period. For these purposes, “disability”disability generally means the executive being unable to perform his or her job.
RETIREMENT. Unvested options, RSUs and PSUs/performance shares (other than Mr. Arduini’s New Hire PSU Award) held for at least one year would generally vest, depending on the award terms. Vested options would generally remain exercisable until their expiration date, and PSUs and performance shares would remain subject to the achievement of the performance objectives. For these purposes, “retirement”retirement generally means reaching the applicable retirement age, typically age 60, and completing 5 years of service.
INVOLUNTARY TERMINATION. Under the terms of the Leadership Performance Share and Leadership PSU Award Agreements with Mr. Culp and Ms. Dybeck Happe, respectively, and Ms. Dybeck Happe’s
employment agreement, amounts shown reflect the value of their Leadership Awards if they had been terminated without cause or left for good reason. Under the terms of Mr. Arduini’s New Hire PSU Award, if a termination without cause or resignation for good reason occurs following December 31, 2023 but prior to the vesting date, the New Hire PSU Award would vest based on the average of target performance for the uncompleted years for the performance period and actual performance for any completed years of the performance period. None of the other named executives were entitled to any potential payments upon separation from the company, except for vesting of certain equity awards in the event that the executive 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. The spin-off of GE HealthCare did not constitute a change in control. For additional detail, see “Employment Agreement with Mr. Culp” Culp on page 4551 and “Employment Agreement with
GE 2022 PROXY STATEMENT 47
Ms. Dybeck Happe” Happe on page 46.52. None of our other named executives are entitled to the acceleration or payment of benefits in the event of a change of control.
54 GE 2023 PROXY STATEMENT
Pension Benefits
“Pension Benefits” Benefits on page 4349 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, 2021.2022.
In the event of death before retirement, for Messrs. Culp, Slattery and Stokes and Ms. Dybeck Happe, each of their respective beneficiaries may receive the following benefit:
| ● | Executive Retirement Benefit. 10 equal annual installments of his or her accrued benefit, reduced by up to 25% for commencement before attaining age 65. |
For Mr.Messrs. Stokes hisand Arduini, their surviving spouse may receive the following pension benefits:
| ● |
|
to death, or an immediate lump-sum payment based on five years of pension distributions, in each case based upon the accrued benefit. (See Impact of GE HealthCare Spin-Off on Pension Plans for information regarding the impact of the GE HealthCare Spin-Off on Mr. Arduini’s benefit under the Pension Plan.) |
For Mr. Stokes, his surviving spouse may receive the following pension benefits:
| ● | Supplementary Pension Benefit. Because Mr. Stokes has more than 15 years of service, a lump-sum payment based on whichever of the following has a higher value: (1) the 50% survivor annuity that the spouse would have received under this plan if Mr. Stokes had retired and elected the spousal 50% joint and survivor annuity option prior to death, or (2) five years of pension distributions under this plan. |
The amounts payable depend on several factors, including employee contributions and the ages of the named executive and surviving spouse.
In the event a disability occurs before retirement:
For Messrs. Culp and Slattery and Ms. Dybeck Happe, they may receive 10 equal annual installments of their accrued Executive Retirement Benefit, reduced by up to 25% for commencement before attaining age 65, but only once they have attained 15 years of service.
For Mr. Arduini, having more than 15 years of service (accounting for his prior service), he could have received an annuity payment of accrued GE Pension benefits.
Mr. Stokes, having more than 15 years of service, may receive an annuity payment of accrued GE Pension and Supplementary Pension benefits, and 10 equal annual installments of his Executive Retirement Benefit.
| POTENTIAL TERMINATION PAYMENTS TABLE (PENSION BENEFITS) | |||||||||
| NAME | LUMP SUM UPON DEATH | ANNUAL BENEFIT* UPON DEATH | ANNUAL BENEFIT* UPON DISABILITY | ANNUAL BENEFIT* UPON VOLUNTARY TERMINATION | ANNUAL BENEFIT* UPON RETIREMENT | ||||
| Culp | N/A | $ | 253,168 | N/A | $ | 0 | N/A | ||
| Dybeck Happe | N/A | $ | 80,498 | N/A | $ | 0 | 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 | $ | 31,554 | $ | 49,121 | $ | 96,546 | N/A | $48,240 | |
POTENTIAL TERMINATION PAYMENTS TABLE (PENSION BENEFITS)
| NAME | LUMP SUM UPON DEATH | ANNUAL BENEFIT* UPON DEATH | ANNUAL BENEFIT* UPON DISABILITY | ANNUAL BENEFIT* UPON VOLUNTARY TERMINATION | ANNUAL BENEFIT* UPON RETIREMENT | |||||||||||||
| Culp | N/A | $ | 331,018 | N/A | $ | 0 | N/A | |||||||||||
| Dybeck Happe | N/A | $ | 104,273 | N/A | $ | 0 | N/A | |||||||||||
| Arduini | N/A | $ | 17,938 | 38,709 | $ | 35,610 | N/A | |||||||||||
| Slattery | N/A | $ | 82,471 | N/A | $ | 0 | N/A | |||||||||||
| Stokes | $ | 6,501,541 | $ | 130,432 | $ | 1,116,170 | $ | 90,676 | N/A | |||||||||
| * | Annual amounts shown for Messrs. Culp and Slattery and Ms. Dybeck Happe are payable in 10 installments as the Executive Retirement Benefit. Annual amounts shown upon death or disability for Mr. Stokes are annuity payments applicable to GE Pension Plan and Supplementary Pension participants, except that |
LUMP SUM UPON DEATH. Lump sum payable to the surviving spouse after death. A lump sum is not available to the surviving spouse of Messrs. Culp and Slattery and Ms. Dybeck Happe under the terms of the Executive Retirement Benefit. For Mr. Stokes, the lump sum represents the Supplementary Pension benefit payable in the event of death. For Mr. Murphy, theThere is no lump sum representsfor Mr. Arduini since he is not eligible for the return of contributions and interest under the U.K. GE Pension Plan.Supplementary Pension.
ANNUAL BENEFITS UPON DEATH. For Messrs. Culp and Slattery and Ms. Dybeck Happe, 10 annual installment payments as the Executive Retirement Benefit. For Mr. Arduini, the annual amount is payable for the life of the surviving spouse as the GE Pension Plan benefit. For Mr. Stokes, the annual amount is payable for the life of the surviving spouse as the GE Pension Plan benefit, except that $40,523$81,047 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.
ANNUAL BENEFITS UPON DISABILITY. Messrs. Culp and Slattery, and Ms. Dybeck Happe would not be eligible for disability benefits because they do not yet have 15 years of service. For Mr. Arduini, the annual amount includes the 50% joint and survivor annuity as the GE Pension Plan benefits. For Mr. Stokes, the annual amount includes the 50% joint and survivor annuity as the GE Pension Plan and Supplementary Pension benefits, except that $40,523$81,047 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.Messrs. Stokes and Arduini, the annual amount includes the 50% joint and survivor annuity payable at age 60 under the GE Pension Plan; this does not include any payments under the GE Supplementary Pension Plan (either the Supplementary Pension benefit or the Executive Retirement Benefit) because they are forfeited upon voluntary termination before age 60. 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, withNone of the amount payable as a 50% joint and survivor annuity. The other named executives are not eligible to retire.
GE 2023 PROXY STATEMENT 55
Deferred Compensation
The named executives are entitled to receive the vested amount in their deferred compensation accounts if their employment terminates. Between the termination event and the date that distributions are made, these accounts would continue to increase or decrease in value based on changes in the value of the named executive’s earnings
48 GE 2022 PROXY STATEMENT
option. Therefore, amounts received by the named executives would differ from those shown in the Nonqualified Deferred Compensation Table on page 42.48. See “Deferred Compensation” Compensation on page 4147 for information on the available distribution types under each plan.
Life Insurance Benefits
For a description of the supplemental life insurance plans that provide coverage to the named executives, see “Life Insurance Premiums” Premiums on page 37.43. Messrs. Culp, Slattery, and Slattery,Arduini, and Ms. Dybeck Happe do not qualify for these supplemental life insurance plans, as they were discontinued for executives joining the company (or being promoted to the relevant band of seniority) on or after January 1, 2018. If the named executives had died on December 31, 2021,2022, 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 | ||
| Arduini | $ | 0 | ||||
| Slattery | $ | 0 | $ | 0 | ||
| Stokes | $ | 9,410,940 | $ | 9,883,378 | ||
| Murphy | $ | 3,763,080 | ||||
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,maturity date, and under Leadership Life, until the later of age 65 or 10 years in the plan.
Other Executive Compensation Policies & Practices
Roles and Responsibilities in Succession Planning and Compensation
MANAGEMENT DEVELOPMENT & COMPENSATION COMMITTEE.
The committee has primary responsibility for helping the Board develop and evaluate potential candidates for executive positions and for overseeing the development of executive succession plans. As part of this responsibility, the committee oversees the compensation program for the CEO and the other named executives.
MANAGEMENT. Our CEO and our Chief Human Resources Officer help the committee administer our executive compensation program. The Chief Human Resources Officer also advises the committee on matters such as past compensation, total annual compensation, potential accrued benefits, GE compensation practices and guidelines, company performance, industry compensation practices and competitive market information.
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 2021,2022, the Management Development & Compensation Committee and the company’s human resources function consulted with Semler Brossy on market practices relating to senior executive compensation. In addition, the Governance Committee and the company’s legal function consulted with Semler Brossy on market practices relating to compensation and benefits for non-employee directors.
COMPENSATION CONSULTANT INDEPENDENCE POLICY. Any compensation consultant that advises the Board on executive or director compensation will not at the same time advise the company on any other human resources matter, and the committee has determined that Semler Brossy’s work with the committee, the Governance Committee and the company’s human resources and legal functions does not raise any conflict of interest.
Clawbacks and Other Remedies for Potential Misconduct
CLAWBACKS. The Board may seek reimbursement of any portion of incentive compensation in connection with an executive officer’s fraudulent or illegal misconduct, or if an executive officer’s conduct resulted in a material inaccuracy in the company’s financial statements or in performance metrics affecting the executive officer’s compensation. If the Board determines that an executive officer engaged in fraudulent or illegal misconduct that resulted in a material inaccuracy in the company’s financial statements or in performance metrics affecting the executive officer’s compensation, the Board will seek reimbursement of any portion of incentive compensation paid or awarded to the executive that is greater than would have been paid or awarded if calculated based on the accurate financial statements or performance metric. We intend to amend our clawback policy or adopt a new clawback policy that is consistent with the NYSE listing standards adopted under Exchange Act Rule 10D-1. For more information, see our Governance Principles (see “Helpful Resources” Resources on page 77).
