DEF 14A 1 ge3334621-def14a.htm DEFINITIVE PROXY STATEMENT

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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Check the appropriate box:
 
Preliminary Proxy Statement
 
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Definitive Proxy Statement
 
Definitive Additional Materials
 
Soliciting Material under § 240.14a-12

General Electric Company

(Name of Registrant as Specified In Its Charter)

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Table of Contents



Table of Contents

Guide to GE’s Proxy Statement

1 PROXY OVERVIEW
10 GOVERNANCE
10 Election of Directors*
14 Board Composition
17 Board Operations
20 Board Leadership Structure
21 How We Oversee & Manage Risk
22 How We Get Feedback from Investors
23 Other Governance Policies & Practices
24 Stock Ownership Information
27 COMPENSATION
27 Management Proposal No. 1 —
Say on Pay*
27 Overview of Our Executive
Compensation Program
29 Changes to Our Compensation
Plans for 2018
30 How Our Incentive Compensation Plans
Paid Out for 2017
34 Compensation Actions for 2017
36 Realized Compensation
37 Summary Compensation
39 Long-Term Incentive Compensation
44 Deferred Compensation
46 Pension Benefits
48 Potential Termination Payments
50 Other Executive Compensation Practices
& Policies
53 Director Compensation
55 Management Proposal No. 2 — Approval
of the GE International Employee Stock
Purchase Plan*
57 AUDIT
57 Management Proposal No. 3 —
Ratification of KPMG as Independent
     
Auditor for 2018* WHERE YOU CAN FIND EACH
SHAREOWNER PROPOSAL
57 Independent Auditor Engagement
58 Independent Auditor Information

60
61
62


63

64
65

59 Audit Committee Report      
60 SHAREOWNER PROPOSALS*           
   
66 Submitting 2019 Proposals
67 VOTING & MEETING INFORMATION
67 Proxy Solicitation & Document
Request Information
68 Voting Information
69 Attending the Meeting
70 Appendix A — GE International
Employee Stock Purchase Plan
73 Helpful Resources
73 Acronyms Used
 
WHY ARE WE SENDING YOU
THESE MATERIALS?
On behalf of our Board of Directors, we are making these materials available to you (beginning on March 14, 2018) in connection with GE’s solicitation of proxies for our 2018 annual meeting of shareowners.
 
 
 
WHAT DO WE NEED FROM YOU?
Please read these materials and submit your vote and proxy by telephone, mobile device, the Internet, or, if you received your materials by mail, you can also complete and return your proxy card or voting instruction form.
 
 
 
WHERE CAN YOU FIND MORE
INFORMATION?

Check out our annual report as well as our integrated summary report. Be sure not to miss the important supplemental information posted on our proxy website.

www.ge.com/proxy

www.ge.com/annualreport

www.ge.com/ar2017/
integrated-report

INDEX OF FREQUENTLY
REQUESTED INFORMATION

58 Auditor Fees
57 Auditor Tenure
20 Board Leadership
23 Board Meeting Attendance
52 CEO Pay Ratio
34 CEO Performance Evaluation
51 Clawback Policy
50 Compensation Consultants
49 Death Benefits
10 Director Biographies
16 Director Independence
14 Director Qualifications
15 Director Term Limits
51 Dividend Equivalents Policy
51 Hedging Policy
22 Investor Outreach
39 Long-Term Performance
Award Program
23 Overboarding
50 Pay For Performance
50 Peer Group Comparisons
38 Perquisites
51 Pledging Policy
23 Political Spending Oversight
66 Proxy Access
36 Realized Compensation
(W-2 income)
24 Related Person Transactions
21 Risk Oversight
48 Severance Benefits
24 Share Ownership for Executives & Directors
51 Share Ownership Requirements
66 Shareowner Proposal Deadlines for 2019
50 Succession Planning
   
Also see “Acronyms Used” on page 73 for a guide to the acronyms used throughout this proxy statement.

GENERAL ELECTRIC COMPANY EXECUTIVE OFFICES
41 Farnsworth Street
Boston, MA 02210



*To be voted on at the meeting.


Table of Contents

GE 2018 PROXY STATEMENT

 
Proxy Overview

This overview highlights information contained elsewhere in the proxy statement and does not contain all of the information that you should consider. You should read the entire proxy statement carefully before voting.

Governance

Dear Shareowners,

The last year has been a difficult one for GE’s shareowners, and no one is more disappointed in our results than your Board of Directors. We take our role as stewards of your investment very seriously, and we have taken a critical look at our operations and processes to assess how we can more effectively protect and increase the value of your investment. As we approach the annual meeting, I want you to understand how the Board has been working on your behalf.

CEO SUCCESSION

The Board’s most important duty is to choose the right leadership for the company. Last June, we announced that John Flannery would take over as Chairman and CEO. John is a proven leader with financial acumen, operational expertise and a global outlook. He spent much of his career at GE Capital before leading and reshaping GE Healthcare. He’s led GE businesses in Argentina, Japan, India and the United Kingdom. John knows the company incredibly well, but he is also capable of looking at GE with fresh eyes and making difficult decisions that break with the company’s traditions. We believe the last six months have already demonstrated that John is the right person to lead GE.

Prior to John’s appointment, the Board conducted a deep dive to evaluate whether to continue to combine the Chairman and CEO roles. We did not begin the process with a pre-determined view, and, after a robust debate, ultimately concluded that continuing to have the CEO speak for and lead the company and the Board was the best approach in view of the size and complexity of GE.

FURTHER ALIGNING OUR EXECUTIVES WITH SHAREOWNERS

The Board has also been actively reviewing our executive compensation programs. A few years ago, we changed the annual cash bonus program to make it more formulaic and tied to our investor framework. But it is clear to us that more change is needed. To address this, we have revisited each of our executive compensation programs, with a few key, common elements as building blocks. First, to promote greater alignment with our shareowners, we are moving compensation for our senior executives away from cash and toward equity. We are doing away with our long-term performance awards, which pay out in cash, and focusing all long-term rewards on equity. Second, we have also been asking our executives to track and measure too many different metrics and targets, so we will refocus our evaluation criteria on fewer, higher impact metrics. We are also tying bonuses at the individual businesses to their performance, rather than overall company results, which we believe will produce a closer connection between pay and performance and accountability.

While our compensation programs did not drive company performance in the way we had hoped, they did hold the senior leadership team accountable. For 2017, the Compensation Committee determined that, for the first time in GE’s history, the senior leaders at GE’s headquarters – our past and present CEOs, CFOs, Vice Chairs, General Counsel and HR directors – would not receive bonuses. We also zeroed out the performance share units awarded to senior leaders in 2015 even though the recipients were technically eligible for a partial payout.

PROTECTING AND GROWING YOUR INVESTMENT

We realize that the company’s track record on M&A and other capital allocation decisions has been disappointing. To increase our oversight of major investment decisions, we have created a new Finance and Capital Allocation Committee of the Board, an important step that mirrors additional management efforts to take a more disciplined approach to capital allocation, including buybacks, dividends and other significant investment decisions as well as M&A. The Board has been deeply engaged in the ongoing portfolio review that is taking a closer look at GE’s businesses and how to maximize their value for the long-term benefit of our shareowners. We are also revisiting the Board’s processes to ensure that we are focused on the topics that are most salient for the company, with a greater emphasis on promoting constructive debate and challenge between our leadership team and the Board. We have also increased our outreach and discussions with major shareowners to better understand investor perspectives and priorities.

HOW WE ARE CHANGING THE BOARD

As part of the Board’s 2017 self-evaluation, we concluded that the Board did not need to be as large as it has been historically, and that reducing the Board to 12 directors would strike the right balance between ensuring sufficiently broad perspectives and expertise and promoting greater dialogue and the heightened sense of accountability that we are trying to drive at all levels of the company. In February, we announced the 2018 slate, which includes Larry Culp, Tom Horton and Leslie Seidman, who will bring additional insight into capital allocation, industrial manufacturing, the aviation industry, accounting and financial reporting.

Our departing directors have all been dedicated and made valuable contributions to GE. In thinking about the Board going forward, we decided to focus on skill sets that were closely aligned to GE’s future portfolio, while also looking at director tenure and each director’s ability to dedicate substantial time to the Board at this critical period. We realize that we need to maintain our Board’s historical focus on cognitive diversity, including attracting directors with different backgrounds, and we will use future refreshment opportunities to continue to advance this important goal. This process will begin with me - I have decided to serve one more term to help facilitate a transition to the next Lead Director and will not stand for reelection in 2019.

The Board is aware of the significant challenges in front of us and we are prepared to meet them. We will continue to work to earn your support, and we are confident and resolute that better days lie ahead for GE and all its stakeholders.

John J. Brennan, Lead Director


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Table of Contents

GE 2018 PROXY STATEMENT

Board Composition & Refreshment

YOUR VOTE IS NEEDED ON DIRECTOR ELECTIONS:

Election of the 12 nominees named in the proxy for the coming year

YOUR BOARD RECOMMENDS A VOTE FOR EACH NOMINEE

HOW WE ARE CHANGING THE BOARD

Significant refreshment, with increased focus on relevant industry and operational expertise

Reduced board size

New committee focused on GE portfolio and capital allocation decisions


DIVERSITY OF EXPERIENCE

GE POLICY:
create an experienced board with expertise in areas relevant to GE

75%
INDUSTRY & OPERATIONS

9/12 directors

     

67%
INVESTOR

8/12 directors

17%
TECHNOLOGY

2/12 directors
75%
RISK MANAGEMENT

9/12 directors

92%
FINANCE & ACCOUNTING

11/12 directors

25%
GOVERNMENT & REGULATORY

3/12 directors


SIGNIFICANT BOARD REFRESHMENT SINCE 2016 ANNUAL MEETING

Term Limits           7
new
directors
  11
retired
directors
+                    
Retirement Age

+            

Annual Board evaluation

         

over last 2 years


           
           

JOINING THE BOARD SINCE THE 2017 ANNUAL MEETING

                  RETIRING FROM BOARD
 
2017: Flannery, Garden
 
2018: Culp, Horton, Seidman

2017: Immelt, Lane, McAdam
 
2018: Dekkers, Henry, Hockfield, Jung, Lazarus, Mollenkopf, Rohr, Schapiro

DIVERSITY OF AGE

GE POLICY:
retirement age 75

DIVERSITY OF TENURE

GE POLICY:
balanced mix of both deep GE knowledge & new perspectives

TERM LIMIT POLICY:
15 years

DIVERSITY OF BACKGROUND

GE POLICY:
build a cognitively diverse board representing a range of backgrounds

2 ethnically
diverse

2 women

3 born
outside
the US

10 current
& former
CEOs

3 government
& regulatory
experience

The Board is committed to building upon its diversity with future refreshment and to interviewing female and ethnically diverse candidates for all vacancies

INDEPENDENCE

GE POLICY:
all non-management directors must be independent

11/12
director nominees are independent

92%
independent (all director nominees except CEO)

92%
meet heightened committee independence standards


BOARD SIZE

Significantly reducing size in 2018 to enhance dialogue and promote accountability

BOARD ACCOUNTABILITY

Annual director elections with majority voting standard

Proxy access at 3%, 3 years, 20% of Board, up to 20 shareowners can aggregate


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GE 2018 PROXY STATEMENT

Board Nominees

The Board recommends a vote for the 12 director nominees set forth below. The committee memberships indicate the anticipated composition of the committees of the Board following the annual meeting. For information on committee composition as of the date of this proxy, see “Board Operations” on page 17.

The Board is nominating three new directors on the 2018 slate: Larry Culp, Tom Horton and Leslie Seidman.

          Name      Age      Director since      Primary Occupation & Other Public Company Boards A C F G
Bazin
56 2016

Chair & CEO, AccorHotels
Boards: AccorHotels, China Lodging Group

Beattie
57 2009

CEO, Generation Capital & Former CEO, The Woodbridge Company
Boards: Baker Hughes, a GE company, Maple Leaf Foods, Acasta Enterprises

⦿, ◼
Brennan
63 2012

Chair Emeritus & Senior Advisor, The Vanguard Group
Boards: American Express

⦿
Culp
54 Nominee
NEW

Senior Lecturer, Harvard Business School &
Former President & CEO, Danaher Corporation
Boards: T. Rowe Price

D’Souza
49 2013

CEO, Cognizant Technology Solutions
Boards: Cognizant

Flannery
56 2017
NEW

Chair & CEO, General Electric

Garden
56 2017
NEW

Chief Investment Officer & Co-Founder, Trian Fund Management
Boards: Bank of New York Mellon, Pentair

Horton
56 Nominee
NEW

Senior Advisor, Warburg Pincus & Former Chairman & CEO, American Airlines
Boards: Qualcomm, Walmart

Lavizzo-Mourey
63

2017

Professor, University of Pennsylvania & Former President & CEO, Robert Wood Johnson Foundation
Boards: Hess

⦿
Mulva
71 2008

Former Chair & CEO, ConocoPhillips
Boards: Baker Hughes, a GE company, General Motors

⦿
Seidman
55 Nominee
NEW

Former Chair, Financial Accounting Standards Board
Boards: Moody’s

Tisch
65 2010

President & CEO, Loews
Boards: Loews and its consolidated subsidiaries


INDEPENDENCE

All director nominees other than the CEO are independent

ATTENDANCE

All director nominees attended at least 75% of the meetings of the Board and committees on which they served in 2017

      QUALIFICATIONS      
AAudit Committee
CCompensation Committee
FFinance Committee
GGovernance Committee
 Member
⦿Chair
Financial Expert & Member
Industry & Operations

Technology

Finance & Accounting

Risk Management

Investor

Government & Regulatory

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Table of Contents

GE 2018 PROXY STATEMENT

Board & Committees

FULL BOARD
           
2017 MEETINGS
15, including 4 formal meetings of the
independent directors

CHAIR
John Flannery

 

LEAD DIRECTOR
Jack Brennan

   

BOARD RHYTHM            

8/year
Regular meetings

2+/year
Business visits for each director

Calls
Between meetings as needed

1/year
Strategy session

1/year
Governance & investor feedback review

1/year
Board self-evaluation


A TYPICAL GE BOARD MEETING ... 2 DAYS, 8X/YEAR

RECENT FOCUS AREAS

Leadership transitions, particularly for the CEO

Review of GE’s portfolio

Creation of Baker Hughes, a GE company

Capital allocation, including dividend policy and pension funding

Business performance reviews, particularly in Power

GE Capital and Insurance

New product launches (e.g., LEAP engine)

COMMITTEES FOLLOWING THE ANNUAL MEETING

For a description of committees as of the date of this proxy and committee activities during 2017, see “Board Operations” on page 17.

AUDIT

CHAIR: Geoff Beattie

MEMBERS: Jack Brennan, Tom Horton, Jim Mulva & Leslie Seidman

OVERSIGHT AND FOCUS AREAS

Financial reporting
KPMG
Internal audit
Accounting policies (e.g., revenue recognition, long-term service agreements)
Compliance
Significant litigation and investigations

FINANCE & CAPITAL ALLOCATION

CHAIR: Jim Mulva

MEMBERS: Sébastien Bazin, Larry Culp, Ed Garden, Leslie Seidman & Jim Tisch

OVERSIGHT AND FOCUS AREAS

Capital allocation framework
Financial risk
Investments and uses of cash (e.g., dividends, buybacks, R&D)
Ongoing GE portfolio review
M&A activity
GE Capital structure

GOVERNANCE & PUBLIC AFFAIRS

CHAIR: Risa Lavizzo-Mourey

MEMBERS: Sébastien Bazin, Frank D’Souza, Tom Horton & Jim Tisch

OVERSIGHT AND FOCUS AREAS

Director recruitment and board composition
GE leadership structure
Board governance processes
Climate change-related risk
Political & lobbying strategy and spending
Sustainability, environmental, human rights & supply chain practices

MANAGEMENT DEVELOPMENT & COMPENSATION

CHAIR: Jack Brennan

MEMBERS: Geoff Beattie, Larry Culp, Frank D’Souza, Ed Garden & Risa Lavizzo-Mourey

OVERSIGHT AND FOCUS AREAS

CEO and management succession
CEO and senior executive performance evaluations & compensation plans
Equity planning
Retention of critical talent
Employee benefit plans

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GE 2018 PROXY STATEMENT

Compensation

YOUR VOTE IS NEEDED ON
MANAGEMENT PROPOSAL #1
Advisory approval of our named executives’ compensation for 2017 YOUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL

Compensation Profile
PRIMARY COMPENSATION ELEMENTS FOR 2017

  Salary Bonus LTPAs PSUs Options RSUs
Who receives All named executives All named executives
except CEO
When granted Reviewed every
18 months
Annually in February or March for prior year Every 3 years – final cycle 2016-2018 Generally annually
Form of delivery Cash   Generally cash Equity
Type of performance Short-term emphasis Long-term emphasis
Performance period Ongoing 1 year 3 years Generally 5-year vesting period
How payout is determined Committee judgment Formulaic & committee judgment Formulaic; committee verifies performance before payout Formulaic; depends on stock price on exercise/vest date
Most recent performance measures N/A 7 financial metrics + strategic goals 5 financial metrics 2 financial metrics + relative TSR modifier Stock price appreciation
What is incentivized Balance against excessive risk taking Deliver on annual investor framework Deliver on long-term investor framework Outperform peers Increase stock price Balance against excessive risk taking

Promoting Accountability Through Pay
2017 ANNUAL BONUSES (CASH)

Result: Overall bonus pool funded at 24% of target, but no bonuses for named executives other than CEO of Aviation

2015–2017 PERFORMANCE SHARE UNITS (EQUITY)

Result: Executives received none of the PSUs based on determination by the Compensation Committee

See “How Our Incentive Compensation Plans Paid Out for 2017” on page 30 for more information on how these plans work. Metrics denoted with a * are non-GAAP financial measures. For information on how we calculate the performance metrics, see “Explanation of Non-GAAP Financial Measures and Performance Metrics” on page 52.

