DEF 14A 1 ge3496121-def14a.htm DEFINITIVE PROXY STATEMENT

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

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Definitive Proxy Statement
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General Electric Company

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Table of Contents


Table of Contents

Guide to GE’s Proxy Statement

      Significant Information in this Section
3 PROXY OVERVIEW            
12 GOVERNANCE
12  Election of Directors  19 Board Leadership 25 Overboarding
16 Board Composition 25 Board Meeting Attendance 25 Political Spending Oversight
19 Board Leadership Structure 12 Director Biographies 26 Related Person Transactions
20 Board Operations 18 Director Independence 23 Risk Oversight
22 Board Governance Practices 16 Director Qualifications 27 Share Ownership for
23 Key Board Responsibilities 16 Director Term Limits Executives & Directors
24 How We Get Feedback from Investors 24 Investor Outreach  
25 Other Governance Policies & Practices  
26 Stock Ownership Information
28 Environment, Social and Governance (ESG)
30 COMPENSATION
30  Management Proposal No. 1 —  Advisory Approval of
Our Named Executives’ Pay
53 CEO Pay Ratio 51 Pay For Performance
35 CEO Performance Evaluation 51 Peer Group Comparisons
30 Overview of Our Executive Compensation Program 51 Compensation Consultants 52 Pledging Policy
32 How Our Incentive Compensation Plans Paid Out for 2018 49 Death Benefits 48 Severance Benefits
35 Compensation Actions for 2018 52 Dividend Equivalents Policy 51 Share Ownership Requirements
38 Summary Compensation 52 Hedging Policy 51 Succession Planning
40 Long-Term Incentive Compensation 40 Long-Term Performance
Award Program
44 Deferred Compensation
45 Pension Benefits
47 Potential Termination Payments
51 Other Executive Compensation Practices & Policies
52 Explanation of Non-GAAP Financial Measures and
Performance Metrics
53 CEO Pay Ratio
54 Director Compensation
56 REDUCTION OF MINIMUM NUMBER OF DIRECTORS
56  Management Proposal No. 2 —  Approval of Reduction of
Minimum Number of Directors from Ten to Seven
57 AUDIT
57  Management Proposal No. 3 —  Ratification of KPMG as
Independent Auditor for 2019
58 Auditor Fees
58 Auditor Tenure
57 Independent Auditor Engagement
58 Independent Auditor Information
59 Audit Committee Report
60 SHAREOWNER PROPOSALS
60  Shareowner Proposal No. 1 —  Independent Chairman 63 Deadlines for 2020
62  Shareowner Proposal No. 2 —  Cumulative Voting 63 Proxy Access
63 Submitting 2020 Proposals
64 VOTING AND MEETING INFORMATION
64 Proxy Solicitation & Document Request Information
64 Voting Information
66 Attending the Meeting Also see “Acronyms Used” on page 67 for a guide to the acronyms used throughout this proxy statement.
67 Helpful Resources

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 20, 2019) in connection with GE’s solicitation of proxies for our 2019 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, and be sure not to miss the important supplemental information posted on our proxy website.

www.ge.com/proxy
www.ge.com/annualreport


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

2     GE 2019 Proxy Statement


Table of Contents

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.

Dear Shareowners,

It is a privilege to serve as your lead director during this important time for GE. I want to share with you some of the major governance actions that the Board has taken in the last year.

CEO SUCCESSION

Choosing the right leadership for GE is the Board’s most important responsibility. We made a CEO change in September 2018 to improve the speed and execution of our strategic plan, to strengthen the balance sheet and improve performance. This was a Board-driven process and the company faced a unique situation, particularly since there had just been a CEO transition in 2017.

In Larry Culp, we had a highly experienced and accomplished CEO who had already been an engaged member of the Board since April 2018. His prior track record as CEO at Danaher, with deep operational focus and a rigorous approach to capital allocation, speaks for itself. We discussed several alternatives leading to the CEO transition, but Larry was clearly and unanimously viewed as the best choice. Larry already had a clear understanding of the company’s strategy and where it should be headed, and we were confident he would hit the ground running on day one.

Larry understands the challenges GE faces. He also knows that despite his excellent track record, he needs to prove himself everyday—to us, our shareowners and our employees.

GE’S STRATEGY

The Board was highly engaged in the review that culminated in the announcement of GE’s new strategic plan in June 2018. The Board continues to believe that empowering the businesses, reducing the emphasis on Corporate and focusing on a narrower set of businesses is the right path for the

       

company and its shareowners. While this plan entails a significant amount of transition, particularly for GE’s employees, we believe it is key to unlocking value for shareowners and laying the foundation for a stronger GE going forward.