OTHER REMEDIES. In cases of detrimental misconduct by an executive officer, the Board may also take a range of other actions to remedy the misconduct, prevent its recurrence, and discipline the individual as appropriate, including terminating the individual’s employment. These remedies would be in addition to, and not in lieu of, any actions imposed by law enforcement agencies, regulators or other authorities.
Compensation Risk Assessment
The committee oversees an annual risk assessment of the company’s executive compensation policies and practices. For 2022, the assessment was led by management, with review and input from the company’s independent compensation consultant. Based on results of the assessment, the committee concluded that the company’s executive compensation design does not encourage excessive risk taking.
56 GE 2023 PROXY STATEMENT
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” Resources on page 77). The named executives’executive’s ownership is shown in the Common Stock & Total Stock-Based HoldingsBeneficial Ownership Table on page 24.25.
| STOCK OWNERSHIP REQUIREMENTS (MULTIPLES OF BASE SALARY) | ||||
| 10X forCEO | 4X forsenior vice | presidents | ||
GE 2022 PROXY STATEMENT 49
HOLDING PERIOD REQUIREMENTS. Our executive officers must also hold for at least one year anythe net shares of GE stock they receivereceived from PSUs and RSUs until satisfaction of the stock ownership requirements. In addition, the net shares of GE stock received through all stock option exercises 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 incentive program. Net shares received from the vesting of PSUs or RSUs must be held untilfor one year, and the net shares of GE stock ownership requirement is met.received upon settlement of PSUs granted in 2020 and thereafter, and of RSUs granted in 2022 and thereafter, must also be held for one year.
NO HEDGING. We believe our executive officers and directors should not speculate or hedge their interests in our stock. We therefore prohibit them from entering into any derivative transactions in GE stock, including any short sale, forward, equity swap, option or collar that is based on GE’s stock price. These restrictions are contained in our Governance Principles (see “Helpful Resources” Resources on page 77). This rule isThese restrictions are not applicable to other GE employees.
NO PLEDGING. We prohibit executive officers and directors from pledging GE stock. These restrictions are contained in our Governance Principles (see “Helpful Resources” Resources on page 77).
NO OPTION BACKDATING OR SPRING-LOADING. The exercise price of each stock option is based on the closing price of GE stock on the grant date.
NO OPTION REPRICING. We prohibit the repricing of stock options. This includes amending outstanding options to lower their exercise price, substituting new awards with a lower exercise price or executing a cash buyout.
NO UNEARNED DIVIDEND EQUIVALENTS. Performance shares, PSUs and RSUs granted to our named executives do not pay dividends or dividend equivalents on shares that are not yet owned. Instead, dividends and dividend equivalents are accrued during the vesting or performance period and paid out only on shares actually received. For more information, see our Governance Principles (see “Helpful Resources” Resources on page 77).
Tax Deductibility of Compensation
The Internal Revenue Code generally imposes a $1 million limit on the amount that a public company may deduct for compensation paid to the company’s applicable named executives, subject to an exception for qualifying performance-based compensation provided pursuant to a binding written contract in effect as of November 2, 2017. We generally expect that compensation paid to our applicable named executives in excess of $1 million will not be deductible.
Compensation Committee Interlocks and Insider Participation
During 2022, no member of the Management Development & Compensation Committee had a relationship that requires disclosure as a compensation committee interlock.
Management Development & Compensation Committee Report
The Management Development & Compensation Committee has reviewed the compensation discussion and analysisCompensation Discussion & Analysis (pages 2526 through 50,57, which, pursuant to SEC rules, does not include the “CEO Pay Ratio” discussion)Ratio and Pay Versus Performance discussions) and discussed that analysis with management. Based on its review and discussions with management, the committee recommended to the Board that the compensation discussion and analysisCompensation Discussion & Analysis be included in the company’s annual report on Form 10-K for 20212022 and this proxy statement. This report is provided by the following independent directors, who comprise the committee:
| Sébastien Bazin | |
| Edward Garden |
GE 2023 PROXY STATEMENT 57
CEO Pay Ratio
HOW WE IDENTIFIED THE MEDIAN EMPLOYEE. After determining that, as of December 31, 2022, there had been no changes to our employee population or employee compensation arrangements that we believe would reasonably be expected to result in a significant change to our pay ratio disclosure, we determined to use the same median employee identified for purposes of our 2021 pay ratio disclosure. To identify the median GE employee, for 2021, we identified our total employee population as of December 31, 2021, and, in accordance with SEC rules, excluded the CEO and employees from certain countries representing in aggregate less than 5% of our employee base*, to arrive at the initial median employee. We then used annualized salary data converted to U.S. dollars, including target bonus award payments to identify the 20 employees with salaries directly above and below the initial median employee. Once we identified this narrowed pool, we re-ranked the consideration pool of employees to find the median employee. We then calculated the median employee’s total compensation in accordance with SEC rules to use as the basis for the pay ratio. Foreign exchange rates were translated to the U.S. dollar equivalent based on rates as of December 31, 2021.
RATIO OF CEO PAY TO MEDIAN EMPLOYEE PAY. Our median employee earned $55,064$49,947 in total compensation for 2021.2022. The total 20212022 compensation reported for Mr. Culp as reported under “SEC Total” Total in the Summary Compensation Table on page 3642 was $22,663,449.$8,198,024. Based upon total compensation for 2021,2022, we calculated that our ratio of CEO to median employee pay was 412164 to 1. Our median employee is employed in France in our Power business.
| * | These 76 countries and their headcounts as of the calculation date were: Algeria (321), Angola (23), Argentina (310), Austria (444), Azerbaijan (4), Bahrain (45), Bangladesh (56), Belgium (215), Benin (8), Bermuda (2), Bulgaria (17), Cambodia (3), Cameroon (7), Chad (1), Chile (190), Colombia (274), Côte d’Ivoire (49), Croatia (515), Czechia (536), Denmark (647), Ecuador (2), Egypt (420), Estonia (12), Ethiopia (9), Georgia (2), Ghana (33), Greece (179), Hong Kong (123), Iraq (101), Jordan (28), Kazakhstan (56), Kenya (96), Kosovo (7), Kuwait (70), Kyrgyzstan (3), Latvia (7), Lebanon (39), Libya (12), Lithuania (10), Luxembourg (4), Mali (1), Mauritius (3), Mongolia (3), Montenegro (5), Morocco (94), Mozambique (3), Myanmar (10), Nepal (5), Netherlands (625), New Zealand (53), Nigeria (159), Oman (16), Pakistan (152), Panama (19), Peru (95), Philippines (105), Portugal (127), Qatar (112), Romania (619), Senegal (4), Serbia (36), Slovakia (38), South Africa (473), Sri Lanka (10), Sweden (583), Tajikistan (8), Tanzania (1), Thailand (275), Trinidad and Tobago (3), Tunisia (77), Turkmenistan (10), Ukraine (41), Uruguay (1), Uzbekistan (3), Venezuela (1), and Zambia (1), for a total of 8,651 employees. As of December 31, 2021, using the methodology required by the rule governing this disclosure, GE had approximately 58,000 U.S. employees and approximately 123,000 employees in other countries, for a total of approximately 181,000 employees globally factored into the sample before the country exclusions listed above. |
50 Pay Versus Performance
In accordance with Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationships between compensation actually paid to named executives and company performance. In this section, we refer to “compensation actually paid” and other terms used in the applicable SEC rules. For information concerning the company’s compensation philosophy and how the company aligns executive compensation with its financial and operational performance, refer to the Overview of Our Incentive Compensation Program section of this proxy statement. We refer collectively to awards of RSUs, PSUs, performance shares and stock options as equity awards in this Pay versus Performance section.