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GE 2018 PROXY STATEMENT

2017 Compensation Decisions

CEO TRANSITION AND KEY CHANGES

     NEW CEO (Flannery)      FORMER CEO (Immelt)
Salary $2M $3.8M 47%      Less cash focus
Target
Bonus
$3M $5.4M 44%
2017 Bonus $0 $0 Accountable for
performance
LTPA Pays in stock Pays in cash Promotes
alignment
with
investors
Equity Greater % of pay Lower %
of pay
Stock
Ownership
Requirement
10x salary 10x salary

OTHER NAMED EXECUTIVES
 No bonuses for named executives, other than CEO of Aviation
 2015 PSU grants cancelled
 Salary increases for Flannery and Miller upon assuming CEO and CFO roles
 Other salary increases limited to historical 18-month cyclical increases
 No 2017 PSU grants

2017 Summary Compensation
(in thousands)

Name & Principal Position Year Salary Bonus PSUs &
RSUs
Stock
Options
LTPAs Pension &
Deferred
Comp.
All Other
Comp.
SEC Total Adjusted
SEC Total**
John Flannery*
Chairman & CEO
2017 $1,738 $0 N/A $2,076 $0 $3,255 $1,932 $9,001 $5,801
Jamie Miller*
SVP & CFO
2017 $1,335 $0 $1,811 $519 $0 $1,155 $238 $5,058 $3,903
David Joyce
Vice Chair & CEO,
Aviation
2017 $1,450 $1,385 $695 $692 $0 $674 $265 $5,161 $4,487
2016 $1,333 $1,524 $6,212 $750 $0 $2,524 $239 $12,583 $10,059
Jeff Immelt
Former Chairman
& CEO
2017 $2,864 $0 N/A N/A $0 $3,373 $1,873 $8,111 $4,982
2016 $3,800 $4,320 $4,673 $2,142 $1,624 $3,580 $1,185 $21,325 $17,962
Jeff Bornstein
Former Vice Chair
& CFO
2017 $1,775 $0 $8,141 *** $692 $0 $3,796 $163 $14,568 *** $10,836 ***
2016 $1,688 $1,920 $1,532 $750 $739 $2,882 $395 $9,906 $7,082
Beth Comstock
Former Vice Chair,
Business Innovations
2017 $1,604 $0 $695 $692 $0 $5,850 $186 $9,028 $3,207
2016 $1,500 $1,248 $6,211 $750 $550 $2,046 $175 $12,479 $10,460
John Rice
Vice Chair, Former CEO,
Global Growth
Organization
2017 $2,800 $0 $695 $692 $0 $2,552 $1,138 $7,877 $5,586
2016 $2,625 $3,278 $1,532 $750 $1,181 $4,184 $1,612 $15,162 $11,213
*

Under applicable SEC rules, we have excluded Mr. Flannery’s and Ms. Miller’s compensation for 2016 as they were not named executives during that year.

**

For a description of the amounts reported in the Adjusted SEC Total column, see “Adjusted SEC Total” on page 39.

***

Includes RSU awards with a grant date fair value of $7.7 million that were subsequently cancelled. Excluding these cancelled RSU awards, Mr. Bornstein’s SEC Total was $6.9 million, and his Adjusted SEC Total was $3.2 million.

Compensation Changes for 2018

SALARY REVIEW CYCLE
Increased for officers from 18 to 24-month intervals
 
SIMPLER ANNUAL BONUS PLAN
Metrics focus on: earnings and cash generation
Bonus pool funding for businesses determined by business results … promoting accountability, rewarding performance
 
EQUITY AWARDS
Greater percentage of overall executive pay
Generally shifting toward RSUs (away from options) for broader executive population, with 3-year vesting period
LONG-TERM PERFORMANCE AWARDS
Terminating cash LTPA program after conclusion of current performance cycle
 
2018 PERFORMANCE SHARE UNITS
One metric: GE TSR v. S&P 500
 
Threshold Target Maximum
35th percentile 55th percentile 80th percentile
Earn 25% Earn 100% Earn 175%
3-year performance period
Use of relative metric promotes flexibility in ongoing portfolio review
One-year mandatory hold post-vesting

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Table of Contents

GE 2018 PROXY STATEMENT

Other Compensation Proposal

YOUR VOTE IS NEEDED ON MANAGEMENT PROPOSAL #2:

Approve the renewal of the GE International Employee Stock Purchase Plan

YOUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL
RENEWING THE GE INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
Approve an additional 50 million shares that can be issued pursuant to the GE International Employee Stock Purchase Plan, which allows eligible employees located outside the U.S. to dedicate up to 10% of their paychecks to the purchase of GE shares, with a 15% match by GE
Approval expected to provide sufficient shares to last for ten years
Encourages eligible employees to acquire an ownership interest in GE, further aligning them with investors
Approximately 21,400 employees participated in the plan in 2017, purchasing 2.9 million shares
Total dilution over the life of the plan expected to be approximately 0.61% based on current shares outstanding


Audit

YOUR VOTE IS NEEDED ON MANAGEMENT PROPOSAL #3:

Ratification of our selection of KPMG as independent auditor

YOUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL

In engaging KPMG for 2018, we reviewed:

KPMG’s performance on GE audit
includes results of internal, worldwide survey
KPMG’s capability & expertise in handling breadth & complexity of our worldwide operations
KPMG’s known legal & regulatory risks
includes interview with KPMG’s chairman & review of the number of audit clients with restatements as compared to other Big 4 firms
     
External data on audit quality & performance includes recent PCAOB reports on KPMG & peer firms
Appropriateness of KPMG’s fees on both an absolute basis & relative to peer firms
 
KPMG’s tenure & independence
including benefits & independence risks of long-tenured auditor & controls/processes that help ensure KPMG’s independence
     

BENEFITS OF A LONG-TENURED AUDITOR

HIGHER AUDIT QUALITY
Institutional knowledge & deep expertise through 100+ years of experience with GE & 1,400+ statutory GE audits in 90+ countries
     
EFFICIENT FEE STRUCTURE
Familiarity with GE business keeps costs competitive
     
NO ONBOARDING OR EDUCATING
NEW AUDITOR
Saves management’s time & resources

INDEPENDENCE CONTROLS

THOROUGH AUDIT
COMMITTEE OVERSIGHT
      RIGOROUS LIMITS ON
NON-AUDIT SERVICES
      STRONG INTERNAL KPMG
INDEPENDENCE PROCESS
      ROBUST REGULATORY
FRAMEWORK
Includes private meetings with KPMG (8X+ per year)
Annual evaluation
Committee–directed process for selecting lead audit engagement partner
Audit Committee preapproves non-audit services
Certain types of otherwise permissible services prohibited
KPMG engaged only when best-suited for the job

Includes periodic internal quality reviews
Large number of partners staffed on GE audit (~400)
Lead audit engagement partner rotation every 5 years
KPMG subject to PCAOB inspections, Big 4 peer reviews & PCAOB/SEC oversight

KPMG Fees

(in millions)        Audit1         Audit-related2           Tax3           All Other4           Total
2017 $95.8 $45.4 $1.7 $0.0 $142.9
2016 $81.5 $6.9 $1.5 $0.0 $89.9
1 Audit & review of financial statements for GE and BHGE 10-K/10-Q, internal control over financial reporting audit, statutory audits; year-over-year increase largely driven by the BHGE audit ($32.3 million), which offset significantly lower recurring costs for the GE audit ($63.5 million).
2 Assurance services, M&A due diligence and audit services; year-over-year increase driven by carve-out audits for businesses in advance of transactions, including GE Oil & Gas ($30.0 million) our Water business ($4.3 million) and Industrial Solutions ($8.1 million).
3 Tax compliance & tax advice/planning.
4 GE did not engage KPMG for any other services. See “Audit” on page 57 for more information.

 

WHAT WE ARE PAYING FOR
 
2 1,400+ ~400
public company
audits
statutory
audits globally
partners

REASONS FOR THE YEAR-OVER-YEAR INCREASE
Additional audit for Baker Hughes, a GE company
Carve-out audits for GE Oil & Gas, our Water business, and Industrial Solutions ahead of transactions

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Table of Contents

GE 2018 PROXY STATEMENT

2018 Shareowner Proposals

YOUR VOTE IS NEEDED ON THE FOLLOWING PROPOSALS
YOUR BOARD RECOMMENDS A VOTE AGAINST THESE PROPOSALS

      Proposal        Proponent        What the proposal asks for        Why the Board recommends a vote
Against the proposal
1 Independent chair
see page 60
Kenneth
Steiner
Require board chair to be independent at the next CEO transition The Board conducted a thorough review at the time of the CEO transition, and GE continues to believe that our present leadership structure is the most effective for GE
2 Cumulative voting
see page 61
Martin
Harangozo
Allow shareowners to aggregate their shares & vote all for one or more nominees Directors should be elected & accountable to all shareowners, not special interests
3 Deduct impact of stock buybacks from executive pay
see page 62
Myra Young Do not use earnings per share or financial ratios in setting executive pay targets unless the impact of stock buybacks is excluded GE’s Compensation Committee should not be restricted from setting performance goals that reflect the company’s capital allocation strategy; buybacks had no impact on compensation for 2017
4 Lobbying report
see page 63
NCPPR* Provide annual report on GE’s direct and indirect lobbying activity GE already provides comprehensive disclosure of its political & lobbying activities and believes that further disclosure is unnecessary
5 Buyback report
see page 64
Dennis
Rocheleau
Prepare and mail to shareowners attending the 2018 annual meeting in person, and upon request, a report on GE’s buyback activity from 2008–2017, including rationale for repurchase programs and metrics on administration GE already discloses details on its buybacks and strategy in its quarterly and annual SEC filings, and preparing and mailing an additional hard copy report is inefficient and unnecessary
6 Written consent
see page 65
William
Steiner
Allow shareholders to act by written consent GE already has a low threshold (10%) for calling special meetings and active investor outreach, making action by written consent unnecessary
* NCPPR = National Center for Public Policy Research

How to Submit a Proposal for Next Year

      Proposals to include in proxy*       Director nominees to include
in proxy (proxy access)**
      Other proposals/nominees to
be presented at annual meeting**
Minimum GE stock ownership requirement $2,000 3% for 3 years (up to 20 shareowners can aggregate) 1 share
Deadline for GE to receive Close of business on 11/14/18 Between 10/15/18 and close of business on 11/14/18
Where to send By mail: Corporate Secretary, General Electric Company, at the address listed on the inside front cover of this proxy statement
By email: shareowner.proposals@ge.com
What to include Information required by SEC rules Information required by our by-laws
* Proposals must satisfy SEC requirements, including Rule 14a-8
** Proposals not submitted pursuant to SEC Rule 14a-8, as well as any director nominees, must satisfy GE’s by-law requirements, which are available on GE’s website (see “Helpful Resources” on page 73)

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Table of Contents

GE 2018 PROXY STATEMENT

Annual Meeting

     

You are invited to attend GE’s 2018 annual meeting. This page contains important information about the meeting, including how you can make sure your views are represented by voting today. Be sure to also check out our annual report and integrated summary report at the websites below.

Cordially,
Alex Dimitrief, Secretary 

 

LOGISTICS

 

DATE:
April 25, 2018

TIME:
10:00 a.m. Eastern Time

WEBCAST:
www.ge.com/investor-relations

LOCATION:
GE Additive Customer
Experience Center
101 N. Campus Drive
Imperial, Pennsylvania 15126

ATTENDING IN PERSON:
You must be a GE shareowner as of the record date, and you must bring your admission card & photo ID. Follow the instructions on page 69 or on our proxy website


VOTING Q&A

Who can vote?
Shareowners as of our record date, February 26, 2018

How many shares are entitled to vote?
8.7 billion common shares (preferred shares are not entitled to vote)

How many votes do I get?
One vote on each proposal for each share you held as of the record date (see first question above)

Do you have an independent inspector of elections?
Yes, you can reach them at IVS Associates, 1000 N. West St., Ste. 1200, Wilmington, DE 19801

Can I change my vote?
Yes, by voting in person at the meeting, delivering a new proxy or notifying IVS Associates in writing. But, if you hold shares through a broker, you will need to contact them

Is my vote confidential?
Yes, only IVS Associates & certain GE employees/agents have access to individual shareowner voting records

How many votes are needed to approve a proposal?
Majority of votes cast; abstentions & broker non-votes generally are not counted & have no effect

Where can I find out more information?
See “Voting & Meeting Information” on page 67

AGENDA

Elect the 12 directors named in the proxy for the coming year

  Your Board recommends a vote FOR each director nominee

read more on page 10

Approve our named executives’ compensation in advisory vote

  Your Board recommends a vote FOR this proposal

read more on page 27

Approval of the GE International Employee Stock Purchase Plan

  Your Board recommends a vote FOR this proposal

read more on page 55

Ratification of the selection of KPMG as independent auditor for 2018

  Your Board recommends a vote FOR this proposal

read more on page 57

Vote on shareowner proposals included in proxy if properly presented at the meeting

  Your Board recommends a vote AGAINST each proposal

read more on page 60

Shareowners also will transact any other business that properly comes before the meeting

HOW YOU CAN VOTE
Do you hold shares directly with GE
or in the Retirement Savings Plan (RSP)?
      Do you hold shares through
a bank or broker?
  

Use the Internet at
www.proxypush.com/GE

Use the Internet at
www.proxyvote.com

Call toll-free (US/Canada)
1-866-883-3382

Call toll-free (US/Canada)
1-800-454-VOTE (8683)

Mail your signed
proxy form

Mail your signed
voting instruction form


Check out our annual report & integrated summary report

www.ge.com/annualreport

www.ge.com/ar2017/integrated-report


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Table of Contents

GE 2018 PROXY STATEMENT

 
Governance

ELECTION OF DIRECTORS:
What are you voting on?

At the 2018 annual meeting, 12 directors are to be elected to hold office until the 2019 annual meeting and until their successors have been elected and qualified.

    All nominees are current GE Board members who were elected by shareowners at the 2017 annual meeting except for John Flannery, who was appointed to the Board in August 2017, Ed Garden, who was appointed to the Board in October 2017 and Larry Culp, Tom Horton and Leslie Seidman,      YOUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL
whose Board service would commence upon his or her respective election at the annual meeting.
   

Sébastien M. Bazin       W. Geoffrey Beattie       John J. Brennan
DIRECTOR SINCE: 2016
AGE: 56
BIRTHPLACE:
FRANCE
INDEPENDENT
QUALIFICATIONS:
DIRECTOR SINCE: 2009
AGE: 57
BIRTHPLACE:
CANADA
INDEPENDENT
QUALIFICATIONS:
DIRECTOR SINCE: 2012
AGE: 63
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
Chairman and CEO, AccorHotels, a global hotel company, Paris, France (since 2013) Finance & Accounting, Risk Management
PRIOR BUSINESS EXPERIENCE
CEO, Europe Colony Capital, a private investment firm (1997–2013) Industry & Operations, Investor
Group Managing Director, CEO and General Manager, Immobilière Hôtelière (1992–1997)
Began career in 1985 in U.S. finance sector, becoming Vice President, M&A, PaineWebber Finance & Accounting
CURRENT PUBLIC COMPANY BOARDS
General Electric
AccorHotels
China Lodging Group*
PAST PUBLIC COMPANY BOARDS
Vice Chairman, Carrefour, a multinational French retailer
OTHER POSITIONS
Vice Chairman, Supervisory Board, Gustave Roussy Foundation, cancer research funding Industry & Operations
Chairman, Théâtre du Châtelet
EDUCATION
Sorbonne University
MA (Economics), Sorbonne University
*Directorship held in his capacity as CEO of AccorHotels. See “Limits on Director Service on Other Public Boards” on page 23 for more information.
CEO, Generation Capital, a private investment company, Toronto, Canada (since 2013) Investor
PRIOR BUSINESS EXPERIENCE
CEO, The Woodbridge Company, a multinational Canadian company that is the majority shareholder of Thomson Reuters, a large information technology company (1998–2012) Investor, Technology, Finance & Accounting
Deputy chairman, Thomson Reuters (2000–2013)
Partner at Toronto law firm Torys (prior to joining The Woodbridge Company)
CURRENT PUBLIC COMPANY BOARDS
General Electric
Baker Hughes, a GE company (lead director, chairman of Governance and Nominating Committee)
Maple Leaf Foods (chairman of Governance Committee)
Acasta Enterprises, a special purpose acquisition corporation that has announced investments in consumer staples and commercial aviation finance businesses (chairman) Investor
PAST PUBLIC COMPANY BOARDS
Royal Bank of Canada Risk Management
Thomson Reuters
OTHER POSITIONS
Chairman, Relay Ventures, a Canadian venture capital firm
Director, DBRS, a rating agency
EDUCATION
Law degree, University of Western Ontario
Chairman Emeritus and senior advisor, The Vanguard Group, Malvern, PA (since 2010) Investor
PRIOR BUSINESS EXPERIENCE
Chairman and CEO, Vanguard, a global investment management company (CEO 1996–2008; Chairman 1998–2009)
CFO and president, Vanguard (joined in 1982) Finance & Accounting
PRIOR REGULATORY EXPERIENCE
Former chairman, Board of Governors of Financial Industry Regulatory Authority (FINRA), financial services industry regulator Risk Management, Regulatory
Former chairman, Financial Accounting Foundation, overseer for financial accounting/reporting standard-setting boards Finance
CURRENT PUBLIC COMPANY BOARDS
General Electric
American Express
PAST PUBLIC COMPANY BOARDS
The Hanover Insurance Group
LPL Financial Holdings
OTHER POSITIONS
Director, Rockefeller Capital Management
Director, Guardian Life Insurance Company of America
Chairman, The Vanguard Charitable Endowment Program
Chair, Board of Trustees, University of Notre Dame
EDUCATION
Dartmouth College
MBA, Harvard University