| AVERAGE SUMMARY | AVERAGE | VALUE OF INITIAL FIXED $100 INVESTMENT BASED ON: | ||||||||||||||||||||||||||||||
| YEAR (a)(1) | SUMMARY COMPENSATION TABLE FOR PEO (b)(1) | COMPENSATION ACTUALLY PAID TO PEO (c)(1)(2) | COMPENSATION TABLE TOTAL FOR NON-PEO NAMED EXECUTIVES (d)(1) | COMPENSATION ACTUALLY PAID TO NON-PEO NAMED EXECUTIVES (e)(1)(2) | TOTAL SHAREHOLDER RETURN (f) | PEER GROUP TOTAL SHAREHOLDER RETURN (g)(6) | NET INCOME ($M) (h) | COMPANY-SELECTED PERFORMANCE MEASURE: FREE CASH FLOW* ($M) (i)(7) | ||||||||||||||||||||||||
| 2022 | $8,198,024 | $(23,798,500 | ) | $8,969,318 | $3,579,820 | (3) | $95 | $127 | $292 | $4,758 | ||||||||||||||||||||||
| 2021 | $22,663,449 | $21,302,944 | (4) | $8,584,656 | $7,655,599 | (4) | $107 | $134 | $(6,591 | ) | $1,889 | |||||||||||||||||||||
| 2020 | $73,192,032 | $115,891,919 | (5) | $14,595,432 | $15,948,471 | (5) | $97 | $111 | $5,546 | $635 | ||||||||||||||||||||||
| (1) | The named executives included in the above table were: |
| YEAR | PRINCIPAL EXECUTIVE OFFICER (PEO) | NON-PEO NAMED EXECUTIVES | |||
| 2022 | H. Lawrence Culp, Jr. | Carolina Dybeck Happe, John Slattery, Peter Arduini and Russell Stokes | |||
| 2021 | H. Lawrence Culp, Jr. | Carolina Dybeck Happe, John Slattery, Russell Stokes and Kieran Murphy | |||
| 2020 | H. Lawrence Culp, Jr. | Carolina Dybeck Happe, Jamie Miller, Kieran Murphy, John Slattery, Scott Strazik |
| (2) | The assumptions we used to calculate the values for RSU awards, PSU awards and performance share awards included in the calculation of compensation actually paid did not differ materially from those used to calculate grant date fair value for such awards. The assumptions we used to calculate the value for stock options did not differ materially from those used to calculate grant date fair value for such awards; we used a Black-Scholes value as of the applicable year-end or vesting date(s), determined using the same methodology we use to determine grant date fair value, except that we used (a) the closing stock price on the applicable revaluation date as the current market price and (b) a reduced expected life, given applicable time lapsed since grant date. |
58 GE 20222023 PROXY STATEMENT
The compensation program for independent directors is designed to achieve the following goals:
| PEO | AVERAGE OF NON-PEOs | |||||
| TOTAL REPORTED IN 2022 SUMMARY COMPENSATION TABLE | $8,198,024 | $8,969,318 | ||||
| Less, value of equity awards reported in the Summary Compensation Table | 5,000,021 | 5,650,966 | ||||
| Add, year-end value of equity awards granted in 2022 that are unvested and outstanding | 0 | 2,477,808 | ||||
| Add, change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | (27,432,952 | ) | (2,103,904 | ) | ||
| Add, fair market value of equity awards granted in 2022 and that vested in 2022 | 0 | 0 | ||||
| Add, change in fair value (from prior year-end) of prior year equity awards that vested in 2022 | 0 | (245,204 | ) | |||
| Less, prior year-end fair value of prior year equity awards that failed to vest in 2022 | 0 | 0 | ||||
| Add, dividends and dividend equivalent payments paid during 2022 on unvested equity awards | 0 | 21 | ||||
| Less, change in present value of accumulated pension plan benefits reported in the Summary Compensation Table | 151,653 | 26,279 | ||||
| Add, service cost for defined benefit and pension plans | 588,102 | 159,026 | ||||
| Add, prior service cost for defined benefit and pension plans | 0 | 0 | ||||
| Compensation Actually Paid for Fiscal Year 2022 | $(23,798,500 | ) | $3,579,820 |
| (4) | The 2021 compensation actually paid to our PEO and the average compensation actually paid of our non-PEO named executives reflects the following adjustments required by the applicable SEC rules from Total compensation reported in the Summary Compensation Table: |
| PEO | AVERAGE OF NON-PEOs | |||||
| TOTAL REPORTED IN 2021 SUMMARY COMPENSATION TABLE | $22,663,449 | $8,584,656 | ||||
| Less, value of equity awards reported in the Summary Compensation Table | 14,999,996 | 4,975,039 | ||||
| Add, year-end value of equity awards granted in 2021 that are unvested and outstanding | 19,784,448 | 5,208,170 | ||||
| Add, change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | (5,540,473 | ) | (1,419,958 | ) | ||
| Add, fair market value of equity awards granted in 2021 and that vested in 2021 | 0 | 0 | ||||
| Add, change in fair value (from prior year-end) of prior year equity awards that vested in 2021 | 0 | 277,481 | ||||
| Less, prior year-end fair value of prior year equity awards that failed to vest in 2021 | 0 | 0 | ||||
| Add, dividends and dividend equivalent payments paid during 2021 on unvested equity awards | 0 | 247 | ||||
| Less, change in present value of accumulated pension plan benefits reported in the Summary Compensation Table | 943,153 | 202,512 | ||||
| Add, service cost for defined benefit and pension plans | 338,669 | 182,553 | ||||
| Add, prior service cost for defined benefit and pension plans | 0 | 0 | ||||
| Compensation Actually Paid for Fiscal Year 2021 | $21,302,944 | $7,655,599 |
| (5) | The 2020 compensation actually paid to our PEO and the average compensation actually paid of our non-PEO named executives reflects the following adjustments required by the applicable SEC rules from Total compensation reported in the Summary Compensation Table: |
| PEO | AVERAGE OF NON-PEOs | |||||
| TOTAL REPORTED IN 2020 SUMMARY COMPENSATION TABLE | $73,192,032 | $14,595,432 | ||||
| Less, value of equity awards reported in the Summary Compensation Table | 72,054,874 | 9,713,809 | ||||
| Add, year-end value of equity awards granted in 2020 that are unvested and outstanding | 144,077,163 | 12,576,780 | ||||
| Add, change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | (4,688,606 | ) | (388,190 | ) | ||
| Add, fair market value of equity awards granted in 2020 and that vested in 2020 | 0 | 0 | ||||
| Add, change in fair value (from prior year-end) of prior year equity awards that vested in 2020 | 0 | (407,968 | ) | |||
| Less, prior year-end fair value of prior year equity awards that failed to vest in 2020 | 24,537,500 | 0 | ||||
| Add, dividends and dividend equivalent payments paid during 2020 on unvested equity awards | 0 | 1,051 | ||||
| Less, change in present value of accumulated pension plan benefits reported in the Summary Compensation Table | 463,799 | 765,112 | ||||
| Add, service cost for defined benefit and pension plans | 367,503 | 50,287 | ||||
| Add, prior service cost for defined benefit and pension plans | 0 | 0 | ||||
| Compensation Actually Paid for Fiscal Year 2020 | $115,891,919 | $15,948,471 |
| (6) | As permitted by SEC rules, the peer group referenced for purposes of “Peer group total shareholder return” is that of the |
Annual Compensation
OVERVIEW. Our independent directors receive annual compensation as shown in the table below. There are no additional meeting fees. The lead director and members of our Board committees receive additional compensation due to the workload and broad responsibilities of these positions.
| All independent directors | $ | 275,000 | |
| Lead director | $ | 50,000 | |
| Audit Committee members | $ | 35,000 | |
| Management Development & Compensation Committee members | $ | 25,000 | |
| Governance & Public Affairs Committee members | $ | 10,000 |
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.
OTHER COMPENSATION. Our independent directors may also receive the following benefits:
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 $9.7 million.
GE 20222023 PROXY STATEMENT 5159
Director RELATIONSHIPS BETWEEN COMPENSATION ACTUALLY PAID AND FINANCIAL PERFORMANCE MEASURES
In accordance with Item 402(v) of Regulation S-K, the company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table. The calculation of compensation actually paid in each of the years shown reflects required adjustments to equity award valuations under SEC rules, which were in turn impacted by our stock price performance and cancellation of performance-based awards that did not meet their established thresholds. When the committee selected performance measures in support of the design of our 2022 executive compensation programs, it focused on factors that it believes will further the company’s and business units’ goals for the year, align with GE’s long-term strategic objectives and contribute to the creation of long-term shareholder value, including our ability to generate free cash flow, organic revenue growth, profit or adjusted profit (as applicable) and organic margin expansion, as well as our adjusted earnings per share and operational measures such as safety performance. For more information about these factors and decisions that informed the 2022 compensation of our named executive officers, see the Compensation TableDiscussion & Analysis section of this proxy statement.
This table showsThe chart below depicts compensation actually paid and the cumulative TSR of GE and the S&P 500 Industrials Index for the three years shown. A significant portion of our executive compensation program is comprised of equity awards, and compensation actually paid for such years was most strongly affected by our stock price performance, as reflected in the equity award valuations required by SEC rules. In addition, our TSR performance being below that of the peer group, the S&P 500 Industrials Index, adversely affected our named executives’ equity award compensation in two of the years shown. Under those awards’ respective terms, our TSR performance resulted in the cancellation of the 2020 PSU awards, which had no payout due to three-year TSR performance, and a downward adjustment to the value of the 2021 PSU awards, for which three-year TSR performance is a modifier.
COMPENSATION ACTUALLY PAID VS. TOTAL SHAREHOLDER RETURN (TSR)
Net income is not a financial performance measure that we use in the compensation that each independent director earnedprogram design for his or her 2021 Boardour named executives. Accordingly, there is not a direct relationship between the compensation actually paid to our named executives and committee service. Mr. Garden has advised us that, pursuantnet income. In addition, a meaningful portion of incentive compensation for our named executives who are leaders of business units is tied to his arrangement with Trian, he transfersthe financial performance of their respective individual business units, rather than enterprise-wide performance measures such as net income.
A significant portion of our compensation program is linked to Trian, or holdsour free cash flow performance for the benefittotal company and the business units, as described in the Compensation Discussion & Analysis section of Trian and/or Trian entities, all directorthis proxy statement. While our free cash flow performance improved sequentially in each of the three years shown, there is not a direct relationship with compensation actually paid because compensation actually paid more strongly reflects the required adjustments for equity award valuations under SEC rules.
MOST IMPORTANT FINANCIAL
PERFORMANCE MEASURES
The financial performance measures to the right represent the most important financial performance measures that were used to determine the compensation actually paid to him.
| NAME OF DIRECTOR | CASH FEES | STOCK AWARDS | MATCHING GIFTS | TOTAL | ||||||||
| Sébastien Bazin | $ | 0 | $ | 310,526 | $ | 0 | $ | 310,526 | ||||
| Ashton Carter | $ | 124,000 | $ | 186,315 | $ | 0 | $ | 310,315 | ||||
| Francisco D’Souza | $ | 0 | $ | 335,568 | $ | 0 | $ | 335,568 | ||||
| Edward Garden | $ | 120,000 | $ | 180,305 | $ | 0 | $ | 300,305 | ||||
| Thomas Horton | $ | 144,000 | $ | 216,366 | $ | 0 | $ | 360,366 | ||||
| Risa Lavizzo-Mourey | $ | 114,000 | $ | 171,290 | $ | 0 | $ | 285,290 | ||||
| Catherine Lesjak | $ | 128,000 | $ | 192,326 | $ | 0 | $ | 320,326 | ||||
| Paula Rosput Reynolds | $ | 108,875 | $ | 226,552 | $ | 0 | $ | 335,427 | ||||
| Leslie Seidman | $ | 124,000 | $ | 186,315 | $ | 5,000 | $ | 315,315 | ||||
| James Tisch | $ | 0 | $ | 285,483 | $ | 0 | $ | 285,483 | ||||
CASH FEES. Amount of cash compensation earnedour named executives in 2021 for Board and committee service.
STOCK AWARDS. Aggregate grant date fair value of DSUs granted in 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 multiplying2022.
| Most Important Financial Performance Measures |
| Free Cash Flow* |
| Organic Revenue Growth* |
| Profit or Adjusted Profit* (as applicable) |
| Organic Margin Expansion* |
| Adjusted Earnings per Share* |
the number of DSUs granted by the closing price of
| * | Non-GAAP Financial Measure |
60 GE stock on the grant date (or the last trading day prior to the grant date), which was $105.04 for March 31, 2021 grants, $107.68 for June 30, 2021 grants, $103.03 for September 30, 2021 grants, and $94.47 for December 31, 2021 grants. The table below shows the cash amounts that the directors deferred into DSUs in 2021 and the number of DSUs accrued as of 2021 fiscal year-end.
| DIRECTOR | CASH DEFERRED INTO DSUs IN 2021 | # DSUs OUTSTANDING AT 2021 FISCAL YEAR-END | |||
| Sébastien Bazin | $ | 124,000 | 18,181 | ||
| Ashton Carter | $ | 0 | 3,643 | ||
| Francisco D’Souza | $ | 134,000 | 23,526 | ||
| Edward Garden | $ | 0 | 9,699 | ||
| Thomas Horton | $ | 0 | 10,340 | ||
| Risa Lavizzo-Mourey | $ | 0 | 10,984 | ||
| Catherine Lesjak | $ | 0 | 7,051 | ||
| Paula Rosput Reynolds | $ | 25,125 | 8,581 | ||
| Leslie Seidman | $ | 0 | 13,102 | ||
| James Tisch | $ | 114,000 | 26,688 | ||
52 GE 20222023 PROXY STATEMENT
MANAGEMENT Advisory Vote on the Frequency of Future Advisory Votes to Approve Our Named Executives’ Compensation What are you voting on? We are asking shareholders to vote, on a non-binding basis, to indicate their preference on the frequency of future say-on-pay votes.
Your Board recommends holding future say-on-pay votes every ONE YEAR Why the Board recommends a vote for holding future say-on-pay votes annually. We have engaged shareholders on this issue and, based on their feedback, we believe that a significant portion of our investors would prefer an annual opportunity to vote to approve our named executives’ compensation. | Say-On-Frequency Vote Pursuant to Section 14A of the Exchange Act, we are asking shareholders to recommend, in an advisory vote, whether future shareholder advisory approval of our named executives’ compensation should occur every one, two or three years. At our 2017 Annual Meeting, our shareholders voted to hold say-on-pay votes annually and our Board adopted this practice. Under SEC rules, we are required to conduct this advisory vote again in 2023 (and the next such vote will occur in 2029). After careful consideration, the Board recommends that future say-on-pay votes continue to be held annually. Our Board believes that holding a vote every year is the most appropriate option because it would continue to enable our shareholders to provide us with timely input regarding the compensation of named executives. Shareholders are not voting to approve or disapprove the Board’s recommendation. Instead, shareholders may indicate their preference regarding the frequency of future say-on-pay votes by selecting one year, two years, or three years or abstaining. Although the vote is non-binding, the Management Development & Compensation Committee and the Board value your opinion and will consider the outcome of the vote in establishing the frequency with which future say-on-pay votes will be held. | |||||||||||
GE 2023 PROXY STATEMENT 61
62GE 20222023 PROXY STATEMENT 53
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” 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: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 2021,2022, the Audit Committee pre-approved all services provided to the company pursuant to the policies and procedures described above.
WE HAVE HIRING RESTRICTIONS FOR DELOITTE EMPLOYEES.
To avoid potential conflicts of interest, the Audit Committee has adopted restrictions on our hiring of any Deloitte partner, director, manager, staff member, advising member of the department of professional practice, reviewing actuary, reviewing tax professional and any other individuals responsible for 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” 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:years shown:
| 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 | |||||
| TYPES OF FEES (IN MILLIONS) | AUDIT | AUDIT- RELATED | TAX | ALL OTHER | TOTAL | ||||||
| 2022 | $57.6 | $ | 40.3 | $0.6 | $0.1 | $98.6 | |||||
| 2021 | $51.6 | $ | 2.1 | $0.5 | $0.3 | $54.5 | |||||
AUDIT FEES. Fees for the audit of GE’s annual financial statements included in our annual report on Form 10-K;10-K for 2022; the review of financial statements included in our quarterly reports on Form 10-Q; the audit of our internal control over financial reporting, with the objective of obtaining reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects; and services routinely provided by the auditor in connection with statutory and regulatory filings or engagements.
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 wasFor 2022, our audit-related fees primarily attributable to higher costsconsisted of fees for financial statement carve-out audits in 2020,procedures associated with GE’s separation strategy, including the BioPharma business withinspin-off of GE Healthcare.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.
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.
54 GE 20222023 PROXY STATEMENT63
GE 2022 PROXY STATEMENT 55
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% |
| |
|
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:
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:
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.
56 GE 2022 PROXY STATEMENT
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 TypesThe 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 LTIPNO 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.
GE 2022 PROXY STATEMENT 57
NON-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 the grant 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 Management Development & Compensation Committee, such participant will forfeit their right to any unvested or unexercised awards under the 2022 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 the U.S. federal income tax consequences applicable to awards granted under the 2022 LTIP based on the federal income tax laws in effect on the date of this proxy statement. This summary is not intended to be exhaustive and does not address all matters relevant to a particular participant based on their specific circumstances. The summary expressly does not discuss the income tax laws of any state, municipality, or non-U.S. taxing jurisdiction, or the gift, estate, excise (including the rules applicable to deferred compensation under Section 409A of the Code), or other tax laws other than U.S. federal income tax law. Because individual circumstances may vary, we advise all participants to consult their own tax advisor concerning the tax implications of awards granted under the 2022 LTIP.
STOCK OPTIONS AND SARS. The grant of a stock option or SAR generally creates no tax consequences for the participant or GE. A participant generally has no taxable income upon exercise of an ISO, except that the alternative 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 interests of the GE and our shareholders.
Additional Equity Compensation Plan Information
For information regarding outstanding equity awards and shares available for future issuance under all of GE’s equity plans as of December 31, 2021, see “Equity Compensation Plan Information” on page 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.
58 GE 2022 PROXY STATEMENT
64 GE 2023 PROXY STATEMENT
Your Board recommends a vote AGAINST this proposal.
WE BELIEVE DETERMINING BOARD LEADERSHIP ON A CASE-BY-CASE BASIS IS IN THE BEST INTERESTS OF GE AND ITS SHAREHOLDERS. Our Board believes that providing strong and independent oversight of the company is central to its role and to good governance. By dictating a rigid policy on the structure of Board leadership, regardless of the circumstances or the individuals involved, this proposal could limit the Board’s ability to establish the leadership structure that is in the best interests of the company and its shareholders at a particular point in time. Because circumstances change over time, we believe it is important for our directors to maintain flexibility to select the most appropriate Board leadership structure. This is especially important as the company executes on its plan to form three independent public companies, each of which will have its own board and board leadership structure. Additionally, according to the 2022 Spencer Stuart Board Index, only 36% of companies in the S&P 500 currently have an independent board chair. The Board will continue to evaluate the suitability of its leadership structure and make changes when those will best serve the interests of GE and its shareholders.
THE BOARD HAS DETERMINED THAT ITS CURRENT LEADERSHIP STRUCTURE, WHICH INCLUDES A STRONG LEAD DIRECTOR, BEST SERVES GE AT THIS TIME. The Board believes that its current leadership structure, which has a combined role of Chairman and CEO, counterbalanced by a strong independent Board led by a lead director and independent directors chairing each of the Board committees, is in the best interests of GE and its shareholders. At the time of GE’s most recent CEO transition in September 2018, the independent directors determined that appointing Mr. Culp, one of our existing directors, to serve as CEO and simultaneously appointing him as Chairman was in the best interests of the company and its shareholders. After deliberation which included whether to appoint an independent Board chair in connection with the CEO transition, the independent directors determined that Mr. Culp was the best candidate to drive the strategy for the company as CEO and lead the Board’s agenda as Chairman. The independent directors concluded that combining these roles was important to provide clarity on decision-making and accountability, particularly at a time of considerable change for the company, and that appointing a strong lead director, as described below, would provide for continuing independent leadership and oversight of the Board. We believe that the company’s successful performance and execution of its strategic transformation has been, and will continue to be, assisted considerably by Mr. Culp’s fulfilling the roles of both CEO and Chairman and that this most recent leadership transition is a good example of the case-by-case Board evaluation that the proposal would restrict. We remain open to the possibility of appointing separate individuals to each of the roles in the future, in light of the needs of the Board and the company at any given time. For instance, when the Board in 2020 agreed to extend the term of Mr. Culp’s employment as CEO through at least 2024, the Board provided for the possibility that Mr. Culp may transition from CEO to executive chairman in August 2023, and that he may serve as a non-employee director or consultant from August 2024 to 2025. This reflects the Board’s openness to different leadership structures, and demonstrates that the Board will evaluate the best leadership structure for GE in the future, as it has done and will continue to do as it executes on GE’s planned separation into three independent public companies. For example, with the spin-off of GE HealthCare in January 2023, the Board determined the best leadership structure for GE HealthCare was to have a separate CEO and board chairman. As we work toward the planned spin-off of GE Vernova, the Board will similarly evaluate and determine the leadership structures that work best for GE Vernova and GE Aerospace, considering each planned company’s specific circumstances.
OUR LEAD DIRECTOR WORKS WITH THE OTHER INDEPENDENT DIRECTORS TO PROVIDE MEANINGFUL INDEPENDENT OVERSIGHT OF MANAGEMENT. Our Board recognizes the importance of independent board oversight of management and believes that it is an essential component of strong corporate performance. The lead director role at GE is designed to empower the independent directors to serve as an independent check on management. Our lead director is selected solely by independent directors, taking into account a variety of factors, including the director’s qualifications and attributes, leadership experience, understanding of our businesses and industries, and willingness to commit the time necessary to fulfill the role. Our current lead director, Mr. Horton brings a valuable perspective through his experience as both a former CEO and an independent director on other boards. The lead director leads regular meetings of the independent directors and meets with the Chair for discussion of matters arising from these meetings. He also is empowered to call additional meetings of the independent directors or the entire Board, serves as a liaison on Board-related issues between the Chair and the independent directors, and performs other functions as the Board may direct. As described in the Board’s Governance Principles, these other functions include (1) advising the Governance & Public Affairs Committee on the selection of committee chairs, (2) approving the agenda, schedule and information sent to the directors for Board meetings, (3) working with the Chair to propose an annual schedule of major discussion items for the Board’s approval, (4) guiding the Board’s governance processes, including the annual Board self-evaluation, succession planning and other governance-related matters, and (5) providing leadership to the Board if circumstances arise in which the role of the Chair may be, or may be perceived to be, in conflict, and otherwise act as chair of Board meetings when the Chair is not in attendance. The lead director oversees the Board’s periodic review of its leadership structure to evaluate whether it remains appropriate for the company. The lead director also frequently meets with our largest shareholders. Through these actions and responsibilities, the lead director serves as a powerful mechanism for the Board overall to exercise its independent oversight.
For the foregoing reasons, the Board recommends a vote AGAINST this proposal.
GE 2023 PROXY STATEMENT 65
Shareholder Proposal No. 2 —
Sale of the Company
Martin Harangozo has notified us that he intends to submit the following proposal at this year’s meeting:
The shareholders recommend General Electric hire an investment bank to explore the sale of the company.