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GE 2018 PROXY STATEMENT

H. Lawrence Culp, Jr.       Francisco D’Souza       John L. Flannery
DIRECTOR SINCE: NEW
AGE: 54
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
DIRECTOR SINCE: 2013
AGE: 49
BIRTHPLACE:
KENYA
INDEPENDENT
QUALIFICATIONS:
DIRECTOR SINCE: 2017
AGE: 56
BIRTHPLACE:
UNITED STATES
QUALIFICATIONS:
Senior Lecturer, Harvard Business School, Boston, MA (since 2015) and Senior Advisor, Bain Capital Private Equity, a global private equity firm, Boston, MA (since 2017) Investor
PRIOR BUSINESS EXPERIENCE
Senior Advisor, Danaher, designer, manufacturer and marketer of industrial and consumer products (2014–2016) Industry & Operations
Former CEO and President, Danaher (2000–2014); joined Danaher subsidiary Veeder-Root in 1990, serving in a number of leadership positions within Danaher, including COO Finance & Accounting, Industry & Operations
CURRENT PUBLIC COMPANY BOARDS
T. Rowe Price Group Investor
PAST PUBLIC COMPANY BOARDS
GlaxoSmithKline Industry & Operations
Danaher
OTHER POSITIONS
Chairman, Board of Visitors & Governors, Washington College
Member, Board of Trustees, Wake Forest University
EDUCATION
Washington College
MBA, Harvard
CEO, Cognizant Technology Solutions Corporation, a multinational IT company, Teaneck, NJ (since 2007) Technology, Finance & Accounting, Industry & Operations
PRIOR BUSINESS EXPERIENCE
President, Cognizant (2007–2012)
COO, Cognizant (2003–2006)
Co-founded Cognizant (1994)
Previously held various roles at Dun & Bradstreet
CURRENT PUBLIC COMPANY BOARDS
General Electric
Cognizant
OTHER POSITIONS
Board Co-Chair, New York Hall of Science
Trustee, Carnegie Mellon University
International Advisory Panel Member, Banco Santander
EDUCATION
University of East Asia
MBA, Carnegie Mellon University
CEO and Chairman, General Electric, Boston, MA (since August and October 2017, respectively) Finance & Accounting, Industry & Operations
PRIOR BUSINESS EXPERIENCE
SVP, GE, and President and CEO, GE Healthcare (2014–2017)
SVP, Business Development GE (2013–2014)
SVP, GE and President & CEO, GE India (2009–2013)
Joined GE Capital in 1987, serving in a number of leadership positions in the leveraged finance and private equity sectors and as President & CEO of GE Equity (2002–2003), head of the Bank Loan Group (2003–2005), and President & CEO of GE Capital Asia Pacific (2005–2009) Finance & Accounting, Risk Management, Investor
CURRENT PUBLIC COMPANY BOARDS
General Electric
OTHER POSITIONS
Former National Advisory Board Member, Columbia University, Mailman School of Public Health
EDUCATION
Fairfield University
MBA, University of Pennsylvania

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GE 2018 PROXY STATEMENT

Edward P. Garden       Thomas W. Horton       Risa Lavizzo-Mourey
DIRECTOR SINCE: 2017
AGE: 56
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
DIRECTOR SINCE: NEW
AGE: 56
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
DIRECTOR SINCE: 2017
AGE: 63
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
Chief Investment Officer and Founding Partner, Trian Fund Management, L.P., an investment management firm, New York, NY (since 2005) Investor
PRIOR BUSINESS EXPERIENCE
Vice Chairman and Director, Triarc Companies (subsequently The Wendy’s Company and previously Wendy’s/Arby’s Group) (2004–2007) and Executive Vice President (2003–2004) Finance & Accounting
Managing Director, Credit Suisse First Boston (1999–2003) Finance & Accounting
Managing Director, BT Alex Brown (1994–1999) Finance & Accounting
CURRENT PUBLIC COMPANY BOARDS
General Electric
The Bank of New York Mellon (Chairman of Human Resources and Compensation Committee) Finance & Accounting, Risk Management
Pentair, an industrial manufacturing company Industry & Operations
PAST PUBLIC COMPANY BOARDS
The Wendy’s Company
Family Dollar Stores
EDUCATION
Harvard College
Senior Advisor, Industrials and Business Services Group, Warburg Pincus LLC, a private equity firm focused on growth investing, New York, NY (since 2015) Investor
PRIOR BUSINESS EXPERIENCE
Chairman, American Airlines Group, one of the largest global airlines (formed following the merger of AMR Corp and US Airways) (2013–2014) Industry & Operations
Chairman and CEO, American Airlines (2011–2014) Industry & Operations
Chairman and CEO, AMR (parent company of American Airlines) (2010–2013) Industry & Operations
EVP and CFO, AMR (2006–2010) Finance & Accounting
Vice Chairman and CFO, AT&T (2002–2006) Finance & Accounting
SVP and CFO, AMR (2000–2002); joined AMR in 1985, serving in various finance and management roles Industry & Operations
CURRENT PUBLIC COMPANY BOARDS
Qualcomm (lead director)
Walmart
OTHER POSITIONS
Executive Board Member, Cox School of Business, Southern Methodist University
Board Member, National Air and Space Museum
EDUCATION
Baylor University
MBA, Southern Methodist University
Professor, University of Pennsylvania, Philadelphia, PA (since 2018) and Former President and CEO, Robert Wood Johnson Foundation, Princeton, NJ (2003–2017) Industry & Operations
PRIOR BUSINESS EXPERIENCE
SVP, Robert Wood Johnson Foundation, largest U.S. philanthropic organization dedicated to healthcare (2001–2003)
PRIOR ACADEMIC EXPERIENCE
Sylvan Eisman Professor of Medicine and Health Care Systems (1995–2001), Director, Institute on Aging (1994–2002), Chief of Geriatric Medicine (1986–1992), University of Pennsylvania Medical School Industry & Operations
PRIOR GOVERNMENT EXPERIENCE
Deputy Administrator, Agency for Health Care Research and Quality (1992–1994) Government
Co-Chair, White House Health Care Reform Task Force, Working Group on Quality of Care (1993–1994)
Advisory Committee Member, Task Force on Aging Research (1985–1992)
Advisory Committee Member, National Committee for Vital and Health Statistics (1988–1992)
Advisory Committee Member, President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry (1997–1998)
CURRENT PUBLIC COMPANY BOARDS
General Electric
Hess, a global, independent energy company Industry & Operations
PAST PUBLIC COMPANY BOARDS
Genworth Financial Risk Management
Beckman Coulter
OTHER POSITIONS
Trustee, Smithsonian Institution Board of Regents
Board of Fellows, Harvard Medical School
Member, National Academy of Medicine
EDUCATION
U. of Washington & SUNY Stony Brook
MD, Harvard Medical School
MBA, University of Pennsylvania

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GE 2018 PROXY STATEMENT

James J. Mulva       Leslie F. Seidman       James S. Tisch
DIRECTOR SINCE: 2008
AGE: 71
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
DIRECTOR SINCE: NEW
AGE: 55
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
DIRECTOR SINCE: 2010
AGE: 65
BIRTHPLACE:
UNITED STATES
INDEPENDENT
QUALIFICATIONS:
Former Chairman, President and CEO, ConocoPhillips, an integrated global energy company, Houston, TX (since 2012) Industry & Operations
PRIOR BUSINESS EXPERIENCE
Chairman, President and CEO, ConocoPhillips (President and CEO 2002–2012; Chairman 2004–2012)
Previously served in various leadership positions at Phillips Petroleum, including CFO, chairman and CEO Finance & Accounting, Risk Management
CURRENT PUBLIC COMPANY BOARDS
General Electric
Baker Hughes, a GE company
General Motors Industry & Operations
PAST PUBLIC COMPANY BOARDS
Statoil, a leading oil and gas company based in Norway Industry & Operations
OTHER POSITIONS
Chair, Board of Visitors, M.D. Anderson Cancer Center, a leading cancer center Industry & Operations
Chair, University of Texas, Medical Board of Advisors Industry & Operations
Former chairman, American Petroleum Institute
EDUCATION
University of Texas
MBA, University of Texas
Former Chairman, Financial Accounting Standards Board (FASB), independent organization responsible for financial accounting and reporting standards, Norwalk, CT (2010–2013) Finance & Accounting, Regulatory
PRIOR BUSINESS EXPERIENCE
Board Member, FASB (2003–2013)
Financial reporting consultant (1999–2003)
Staff Member, FASB (1994–1999)
Vice President, Accounting Policy, JP Morgan (1987–1996) Finance & Accounting
Auditor, Arthur Young (1984–1987)
CURRENT PUBLIC COMPANY BOARDS
Moody’s, provider of credit ratings, research and analytical tools (chairman, Audit Committee) Finance & Accounting
OTHER POSITIONS
Founding Director, Pace University Center for Excellence in Financial Reporting (since 2014) Finance & Accounting
Board of Governors, Financial Industry Regulatory Authority (FINRA), financial services industry regulator Risk Management, Regulatory
Advisor, Idaciti, developer of financial reporting and analysis software Finance & Accounting, Industry & Operations
Certified Public Accountant (Inactive) Finance & Accounting
EDUCATION
Colgate University
MS (Accounting), New York University
President and CEO, Loews Corp., a diversified holding company with subsidiaries involved in energy, insurance, packaging and hospitality, New York, NY (since 1998) Finance & Accounting, Industry & Operations, Investor
CURRENT PUBLIC COMPANY BOARDS
General Electric
Loews and two of its subsidiaries, CNA Financial, a property and casualty insurance company, and Diamond Offshore Drilling (chairman), an offshore drilling contractor Industry & Operations, Risk Management
OTHER POSITIONS
Director, Mount Sinai Medical Center, a leading U.S. hospital Industry & Operations
Former director, Federal Reserve Bank of New York, a government-organized financial and monetary policy organization
Director, WNET (nonprofit)
Director, New York Public Library
Director, Partnership for New York City
Member, Council on Foreign Relations
Member, American Academy of Arts & Sciences
EDUCATION
Cornell University
MBA, University of Pennsylvania

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GE 2018 PROXY STATEMENT

   

DIRECTOR RECRUITMENT
PROCESS

 

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
Board Composition

How We Are Changing the Board

The Governance & Public Affairs Committee (the Governance Committee) is charged with reviewing the composition of the Board and refreshing it as appropriate. With this in mind, the committee continuously reviews potential candidates and recommends nominees to the Board for approval.

As discussed in more detail under “How We Assess Board Size” on page 15, in 2017 the committee recommended, and the Board agreed, to significantly reduce the size of the Board to 12 directors, while at the same time adding three new directors. The Board has experienced significant refreshment over the past two years, and of the 12 nominees proposed for election, seven are new to the Board in the last two years.

IMPORTANT FACTORS IN ASSESSING BOARD COMPOSITION
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 shareowners. The committee considers a wide range of factors when selecting and recruiting director candidates, including:

Ensuring an experienced, qualified Board with expertise in areas relevant to GE. The committee seeks directors who possess extraordinary leadership qualities and demonstrate a practical understanding of organizations, processes, 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 succession planning. In addition to these threshold qualities, we seek directors who bring to the Board specific types of experience relevant to GE:

   

INDUSTRY & OPERATIONS EXPERIENCE

We have sought directors with leadership and operational experience in the industries in which we compete. For example, in the last two years we have added directors with industrial manufacturing, aviation and healthcare expertise.

INVESTOR EXPERIENCE

To ensure strong alignment with our investors, we have added directors who have experience overseeing investments and investment decisions. We believe that these directors can help focus management and the Board on the most critical value drivers for the company, including with respect to setting executive compensation targets and objectives.

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.

TECHNOLOGY EXPERIENCE

As a digital industrial company and leading innovator, we seek to add additional directors with technology backgrounds because our success depends on developing and investing in new technologies and ideas. Technology experience has become increasingly important as we intensify our focus on the Industrial Internet.

RISK MANAGEMENT EXPERIENCE

In light of the Board’s role in overseeing risk management and understanding the most significant risks facing the company, including cybersecurity risk, we continue to require directors with experience in risk management and oversight.

GOVERNMENT AND REGULATORY EXPERIENCE

We have added directors with experience in governmental and regulatory organizations because many of GE’s businesses are heavily regulated and are directly affected by governmental and regulatory actions and socioeconomic trends.



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Table of Contents

GE 2018 PROXY STATEMENT

Enhancing the Board’s diversity of background. GE has been committed for decades to building a cognitively diverse Board comprising 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 acknowledges that the new and smaller Board will be less diverse following the retirement of several directors in 2018, including GE’s three longest-tenured directors, all of whom are women. The Board is committed to using future refreshment opportunities to strengthen its cognitive diversity, beginning with the recruitment of a new director in 2019, following Jack Brennan’s retirement. To accomplish this, 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. In addition, the Governance Committee is committed to interviewing women and ethnically diverse candidates for all future vacancies on the Board.

Complying with regulatory requirements and the Board’s independence guidelines. The committee considers regulatory requirements affecting directors, including potential competitive restrictions. It also looks at other positions the director has held or holds (including other board memberships), and the Board reviews director independence.

CANDIDATE RECOMMENDATIONS. The committee considers all shareowner recommendations for director candidates. We evaluate them in the same manner as candidates suggested by other directors and candidates suggested by third-party search firms, which the company retains from time to time to help identify potential candidates. Mr. Garden was recommended for the Board by Trian Fund Management, L.P., a GE shareowner. Mr. Culp was originally recommended for the Board by a shareowner, and Mr. Horton and Ms. Seidman were originally recommended by management.

How We Assess Board Size

The Governance Committee takes a fresh look at Board size each year, consistent with the Board’s Governance Principles (see “Helpful Resources” on page 73). In fall 2017, the committee recommended reducing the size of the Board. The committee made this recommendation following the Board’s self-evaluation and in light of the broader GE portfolio review, including the narrower scope of GE’s activities following the GE Capital exit plan, assessment of trends with peer companies and taking into account investor feedback. The Board announced its adoption of the committee’s recommendation in November 2017 by setting a target board size of 12 directors for the 2018 proxy slate. The Board and committee believe that reducing the size of the Board will enhance the operational oversight of the Board.

RECRUITMENT PRIORITIES GOING FORWARD
Cognitive diversity
Industry expertise
Capital allocation expertise
Technology expertise

HOW YOU CAN RECOMMEND A CANDIDATE

Write to the Governance Committee, c/o Corporate Secretary, GE, at the address listed on the inside front cover of this proxy statement, and include all information that our by-laws require for director nominations.


HOW WE REFRESH THE BOARD
Term limits. The Board has a 15-year term limit for independent directors.
Age limits. With limited exceptions, directors may not be renominated to the Board after their 75th birthday.
Board evaluation. Each year, the Board assesses its effectiveness through a process led by its lead director. See “How We Evaluate the Board’s Effectiveness” on page 19.

See the Board’s Governance Principles (see “Helpful Resources” on page 73) for more information on these policies.


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Table of Contents

GE 2018 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 (listed under “Election of Directors” on page 10) other than Mr. Flannery are independent, as are retiring directors Messrs. Dekkers, Henry, Mollenkopf and Rohr, and Mses. Hockfield, Jung and Lazarus. Former directors Messrs. Lane and McAdam were independent throughout the period they served on our Board. Mr. Immelt, as our former CEO and chair, was not independent.

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 on GE’s website (see “Helpful Resources” on page 73), the Board considers all relevant facts and circumstances when making an independence determination.

Applying the guidelines in 2017. In assessing director independence for 2017, the Board considered relevant transactions, relationships and arrangements, including relationships among Board members, their family members and the company. For details, see “Relationships and Transactions Considered for Director Independence” below.

COMMITTEE MEMBERS. All members of the Audit Committee, Management Development and Compensation Committee (the Compensation Committee), and Governance Committee must be independent, as defined by the Board’s Governance Principles. Some committee members must also meet additional standards:

Heightened standards for Audit Committee members. Under a separate SEC independence requirement, Audit Committee members may not accept any consulting, advisory or other fees from GE or any of its subsidiaries, except compensation for Board service.

Heightened standards for members of the Compensation and Governance Committees. As a policy matter, the Board also applies a separate, heightened independence standard to members of the Compensation and Governance Committees: no member of either committee may be a partner, member or principal of a law firm, accounting firm or investment banking firm that accepts consulting or advisory fees from GE or a subsidiary. In addition, in determining that Compensation Committee members are independent, NYSE rules require the Board to consider their sources of compensation, including any consulting, advisory or other compensation paid by GE or a subsidiary.

The Board has determined that all members of the Audit, Compensation and Governance Committees, as well as the Technology & Industrial Risk Committee (the Industrial Risk Committee) and the Finance & Capital Allocation Committee (the Finance Committee), are independent and also satisfy any committee-specific independence requirements.


Relationships and Transactions Considered for Director Independence

                  GE Transaction & 2017 Magnitude
Director/
nominee
Organization Relationship

Sales to GE
Greater of <1% of
other company’s
revenues and
<$1 million

     

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
D’Souza Cognizant CEO & director N/A N/A
Garden Triland Partners LP Brother is executive & owner N/A N/A
McAdam Verizon Chair & CEO
Mollenkopf Qualcomm CEO & director N/A
Tisch Loews President & CEO N/A
All directors Various charitable organizations Executive, director or trustee Charitable contributions from GE
<1% of the organization’s revenues

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GE 2018 PROXY STATEMENT

Board Operations

AN INTRODUCTION TO HOW OUR BOARD OPERATES

The Board is elected by shareowners to oversee management and assure that shareowners’ long-term interests are being served. In 2017, there were eight regularly scheduled Board meetings. A significant portion of the Board’s oversight responsibilities is carried out through its independent committees.

WHAT’S CHANGED SINCE OUR LAST PROXY STATEMENT?

New Finance & Capital Allocation Committee. The Board decided to create the committee, which began meeting in December 2017, to assist in the oversight of significant M&A activity and other capital allocation decisions, such as investments (including R&D), buybacks and dividends.

Phasing out the Technology & Industrial Risk Committee. In light of the smaller Board, following the annual meeting, we will be phasing out the committee and reallocating its oversight responsibilities to the full Board and other committees.

COMMITTEE COMPOSITION

Independence. All committee members satisfy the NYSE’s and GE’s definitions of independent director.

Financial acumen. Ms. Schapiro and Messrs. Bazin, Beattie, Mulva and Rohr are “audit committee financial experts” (per SEC rules), and each of these directors, as well as Mr. Henry, are “financially literate” (per NYSE rules). New appointees to the Audit Committee following the annual meeting, Messrs. Brennan and Horton and Ms. Seidman, are also “audit committee financial experts.”

COMMITTEE OPERATIONS

Each committee meets periodically throughout the year, reports its actions to the Board, receives reports from senior management, annually evaluates its performance and can retain outside advisors. Formal meetings are typically supplemented with additional calls and sessions.

COMMITTEE RESPONSIBILITIES

The primary responsibilities of each committee are listed to the right. For more detail, see the Governance Principles and committee charters on GE’s website (see “Helpful Resources” on page 73).

Full Board

 

CHAIRMAN, JOHN FLANNERY &
LEAD INDEPENDENT DIRECTOR,
JACK BRENNAN

 
In 2017, the Board focused on:
Leadership transitions, particularly for the CEO
Review of GE’s portfolio
Creation of Baker Hughes, a GE company
Capital allocation, including dividend policy and pension funding
Business performance reviews, particularly in Power
GE Capital and Insurance
New product launches (e.g., LEAP engine)
 

15 MEETINGS IN 2017
(incl. 4 independent director meetings)

 

MEMBERS

 

Bazin

Beattie

Brennan

D’Souza

Dekkers

Flannery

Garden

Henry

Hockfield

Jung

Lavizzo-Mourey

Lazarus

Mollenkopf

Mulva

Rohr

Schapiro

Tisch

 
 
KEY OVERSIGHT RESPONSIBILITIES
 
Corporate strategy
Capital allocation
Business development
Risk management, including cybersecurity (except as delegated to the committees)
 
 

TYPICAL UPDATES AT EVERY MEETING

 
Operations (CFO)
Global growth (CEO of GGO)
Key businesses (business CEOs)
Audit

 

CHAIR, MARY SCHAPIRO*

 
Key priorities for 2017 included:
New revenue recognition standard
Long-term service agreement accounting
Financial reporting changes
Oversight of significant litigation and investigations
Accounting for Baker Hughes, a GE company
 

12 MEETINGS IN 2017

 

MEMBERS

 

Beattie

Henry

Mulva

Rohr

Schapiro

 
 
KEY OVERSIGHT RESPONSIBILITIES
 
Independent auditor engagement
Financial reporting and accounting standards
Internal audit functions (Corporate Audit Staff)
Disclosure and internal controls
Compliance and integrity programs
* Geoff Beattie will become the Audit Committee chair following the annual meeting.

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Finance & Capital
Allocation
 
 

CHAIR, JIM MULVA

 
The Finance & Capital Allocation Committee was established in December 2017, and since then has focused on:
Portfolio assessment and M&A activity
GE Capital structure
Funding options for Insurance
 

3 MEETINGS IN 2017

 

MEMBERS

 

Bazin

Garden

Mulva

Rohr

Tisch

 
 
KEY OVERSIGHT RESPONSIBILITIES
 
Capital allocation and liquidity
Dispositions and M&A activity
Financial and capital structure risks
Organic investments
Dividends and buybacks
Pension liabilities
Governance &
Public Affairs
 
 

CHAIR, SHELLY LAZARUS*

 
Key priorities for 2017 included:
Reviewing the company’s leadership structure in connection with the CEO transition
Assessing GE’s Board composition
Identifying new directors for 2018
Board governance processes
Political/lobbying strategy
Environmental, human rights and supply chain practices
 

8 MEETINGS IN 2017

 

MEMBERS

 

Brennan

Garden

Hockfield

Jung

Lavizzo-Mourey

Lazarus

Tisch

 
 
KEY OVERSIGHT RESPONSIBILITIES
 
Director recruitment
Corporate governance
Board committee structure and membership
Annual Board self-evaluation
Conflict-of-interest reviews
Director compensation
GE positions on corporate social responsibilities
Political spending and lobbying
* Risa Lavizzo-Mourey will become the Governance Committee chair following the annual meeting.
Management
Development &
Compensation
 
 

CHAIR, JACK BRENNAN

 
Key priorities for 2017 included:
Overseeing the CEO succession process
Succession for other key management roles
Retention of critical talent
Redesign of our executive compensation programs for 2018
Re-look at employee benefit programs
 

8 MEETINGS IN 2017

 

MEMBERS

 

Brennan

Dekkers

Garden

Jung

Lazarus

Rohr

 
 
KEY OVERSIGHT RESPONSIBILITIES
 
CEO and senior executive performance evaluations
CEO and senior executive compensation
Executive succession planning
Development and selection of senior management
Incentive compensation programs


Technology & Industrial Risk
    
 
 

CO-CHAIRS, MARIJN DEKKERS &
SUSAN HOCKFIELD

 
Key priorities for 2017 included:
Product risks
Cybersecurity
Engineering, procurement and construction projects
Military sales
Nuclear activities
Intellectual property risks

6 MEETINGS IN 2017

 

MEMBERS

 
   

D’Souza

Dekkers

Hockfield

Mollenkopf

Following the annual meeting, the committee will be phased out and its key oversight responsibilities will be reallocated as set forth below:

 
KEY OVERSIGHT RESPONSIBILITIES
 
Technology and product risk and strategy Board
Cybersecurity Board
Investments and science, technology Finance
and software initiatives
Science and technology trends Board
R&D operations, including the GRC Board & Finance
Climate-change related risks Governance

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GE 2018 PROXY STATEMENT

Board Members Are Encouraged to Visit at Least Two GE Businesses Per Year

GE PRACTICE. We encourage our directors to meet with GE senior managers throughout the company. To facilitate this contact, directors are encouraged to make at least two visits to GE businesses each year, typically unaccompanied by corporate management. Priority goes to those businesses identified as strategically important during the company’s annual financial and strategic planning sessions as well as any that were recently acquired or are a particular focus of risk oversight. These visits also serve as an important tool in the Board’s succession planning process for the CEO and the rest of the senior leadership team.

 
   

10 BUSINESS VISITS IN 2017

   
 

UNITED STATES

Additive, Cincinnati, Ohio

Aviation, Cincinnati, Ohio

GE Capital, Norwalk, Connecticut

Global Research Center, Niskayuna, New York

Healthcare, Chicago, Illinois

Oil & Gas, Houston, Texas

Power, Schenectady, New York

 

EUROPE

Oil & Gas, Florence, Italy

 
ASIA

Digital, Shanghai, China

Healthcare, Beijing, China

 

How We Evaluate the Board’s Effectiveness

ANNUAL EVALUATION PROCESS. Each year, the lead director or an independent consultant interviews each director to obtain his or her assessment of director performance, Board dynamics and the effectiveness of the Board and its committees. In 2017, the Board used an independent outside consultant to conduct the assessment. The interviews focused on:

reviewing the Board’s performance over the prior year and a half; and
identifying areas for potential enhancements of the Board’s processes going forward.

At times, directors may also complete written assessments. After the self-evaluation in 2017, the outside consultant reviewed the results with the lead director and chair of the Governance Committee and then met with the full Board to discuss the findings from the evaluation. For more information on this evaluation process, see the Board’s Governance Principles (see “Helpful Resources” on page 73).

CHANGES MADE IN RESPONSE TO 2017 EVALUATIONS. In response to feedback received from our directors in 2017, the Board made a number of changes, including:

creating a Finance & Capital Allocation Committee;
reducing the size of the Board to 12 directors for the 2018 slate, including three new directors; and
contemporizing the format of Board meetings by fostering more rigorous dialogue through interactive deep dives related to the most salient topics facing the company.

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GE 2018 PROXY STATEMENT

Board Leadership
Structure

Our CEO serves as the chairman of the Board. An independent director serves as the Board’s lead director, with broad authority and responsibility over Board governance and operations.

WHY OUR BOARD LEADERSHIP STRUCTURE IS APPROPRIATE FOR GE AT THIS TIME. The Board regularly reviews its leadership structure, and the Board conducted a deep dive to evaluate whether to continue to combine or to split the chair and CEO roles in the months leading up to the company’s recent CEO transition. After considering the perspectives of the independent directors, the views of our significant shareowners, voting results of recent independent chair proposals at GE, academic research, practical experience at peer companies, and benchmarking and performance data, the Board determined that appointing Mr. Flannery as chair and CEO (following a brief transition period in which Mr. Immelt continued to serve as the chair after retiring as CEO) was in the best interests of the company and its shareowners. In the Board’s view, this structure continues to allow our CEO to speak for and lead the company and Board while also providing for effective oversight and independent leadership by an independent director. The Board will continue to monitor the appropriateness of this structure.

HOW WE SELECT THE LEAD DIRECTOR. The Governance Committee considers feedback from the current lead director, our Board members and the chairman, and then makes a recommendation to the Board’s independent directors. The independent directors elect the lead director, taking into account the recommendation of the committee. Jack Brennan, chair emeritus of the Vanguard Group, was elected as the lead director in 2014. Under the Board’s Governance Principles, Mr. Brennan also serves as chair of the Compensation Committee. In the event of Mr. Brennan’s incapacity, the chair of the Governance Committee would serve as the lead director until the independent directors selected a new lead director.

BOARD LEADERSHIP STRUCTURE



THE LEAD DIRECTOR’S ROLE. The lead director focuses on overseeing the Board’s processes and prioritizing the right matters. Specifically, the lead director has the following responsibilities (and may also perform other functions at the Board’s request), as detailed in the Board’s Governance Principles:
Board leadership — provides leadership to the Board in any situation where the chairman’s role may be perceived to be in conflict, and chairs meetings when the chairman is absent
Leadership of independent director meetings — leads independent director meetings, which are scheduled at least three times per year (in addition to the numerous informal sessions that occur throughout the year) without any management directors or GE employees present
Additional meetings — calls additional Board or independent director meetings as needed
Chairman-independent director liaison — regularly meets with the chairman and serves as liaison between the chairman and the independent directors
Shareowner communications — makes himself/herself available for direct communication with our major shareowners
Board priorities — works with the chairman to propose an annual schedule of major Board discussion items
Board agenda, schedule & information — approves the agenda,schedule and information sent to directors
Board governance processes — works with the Governance Committee to guide the Board’s governance processes, including succession planning and the annual Board self-evaluation
Board leadership structure review — oversees the Board’s periodic review and evaluation of its leadership structure
Chairman evaluation — leads annual chairman evaluation
Committee chair selection — advises the Governance Committee in choosing committee chairs

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GE 2018 PROXY STATEMENT

How We Oversee & Manage Risk

A disciplined approach to risk is important in a diversified organization like ours to ensure that we are executing according to our strategic objectives and that as a company we only accept risk for which we are adequately compensated.


Board Oversight

The Board has oversight for risk management at GE with a focus on the most significant risks facing the company, including strategic, operational, financial and legal and compliance risks. With the phasing out of the Industrial Risk Committee, the Board is also assuming responsibility for the oversight of cybersecurity risk and certain other risk focus areas that were previously subject to the Industrial Risk Committee’s oversight, such as product quality, sourcing and supply chain risks. 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.

Following the annual meeting, the Board’s delegated responsibility for the oversight of specific risks to Board committees will be as set forth below.

Management’s Risk Assessment & Mitigation Processes

The Board’s risk oversight process builds upon management’s risk assessment and mitigation processes, which include reviews of strategic and operational planning; executive development and evaluation; compliance under the company’s code of conduct, The Spirit & The Letter, laws and regulations; the company’s integrity programs; health, safety and environmental compliance; financial reporting and controllership; and information technology and cybersecurity programs.

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How We Get Feedback from Investors

We Have a Robust Investor Engagement Program

We conduct extensive governance reviews (i.e., assessing trends in global governance) and investor outreach throughout the year involving our directors, senior management, investor relations and legal departments. This ensures that management and the Board understand and consider the issues that matter most to our shareowners so GE can address them effectively.

How the Board Receives Direct Feedback from Major Institutional Investors

STRATEGY AND BUSINESS MATTERS. From time to time, the company invites major institutional investors to meet with GE’s independent directors. This complements management’s investor outreach program and allows directors to directly solicit and receive investors’ views on GE’s strategy and performance.

GOVERNANCE AND COMPENSATION MATTERS. Our lead director regularly accompanies management on its governance-focused roadshow with a number of significant investors. In late 2017 and early 2018, our lead director participated in discussions with a number of our largest investors to solicit feedback on the Board’s composition, executive compensation programs and the Board’s role in overseeing the company’s strategy and portfolio transformation.

How We Incorporated Investor Feedback Over the Past Year

In 2017, we sought feedback from investors on a number of issues, and the Board decided to:

Reduce the size of the Board to 12 directors;
Establish the Finance Committee to enhance oversight of capital allocation decisions;
Simplify our executive compensation programs by reducing the number of metrics and individual programs;
Create greater shareowner-management alignment by delivering a greater percentage of executive compensation in the form of equity rather than cash; and
Simplify our investor presentations by reducing the number of metrics reported.

Investor Outreach and Our 2017 Say-On-Pay Vote

At our 2017 annual meeting, 89% of shareowners expressed support for the compensation of our named executives. Following the meeting, we met with our largest investors to review compensation actions for the past year and discuss our say-on-pay vote.

As part of its assessment of GE’s executive compensation programs, the Compensation Committee reviewed these voting results, evaluated investor feedback and considered other factors discussed in this proxy statement, including the alignment of our compensation program with the long-term interests of our shareowners and the relationship between risk-taking and the incentive compensation we provide to our named executives.

OUR INVESTOR ENGAGEMENT PROGRAM

After considering these factors, the committee decided to make the following changes to increase management accountability and more closely align management’s interests with shareowners:

Deliver a greater percentage of executive compensation in the form of equity rather than cash;
Terminate the Long-Term Performance Awards program, which pays awards in cash, after the end of the 2018 performance cycle;
Broaden our Performance Share Unit program across our senior executive ranks; and
Simplify the performance metrics used across our incentive compensation programs.

These changes are discussed in more detail under “Changes to Our Compensation Plans for 2018,” on page 29.

HOW YOU CAN COMMUNICATE WITH YOUR BOARD
The Audit Committee and the independent directors have established procedures to enable anyone who has a comment or concern about GE’s conduct — including any employee who has a concern about our accounting, internal accounting controls or auditing matters — to communicate that comment or concern directly to the lead director or to the Audit Committee. Information on how to submit these comments or concerns can be found on GE’s website (see “Helpful Resources” on page 73).


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GE 2018 PROXY STATEMENT

Other Governance Policies & Practices

Director Attendance at Meetings

The Board expects directors to attend all meetings of the Board and the committees on which the director serves as well as the annual shareowners meeting.

BOARD/COMMITTEE MEETINGS. In 2017, 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.

ANNUAL SHAREOWNERS MEETING. 15 out of 18 director nominees for 2017 attended the 2017 annual meeting.

Board Integrity Policies

CODE OF CONDUCT. All directors, officers and employees of GE must act ethically at all times and in accordance with GE’s code of conduct (contained in the company’s integrity policy, The Spirit & The Letter). Under the Board’s Governance Principles, the Board does not permit any waiver of any ethics policy for any director or executive officer. The Spirit & The Letter, and any amendments to the code that we are required to disclose under SEC rules, are posted on GE’s website (see “Helpful Resources” on page 73).

CONFLICTS OF INTEREST. All directors are required to recuse themselves from any discussion or decision affecting their personal, business or professional interests. If an actual or potential conflict of interest arises, the director is required to promptly inform the CEO and the lead director. The Governance Committee reviews any such conflict of interest. If any significant conflict cannot be resolved, the director involved is expected to resign.

Limits on Director Service on Other Public Boards

GE POLICY. As discussed in detail in the Board’s governance documents, and summarized in the table below, the Board has adopted policies to ensure that all of our directors have sufficient time to devote to GE matters.

      Permitted # of public company boards
(including GE)
Public company CEOs 3
Other directors 5
Permitted # of public company
audit committees (including GE)
Audit Committee Chair 2
Audit Committee member 3
Other restrictions
Lead Director Can’t serve as lead director, chairman
or CEO of another public company
HOW WE APPLIED TO TISCH. The Board determined to waive the first limitation for Mr. Tisch, who is CEO of Loews, because the three other public company boards on which he serves are all within Loews’s consolidated group of companies. Loews is a diversified holding company whose business operations are entirely conducted through its subsidiaries. Two of these subsidiaries, CNA Financial (89% owned) and Diamond Offshore Drilling (53% owned), accounted for more than 80% of Loews’s revenues over the past three years. Mr. Tisch serves on the boards of these subsidiaries and on the holding company’s board. Since Mr. Tisch’s responsibilities as a board member of these companies are integrally related to and subsumed within his role as CEO of Loews, the Board believes that this board service does not meaningfully increase his time commitments or fiduciary duties, as would be the case with service on unaffiliated public company boards.

HOW WE APPLIED TO BAZIN. Mr. Bazin is in compliance with GE’s policy on public board service as he serves on three public company boards, including GE. In assessing the time commitment for these boards, we note that Mr. Bazin serves on two of those boards in connection with his role as CEO of AccorHotels. In addition to serving as the Chairman of Accor, he serves on the board of China Lodging Group, in which Accor owns a stake. Accor and China Lodging Group have also entered into a strategic alliance pursuant to which China Lodging Group is the master franchiser for Accor’s economy hotel business in China.

Independent Oversight of Political Spending

The Governance Committee, composed solely of independent directors, oversees the company’s political spending and lobbying. This includes political and campaign contributions as well as any contributions to trade associations and other tax-exempt and similar organizations that may engage in political activity. As part of its oversight role in public policy and corporate social responsibility, the committee is responsible for the following:

Policy oversight. A yearly review of GE’s political spending policies and lobbying practices.