Whereas: General Electric had lost nearly all its valuation in the last two decades, during a time when the stock market popular Standard and Poor’s 500 performance about tripled in valuation. The dividend is all but gone and less than when Mr. Jack Welch became CEO in 1981. Promised benefits to retirees have been broken. Rolling heads around as Mr. John Flannery replacing Mr. Jeffrey Immelt, or Mr. Lawrence Culp Jr. replacing Flannery has had no substantial positive effect in restoring the company valuation, or growing it to the broader market. In fact, all three of these leaders reduced company valuation. It is clear that a new approach is needed to drive the General Electric Company so that it performs for the shareholders consistent with general stock market performance.
This proposal has been on previous proxy statements. General Electric argued:
“General Electric is one of the most valuable and respected companies in the world. Our businesses are bound together by common operating systems, technologies and initiatives and a common culture with strong values. Throughout the company, we focus on infrastructure markets, because they utilize General Electric capabilities in technology, globalization, financing and customer relationships. General Electric is the only company listed
in the Dow Jones Industrial Index today that was also included in the original index in 1896, and since 1899, General Electric has paid a quarterly dividend without interruption. In addition, contrary to the assertions in the proposal’s supporting statement, General Electric is committed to product safety and consumer protection, takes a number of precautions to ensure the safety of our products, and has made the Ethisphere Institute’s list of the world’s most ethical companies for the last eight years. Our management approach emphasizes stable growth through diversification across several business segments. To maximize long-term shareowner value, we continually reevaluate our businesses and make adjustments when warranted. This review process led to recent significant decisions like the sale of General Electric’s remaining stake in NBC Universal and certain of our machining and fabrication businesses. General Electric’s strong management allowed the company to weather the recent economic downturn and has led to a rebound in stock price, an increase in dividend paid per share and a market capitalization of over $280 billion. General Electric’s new resurgence over the past few years has placed it back on Fortune’s most admired companies list. We believe it is in the best long- term interests of our shareowners to continue this course. Therefore, the Board recommends a vote AGAINST this proposal”.
Clearly, the arguments General Electric has made above pertaining to “the best long-term interests of our shareowners to continue this course”, proved to be flat wrong. History proves General Electric cannot be trusted with any argument against this proposal.
Your Board recommends a vote AGAINST this proposal.
For the foregoing reasons, the Board recommends a vote AGAINST this proposal. | ||||||
66GE 20222023 PROXY STATEMENT59
Fiduciary Carbon-Emission Relevance Report
SOC Investment GroupThe National Center for Public Policy Research has notified us that it intends to submit the following proposal at this year’s meeting:
RESOLVED: Shareholders request General Electric’s Board of Directors provide an audited report evaluating the material factors relevant to decisions about whether a 2050 net-zero carbon goal, or other similar decarbonization goals, is appropriate, including factors that mitigate against the adoptions of such goals. These factors might reasonably include technological feasibility (or its absence), the economic consequences of adoption, the possibility that the Board ofclimate models that underlie such goals are incorrect, the possibility that failure to adopt such goals in other countries will render adoption by General Electric Company (GE) seek shareholder approvalmeaningless, the possibility that U.S. governments will not mandate such decarbonization, unending adoption-favoring “stranded asset” assumptions, and relevant considerations. The report should be produced at reasonable cost and omitting proprietary information.
Claims about the need for decarbonization at all, but especially by some activist-generated date certain, are based on a long series of any senior manager’s newassumptions that are either counterfactual or renewed pay packageinsufficiently examined. For decades, for instance, claims have been made that providesaction must be taken before some date, or it will be too late.2 If those claims were right, it’s too late for severancedecarbonization to matter now, so we should be building up economic resources to deal with climate change. If they were wrong, then the odds are high that current claims are also wrong.
General Electric’s decarbonization will be meaningless if other countries do not follow the same decarbonization schedules, and there is abundant evidence that they will not.3 The United States government has never mandated net-zero by statute or termination payments with an estimated value exceeding 2.99 timesauthorized regulatory action4, and is unlikely ever to do so; this contravenes the sumassumptions of “stranded asset” analysis. If decarbonization is neither required nor technologically feasible, General Electric will lose significant markets and revenues to private equity firms and (less clean-producing) state actors, thus harming shareholders while also harming 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,environment. These and change-in-control clauses in long-term equity plans, but not life insurance, pension benefits, or deferred compensation earnedall relevant considerations should be fully and vested prior to termination.objectively examined.
“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.
General Electric has touted its commitment to achieving net-zero carbon emissions by 2050.1 It does not appear from publicly available information, however, that this policy cover new and renewed executive severance approvals, we noteGeneral Electric has fully considered the risk 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 contingentdecarbonization on at least a 50% increase in the stock price, at which time the award would be worth $46.5 million.activist schedules might entail.
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
| 1 | https://www.ge.com/about-us/energy-transition |
| 2 | https://nypost.com/2021/11/12/50-years-of-predictions-that-the-climate-apocalypse-is-nigh/ |
| 3 | https://www.theepochtimes.com/across-the-world-coal-power-is-back_4671888.html; https://www.realclearenergy.org/articles/2022/06/03/india_and_china_ coal_production_surging_by_700m_tons_per_year_thats_greater_than_all_us_coal_output_835483.html; https://www.realclearenergy.org/articles/2022/06/03/ india_and_china_coal_production_surging_by_700m_tons_per_year_thats_greater_than_all_us_coal_output_835483.html; https://www.breitbart.com/ environment/2022/04/21/worlds-worst-polluter-china-increases-coal-production-by-three-hundred-million-tons/; https://mishtalk.com/economics/global-net-zero-climate-change-targets-are-pie-in-the- sky |
| 4 | https://www.npr.org/2022/06/30/1103595898/supreme-court-epa-climate-change |
Your Board recommends a vote AGAINST this proposal. INNOVATING TECHNOLOGY TO ADDRESS THE PRESSING CHALLENGES OF DECARBONIZATION AND CLIMATE CHANGE IS CENTRAL TO OUR BUSINESSES’ STRATEGIES; GE’S SENIOR MANAGEMENT AND BOARD OF DIRECTORS HAVE TAKEN CONSIDERABLE CARE IN ANALYZING AND ARTICULATING GE’S AMBITIONS FOR GREENHOUSE GAS EMISSION REDUCTIONS, AND THE REPORT REQUESTED BY THIS PROPOSAL IS THEREFORE UNNECESSARY. GE recognizes the challenges and risks posed by climate change, and we support the Paris Agreement and other ambitious targets to reduce emissions. As a company whose equipment helps provide one-third of the world’s electricity across 170 countries, GE aims to play a unique role in providing our customers with power generation equipment and services to make electricity more sustainable, affordable, and reliable, in a context where global electricity demand and risks are expected to grow considerably in the decades to come. Our Aerospace business, whose engines together with our partners power three-quarters of commercial flights worldwide, will also play a key role in creating a smarter and more efficient future of flight. These are central strategic considerations for our businesses, especially as our customers and investors are increasingly adopting their own greenhouse gas reduction goals, and are looking to GE to innovate and help develop the technologies needed to achieve these goals. Because these dynamics are so central to our business strategies and to addressing the needs of our customers, GE’s role in helping to decarbonize power generation and commercial aviation has been a key area of focus at the company’s most senior management levels and with the GE Board of Directors. That focus extends to decisions about our asset and business portfolios and the types of opportunities that we pursue, as well as the technology and innovation that we provide today and invest in for the future. For example, in recent years GE has chosen to exit its new coal business while (i) innovating renewable energy and other emissions reduction technology, (ii) providing highly efficient gas turbines that can be a force multiplier for reducing power sector emissions and (iii) investing in breakthrough technologies such as small modular nuclear reactors and technologies to reduce gas turbine emissions, including hydrogen as a fuel and carbon capture and sequestration. This focus also extends to decisions about the company’s greenhouse gas emission reduction strategy. Senior management and the GE Board of Directors have invested substantial time assessing and articulating GE’s own ambitions to reduce greenhouse gas emissions across our operations and from customers’ use of our products. We have articulated a goal of carbon neutrality by 2030 for our operations (Scope 1 and 2 emissions) and an ambition to be a net zero company by 2050, including the Scope 3 emissions from the use of sold products. These long-range decarbonization objectives have been the product of significant analysis and deliberative processes, and we continue to refine our interim targets and report on our progress over time, as we have described more fully in our annual Sustainability Report. The assertion in Shareholder Proposal #3 that GE has not adequately considered its decarbonization objectives before establishing them is incorrect. Contrary to this shareholder proposal’s premise, we believe these goals are appropriate for the company and well-aligned with the expectations of the majority of our customers, shareholders and other stakeholders, and that the report requested by Shareholder Proposal #3 is therefore unnecessary. For the foregoing reasons, the Board recommends a vote AGAINST this proposal. |
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
60 GE 20222023 PROXY STATEMENT67
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.
GE 2022 PROXY STATEMENT 61
Assess Energy-Related Asset Resilience
Alexandra A. Brown hasHenry H. Barrett and MKT Forces Trading Limited have notified us that she intendsthey intend to submit the following proposal at this year’s meeting:
RESOLVED, shareholdersRESOLVED: Shareholders ask the Board of General Electric Company (“GE” or “the Company”) requestto provide an audited report to address how application of the International Energy Agency’s Net Zero Emissions by 2050 pathway would affect the assumptions and estimates that underlie GE’s valuation and expected cash flow assessments. The report should address GE’s existing assets as well as planned investments in renewable energy, nuclear, and thermal power; and include asset lives, asset retirement obligations, and capital expenditures (including new material capital expenditures), as well as potential impairments. The report should be produced at reasonable cost and omit proprietary information.
Supporting Statement
In 2021, a majority of shareholders voted for a similar proposal that sought disclosure regarding GE’s alignment with a net zero pathway. The Company has not meaningfully responded, and the Board nominatetime to do so is now.
The International Energy Agency’s Net Zero Emissions by 2050 Scenario1 (“NZE2050”) makes clear that achieving net zero emissions by 2050 implies an Employee Representative Directorextremely limited and narrowing role for electionfossil fuels in electricity generation. Despite having its own net zero by 2050 target, GE has reported involvement in almost 25 gigawatts of new LNG to power projects in Vietnam and Bangladesh and two LNG import facilities in Bangladesh, planned to operate to 2050 and beyond.