Budget oversight. Approval of GE’s annual budget for political activities and a semi-annual review of how it is being spent.

Reporting. Issuance of a yearly report on the company’s political spending, which is available on our Sustainability website (see “Helpful Resources” on page 73).


HOW YOU CAN FIND MORE INFORMATION ABOUT OUR GOVERNANCE PRACTICES

Each year we review GE’s governance documents and modify them as appropriate. These documents include the Board’s Governance Principles — which include our director qualifications and director independence guidelines — as well as Board committee charters. The web links for these materials can be found under “Helpful Resources” on page 73, and you can receive copies upon request.


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GE 2018 PROXY STATEMENT

Related Person Transactions

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 facts and circumstances, and for developing and implementing processes and controls for obtaining information about these transactions from directors and executive officers. As SEC rules require, we disclose in this proxy statement all such transactions that are determined to be directly or indirectly material to a related person. In addition, the Governance Committee reviews and approves or ratifies any such related person transaction. As described in the Governance Principles, which are available on GE’s website (see “Helpful Resources” on page 73), in the course of reviewing and approving or ratifying a disclosable related person transaction, the committee considers the factors in the box to the right.

FACTORS USED IN ASSESSING RELATED PERSON TRANSACTIONS
Nature of related person’s interest in transaction
Material transaction terms, including amount involved and type of transaction
Importance of transaction to related person and GE
Whether transaction would impair a director or executive officer’s judgment to act in GE’s best interest
Any other matters the committee deems appropriate, including any third-party fairness opinions or other expert reviews obtained in connection with the transaction

TRANSACTIONS FOR 2017. During 2016, Triland Partners Limited Partnership, a company in which Mr. Garden’s brother, Thomas Garden, is the managing general partner and sole owner, entered into transactions with a GE affiliate for the development and acquisition of certain renewable energy projects. These transactions were entered into before Mr. Garden joined the Board, and payments to Triland Partners by the GE affiliate during 2017 and 2018 for reimbursable expenses, overhead, and profit were approximately $950,000.


Stock Ownership Information

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 (Exchange Act) requires GE’s directors and executive officers, and persons who beneficially own more than 10% of our common or preferred stock, to file reports with the SEC regarding their initial stock ownership and changes in their ownership.

GE PRACTICES. As a practical matter, GE assists its directors (other than Mr. Garden whose filings are made on his behalf by personnel at Trian Fund Management, L.P. (Trian)) and executive officers by

monitoring transactions and completing and filing Section 16 reports on their behalf.

TIMELINESS OF 2017 REPORTS. Based solely on a review of the reports filed for fiscal 2017 and related written representations, we believe that all of our executive officers and directors filed the required reports on a timely basis under Section 16(a).


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GE 2018 PROXY STATEMENT

Common Stock & Total Stock-Based Holdings Table

The following table includes all GE stock-based holdings, as of December 31, 2017, of our directors and nominees, named executives, current directors and executive officers as a group, and beneficial owners of more than 5% of our common stock.

Directors & Nominees       Common Stock       Total
Sébastien M. Bazin 0 19,619
W. Geoffrey Beattie 883,088 1,014,613
John J. Brennan 35,000 111,797
H. Lawrence Culp, Jr. 12,592 12,592
Francisco D’Souza 91,500 145,806
Marijn E. Dekkers 41,000 87,418
Edward P. Garden 70,851,055 70,853,818
Peter B. Henry 0 17,590
Susan J. Hockfield 0 92,446
Thomas W. Horton 0 0
Andrea Jung 7,519 160,832
Risa Lavizzo-Mourey 15,000 21,598
Rochelle B. Lazarus 38,372 262,322
Steven M. Mollenkopf 5,500 18,513
James J. Mulva 4,105 155,944
James E. Rohr 57,425 89,587
Mary L. Schapiro 7,100 49,205
Leslie F. Seidman 0 0
James S. Tisch 3,540,000 3,630,773
Total 75,589,256 76,744,473

Common Stock
Named Executives       Stock       Options       Total
John L. Flannery 683,109 2,090,000 4,043,709
Jamie L. Miller 240,207 935,000 2,019,207
David L. Joyce 537,287 3,584,000 4,610,975
Jeffrey R. Immelt 2,607,745 1,100,000 4,403,324
Jeffrey S. Bornstein 264,383 4,143,500 4,493,717
Elizabeth J. Comstock 271,099 2,621,500 3,003,912
John G. Rice 601,502 5,690,000 6,870,292
Total 5,205,332 20,164,000 29,445,136

Current Directors & Executives       Common Stock       Total
As a group (23 people) 92,016,775 97,511,923
   
5% Beneficial Owners Common Stock
BlackRock, Inc. 531,736,188
The Vanguard Group 613,678,452
Total 1,145,414,640

PERCENTAGE OWNERSHIP
No director or named executive owns more than one-tenth of 1% of the total outstanding shares of GE common stock. Funds managed by Trian, of which Mr. Garden is the Chief Investment Officer, own 0.8% of our outstanding shares, though Mr. Garden disclaims beneficial ownership of these shares.
BlackRock and Vanguard own 6.1% and 7.1%, respectively, of our total outstanding shares.
COMMON STOCK. This column shows beneficial ownership of our common stock as calculated under SEC rules. Except to the extent noted below, everyone included in the table has sole voting and investment power over the shares reported. None of the shares are pledged as security by the named person, although standard brokerage accounts may include non-negotiable provisions regarding set-offs or similar rights.1 For the named executives, this column also includes shares that may be acquired under stock options that are currently exercisable or will become exercisable within 60 days (see the Options sub column).

TOTAL. This column shows the individual’s total GE stock-based holdings, including voting securities shown in the Common Stock column (as described above), plus non-voting interests that cannot be converted into shares of GE common stock within 60 days, including, as appropriate, PSUs, RSUs, DSUs, deferred compensation accounted for as units of GE stock, and stock options. PSUs include awards granted in 2015 that were ultimately cancelled in February 2018. As described under “Director Compensation” on page 53, directors must hold the DSUs included in this column until one year after leaving the Board.

COMMON STOCK & TOTAL. Both columns include the following shares over which the named individual has shared voting and investment power through family trusts or other accounts: Beattie (883,088),2 Dekkers (40,000), Garden (70,851,055),3 Jung (69), Lazarus (8,000), Mulva (4,105), Rohr (57,425) and Tisch (3,540,000).4

CURRENT DIRECTORS & EXECUTIVES. These columns show ownership by our current directors and executive officers (therefore excluding any shares owned by Mr. Culp, Mr. Horton, Ms. Seidman, Mr. Immelt, Mr. Bornstein or Ms. Comstock). This row includes: (1) 14,174,000 shares that may be acquired under stock options that are or will become exercisable within 60 days, (2) 5,000 RSUs that vested within 60 days, and (3) 75,386,336 shares over which there is shared voting and investment power. Current directors and executive officers as a group own approximately 1.1% of GE’s total outstanding shares, including those shares owned by the Trian Entities (as defined below).

5% BENEFICIAL OWNERS. This column shows shares beneficially owned by BlackRock, Inc., 55 East 52nd Street, New York, NY 10055, and The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355, as follows:

(# of shares)       BlackRock       Vanguard
Sole voting power 460,148,712 12,198,552
Shared voting power 0 1,908,608
Sole investment power 531,736,188 599,874,537
Shared investment power 0 13,803,915

The foregoing information is based solely on a Schedule 13G/A filed by BlackRock with the SEC on February 8, 2018, and a Schedule 13G/A filed by Vanguard with the SEC on February 9, 2018, as applicable.

See footnotes on next page.


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1 For Mr. Garden, this column refers to 70,851,055 shares owned by the Trian Entities (as defined below). Trian, an institutional investment manager, serves as the management company for Trian Partners, L.P., Trian Partners Master Fund, L.P., Trian Partners Master Fund (ERISA), L.P., Trian Partners Parallel Fund I, L.P., Trian Partners Strategic Investment Fund II, L.P., Trian Partners Strategic Investment Fund-A, L.P., Trian Partners Strategic Investment Fund-N, L.P., Trian Partners Strategic Investment Fund-D, L.P., Trian Partners Strategic Fund-G II, L.P., Trian Partners Strategic Fund G-III, L.P., Trian Partners Co-Investment Opportunities Fund, Ltd., Trian SPV (Sub) X, L.P., Trian Partners Strategic Fund-K, L.P. and Trian Partners Strategic Fund-C, Ltd. (collectively, the Trian Entities) and as such determines the investment and voting decisions of the Trian Entities with respect to the shares of the company held by them. None of such shares are held directly by Mr. Garden. Of such shares, 37,711,617 shares are currently held in the ordinary course of business with other investment securities owned by the Trian Entities in co-mingled margin accounts with a prime broker, which prime broker may, from time to time, extend margin credit to certain Trian Entities, subject to applicable federal margin regulations, stock exchange rules and credit policies. Mr. Garden is a member of Trian Fund Management GP, LLC, which is the general partner of Trian, and therefore is in a position to determine the investment and voting decisions made by Trian on behalf of the Trian Entities. Accordingly, Mr. Garden may be deemed to indirectly beneficially own (as that term is defined in Rule 13d-3 under the Exchange Act) the shares owned by the Trian Entities. Mr. Garden disclaims beneficial ownership of such shares for all other purposes.
2 For Mr. Beattie, this refers to 16,390 shares owned by family trusts, 66,698 shares held through a holding company and 800,000 shares held through an investment company. Mr. Beattie disclaims beneficial ownership of those shares held through the investment company.
3 As described in note 1 above, these shares are owned by the Trian Entities.
4 For Mr. Tisch, this refers to 540,000 shares owned by a Tisch family trust and 3,000,000 shares owned by Loews Corporation, of which Mr. Tisch is the CEO, President, a director and shareholder. Mr. Tisch disclaims beneficial ownership of the shares owned by Loews Corporation except to the extent of his pecuniary interest, if any, in those shares.

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Compensation

Management Proposal No. 1

ADVISORY APPROVAL OF OUR NAMED
EXECUTIVES’ PAY

What are you voting on?

In accordance with Section 14A of the Exchange Act, we are asking shareowners to vote on an advisory basis to approve the compensation paid to our named executives, as described in this proxy statement.

Why the Board recommends a vote FOR the say-on-pay proposal. The Board believes that our compensation policies and practices are effective in achieving the company’s goals of:

Promoting accountability for performance.
Rewarding sustained financial and operating performance and withholding compensation when those objectives are not achieved.
Aligning our executives’ interests with those of our shareowners to create long-term value.
Motivating executives to remain with us for long and productive careers.

Impact of the say-on-pay vote. This advisory proposal, commonly referred to as a “say-on-pay” proposal, is not binding on the Board. However, the Board and the Compensation Committee will review and consider the voting results when evaluating our executive compensation program.

We hold say-on-pay votes annually. Under the Board’s policy of providing for annual say-on-pay votes, the next say-on-pay vote will occur at our 2019 annual meeting.

YOUR BOARD RECOMMENDS A VOTE FOR THE SAY-ON-PAY PROPOSAL

Overview of Our Executive
Compensation Program

Although the executive compensation discussion in this proxy statement focuses on the compensation decisions for our named executives — John Flannery (Chair & CEO), Jamie Miller (SVP & CFO), David Joyce (Vice Chair & CEO of Aviation), Jeff Immelt (Former Chair & CEO), Jeff Bornstein (Former Vice Chair & CFO), Beth Comstock (Former Vice Chair & CEO, Business Innovations) and John Rice (Vice Chair & Former CEO, Global Growth Organization) — our executive compensation programs apply broadly across GE’s employee ranks. Approximately 3,800 executives receive equity incentives and participate in our annual cash bonus plan, and a subset of our senior executives participate in our long-term performance award program. We strive to pay fair and competitive wages to all of our employees, considering the specific job markets in which they work and peer compensation.

Key Considerations in Setting Pay

This section describes the key considerations the Compensation Committee takes into account when designing pay programs and making compensation decisions. This past year was a difficult one for the company, and management’s execution on the company’s operating framework fell substantially short of expectations. As a result, these plans paid out significantly less than in prior years, and the committee determined that our named executives, other than Mr. Joyce, would not receive annual cash bonuses for 2017. Additionally, the committee decided to cancel the 2015 PSU awards, despite the fact that one of the performance goals was met for the period. These results also played a part in the committee’s decision to undertake a comprehensive evaluation of our compensation programs, solicit investor feedback and, ultimately, make changes to our compensation programs for 2018. We believe these changes will drive better performance and alignment with investors, while continuing to promote accountability, as further described below.

EMPHASIS ON CONSISTENT, SUSTAINABLE AND RELATIVE PERFORMANCE

Our compensation program provides the greatest pay opportunity for named executives who demonstrate superior performance for sustained periods of time. It also rewards them for executing GE’s strategy through business cycles. In evaluating performance consistency, we also weigh the performance of each named executive relative to peers in the relevant industry segment or function.

CHALLENGING PERFORMANCE METRICS ALIGNED TO OUR INVESTOR FRAMEWORK

We typically set performance metrics for our incentive compensation programs that match our short-term and long-term operating frameworks. We set target performance levels that are challenging but achievable with good performance, and maximum performance levels that represent stretch goals.

EMPHASIS ON FUTURE PAY OPPORTUNITY VERSUS CURRENT PAY

The Compensation Committee strives to provide an appropriate mix of compensation elements, including finding a balance between current and long-term compensation and between cash and equity incentive compensation. Cash payments primarily are aligned with and reward more recent performance, while equity awards encourage our named executives to continue to deliver results over a longer period of time and also serve as a retention tool. The committee believes that most of our named executives’ compensation should be contingent on company performance, primarily long-term operating and stock-price performance. Consistent with this belief, the committee has decided to terminate the cash-based Long-Term Performance Award (LTPA) program, after the conclusion of the current performance cycle in 2018, and in the future, we expect a greater percentage of our executive compensation to be paid in the form of equity.


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COMPENSATION COMMITTEE JUDGMENT

Our compensation programs balance arrangements where the payouts are tied to specific quantitative performance objectives with those where the committee evaluates a broad range of quantitative and qualitative factors, such as reliability in delivering financial and growth targets, sustainability-focused measures (including performance in light of risk assumed), performance in the context of the economic environment relative to other companies, a track record of integrity, good judgment, the ability to create further growth and lead others, and the absolute size of total pay packages. The committee exercised its discretion with respect to the 2017 awards by determining not to pay a bonus to most of our named executives and by cancelling the 2015 PSU awards, despite the fact that one of the performance goals was met.

BALANCE BETWEEN OVERALL COMPANY AND BUSINESS UNIT RESULTS

The committee believes that the named executives, as key members of the company’s leadership team, share the responsibility to support GE’s overall goals and performance. This compensation philosophy is most clearly reflected in our annual equity incentive grants, which tie executives’ pay across our businesses to overall company performance. In addition, the committee believes that there should also be clear accountability for the performance of one’s business or function. As a result, beginning in 2018, the annual cash bonus program will be funded at each of our top-tier businesses based upon individual business results, while our corporate executives (other than our segment CEOs) who have broad horizontal responsibilities across GE, will continue to be compensated based upon overall GE results.

CONSIDERATION OF RISK

Our compensation programs are balanced and also focused on the long term so that our named executives can achieve the highest compensation through consistent superior performance over sustained periods of time. In addition, large amounts of compensation are usually deferred or realizable only upon retirement, providing strong incentives to manage for the long term while avoiding excessive risk-taking in the short term. Compensation is also balanced among current cash payments, deferred cash and equity awards. Our equity awards also have specific holding requirements for senior executives, which also discourages excessive risk taking. The Compensation Committee retains discretion to adjust compensation pursuant to our clawback policy as well as for quality of performance and adherence to company values. See “Clawbacks and Other Remedies for Potential Misconduct” on page 51 for more information.

Primary Compensation Elements for 2017

The table below sets forth the primary elements of our executive compensation programs. In 2017, the Compensation Committee decided to terminate the LTPA program after the current award cycle concludes in 2018. Additionally, the committee decided not to award any PSUs to the executive team in 2017. In February 2018, the committee made PSU grants to our current named executives. See “Changes to Our Compensation Plans for 2018” on page 29.

  Salary Bonus LTPAs PSUs Options RSUs
Who receives All named executives All named executives
except CEO
When granted Reviewed every
18 months
Annually in February or
March for prior year
Every 3 years –
final cycle 2016-2018
Generally annually
Form of delivery Cash   Generally cash Equity
Type of
performance
Short-term emphasis Long-term emphasis
Performance
period
Ongoing 1 year 3 years Generally 5-year vesting period
How payout
determined
Committee judgment Mix of formulaic
pool funding
& committee
judgment
Formulaic; committee verifies performance
before payout
Formulaic; depends on stock price on exercise/vest date
Most recent performance
measures
N/A 7 financial metrics &
strategic goals
5 financial metrics 2 financial metrics & relative TSR modifier Stock price appreciation
What is incentivized Balance against
excessive risk taking
Deliver on annual
investor framework
Deliver on long-term
investor framework
Outperform peers Increase stock price Balance against
excessive risk taking

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GE 2018 PROXY STATEMENT

Changes to Our Compensation Plans for 2018

As part of our ongoing re-look at the company, we are making significant changes to our executive compensation programs. These changes are designed to simplify our programs, in terms of both number of programs and goals, and to more closely align leaders across the company to our investors.

SHIFT FROM CASH TO EQUITY. Going forward we expect a greater percentage of our leadership team’s compensation to be paid in equity, rather than cash. The most significant reflection of this change was the Compensation Committee’s decision to eliminate the LTPA program, which pays out in cash, at the conclusion of its current cycle in 2018. The shift to equity is also reflected in Mr. Flannery’s salary, which is 47% lower than the salary paid to Mr. Immelt.