Recognizing there are transition risks associated with meeting the BoardParis Agreement’s climate goals and NZE2050, investors are increasingly demanding disclosure of how climate action scenarios would affect key assumptions – including those related to asset lives. Climate Action 100+2 has identified companies – including GE – who fail to back their net zero commitments with clear plans, noting particular inadequacies in decarbonization strategy and capital allocation alignment.3
GE continues to rely on gas demand scenarios4 that fail to meet net zero emissions by 2050 and, therefore, risk leaving assets stranded.
Given GE’s plans to spin off its power businesses into a new entity, GE Vernova, investors need more disclosure from the company regarding the risks to its assets.
A majority of GE’s shareholders at GE’s 2023 annual meeting of shareholders. The Employee Representative Director shall bevoted for a current non-executive GE employee who consents to servesimilar proposal in 2021 that sought disclosure on the Board. Current employees shall be givencompany’s alignment with a net zero pathway. This proposal builds upon the opportunity to suggest persons to serve as2021 resolution, and seeks decision-critical information for investors that we hope will demonstrate 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.
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 spinoffsresilience of GE’s divisions into publicly traded companies is only undertaken if it can be done inenergy-related assets within the context of a manner that protects the integritycredible net zero by 2050 pathway.
Therefore: Vote FOR GE’s future resilience 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 presentedprofitability by its impending corporate restructuring. We strongly believe the Employee Representative Director would promote GE’s continued success.
| 1 | |
| 2 | www.climateaction100.org/wp-content/uploads/2022/01/Climate-Action-100-2021-Progress-Update-Final.pdf |
| 3 | www.climateaction100.org/company/general-electric-company |
| 4 | www.ge.com/content/dam/gepower-new/global/en_US/downloads/gas-new-site/future-of-energy/ge-future-of-energy- white-paper.pdf |
68 GE HAS A ROBUST AND EFFECTIVE PROCESS FOR IDENTIFYING AND RECRUITING QUALIFIED, INDEPENDENT AND DIVERSE DIRECTORS. 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. 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.
62 GE 20222023 PROXY STATEMENT
Your Board recommends a vote AGAINST this proposal. GE IS HELPING LEAD THE GLOBAL ENERGY TRANSITION BY INNOVATING TECHNOLOGY TO ADDRESS THE PRESSING CHALLENGES OF DECARBONIZATION AND ELECTRIFICATION. As a company whose equipment helps provide one-third of the world’s electricity across 170 countries, GE aims to play a unique role in providing our customers with power generation equipment and services to make electricity more sustainable, affordable, and reliable, in a context where global electricity demand and risks are expected to grow considerably in the decades to come. These are central strategic considerations for our businesses, especially as our customers and investors are increasingly adopting their own greenhouse gas reduction goals, and are looking to GE to innovate and help develop the technologies needed to achieve these goals. Because these dynamics are so central to our business strategy and to addressing the needs of our customers, GE’s role in helping to decarbonize power generation has been a key area of focus at the company’s most senior management levels and the GE Board of Directors. That focus extends to decisions about our asset and business portfolios and the types of opportunities that we pursue, as well as the technology and innovation that we provide today and invest in for the future. For example, in recent years GE has chosen to exit its new coal business while (i) innovating renewable energy and other emissions reduction technology, (ii) providing highly efficient gas turbines that can be a force multiplier for reducing power sector emissions and (iii) investing in breakthrough technologies such as small modular nuclear reactors and technologies to reduce gas turbine emissions, including hydrogen as a fuel and carbon capture and sequestration. AS WE WORK TOWARD SEPARATING GE VERNOVA, OUR PORTFOLIO OF ENERGY BUSINESSES, INTO AN INDEPENDENT PUBLIC COMPANY, WE EXPECT TO PROVIDE EXTENSIVE NEW REPORTING ABOUT THE FINANCIAL PROFILE OF THOSE BUSINESSES AND RELATED RISKS AND OPPORTUNITIES, INCLUDING DYNAMICS RELATED TO DECARBONIZATION. Shareholder Proposal #4 asserts that as GE prepares for the GE Vernova spin-off, investors “need more disclosure from the company regarding the risks to its assets”; investors will indeed receive significant additional disclosure in connection with the SEC reporting required before and after the planned GE Vernova spin-off, making a separate report like the one that this shareholder proposal requests unnecessary at this time. As we announced in November 2021, we have been working to execute a strategic plan to form three industry-leading, global, investment-grade public companies from GE businesses. In January 2023, we completed the separation of our HealthCare business from GE through the spin-off of GE HealthCare Technologies Inc., and we are working toward a second planned spin-off of GE Vernova. As with the GE HealthCare spin-off, the spin-off of GE Vernova will require the preparation and filing with the Securities and Exchange Commission of a registration statement on Form 10. This detailed filing will include audited financial statements of the GE Vernova businesses, on a carve-out, standalone basis that GE Vernova will report on following separation from GE. In addition, the Form 10 will be required to disclose material information about, among other things: (i) trends in market demand and competitive conditions; (ii) the status of development efforts for new or enhanced products; (iii) effects that compliance with government regulations, including environmental regulations, may have upon capital expenditures, earnings, and the competitive position of GE Vernova; (iv) material factors that make an investment in the company speculative or risky; (v) critical accounting estimates; (vi) trends in the company’s capital resources, including any reasonably likely material changes in the mix and relative cost of such resources; and (vii) other material information relevant to an assessment of the financial condition and results of operations of GE Vernova, including any known material events and uncertainties that are reasonably likely to cause reported financial information to not be necessarily indicative of future operating results or financial condition. This Form 10 reporting, since it will focus on a company with more limited operations than GE has today on a consolidated basis, will necessarily entail a more granular level of financial reporting and accompanying discussion than has been provided to date for GE Renewable Energy and GE Power as reporting segments within GE. WE BELIEVE THAT THE REPORT SOUGHT BY THIS PROPOSAL SHOULD NOT BE PRIORITIZED AT THIS TIME, AND THAT THE GE VERNOVA SEPARATION ACTIVITIES AND OUR EXISTING AND ONGOING CLIMATE AND SUSTAINABILITY REPORTING BETTER SERVE THE INTERESTS OF SHAREHOLDERS TODAY. We do not believe the report requested by Shareholder Proposal #4 should be prioritized by GE or by our shareholders today. The number of requests for climate-related reporting continues to grow, and shareholder proposals in this area are often animated by particular groups’ own interests, rather than the best interest of all shareholders. That is evident with Shareholder Proposals #3 and #4, which reflect sharply differing perspectives about climate-change related risks and actions that should be taken. In this context, we believe it is important to focus the company leadership’s time and resources on the most important priorities for all shareholders. Readying the GE Vernova businesses for the planned spin-off is a top priority for GE today. There is significant operational work required to prepare for the business separation, and this requires the attention of management and significant resources internally. As noted above, preparation for the spin-off will also require detailed new reporting about GE Vernova in a Form 10 registration statement that will be reviewed and need to be declared effective by the SEC before the spin-off. In addition to the spin-off-related work, GE in recent years has articulated a goal of carbon neutrality by 2030 for our operations (Scope 1 and 2 emissions) and an ambition to be a net zero company by 2050, including the Scope 3 emissions from the use of sold products. We have provided a roadmap for our technology portfolio to help achieve net zero for the power sector, as described more fully in our Sustainability Report. These reporting efforts have been well received in many of our engagements with shareholders and other stakeholders for sharing information in a credible way, which we will continue to refine over time. We are committed to updating this information through a process of continuous learning and anticipate further updates in our 2022 Sustainability Report. These are areas of climate-related reporting that GE, and ultimately GE Vernova as a standalone company, also plan to carry forward, and we believe that continuing to enhance this ongoing reporting is better aligned with our current priorities and efforts than the report that this shareholder proposal requests. Moreover, as the U.S. and E.U. adopt anticipated climate-related disclosure obligations, this type of reporting will continue to evolve over time to better meet the information needs of investors and other stakeholders. As compared to GE’s priorities of both (i) working toward the spin-off of GE Vernova and preparing the Form 10 disclosures that spin-off will require, and (ii) continuing to deepen and refine our existing framework of climate and decarbonization-related reporting in our Sustainability Reports, we do not believe that the particular report requested by Shareholder Proposal #4 is necessary or that it should be prioritized at this time. Accordingly, we do not believe it is in shareholders’ best interests to support this proposal. For the foregoing reasons, the Board recommends a vote AGAINST this proposal. |
GE 2023 PROXY STATEMENT 69
Submitting 2024 Proposals
The table below summarizes the requirements for shareholders who wish to submit proposals, including director nominations, for next year’s 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 2024 PROXY | DIRECTOR NOMINEES FOR INCLUSION IN | OTHER PROPOSALS/NOMINEES TO BE PRESENTED AT | |||||||||
| 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 | Shareholders may present proposals or director nominations directly at the Annual 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 (5 p.m. ET) on November | No earlier than October | |||||||||
| Where to send | By mail: Corporate Secretary, at the address set forth on the inside front cover of this proxy statement By email: | ||||||||||
| What to include | The information required by SEC Rule 14a-8 | The information required by our by-laws** | |||||||||
| * | |
| With respect to proposals not submitted pursuant to SEC Rule 14a-8 and nominees presented directly at the | |
| In addition to satisfying the deadlines and other requirements under Article VII, Section D of our by-laws, SEC rules require shareholders to provide notice under SEC Rule 14a-19 of the intent to solicit proxies in support of director nominees (other than the company’s nominees) by notifying the company no later than the close of business (5 p.m. ET) on March | |
| ** | Our by-laws are available on GE’s website (see Helpful Resources on page 77). |
70 GE 20222023 PROXY STATEMENT 63
Voting and Meeting Information
Voting Standards and Board Recommendations
The following table summarizes the Board’s voting recommendations for each proposal, the vote required for each proposal to pass and the effect of abstentions and broker non-votes on each proposal.
| VOTING ITEM | BOARD RECOMMENDATION | VOTING STANDARDS | TREATMENT OF ABSTENTIONS & BROKER NON-VOTES |
| Election of Directors | FOR | Majority of Votes Cast | Not counted as votes cast and therefore no effect, if any |
| Say-on-Pay | |||
| Shareholder Proposal No. 1 | AGAINST | ||
| Shareholder Proposal No. 2 | |||
| Shareholder Proposal No. 3 | |||
| Shareholder Proposal No. 4 |
WE HAVE A MAJORITY VOTING STANDARD FOR DIRECTOR ELECTIONS. Each director nominee who receives a majority of the votes cast will be elected. Any current director who does not meet this standard is subject to the Board’s policy regarding resignations by directors who do not receive a majority of “For” votes, which is described in the Board’s Governance Principles (see “Helpful Resources” 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.GE2023. If you encounter any difficulties accessing the virtual Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual Annual Meeting log-in page. Technical support will be available starting 15 minutes prior to the meeting. The virtual meeting format for the Annual Meeting enablesis designed to enable full and equal participation by all of our shareholders from any place in the world at little to no cost.
CAN I ASK A QUESTION AT THE VIRTUAL ANNUAL MEETING?
Shareholders of record will be able to submit questions either before (by going to www.proxyvote.com) or during the virtual meeting (by going to the Annual Meeting Website) by typing the question into the “Ask a Question” field and clicking “Submit.” We will answer questions that comply with the meeting rules of conduct during the Annual Meeting, subject to time constraints. If we receive substantially similar questions, we may group such questions together. Questions related to personal matters, that are not pertinent to Annual Meeting matters, or that
contain derogatory references to individuals, use offensive language, or are otherwise out of order or not suitable for the conduct of the Annual Meeting will not be addressed during the meeting. If there are questions pertinent to Annual Meeting matters that cannot be answered during the Annual Meeting due to time constraints, management will post answers to such questions at www.ge.com/investor-relations.
WHAT DO I DO IF I NEED TECHNICAL ASSISTANCE DURING THE MEETING?
If you encounter any difficulties accessing the meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual shareholder meeting log-in page.
GE 2023 PROXY STATEMENT 71
Voting Information
WHO IS ENTITLED TO VOTE?
Shareholders of record at the close of business on March 8, 20227, 2023, are eligible to vote at the meeting. Our voting securities consist of our $0.01 par value common stock (our(holders of our preferred stock isare not entitled to vote at the annual meeting), and there were 1,101,751,3551,090,282,930 shares outstanding on the record date.
HOW DO I VOTE MY SHARES IF I AM A RECORD HOLDER?
If your name is registered on GE’s shareholder records as the owner of shares, you are the “record holder.” If you hold shares as a record holder, there are four ways that you can vote your shares.
| ● | Over the | |
| ● | 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 | |
64 GE 2022 PROXY STATEMENT
| ● | 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 | |
| ● | Online at the Annual | |
| ● | 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. UnlessIf you do not provide the broker or nominee that holds your shares with voting instructions, the broker or nominee will determine if it has the discretionary authority to vote on your behalf.
The determination of whether a proposal is “routine” or “non-routine” will be made by the NYSE or by Broadridge Financial Solutions, our independent agent to receive and tabulate shareholder votes, based on NYSE rules that regulate member brokerage firms. If a proposal is deemed “routine” and you do not give instructions to your broker or nominee, they may, but are not required to, vote your shares with respect to the proposal. If the proposal is deemed “non-routine” and you do not give instructions to your broker or nominee, they may not vote your shares with respect to the proposal and the shares will be treated as broker non-votes.
Therefore, if you do not provide voting instructions to your broker or nominee, your broker or nominee may only vote your shares may not be voted on any matter exceptroutine matters properly presented for ratifyinga vote at the appointment of our independent auditors.Annual Meeting. 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 1-800-579-16391-800-786-2543 or at www.shareowneronline.com.
HOW DO I VOTE FOR SHARES HELD IN THE GE RETIREMENT SAVINGS PLAN?
If you are a RSP participant, the trusteestrustee of the RSP trust will vote the shares allocable to your RSP account as of March 7, 20226, 2023 as you instruct (you should consider this date the “record date” for purposes of the shares allocable to your RSP account). You may give instructions via telephone or the internet or by mailing the proxy form. If your valid proxy form is received by May 1, 2022April 30, 2023 and it does not specify a choice, the trustee will vote the shares as the Board recommends.
72 GE 2023 PROXY STATEMENT
If your proxy form is not received by May 1, 2022April 30, 2023 and you did not submit a vote via telephone or the internet by that date, shares allocable to your RSP account will not be voted. You may revoke a previously delivered proxy by either notifying the inspector of election in writing that you wish to
revoke or by delivering a subsequent proxy by May 1, 2022.April 30, 2023. The address for the inspector of election is First Coast Results, Inc., 200 Business Park Circle, Suite 112, Saint Augustine, FL 32095. For more information about the voting process, you can call the GE RSP Service Center at 1-877-55-GERSP (1-877-554-3777).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?
HOW WILL PROXIES BE VOTED?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.
| ● | Proxies will be voted as you specify for or, if you don’t specify, as recommended by the Board. Shareholders should specify their choice for each matter on the proxy form. If no specific instructions are given, proxies which are signed and returned will be voted in accordance with the Board’s recommendations. |
| ● | What happens if other matters are properly presented at the Annual Meeting. If any matter not described in this proxy statement is properly presented for a vote at the Annual Meeting, the persons named on the proxy will vote in accordance with their judgment. |
| ● | What happens if a director nominee is unable to serve. We do not know of any reason why any nominee would be unable to serve as a director. If any nominee is unable to serve, the Board can either nominate a different individual or reduce the Board’s size. If it nominates a different individual, the shares represented by all valid proxies will be voted for that nominee. |
CAN I CHANGE MY VOTE?
You may change your vote by revoking your proxy at any time before it is exercised, which can be done by voting electronically during the meeting, by delivering a new proxy or by notifying the inspector of election in writing. If your GE shares are held for you in a brokerage, bank or other institutional account, you must contact that institution to revoke a previously authorized proxy. The address for the inspector of election is First Coast Results, Inc., 200 Business Park Circle, Suite 112, Saint Augustine, FL 32095.
HOW ARE VOTES COUNTED?
Each share counts as one vote.
WHAT ARE BROKER NON-VOTES?
Broker non-votes occur on a matter up for vote when a broker, bank or other holder of shares you own in “street name” is not permitted to vote on that particular matter without instructions from you, you do not give such instructions and the broker, bank or other nominee indicates on its proxy form, or otherwise notifies us, that it does not have authority to vote its shares on that matter. Whether a broker has authority to vote its shares on uninstructed matters is determined by NYSE rules.
IS MY VOTE CONFIDENTIAL?
Individual votes of shareholders are kept private, except as necessary to meet legal requirements. Only the independent inspector and certain employees of GE and its agents have access to proxies and other individual shareholder voting records, and they must acknowledge in writing their responsibility to comply with this confidentiality policy.
GE 20222023 PROXY STATEMENT 65 73
WHO IS SOLICITING MY PROXY AND WHO PAYS THE EXPENSE OF SUCH SOLICITATIONS?
Your proxy is being solicited on behalf of the Board.
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.
WHAT IS “HOUSEHOLDING”?
Shareholders sharing a single address may receive only one copy of the proxy statement and annual report or the Notice, unless the transfer agent, broker, bank or other nominee has received contrary instructions from any owner at that address. This practice, known as householding, is designed to reduce printing and 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 in the subject line, or call 800-579-1639. We will promptly deliver them to you. |
| ● | To stop receiving separate copies.If you currently receive separate copies of these materials and wish to receive a single copy in the future, you will need to contact your broker, bank or other institution where you hold your shares. |
HOW YOU CAN OBTAIN MORE INFORMATION?
If you have any questions about the proxy voting process, please contact the broker, bank or other institution where you hold your shares. The SEC also has a website (see “Helpful Resources” Resources on page 77) with more information about your rights as a shareholder. Additionally, you may contact our Investor Relations team by following the instructions on our Investor Relations website (see “Helpful Resources” Resources on 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 2023 Annual Meeting: This proxy statement and our annual report may be viewed online at GE’s Annual Meeting website (see Helpful Resources on page 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 Shareholder Services page of our Investor Relations website (see Helpful Resources on page 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: | ||
| ● | Calling 800-579-1639 | |
| ● | Going online to www.proxyvote.com | |
| ● | Emailing sendmaterial@proxyvote.com with the control number from your Notice in the subject line | |
In addition, participants in the RSP may request copies of our annual report by calling the RSP Service Center at 877-554-3777. | ||
74 GE 2023 PROXY MATERIALS ELECTRONICALLY OR SIGN UP FOR ELECTRONIC DELIVERY ... AND DONATE TO AMERICAN FORESTSImportant Notice Regarding the Availability of GE’s Proxy Materials for the 2022 Annual Meeting: This proxy statement and our annual report may be viewed online at GE’s Annual Meeting website (see “Helpful Resources” on page 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 Shareholder Services page of our Investor Relations website (see “Helpful Resources” on page 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 REPORTIf 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:
In addition, participants in the RSP may request copies of our annual report by calling the GE RSP Service Center at 877-554-3777.
66 GE 2022 PROXY STATEMENT
GE 2022 Long-Term Incentive Plan
Effective [insert date of shareholder approval]
Section I. PurposeThe 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. DefinitionsAs 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.
GE 2022 PROXY STATEMENT 67
(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. EligibilityAny Eligible Person is eligible for selection by the Committee to receive an Award.
Section IV. Effective Date and Termination of PlanThis 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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designate and delegate to one or more officers or employees of the Company 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 Participants under this Plan;
(vi) to determine the extent 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 any Award granted hereunder, and to make exceptions to any such provisions if the Committee, in good faith, determines that it is appropriate to do so;
(viii) to approve corrections in the documentation 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 its 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 Plan 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 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.
(d) Indemnification. Subject to requirements of applicable law, each individual who is or shall have been a member of the Board, the Committee or an officer or manager of the 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 be imposed upon or reasonably incurred by him 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 against and from any and all amounts paid by
him 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 be 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 the Committee at any time, and from time to time, prior to the termination of the Plan. Receipt of an Award does not obligate 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 time or times at or within which the shares of Common Stock or cash, as applicable, may be acquired from the Company and the consideration, if any, that must be paid. Such Award Agreement may contain, incorporate or reference such applicable terms and conditions described in this Plan and/or such other terms and conditions determined by the Committee consistent with its authority under this Plan. The terms of Awards may vary among Participants, and the Plan does not impose upon the Committee any requirement to make Awards subject to uniform terms or interpretations. Accordingly, individual Award Agreements may vary.
(b) Termination of Employment. Subject to the express provisions of the Plan, the Committee shall specify before, at, or after the time of grant of an Award the provisions governing the effect(s) upon an Award of a Participant’s Termination of Employment or Separation from Service.