FEWER GOALS, WITHOUT OVERLAPS. Beginning in 2018, we will have fewer goals in our compensation programs. In addition to eliminating the goals that determined payouts under the LTPA after the current performance cycle, we will also reduce the number of goals used to determine annual bonuses to focus on two — an earnings metric and a cash metric. By contrast, the 2017 bonus program had five financial performance goals and, for the CEO and his direct reports, two modifiers, as well as a series of strategic goals.

Consistent with prior years, we will disclose the threshold, target and maximum goals for these performance metrics in the 2019 proxy.

2018 PSUs have an approximately three-year performance cycle and will pay out in equity based upon a single performance metric: GE Total Shareholder Return (TSR) versus the S&P 500 from the grant date of February 26, 2018 through December 31, 2020. PSUs will be earned as follows (with proportional adjustment for performance between threshold, target and maximum):

Threshold Target Maximum
35th percentile 55th percentile 80th percentile
Earn 25% Earn 100% Earn 175%

The Compensation Committee determined that a single TSR-based metric for the PSUs was appropriate given the difficulty in setting other performance targets during the ongoing portfolio review. Achievement of the performance metric will be adjusted to reflect any change in GE’s capital structure. Additionally, any equity awarded to our executives as a result of the vesting of the PSUs will have a mandatory one-year hold period, regardless of whether the executive has satisfied the company’s stock ownership requirement. Following the completion of our portfolio review, the committee anticipates using operating metrics for determining the performance conditions of any future PSU grants.

Our current named executives received the following 2018 PSU awards: Mr. Flannery (800,000), Ms. Miller (200,000) and Mr. Joyce (116,700). These awards were larger than what otherwise might have been awarded due to the fact that no PSUs were awarded in 2017.

FOCUS ON BUSINESS PERFORMANCE. Our bonus program going forward will be funded for each segment (e.g., Power, Aviation) based solely on the segment’s performance, rather than being based on company performance. Funding of the bonus pool for eligible employees at Corporate will continue to be based on companywide results, with certain functions within Corporate having separate, function-specific targets and pool funding.

GENERAL SHIFT FROM OPTIONS TO RSUs. Equity awards for our broader leadership team will generally be granted in RSUs, rather than options, and these awards will generally vest over three years, rather than five, which we believe is more consistent with peer programs and aligned to current goal setting. We expect that the CEO will only receive PSUs, and that his direct reports at the senior vice president level and above will receive a mix of RSUs and PSUs.


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GE 2018 PROXY STATEMENT

How Our Incentive Compensation Plans Paid Out for 2017

This section provides an overview of how GE performed against the goals established under its 2017 annual bonus program and the 2015 PSUs. See “Compensation Actions for 2017” on page 34 for amounts paid to the named executives as well as how we assessed their individual performance. See “Long-Term Performance Awards (LTPAs)” on page 44 for information on our 2016–2018 LTPAs.

2017 Annual Bonuses

BONUS POOL FUNDED AT 24%. The Corporate bonus pool was funded at 24%, based on achievement of only 20% of our financial goals and 35% of our strategic goals, which were weighted at 75% and 25%, respectively. However, none of our named executives other than David Joyce, Vice Chair & CEO, Aviation, received a bonus for 2017. The results for the Corporate bonus pool funding are shown below.

FUNDING METRICS FOR THE 2017 ANNUAL BONUS POOL. For the 2017 annual bonus program, the Compensation Committee established the following five financial goals, each weighted 15% (in addition to strategic goals), for funding the company’s bonus pool: (1) Industrial Operating + GE Capital Verticals EPS; (2) Industrial segment organic revenue growth; (3) Industrial operating margin expansion; (4) operating cash flow; and (5) Predix-powered + software orders.

ADJUSTMENTS TO BONUS PROGRAM. The Compensation Committee maintains authority to adjust performance metrics under the bonus program. In March 2017, the committee modified the performance framework for the CEO and his direct reports at the senior vice president level and above (including all of the named executives) so that their bonuses could also be increased or decreased by 20% from what otherwise would have been payable based on achievement of two additional targets (if both targets were achieved, there would have been a 20% increase, and if both targets were missed, there would have been a 20% decrease, with no adjustment for achieving one target but missing the other). Specifically, a target was set for Industrial operating profit* of $17.2 billion for 2017, and a second target was set for reducing Industrial structural costs* by $1 billion from $24.9 billion in 2016 to $23.9 billion in 2017. The Industrial structural cost reduction target was achieved ($1.7 billion for 2017), but the Industrial operating profit target was not met ($13.9 billion for 2017), and as a result there was no impact on bonuses. For more information on how these metrics are calculated, see “Explanation of Non-GAAP Financial Measures and Performance Metrics” on page 52.

HOW WE PERFORMED AGAINST OUR
STRATEGIC GOALS

DRIVE EXECUTION. GE’s execution fell significantly short of expectations in 2017. The company did not meet its goals to achieve 3–5% organic revenue growth and 100 basis points of margin expansion, despite beating expectations in taking out $1.7 billion of structural cost. Additionally, operational improvement around cash generation and, in particular, inventory management did not meet our goals. While the company did not meet its overall targets, several of our operating segments, including Aviation and Healthcare, executed well on revenue growth, margins, and cash.
SIMPLIFY THE COMPANY AND RUN CORPORATE TO ADD VALUE. We took actions to simplify the cost structure of the company in 2017, including reducing Industrial structural cost by $1.7 billion (ahead of target) and reducing the size of Corporate. We are working to drive a culture of increased transparency and accountability at all levels of the company to better anticipate and mitigate against the performance and cost issues we experienced in Power and Insurance in 2017. In addition, as discussed elsewhere in this proxy, we are simplifying the Board by reducing its size from 18 to 12 directors, and adding three new directors with relevant industry experience and operational skills.

* Non-GAAP financial measures (other than Digital orders). For information on how these metrics are calculated, see “Explanation of Non-GAAP Financial Measures and Performance Metrics” on page 52.
** Percentages may not add due to rounding.

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CREATE A MORE VALUABLE PORTFOLIO. In July 2017, GE completed the combination of our legacy Oil & Gas business with Baker Hughes, creating Baker Hughes, a GE company, a full stream oil and gas company. GE also completed the sale of the Water business and disposed of the remaining financial services assets under the GE Capital exit plan. Although an agreement was reached for the sale of Industrial Solutions during the year, the transaction did not close during the year as originally anticipated. The company made significant progress in identifying markets and industries where it expects to focus in the future.

MAKING BIG BETS ON THE FUTURE OF INDUSTRIAL PRODUCTIVITY. The company made significant progress on Digital and Additive manufacturing initiatives, which we see as key to our future productivity. Digital increased Predix orders by more than 100%, with more than 1,000 customers on Predix-powered solutions at the end of 2017. The team successfully integrated ServiceMax, Meridium and other acquisitions. In light of this rapid growth, additional time was spent stabilizing the platform and ensuring scalability for customers. The company also decided to focus sales efforts on customers in GE’s core vertical Industrial businesses. In terms of Additive manufacturing, we acquired GeonX, integrated Concept Laser and secured nearly all of the outstanding shares of Arcam, expanding our materials catalog and our production capacity by 50%. We also significantly increased internal supply chain capability and are on track to significantly increase our part applications by 2020.

The Compensation Committee assessed GE’s performance on its strategic goals at 35% because despite achieving several important goals, a number of goals were not achieved. In the view of the committee, the company continues to need to work on performance and execution, expanding growth and improving margins, improving capital allocation and other key goals.

HOW WE EVALUATED BUSINESS PERFORMANCE AND ALLOCATED THE BONUS POOL

CORPORATE. Each of our named executives other than Mr. Joyce was evaluated based upon the achievement of performance goals for the overall company and, as noted above, the Compensation Committee exercised its discretion and did not grant bonuses to these named executives for 2017 in light of the company’s performance.

AVIATION. Mr. Joyce’s performance was based upon the Aviation business, for which he is the CEO. The Aviation business performed very strongly in 2017. The Aviation business’s bonus pool was funded at 43% of target, reflecting the lower overall company bonus pool funding, and based on the following performance assessment:

Financial. Aviation exceeded its operating plan on free cash flow, operating profit, structural cost and working capital.

Strategic. Aviation continued to perform at a high level in both the commercial and military engine markets. Additionally, the Aviation team made significant strides on additive manufacturing, positioning the business for future growth in line with strategic plans.


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HOW THE BONUS PROGRAM WORKS. We pay cash bonuses to our named executives each February or March for the prior year under a program designed to closely align incentive compensation and annual company results. Here’s how the plan worked for 2017:

* As part of the transition from the prior bonus program (in effect before 2015), any individual, including the named executives, whose 2014 bonus payment as a percentage of salary was higher than the target bonus percentage under the new program has a target bonus equal to their bonus under the prior program (until such time as their salaries increase to the point where their target bonus is consistent with their seniority level).
** The amount allocated to Corporate typically reflects the overall bonus pool funding percentage, but may be adjusted depending on the amounts allocated to the businesses.

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2015 PSU Grants

2015 PSUs CANCELLED. In February 2018, the Compensation Committee cancelled the PSUs that were granted to executives in 2015, including all of the named executives. The company met one of two goals under the PSUs, earning $88.7 billion in total cash during the 2015–2017 period, compared to a threshold of $87 billion. The second goal, which was based on operating margin for 2017, was not met, achieving only 12.1% margins compared to a threshold of 16.5%. Under the formula for the PSUs, after the 25% downward adjustment for being in the bottom 40% of the S&P 500 in terms of TSR, the PSUs would have paid out at 25%.

Despite achieving one of the goals, the committee nonetheless determined that a payout for the PSUs was not appropriate, and cancelled the awards. The value forfeited by the named executives was $7.2 million, based on the closing price of GE stock on February 26, 2018, the date the committee made its determination.

PERFORMANCE METRICS       Weighting       2015 PSUs

Total cash (2015–2017)*

50%

Operating margin (2017)*

50%

Relative TSR vs. S&P 500
(2015–2017)

+/- 25% adjustment

Total cash = GE CFOA (Industrial CFOA + dividends from GE Capital) + proceeds from Industrial dispositions (after tax)
Operating margin = Industrial segment operating margin (excludes adjusted corporate operating costs)
Relative TSR =
If GE TSR performance ≥ 75th percentile of S&P 500 positive 25% adjustment
If GE TSR performance ≤ 40th percentile of S&P 500 negative 25% adjustment
If GE TSR performance = 50th percentile no adjustment (with proportional adjustment for performance between 40th and 75th percentiles)

* For information on how we calculate performance metrics, see “Explanation of Non-GAAP Financial Measures and Performance Metrics” on page 52.

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GE 2018 PROXY STATEMENT

Compensation Actions for 2017

Aligning CEO Pay with Investors

John Flannery
CHAIRMAN (SINCE OCTOBER 2, 2017) & CEO
(SINCE AUGUST 1, 2017)
AGE: 56
EDUCATION: FAIRFIELD UNIVERSITY, MBA, WHARTON
GE TENURE: 31 YEARS
     
March 2017 (see “2017 Annual Bonuses” on page 30). The Compensation Committee determined that despite the significant progress Mr. Flannery had made on setting out a strategic path for the company, and the strong performance of the Healthcare business during the first half of the year, he would not receive a bonus in light of the poor overall performance of the company.
PAY. Upon his appointment as CEO, Mr. Flannery’s salary was set at $2,000,000. The Compensation Committee did not award Mr. Flannery a bonus (with his concurrence), despite the 24% funding for the company bonus pool. The committee granted Mr. Flannery an equity award of 600,000 stock options with a grant date fair value of $2.1 million in September 2017. The Compensation Committee did not award the PSU portion of Mr. Flannery’s planned 2017 award as it continued to assess the appropriate performance metrics and targets for the awards.
PERFORMANCE. As the Chairman & CEO, Mr. Flannery plays a critical role in shaping the company’s strategy and delivering on the performance framework for the company. As such, when Mr. Flannery was appointed as CEO, the Compensation Committee determined that his performance goals would be the same as the financial and strategic goals that were set for the overall company, including the additional targets that were set in

Changes in Our CEO Compensation Structure

As part of the CEO transition in 2017, the Compensation Committee made the following changes to the CEO compensation structure to increase accountability and alignment with investors: (1) set a significantly lower base salary for Mr. Flannery compared to Mr. Immelt; (2) increased the target bonus from 100% to 150% of salary; and (3) increased the percentage of compensation delivered in the form of equity, including determining that Mr. Flannery’s 2016–2018 LTPA grant would be paid out (to the extent there is a payout) in stock rather than cash.

Equity Grants in 2017

Historically our Compensation Committee granted equity awards in the fall of each year. For the named executives, this generally consisted of PSUs and stock options (weighted 2/3 PSUs) for our CEO, and PSUs, RSUs and stock options (each weighted 1/3) for our other named executives. This past fall, the committee granted equity awards to our named executives (other than Mr. Immelt due to his pending retirement) in line with this framework, except that, in light of management and the Board’s re-look at the company, including the investor performance framework and strategy, as well as the committee’s expectation that in 2018 it would start to grant equity awards in the first quarter of the year, the committee deferred granting PSUs until February 2018 to allow the committee more time to consider the appropriate performance metrics and targets. As a result, the annual equity grants to our named executives in 2017 do not include PSUs and, therefore, have a lower total grant date fair value (2/3 lower for the CEO, 1/3 lower for the other named executives) than they otherwise would have had the PSU portion of the grant been included. In February 2018, the committee made PSU awards to our named executive officers, subject to the performance metrics described above under “Changes to Our Compensation Plans for 2018” on page 29. Mr. Flannery received 800,000 PSUs, Ms. Miller received 200,000 PSUs, and Mr. Joyce received 116,700 PSUs.

Compensation for Our Other Named Executives

     
Jamie Miller
AGE: 49
EDUCATION:
MIAMI UNIVERSITY
GE TENURE:
12 YEARS
     
CURRENT AND PRIOR ROLES
Senior Vice President & CFO (since November 1, 2017); former President & CEO, GE Transportation; former Chief Information Officer, GE; former Controller, GE
PERFORMANCE ASSESSMENT
The committee recognized Ms. Miller’s contribution toward the strong performance of the Transportation business under her leadership in a challenging market, in addition to the ongoing portfolio review, but did not grant a bonus in light of the company’s poor performance.
     
COMPENSATION DECISIONS FOR 2017
Base salary — increased by 10% to $1.35 million effective April 2017, after an 18-month interval since her last salary increase that is standard for GE’s named executives; subsequently increased by 7% to $1.45 million upon her promotion to CFO
Cash bonus — did not receive a bonus
Equity grant — $1 million grant date fair value, divided evenly between stock options and RSUs
Special retention grant — 50,000 RSUs, with grant date fair value of $1.3 million for retention, awarded in July 2017

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GE 2018 PROXY STATEMENT

     

David Joyce
AGE: 61
EDUCATION:
MICHIGAN STATE;
M.A. FINANCE,
XAVIER
GE TENURE:
38 YEARS

     

CURRENT AND PRIOR ROLES
Vice Chair, GE and President & CEO, Aviation (since 2008), leader for GE Additive; previously vice president and general manager of commercial engines and held other GM positions within Aviation
PERFORMANCE ASSESSMENT
The committee recognized Mr. Joyce’s contribution toward the strong performance of the Aviation business in meeting nearly all of its financial and strategic goals, including exceeding goals for free cash flow, operating profit, structural cost and working capital.

     

COMPENSATION DECISIONS FOR 2017
Base salary — remained flat at $1.45 million, with his last salary increase effective September 2016
Cash bonus — $1.39 million, consisting of $685,000, representing 43% of $1.6 million target (same as Aviation’s 43% funding), plus $700,000 for extraordinary performance at Aviation and GE Additive
Equity grant — $1.39 million grant date fair value (same as the vice chairs), delivered equally between stock options and RSUs
             
     
Jeff Immelt
AGE: 62
EDUCATION:
DARTMOUTH;
MBA, HARVARD
GE TENURE:
36 YEARS
     
CURRENT AND PRIOR ROLES
Former Chairman (retired October 2, 2017) and CEO (retired July 31, 2017), GE (since 2001)
PERFORMANCE ASSESSMENT
The committee did not grant Mr. Immelt any equity awards due to his pending retirement and did not grant him a bonus in light of the company’s poor performance.
     
COMPENSATION DECISIONS FOR 2017
Base salary — remained flat at $3.8 million, with his last salary increase effective March 2014 (paid through departure in early October 2017)
Cash bonus — did not receive a bonus
Equity grant — did not receive an equity grant due to his pending retirement
             
     
Jeff
Bornstein
AGE: 52
EDUCATION:
NORTHEASTERN
GE TENURE:
29 YEARS
     
CURRENT AND PRIOR ROLES
Former Vice Chair & CFO, GE (since 2013, left the company on December 31, 2017); previously CFO of GE Capital, Aircraft Engine Services and Plastics
PERFORMANCE ASSESSMENT
The committee did not grant Mr. Bornstein a bonus in light of the company’s poor performance.
     
COMPENSATION DECISIONS FOR 2017
Base salary — remained flat at $1.775 million, with his last salary increase effective July 2016
Cash bonus — did not receive a bonus
Equity grant — $1.39 million grant date fair value (same as the vice chairs), delivered equally between stock options and RSUs (subsequently cancelled)
Special retention grant — 250,000 RSUs, with grant date fair value of $7.0 million for retention, awarded in June 2017; this grant was cancelled upon his departure
             
     
Beth
Comstock
AGE: 57
EDUCATION:
WILLIAM & MARY
GE TENURE:
25 YEARS
     
CURRENT AND PRIOR ROLES
Former Vice Chair, GE & CEO, Business Innovations (since 2015, retired December 31, 2017); previously chief marketing and commercial officer; president of integrated media at NBC Universal
PERFORMANCE ASSESSMENT
The committee did not grant Ms. Comstock a bonus in light of the company’s poor performance.
     