(c) Rights of a Shareholder. Except as otherwise set forth in the applicable Award Agreement, a Participant shall have no rights as a shareholder (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 be 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 date such prohibition no longer applies. The Committee will establish the price at which
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(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: (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 Section 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 the 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.
(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 will have no rights to receive dividends or Dividend Equivalents in respect of a Stock Appreciation Right or any shares of Common Stock subject to a Stock Appreciation Right until the Participant has become the holder of record of 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 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. 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.
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(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.
(c) Director Deferred Stock Units. For the avoidance of doubt, 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 AwardsThe Committee may establish performance criteria and level of achievement versus such criteria that shall determine the amount of cash or the number of shares of Common Stock, Options, SARs, Restricted Stock or Restricted Stock Units to be granted, 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 the Committee. Participants shall have no voting rights and will have no rights to receive dividends or Dividend Equivalents in respect of a Performance 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 PaymentThe 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 XV. Adjustment of and Changes in the Stock(a) The number and kind of shares of Common Stock available 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 reflect a deemed reinvestment in shares of Common Stock of the amount distributed to the Company’s shareholders. The terms of any outstanding Award shall also be equitably adjusted by the Committee as to price, number or kind of shares of Common Stock subject to such Award, vesting, performance criteria, and other terms to reflect the foregoing events, which adjustments need not be uniform as between different Awards or different types of Awards. No fractional shares of Common Stock shall be issued or issuable pursuant to such an adjustment.
(b) In the event there is any other change in the number or kind of outstanding shares of Common Stock (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 Committee in its sole discretion.
(c) In the event of a 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:
(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;
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(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. TransferabilityEach 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.
(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. WithholdingTo 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 AwardsThe 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
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Section XX. Other
a. Non-Exclusivity of PlanNeither 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 LawThis 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 ServiceNothing 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 DelayIf, 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.
g. InterpretationHeadings 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/RecoupmentIf 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.
74 GE 2022 PROXY STATEMENT
Explanation of Non-GAAP Financial Measures and Performance Metrics
The reasons we use non-GAAP financial measuresAs noted throughout, in this proxy statement and the reconciliations to their most directly comparable GAAPwe reference certain non-GAAP financial measures. Information on why GE uses these non-GAAP financial measures follow.
GE Industrial Free Cash Flows (FCF)
We believeand how these measures will better allow managementare calculated is presented either in the Management’s Discussion and investors to evaluateAnalysis within our Form 10-K for 2022 on the capacitypages of our industrial operations to generatethe 10-K indicated after each measure (see Helpful Resources on page 77), or as noted below.
| ● | Organic revenue growth (pages 26 and 27) |
| ● | Adjusted profit (page 28) |
| ● | Organic margin expansion (pages 26 and 28) |
| ● | Free cash flow (page 19) |
| ● | Adjusted earnings per share (page 29) |
For adjusted earnings per share and free cash flows withoutflow for 2021, which are included in this proxy statement as financial metrics for the effects2021 PSU awards, the calculations of these amounts were based on past financial reporting before GE transitioned from three-column to one-column financial statement presentation after we stopped reporting our financial services business (GE Capital) as a separate reporting segment in 2022. Adjusted earnings per share and free cash usedflow for taxes related to business sales,2021, on a three-column basis, are calculated from the company’s unaudited financial statements 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 | |||||||
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GE Industrial Adjusted Profit & Profit Margin
We believe that adjusting profit to exclude the effects ofreflect further adjustments for other items that are considered not closely associated with ongoing operations provides managementrepresentative of underlying trends of GE’s business.
For free cash flow for 2020, which is included in this proxy statement as a company-selected performance measure for Pay versus Performance, this amount is presented on a one-column reporting basis and investors with a meaningful measure that increasesis calculated from the period-to-period comparability. Gains (losses)company’s audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2021 and restructuring andreflects further adjustments for other items that are impacted by the timing and magnitudeconsidered not representative of gains associated with dispositions, and the timing and magnitudeunderlying trends of costs associated with restructuring and other activities. A reconciliation to the most directly comparable GAAP measure is set forth below.GE’s business.
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 20222023 PROXY STATEMENT75
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 measureThis Page 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 | |||||
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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 STATEMENTIntentionally Left Blank.
| ANNUAL MEETING | ||
| Annual Meeting website | www.ge.com/annualmeeting | |
| Online voting for registered holders | www.proxyvote.com | |
| and RSP participants | ||
| Online voting for beneficial owners | ||
| Questions regarding admission | www.ge.com/annualmeeting | |
| Webcast | www.virtualshareholdermeeting.com/ | |
| SEC website on proxy matters | ||
| Electronic delivery of future | www.ge.com/investor-relations/shareholder-services | |
| proxy materials | ||
| Information for RSP Participants | ||
| BOARD OF DIRECTORS | ||
| GE Board and Governance | www.ge.com/investor-relations/governance | |
| Documents | ||
| FINANCIAL REPORTING | ||
| Annual report | www.ge.com/investor-relations/annual-report | |
| Forward-looking statements | www.ge.com/investor-relations/ 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 | ||
| ESG/Sustainability Information | www.ge.com/sustainability | |
| Diversity Information | www.ge.com/about-us/diversity | |
| 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 Stock Units | |
| RSP | Retirement Savings Plan | |
| RSUs | Restricted Stock Units | |
| S&P | Standard & Poor’s | |
| SEC | Securities and Exchange Commission | |
| TSR | Total Shareholder Return |
Web links throughout this document are inactive textual references provided for convenience only, and the content on the referenced websites is not incorporated herein by reference and does not constitute a part of this proxy statement.
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.
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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. |
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 | 2022 Annual Report
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 | 2023 Proxy Statement https://www.ge.com/proxy | |
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| The manufacturing facility that produced this report is an EPA GreenPower Partner that is powered by renewable energy generated by GE wind turbines. | ||
| 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 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. | ||
Caution ConcerningForward-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 20222023 PROXY STATEMENT77
General Electric Company
5 Necco Street
Boston, MA 02210
www.ge.com
GE SHAREOWNER SERVICES
1 RIVER RD, BLDG 5-3W
SCHENECTADY, NY 12345
 | SCAN TO |  |
VOTE BY INTERNET
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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, 20222, 2023 for shares held directly and by 11:59 p.m. Eastern Time on May 1, 2022April 30, 2023 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
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Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 3, 20222, 2023 for shares held directly and by 11:59 p.m. Eastern Time on May 1, 2022April 30, 2023 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||
| KEEP THIS PORTION FOR YOUR RECORDS | ||
| DETACH AND RETURN THIS PORTION ONLY |
| GENERAL ELECTRIC COMPANY | ||
| The Board of Directors recommends you vote FOR each of the following director nominees (1a through 1j): | ||
The Board of Directors recommends you vote FOR eachof the following director nominees (1a through 1m):
| 1. | Election of Directors | ||||||||
| Nominees: | For | Against | Abstain | ||||||
| 1a. | Stephen Angel | ☐ | ☐ | ☐ | |||||
| 1b. | Sébastien Bazin | ☐ | ☐ | ☐ | |||||
| 1c. | H. Lawrence Culp, Jr. | ☐ | ☐ | ☐ | |||||
| 1d. | Edward Garden | ☐ | ☐ | ☐ | |||||
| 1e. | Isabella Goren | ☐ | ☐ | ☐ | |||||
| 1f. | Thomas Horton | ☐ | ☐ | ☐ | |||||
| 1g. | Catherine Lesjak | ☐ | ☐ | ☐ | |||||
| 1h. | Darren McDew | ☐ | ☐ | ☐ | |||||
| 1i. | Paula Rosput Reynolds | ☐ | ☐ | ☐ | |||||
| 1j. | Jessica Uhl | ☐ | ☐ | ☐ | |||||
| Management Proposals The Board of Directors recommends you vote FOR proposals 2 | For | Against | Abstain | |||||
| 2. | Advisory Approval of Our Named | ☐ | ☐ | ☐ | ||||
| 1 Year | 2 Years | 3 Years | Abstain | |||||
| 3. | Advisory Vote on the Frequency of Future Advisory Votes to Approve Our Named Executives’ Compensation | ☐ | ☐ | ☐ | ☐ | |||
| For | Against | Abstain | ||||||
| 4. | Ratification of Deloitte as Independent Auditor for | ☐ | ☐ | ☐ | ||||
| Shareholder Proposals | ||||||||
| The Board of Directors recommends you vote AGAINST proposals 5, 6, 7 and | For | Against | Abstain | |||||
| 5. | Independent Board Chairman | ☐ | ☐ | ☐ | ||||
| 6. | Sale of the Company | ☐ | ☐ | ☐ | ||||
| 7. | Fiduciary Carbon-Emission Relevance Report | ☐ | ☐ | ☐ | ||||
| 8. | Assess Energy-Related Asset Resilience | ☐ | ☐ | ☐ | ||||
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 |
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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, 20223, 2023 10:00 AM
a.m. Eastern Time
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 20222023 Annual Meeting of Shareholders and any adjournments or postponements thereof. If this proxy is properly executed, the proxiesproxy 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. TheIf this proxy is properly executed, the proxies will vote as the Board of Directors recommends where a choice is not specified. In the event that any of the nominees named on the reverse side of this form are unavailable for election or unable to serve, the shares represented by the proxy (and shares allocable to a participant’s RSP account) may be voted for a substitute nominee selected by the Board of Directors.
SPECIAL INSTRUCTIONS FOR PARTICIPANTS IN THE GE RETIREMENT SAVINGS PLAN
In accordance with the terms of the GE Retirement Savings Plan (RSP), any shares allocable to the participant'sparticipant’s RSP account as of March 7, 20226, 2023 will be voted by the trustee of the RSP trust in accordance with the instructions of the participant received via telephone or the Internet or indicated on the reverse.reverse side of this form. IF THIS FORM IS RECEIVED OR A VOTE IS SUBMITTED VIA THE INTERNET ON OR BEFORE MAY 1, 2022,APRIL 30, 2023, BUT A CHOICE IS NOT SPECIFIED, THE TRUSTEE WILL VOTE SHARES ALLOCABLE TO THE PARTICIPANT'SPARTICIPANT’S RSP ACCOUNT AS THE BOARD OF DIRECTORS RECOMMENDS. IF THIS FORM IS NOT RECEIVED ON OR BEFORE MAY 1, 2022,APRIL 30, 2023, AND NO VOTE WAS SUBMITTED VIA TELEPHONE OR THE INTERNET BY THAT DATE, SHARES ALLOCABLE TO THE PARTICIPANT'SPARTICIPANT’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