COMPENSATION DECISIONS FOR 2017
Base salary — increased 8% to $1.625 million, effective March 2017, after an 18-month interval since her last salary increase that is standard for GE’s named executives
Cash bonus — did not receive a bonus
Equity grant — $1.39 million grant date fair value (same as the vice chairs), delivered equally between stock options and RSUs (subsequently cancelled)
             
     
John Rice
AGE: 61
EDUCATION:
HAMILTON
GE TENURE:
40 YEARS
     
CURRENT AND PRIOR ROLES
Vice Chair, Former President & CEO, Global Growth Organization (since 2010, stepped down December 31, 2017 from Global Growth Organization; remaining as Vice Chair through March 31, 2018); previously CEO of Technology Infrastructure, Industrial, Energy and Transport Systems
PERFORMANCE ASSESSMENT
The committee did not grant Mr. Rice a bonus in light of the company’s poor performance.
     
COMPENSATION DECISIONS FOR 2017
Base salary — increased 7% to $2.8 million, effective January 2017, after an 18-month interval since his last salary increase that is standard for GE’s named executives
Cash bonus — did not receive a bonus
Equity grant — $1.39 million grant date fair value (same as the vice chairs), delivered equally between stock options and RSUs

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GE 2018 PROXY STATEMENT

Realized Compensation

The SEC’s calculation of total compensation, as shown in the Summary Compensation Table on page 37, includes several items for which the named executives do not actually receive the amounts during the year, such as equity grants that may not vest for several years (or at all), and others that are driven by accounting and actuarial assumptions. It also excludes items that may be paid during the year, but that are attributable to prior periods. As a result, total compensation as defined by the SEC differs substantially from the compensation actually realized by our named executives in a particular year. To supplement the SEC-required disclosure, the table below shows compensation actually realized by the named executives, as reported on their IRS W-2 forms. These amounts are not a substitute for the amounts reported as SEC total compensation. Information on how realized compensation is calculated can be found in the supplemental materials on GE’s proxy website (see “Helpful Resources” on page 73).

SIGNIFICANT ITEMS IN REALIZED COMPENSATION. For Mr. Flannery, 49% of his 2017 realized pay relates to tax equalization payments relating to global assignments that accrued in prior years but that were not paid until 2017; these payments were made to keep Mr. Flannery in the same tax-neutral position

in which he would have been, had he not moved overseas at the company’s request. His realized pay also reflects $3.6 million of income related to the vesting of RSUs granted in prior years, as well as relocation and tax benefits associated with two moves (to Chicago to lead Healthcare and to Boston upon becoming CEO). For Ms. Miller, 80% of her 2017 realized pay relates to equity awards from prior years, including $8.3 million from stock option exercises and another $1.5 million from the vesting of RSUs. For Mr. Joyce, 85% of his 2017 realized pay relates to equity awards from prior years, including $16.8 million from stock option exercises and another $0.9 million from the vesting of RSUs. For Mr. Immelt, approximately 62% of his 2017 realized pay relates to the vesting of RSU and PSU awards valued at $18.2 million, most of which relate to his PSU grants that vested in March 2017, and the residual relates to RSUs that vested on his retirement. Another $4.3 million relates to Mr. Immelt’s bonus for 2016, which was paid in 2017. For Mr. Bornstein, 63% of his 2017 realized pay relates to the vesting of RSUs valued at $7.1 million, some of which were accelerated under the terms of Mr. Bornstein’s separation agreement (see “Option Exercises and Stock Vested Table” on page 43 and “Separation Agreement with Mr. Bornstein” on page 48).



Realized Compensation Table

Realized Compensation
Name 2015 2016 2017
Flannery*                   $16,005,604
Miller* $12,489,770
Joyce* $12,561,316 $20,928,993
Immelt $10,028,885 $27,466,598 $29,283,346
Bornstein $5,266,094 $13,638,042 $11,181,051
Comstock* $9,348,124 $7,225,080
Rice $9,671,232 $19,154,417 $7,870,257
* Under applicable SEC rules, we have excluded Mr. Flannery’s and Ms. Miller’s compensation for 2015 and 2016 and Ms. Comstock’s and Mr. Joyce’s compensation for 2015 as they were not named executives during those years.

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GE 2018 PROXY STATEMENT

Summary Compensation

Summary Compensation Table

Name &
Principal Position
   Year    Salary    Bonus    PSUs &
RSUs
   Stock
Options
   LTPAs    Pension &
Deferred
Comp.
   All Other
Comp.
   SEC Total    Adjusted
SEC Total**
John Flannery* 2017 $1,737,500 $0 N/A $2,076,000 $0 $3,255,222 $1,931,881 $9,000,603 $5,800,715
Chairman & CEO
Jamie Miller* 2017 $1,335,417 $0 $1,810,930 $519,000 $0 $1,154,778 $237,736 $5,057,861 $3,903,083
SVP & CFO
David Joyce* 2017 $1,450,000 $1,385,000 $695,240 $692,000 $0 $673,996 $264,930 $5,161,166 $4,487,170
Vice Chair & CEO, 2016 $1,333,333 $1,524,000 $6,212,431 $750,000 $0 $2,523,853 $239,240 $12,582,857 $10,059,004
Aviation
Jeff Immelt 2017 $2,864,394 $0 N/A N/A $0 $3,373,410 $1,873,463 $8,111,267 $4,982,197
Former Chairman 2016 $3,800,000 $4,320,000 $4,673,098 $2,142,000 $1,624,000 $3,580,288 $1,185,138 $21,324,524 $17,962,122
& CEO 2015 $3,800,000 $5,400,000 $6,238,766 $2,964,000 $7,614,000 $6,336,805 $620,376 $32,973,947 $26,831,472
Jeff Bornstein 2017 $1,775,000 $0 $8,140,971 *** $692,000 $0 $3,796,480 $163,272 $14,567,723 *** $10,835,590 ***
Former Vice Chair 2016 $1,687,500 $1,920,000 $1,532,431 $750,000 $739,000 $2,882,201 $394,601 $9,905,733 $7,081,503
& CFO 2015 $1,600,000 $2,500,000 $2,746,623 $1,086,800 $3,351,200 $1,815,193 $161,000 $13,260,816 $11,497,856
Beth Comstock* 2017 $1,604,167 $0 $695,240 $692,000 $0 $5,850,496 $186,456 $9,028,359 $3,206,630
Former Vice Chair, 2016 $1,500,000 $1,248,000 $6,210,931 $750,000 $549,600 $2,045,801 $175,054 $12,479,386 $10,459,690
Business Innovations
John Rice 2017 $2,800,000 $0 $695,240 $692,000 $0 $2,552,260 $1,137,866 $7,877,366 $5,586,117
Vice Chair, 2016 $2,625,000 $3,278,000 $1,532,431 $750,000 $1,180,600 $4,184,304 $1,611,666 $15,162,001 $11,212,853
Former CEO,
Global Growth
2015 $2,537,500 $4,088,000 $2,991,242 $1,185,600 $5,844,600 $1,317,517 $1,695,689 $19,660,148 $18,554,554
Organization
* Under applicable SEC rules, we have excluded Mr. Flannery’s and Ms. Miller’s compensation for 2016 and 2015 and Ms. Comstock’s and Mr. Joyce’s compensation for 2015 as they were not named executives during those years.
** For a description of the amounts reported in the Adjusted SEC Total column, see “Adjusted SEC Total” on page 39.
*** Includes RSU awards with a grant date fair value of $7.7 million that were subsequently cancelled. Excluding these cancelled RSU awards, Mr. Bornstein’s SEC Total compensation was $6,917,483, and his Adjusted SEC Total was $3,185,350.

SALARY. Base salaries for our named executives depend on the scope of their responsibilities, their leadership skills and values, and their performance and length of service. Historically, they generally have been eligible for salary increases at intervals of 18 months or longer. The amount of any increase is affected by current salary and amounts paid to peers within and outside the company. Each of the named executives contributed a portion of his or her salary to the GE Retirement Savings Plan (RSP), the company’s 401(k) savings plan. The salary amount for Mr. Immelt is through his retirement in October 2017.

BONUS. Amounts earned under our annual cash bonus program. None of our named executives received bonuses for 2017, other than Mr. Joyce. See “How the Bonus Program Works” on page 32 for additional information.

PSUs & RSUs. Aggregate grant date fair value of stock awards in the form of PSUs and RSUs granted in the years shown, other than for 2017, during which only RSUs (and no PSUs) were granted. Generally, the aggregate grant date fair value is the amount that the company expects to expense for accounting purposes over the award’s vesting schedule and does not correspond to the actual value that the named executives will realize from the award. In particular, the actual value of PSUs received is different from the accounting expense because it depends on performance. For example, as described under “2015 PSU Grants” on page 33, the 2015 PSU grants were cancelled by the Compensation Committee, and as a result, none of our named executives received a payout for these awards. Although the PSUs were cancelled, GE does not adjust the related amounts previously reported as compensation in the year of the PSU award to reflect the cancellation (in the case of Mr. Immelt, $6.2 million reported as compensation for him in 2015).

In accordance with SEC rules, the aggregate grant date fair value of the PSUs is calculated based on the most probable outcome of the performance conditions as of the grant date.

For Mr. Bornstein, the 2017 amounts reported under PSUs & RSUs represent a 250,000 RSU retention grant in June 2017 in connection with his promotion to Vice Chair with a grant date fair value of $7.0 million and another 28,000 RSUs granted to him in September 2017 with a grant date fair value of $0.7 million. Both awards were cancelled upon Mr. Bornstein’s departure from the company, although modifications of certain awards under the terms of his separation agreement were valued at $0.5 million.

Ms. Comstock’s September 2017 grant of 28,000 RSUs, which had a grant date fair value of $0.7 million, was similarly cancelled upon her retirement.

STOCK OPTIONS. Aggregate grant date fair value of option awards granted in the years shown. These amounts reflect the company’s accounting expense and do not correspond to the actual value that the named executives will realize. For information on the assumptions used in valuing a particular year’s grant, see the note on Other Stock-Related Information in GE’s financial statements in our annual report on Form 10-K for that year. The stock options granted to Mr. Bornstein and Ms. Comstock in 2017 were subsequently cancelled upon their respective departures from the company. See the Long-Term Incentive Compensation Table on page 40 for additional information on 2017 grants.

LTPAs. Amounts earned under our Long-Term Performance Awards (LTPAs), a non-equity incentive plan arrangement, which we historically granted only once every three or more years. The LTPA program will be terminated after the conclusion of the current performance cycle, which ends in 2018. LTPA amounts reflect achievement of pre-established performance goals over the performance period. The amounts for 2016 and 2017 reflect the first- and second-year installments of the 2016–2018 LTPAs and are based on salaries in effect as of the end of the year and bonuses paid for those years, even though no amounts were paid. The $0 values for 2017 for



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Messrs. Immelt, Bornstein, Rice and Ms. Comstock reflect our current expectation that the performance goals for the 2016–2018 LTPA will not be met (in which case they would not receive the amounts reported for 2016 and 2017). See “Long-Term Performance Awards (LTPAs)” on page 44 for additional information. Because Mr. Flannery, Ms. Miller and Mr. Joyce were not named executives when the 2016–2018 LTPAs were granted, their awards do not include the annual installment provision that applies to other named executives, and the amount reported for them in 2017 is therefore also $0.

PENSION & DEFERRED COMP. Sum of the change in pension value and above-market earnings on nonqualified deferred compensation, which break down as shown in the following table.

Name            Change in
Pension Value
           Above-market
Earnings
Flannery $3,199,888 $55,334
Miller $1,154,778 $0
Joyce $673,996 $0
Immelt $3,129,070 $244,340
Bornstein $3,732,133 $64,347
Comstock $5,821,729 $28,767
Rice $2,291,249 $261,011

Year-over-year changes in pension value generally are driven by changes in actuarial pension assumptions as well as increases in service, age and compensation. See “Pension Benefits” on page 46 for additional information, including the present value assumptions used in this calculation. For Ms. Comstock, the change in pension value includes early retirement allowance payments valued at $3.1 million (see “Early Retirement Agreement with Ms. Comstock” on page 48).

Above-market earnings represent the difference between market interest rates calculated under SEC rules and the 6% to 14% interest contingently credited by the company on salary that the named executives deferred under various executive deferred salary programs in effect between 1987 and 2017. See “Deferred Compensation” on page 44 for additional information.



ALL OTHER COMP. We provide our named executives with other benefits that we believe are reasonable, competitive and consistent with our overall executive compensation program. The costs of these benefits for 2017, minus any reimbursements by the named executives, are shown in the table below.

Name Life Insurance
Premiums
     Retirement
Savings Plan
     Personal
Use of Aircraft
     Leased Cars      Financial &
Tax Planning
     Relocation
Benefits
     Relocation
Tax Benefits
     Other      Total
Flannery $136,456 $9,450 $21,398 $14,610 $0 $1,051,254 $689,059 $9,654 $1,931,881
Miller $62,120 $9,450 $9,177 $21,128 $5,300 $127,133 $2,694 $734 $237,736
Joyce $227,424 $9,450 $4,632 $22,074 $0 N/A N/A $1,350 $264,930
Immelt $226,600 $9,450 $133,565 $10,708 $0 $819,864 $662,711 $10,565 $1,873,463
Bornstein $107,712 $9,450 $10,181 $8,497 $24,205 N/A N/A $3,227 $163,272
Comstock $153,406 $9,450 $0 $0 $20,600 N/A N/A $3,000 $186,456
Rice $172,938 $9,450 $23,400 $24,360 $15,125 $350,600 $539,307 $2,686 $1,137,866

Life Insurance Premiums. Taxable payments to cover premiums for universal life insurance policies they own. These policies include: (1) Executive Life, which provides universal life insurance policies for the named executives totaling $3 million in coverage at the time of enrollment and increased 4% annually thereafter; and (2) Leadership Life, which provides universal life insurance policies for the named executives with coverage of 2X their annual pay (salary + most recent bonus).

Retirement Savings Plan. GE’s matching contributions to the named executives’ RSP accounts equaling 3.5% of pay up to the caps imposed under IRS rules.

Personal Use of Aircraft. For security purposes, prior to September 2017, the Compensation Committee required our CEO, as well as Mr. Flannery while he was CEO-elect, to use company aircraft for all air travel, including personal travel. This policy ended at the request of Mr. Flannery and with the agreement of the committee. Amounts reflect the incremental cost to GE for the named executives’ personal use of company aircraft, based on the following variable costs: a portion of ongoing maintenance and repairs, aircraft fuel, satellite communications and any travel expenses for the flight crew. These amounts exclude non-variable costs, such as exterior paint, interior refurbishment and regularly scheduled inspections, which would have been incurred regardless of whether there was any personal use. Aggregate incremental cost, if any, of travel by the executive’s family or guests is also included. Amounts reported for Mr. Flannery

reflect travel during the period between the announcement of his appointment as CEO and the revocation of the policy requiring him to use company aircraft. All named executives have repaid to the company the maximum amount for which reimbursement is permitted under Federal Aviation Administration rules.

Leased Cars. Expenses for the leased cars program, such as leasing and management fees, administrative costs and maintenance costs. This program will be discontinued at the end of 2018 for all GE officers.

Financial & Tax Planning. Expenses for the use of advisors for financial, estate and tax preparation and planning, and investment analysis and advice.

Relocation Benefits. Expenses for relocating the named executives and their families to GE’s headquarters in Boston, other than Mr. Flannery, for whom this column also includes the cost of relocation expenses to Chicago in connection with the relocation of the GE Healthcare headquarters to that city in 2016 and for Mr. Rice, for whom this column includes benefits provided to him in connection with his non-permanent relocation, at the company’s request, to Hong Kong. Mr. Rice returned from this assignment in April 2017. Benefits for the named executives, including the tax benefits described below, generally were consistent with those provided to all employees who were asked to relocate, except that the company’s officers received a higher potential home loss buyout benefit than other employees. See “Significant Items in Realized Compensation” on page 36 for


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a discussion of additional amounts not reported in this column that relate to tax equalization payments from Mr. Flannery’s global assignments in prior years.

With respect to Mr. Rice’s relocation to Hong Kong, benefits are consistent with those we provide to employees working on non-permanent assignments outside their home countries, and consisted of: (1) cost-of-living adjustment ($137,869); (2) housing and utilities ($149,712); and (3) other expatriate and relocation allowances and expenses ($63,019). Any benefits paid in Hong Kong dollars (HKD) were converted to USD at a rate of 7.76 HKD per USD for the period.

Relocation Tax Benefits. Tax benefits provided in connection with relocations.

Other. Total amount of other benefits provided, none of which individually exceeded the greater of $25,000 or 10% of the total

amount of benefits included in the Personal Use of Aircraft, Leased Cars, Financial & Tax Planning, Relocation Benefits and Other columns for the named executive (except as otherwise described in this section). These other benefits included items such as: (1) car service fees; (2) home alarm and generator installation, maintenance and monitoring; and (3) an annual physical examination.

SEC TOTAL. Total compensation, as determined under SEC rules.

ADJUSTED SEC TOTAL. We are presenting this supplemental column to show how the Compensation Committee views the named executives’ annual compensation. This column adjusts the amounts reported in the SEC Total column by subtracting the change in pension value reported in the Pension & Deferred Comp. column to show how year-over-year changes in pension value impact total compensation. The amounts reported in this column differ substantially from, and are not a substitute for, the amounts reported in the SEC Total column.


Long-Term Incentive Compensation

Overview of Long-Term Incentive Compensation

In recent years, GE provided the CEO and other senior leaders four different forms of long-term incentive compensation awards: Long-Term Performance Awards (LTPAs), Performance Share Units (PSUs), stock options and, for senior leaders other than the CEO, Restricted Stock Units (RSUs). In 2017, the Compensation Committee decided to terminate the LTPA program following the conclusion of the current performance cycle, which ends in 2018. In addition, the Compensation Committee did not award any PSUs to our senior leaders in 2017.

Annual Equity Incentive Awards

Historically, GE used a different equity compensation structure for the CEO than for other senior leaders: The CEO typically received equity compensation solely in the form of PSUs while other senior leaders received it largely in the form of stock options. In 2015, we began granting annual equity incentive awards to all named executives (other than the CEO) in the form of stock options, RSUs and PSUs to better align the equity compensation structure for the company’s most senior leaders and drive greater accountability.

How we determine award amounts. In recent years, our annual equity incentive awards were targeted to be equally weighted (by approximate accounting value) among stock options, RSUs and PSUs, except that the CEO’s award was targeted to be weighted 2/3 PSUs and 1/3 stock options (he did not typically receive RSUs). In 2017, the Compensation Committee did not award PSUs, and only RSU and option awards were made while the committee considered the appropriate performance metrics and targets for the PSUs. In determining award amounts, the committee evaluates executives’ achievement of specific performance goals — with strong emphasis on their contributions to overall company performance in addition to their individual business or function — as well as expected future contributions to GE’s long-term success, using past performance as a key indicator.

Why we use stock options and RSUs. We believe that stock options and RSUs are a means to effectively focus our named executives on delivering long-term value to our shareowners. Options have value only to the extent that the price of GE stock rises between the grant date and the exercise date, and RSUs reward and retain the named executives by offering them the opportunity to receive GE stock if they are still employed by us on the date the restrictions lapse.
Why we use PSUs. We see PSUs as a means to focus our named executives on GE’s long-term operating goals. PSUs have formulaically determined payouts that convert into shares of GE stock only if the company achieves specified performance goals. See the Outstanding Equity Awards Table on page 41 for information regarding the performance conditions for outstanding PSUs.

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Long-Term Incentive Compensation Table

The following table — also known as the Grants of Plan-Based Awards Table — shows RSUs and stock options granted to our named executives in 2017 under the 2007 Long-Term Incentive Plan, a plan that shareowners approved in 2007, 2012 and 2017. No grants were made of PSUs or LTPAs during 2017, and no grants were made to Mr. Immelt under the 2007 Long-Term Incentive Plan during 2017 in light of his retirement.

Grant
Date
Estimated Future Payouts
Under Performance Share Units (#)
Restricted
Stock Units
(#)
Stock
Options
(#)
Stock
Option
Exercise
Price
Grant
Date
Fair Value of
Awards
Name             Award Type       Threshold        Target        Maximum                        
Flannery 9/6/2017 Annual Equity 600,000 $24.92 $2,076,000
Miller 7/27/2017 Retention 50,000 $1,289,500
9/6/2017 Annual Equity 21,000 $521,430
9/6/2017 Annual Equity 150,000 $24.92 $519,000
Joyce 9/6/2017 Annual Equity 28,000 $695,240
9/6/2017 Annual Equity 200,000 $24.92 $692,000
Immelt N/A N/A N/A
Bornstein* 6/9/2017 Retention 250,000 $6,955,000
9/6/2017 Annual Equity 28,000 $695,240
9/6/2017 Annual Equity 200,000 $24.92 $692,000
10/6/2017 Separation 15,000 80,000 100,000 $490,731
Modification*
Comstock* 9/6/2017 Annual Equity 28,000 $695,240
9/6/2017 Annual Equity 200,000 $24.92 $692,000
Rice 9/6/2017 Annual Equity 28,000 $695,240
9/6/2017 Annual Equity 200,000 $24.92 $692,000

*  Amounts reported as RSUs and stock options for Mr. Bornstein and Ms. Comstock reflect awards previously granted that were cancelled pursuant to their separation and early retirement agreements, respectively. For Mr. Bornstein, amounts reported for PSUs reflect his continued eligibility for his existing PSU awards, originally granted in 2015 and 2016, under the terms of his separation agreement (see “Separation Agreement with Mr. Bornstein” and “Early Retirement Agreement with Ms. Comstock” on page 48).

PERFORMANCE SHARE UNITS. The values above for estimated future payouts of PSUs for Mr. Bornstein reflect the potential threshold, target and maximum number of PSUs that could be granted under pre-existing PSU awards for which Mr. Bornstein continued to be eligible following his separation from the company. This represents his 2015 PSU award (target 53,000 PSUs) which was subsequently cancelled in February 2018, and his 2016 PSU award (target 27,000 PSUs), which remains outstanding.

RESTRICTED STOCK UNITS. The number of RSUs granted in 2017, which will vest in five equal annual installments, with the first installment (20%) vesting one year from the grant date, except Ms. Miller’s special retention grant in July 2017 will vest in equal installments in 2020 and 2022. Dividend equivalents are paid out only on shares actually received, except for Ms. Miller’s July 2017 special retention grant, which was awarded prior to her being designated an executive officer.

STOCK OPTIONS. The number of stock options granted in 2017, which will vest in five equal annual installments, with the first installment (20%) becoming exercisable one year from the grant date. See the Outstanding Equity Awards Table on page 41 and “Potential Termination Payments” on page 48 for information on accelerated vesting for retirement-eligible awards.

STOCK OPTION EXERCISE PRICE. Stock option exercise prices reflect the closing price of GE stock on the grant date.

GRANT DATE FAIR VALUE OF AWARDS. Generally, the aggregate grant date fair value is the amount that the company expects to expense in its financial statements over the award’s vesting schedule.

For stock options, fair value is calculated using the Black-Scholes value of each option on the grant date (resulting in a $3.46 per unit value for the September grants).
For RSUs, fair value is calculated based on the closing price of the company’s stock on the grant date, reduced by the present value of dividends expected to be paid on GE common stock before the RSUs vest (resulting in a $27.82 per unit value for Mr. Bornstein’s June grant and a $24.83 per unit value for the September grants) because dividend equivalents on unvested RSUs (granted after 2013) are accrued and paid out only if and when the award vests. For Ms. Miller’s July grant, fair value was calculated based on the closing price of the company’s stock on the grant date (resulting in a $25.79 per unit value).


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Outstanding Equity Awards Table

The following table — also known as the Outstanding Equity Awards at Fiscal Year-End Table – shows the named executives’ stock and option grants as of year-end. It includes unexercised stock options (vested and unvested) and RSUs and PSUs for which vesting conditions were not yet satisfied as of December 31, 2017.

Name of
Executive
   Grant
Date
   Award
Type
   Number
Outstanding
   Portion
Exercisable
   Exercise
Price
   Expiration
Date
   Market
Value
   Vesting Schedule
Flannery   7/23/2009 Options 100,000 100,000 $11.95 7/23/2019 $550,000
6/10/2010 Options 350,000 350,000 $15.68 6/10/2020 $619,500
6/9/2011 Options 450,000 450,000 $18.58 6/9/2021 $0
9/7/2012 Options 500,000 500,000 $21.59 9/7/2022 $0
7/25/2013 RSUs 10,000 $174,500 100% on 7/25/2018
9/13/2013 Options 400,000 320,000 $23.78 9/13/2023 $0 100% on 9/13/2018
7/24/2014 RSUs 40,000 $698,000 50% in 2018 and 2019
9/5/2014 Options 450,000 270,000 $26.10 9/5/2024 $0 50% in 2018 and 2019
9/11/2015 Options 150,000 60,000 $24.95 9/11/2025 $0 33% in 2018, 2019 and 2020
9/11/2015 RSUs 18,000 $314,100 33% in 2018, 2019 and 2020
9/11/2015 PSUs 44,000 $767,800 100% in 2018, subject to performance
9/9/2016 Options 200,000 40,000 $30.11 9/9/2026 $0 25% in 2018, 2019, 2020 and 2021
9/9/2016 RSUs 21,600 $376,920 25% in 2018, 2019, 2020 and 2021
9/9/2016 PSUs 27,000 9/6/2027 $471,150 100% in 2019, subject to performance
9/6/2017 Options 600,000 $24.92 $0 20% in 2018, 2019, 2020 and 40% in 2021
Total 3,360,600 2,090,000 $3,971,970
Miller 9/7/2012 Options 325,000 325,000 $21.59 9/7/2022 $0
7/25/2013 RSUs 15,000 $261,750 100% on 7/25/2018
9/13/2013 Options 350,000 280,000 $23.78 9/13/2023 $0 100% on 9/13/2018
7/24/2014 RSUs 30,000 $523,500 50% in 2018 and 2019
9/5/2014 Options 400,000 240,000 $26.10 9/5/2024 $0 50% in 2018 and 2019
9/11/2015 Options 150,000 60,000 $24.95 9/11/2025 $0 33% in 2018, 2019 and 2020
9/11/2015 RSUs 18,000 $314,100 33% in 2018, 2019 and 2020
9/11/2015 PSUs 44,000 $767,800 100% in 2018, subject to performance
7/28/2016 RSUs 40,000 $698,000 25% in 2018, 2019, 2020, 2021
9/9/2016 Options 150,000 30,000 $30.11 9/9/2026 $0 25% in 2018, 2019, 2020, 2021
9/9/2016 RSUs 16,000 $279,200 25% in 2018, 2019, 2020, 2021
9/9/2016 PSUs 20,000 $349,000 100% in 2019, subject to performance
7/27/2017 RSUs 50,000 $872,500 50% in 2020 and 2022
9/6/2017 Options 150,000 $24.92 9/6/2027 $0 20% in 2018, 2019, 2020, 2021, 2022
9/6/2017 RSUs 21,000 $366,450 100% on 9/6/2018
Total 1,779,000 935,000 $4,432,300
Joyce 9/9/2008 Options 100,000 100,000 $28.12 9/9/2018 $0
6/10/2010 Options 650,000 650,000 $15.68 6/10/2020 $1,150,500
6/9/2011 Options 700,000 700,000 $18.58 6/9/2021 $0
9/7/2012 Options 700,000 700,000 $21.59 9/7/2022 $0
9/13/2013 Options 500,000 500,000 $23.78 9/13/2023 $0
9/5/2014 Options 550,000 550,000 $26.10 9/5/2024 $0
9/11/2015 Options 184,000 184,000 $24.95 9/11/2025 $0
9/11/2015 RSUs 30,000 $523,500 33% in 2018, 2019, 2020
9/11/2015 PSUs 53,000 $924,850 100% in 2018, subject to performance
7/28/2016 RSUs 150,000 $2,617,500 100% on 12/31/19
9/9/2016 Options 200,000 200,000 $30.11 9/9/2026 $0
9/9/2016 PSUs 27,000 $471,150 100% in 2019, subject to performance
9/6/2017 Options 200,000 $24.92 9/6/2027 $0 100% on 9/6/2018
9/6/2017 RSUs 28,000 $488,600 100% will vest on 9/6/2018
Total 4,072,000 3,584,000 $6,176,100
Immelt 11/6/2014 Options 500,000 500,000 $26.36 11/6/2024 $0
11/5/2015 Options 600,000 600,000 $29.64 11/5/2025 $0
11/5/2015 PSUs 200,000 $3,490,000 100% in 2018, subject to performance
Total 1,300,000 1,100,000 $3,490,000

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Name of
Executive
   Grant
Date
   Award
Type
   Number
Outstanding
   Portion
Exercisable
   Exercise
Price
   Expiration
Date
   Market
Value
   Vesting Schedule
Bornstein 9/9/2008 Options 137,500 137,500 $28.12 9/9/2018 $0
3/12/2009 Options 95,000 95,000 $9.57 3/12/2019 $748,600
7/23/2009 Options 440,000 440,000 $11.95 7/23/2019 $2,420,000
6/10/2010 Options 650,000 650,000 $15.68 12/31/2019 $1,150,500
6/9/2011 Options 700,000 700,000 $18.58 12/31/2019 $0
9/7/2012 Options 725,000 725,000 $21.59 12/31/2019 $0
9/13/2013 Options 550,000 550,000 $23.78 12/31/2019 $0
9/5/2014 Options 550,000 550,000 $26.10 12/31/2019 $0
11/5/2015 Options 176,000 176,000 $29.64 12/31/2019 $0
11/5/2015 PSUs 53,000 $924,850 100% in 2018, subject to performance
9/9/2016 Options 120,000 120,000 $30.11 12/31/2019 $0
9/9/2016 PSUs 27,000 $471,150 100% in 2019, subject to performance
Total 4,223,500 4,143,500 $5,715,100
Comstock 9/9/2008 Options 87,500 87,500 $28.12 9/9/2018 $0
6/10/2010 Options 400,000 400,000 $15.68 6/10/2020 $708,000
6/9/2011 Options 500,000 500,000 $18.58 12/31/2020 $0
9/7/2012 Options 500,000 500,000 $21.59 12/31/2020 $0
9/13/2013 Options 400,000 400,000 $23.78 12/31/2020 $0
9/5/2014 Options 400,000 400,000 $26.10 12/31/2020 $0
9/11/2015 Options 134,000 134,000 $24.95 12/31/2020 $0
9/11/2015 PSUs 39,000 $680,550 100% in 2018, subject to performance
9/9/2016 Options 200,000 200,000 $30.11 12/31/2020 $0
9/9/2016 PSUs 27,000 $471,150 100% in 2019, subject to performance
Total 2,687,500 2,621,500 $1,859,700
Rice 6/23/1995 RSUs 43,056 $751,327 100% on 11/15/2021
6/26/1998 RSUs 57,408 $1,001,770 100% on 11/15/2021
7/29/1999 RSUs 28,704 $500,885 100% on 11/15/2021
7/27/2000 RSUs 28,704 $500,885 100% on 11/15/2021
9/10/2001 RSUs 23,920 $417,404 100% on 11/15/2021
9/12/2003 RSUs 29,900 $521,755 100% on 11/15/2021
9/9/2008 Options 300,000 300,000 $28.12 9/9/2018 $0
3/12/2009 Options 1,000,000 1,000,000 $9.57 3/12/2019 $7,880,000
7/23/2009 Options 800,000 800,000 $11.95 7/23/2019 $4,400,000
6/10/2010 Options 1,000,000 1,000,000 $15.68 6/10/2020 $1,770,000
6/9/2011 Options 850,000 850,000 $18.58 6/9/2021 $0
9/13/2013 Options 650,000 650,000 $23.78 9/13/2023 $0
9/5/2014 Options 650,000 650,000 $26.10 9/5/2024 $0
11/5/2015 Options 240,000 240,000 $29.64 11/5/2025 $0
11/5/2015 PSUs 58,000 $1,012,100 100% in 2018, subject to performance
9/9/2016 Options 200,000 200,000 $30.11 9/9/2026 $0
9/9/2016 PSUs 27,000 $471,150 100% in 2019, subject to performance
9/6/2017 Options 200,000 $24.92 9/6/2027 $0 100% on 9/6/2018
9/6/2017 RSUs 28,000 $488,600 100% on 9/6/2018
Total 6,214,692 5,690,000 $19,715,876

MARKET VALUE. The market value of RSUs and PSUs is calculated by multiplying the closing price of GE stock as of December 29, 2017 ($17.45) (the last trading day for the year) by the number of shares underlying each award and, with respect to the PSUs, assuming satisfaction of the target levels for the applicable performance conditions. For options, the market value is calculated by multiplying the number of shares underlying each award by the spread between the award’s exercise price and the closing price of GE stock as of December 29, 2017.

VESTING SCHEDULE

Options vest on the anniversary of the grant date in the years shown in the table. The table shows an accelerated stock option vesting schedule for Messrs. Joyce and Rice because their awards qualified for retirement-eligible vesting between 2017 and 2021 and for Mr. Flannery for his 2017 award, which is eligible for accelerated vesting in 2021. See “Potential Termination Payments” on page 48 for the requirements for an award to qualify for retirement-eligible accelerated vesting (the executive is age 60 or older and the award has been held for at least one year).
RSUs vest on the anniversary of the grant date in the years shown in the table, except that certain awards vest on the named executive’s 65th birthday or upon the awards qualifying for retirement-eligible vesting (as discussed above for options).

PSUs vest at the beginning of the year indicated when the Compensation Committee certifies that the performance conditions have been achieved. See “2015 PSU Grants” on page 33 for details on the performance conditions for the 2015 grants, which were cancelled by the committee. See the table on the next page for details on the performance conditions for the 2016 grants. No PSUs were granted in 2017.


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2016 PSUs

     (2016–2018)
Performance goal How measured Weighting Threshold      Target
Total cash Cumulative 50% $70 billion $85 billion
Operating margin Last year in period 50% 15.0% 16.0%
Relative TSR Cumulative vs. S&P 500 +/- 25% adjustment

HOW WE DEFINE THE PERFORMANCE GOALS*

Total cash = GE CFOA (Industrial CFOA + dividends from GE Capital) + proceeds from Industrial dispositions (after tax)

Operating margin = Industrial operating margin (includes adjusted corporate operating costs)

*The Compensation Committee has the authority to adjust these metrics for extraordinary items. For information on how we calculate performance metrics, see “Explanation of Non-GAAP Financial Performance Metrics” on page 52.


+/- 25% adjustment to # of PSUs earned refers to:

GE TSR performance ≥ 75th percentile é positive 25% adjustment
GE TSR performance < 40th percentile ê negative 25% adjustment
GE TSR performance = 50th percentile è no adjustment (with proportional adjustment for performance between 40th and 75th percentiles)

Option Exercises and Stock Vested Table

The table at right shows the number of shares the named executives acquired and the values they realized upon the exercise of options and the vesting of RSUs and PSUs during 2017. Values are shown before payment of any applicable withholding taxes or brokerage commissions. Executives that remain employed by GE are required to hold the stock that they receive following the exercise of stock options (less those shares that are withheld to satisfy the exercise and pay taxes) for a year following exercise. Similarly, continuing executives cannot sell stock they receive as the result of the vesting of RSUs or PSUs until they have satisfied their stock ownership requirement. See “Share Ownership and Equity Grant Policies” on page 51.

PSUS & RSUS. For Messrs. Immelt and Rice, includes partial vesting of certain awards for U.S. Federal Insurance Contributions Act (FICA) tax purposes. For Mr. Bornstein and Ms. Comstock, includes accelerated vesting of certain awards pursuant to their respective separation and retirement agreements. Receipt of a portion of these awards for Mr. Immelt ($6,834,153) is subject to a six-month delay under applicable U.S. federal income tax rules.

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