A central pillar of this plan is reducing the company’s outstanding debt, and this continues to be an area of focus for the Board. We recently completed the merger of GE’s Transportation business with Wabtec, we’re exiting our interest in Baker Hughes, a GE company, and we recently announced an agreement to sell GE’s BioPharma business to Danaher for $21 billion. These are important milestones. We are also engaged in improving the company’s performance, particularly in Power, and on simplifying the company across multiple dimensions.

COMPENSATION AND TALENT

Last year the Board made several changes to GE’s compensation plans with the objective of driving better performance, rewarding and retaining top talent, and better aligning incentives for executives with shareowners. For 2018, the bonus pool was redesigned to make payouts for business executives based on business unit performance, rather than overall company results. This was reflected in the bonuses paid to our Aviation and Healthcare teams, who exceeded expectations this past year. Smaller or no bonuses were paid to businesses that fell short of expectations. We have also shifted pay for our top executives to be increasingly weighted towards equity, rather than cash, to drive alignment with shareowners.

As GE works through a period of significant transition, we recognize the importance of ensuring that management has the right mix of new, outside views and experienced leaders who know the company well. In the last year, in addition to Larry, GE brought in a

 

   

   

new general counsel, controller, and head of investor relations from outside the company, as well as several outside hires within the businesses. In February, GE also brought in a new head of human resources, who we expect to help reenergize our focus on talent and human capital management.

BOARD DEVELOPMENTS

In 2018, GE significantly reduced the size of its Board to twelve directors—a size we expect to target going forward. In addition to three new directors last year (including Larry and me), there are two new nominees on our slate of ten directors this year—Paula Rosput Reynolds and Cathie Lesjak. Paula has executive experience in the power and insurance industries, while Cathie brings strong experience in finance, accounting and operations from her career in the technology industry. Our two longest tenured directors, Jim Mulva and Geoff Beattie, are retiring from the GE board this year. We will continue to look for new directors who have relevant domain expertise and skill sets that tie to GE’s long-term strategy.

The Board has also taken action based on investor feedback on several important issues. We announced in December that we would open up the tender for the company’s independent auditor. We implemented a new approach to risk focused on the most critical strategic risks facing the company. And we have brought in new advisors to provide the Board with fresh perspectives on important strategic, financial and legal issues.

My fellow directors and I remain committed to continuing the progress we’ve made toward creating a stronger, simpler, more focused company, for you and all of GE’s stakeholders. Thank you for your support.

Thomas W. Horton
Lead Director

GE 2019 Proxy Statement      3


Table of Contents

Annual Meeting










LOGISTICS

DATE AND TIME:
May 8, 2019 at 10:00 a.m. Eastern Time

WEBCAST:
www.ge.com/investor-relations

LOCATION:
Westchester Marriott
670 White Plains Rd.
Tarrytown, NY 10591

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 66 or on our proxy website
 
Check out our annual report

www.ge.com/annualreport






















HOW YOU CAN VOTE

Do you hold shares directly with GE or in the Retirement Savings Plan (RSP)?












Use the Internet at
www.proxypush.com/GE
 
Call toll-free (US/Canada)
1-866-883-3382
 
Mail your signed proxy form
   
Do you hold shares through a bank or broker?
 
Use the Internet at
www.proxyvote.com
 
Call toll-free (US/Canada)
1-800-454-VOTE (8683)
 
Mail your signed voting instruction form









You are invited to attend GE’s 2019 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 at the website below.

Cordially,
Mike Holston, Secretary

   



















AGENDA
 
Board Recommendation Read More
1 Elect the 10 directors named in the proxy for the coming year FOR each director nominee Page 12
 
2 Approve our named executives’ compensation in an advisory vote FOR Page 30
 
3 Amend the Certificate of Incorporation to reduce the a minimum number of directors for our Board from ten to seven FOR Page 56
 
4 Ratification of the selection of KPMG as independent auditor for 2019 FOR Page 57
 
5 Vote on shareowner proposals included in the proxy, if properly presented at the meeting AGAINST each proposal Page 60










Shareowners also will transact any other business that properly comes before the meeting
    VOTING Q&A
 
Who can vote?
Shareowners as of our record date, March 11, 2019

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?
Generally majority of votes cast, with abstentions & broker non-votes generally not being counted & having no effect; for the management proposal to amend the Certificate of Incorporation, majority of shares outstanding, with abstentions & broker non-votes having the same effect as a vote AGAINST

Where can I find out more information?
See “Voting and Meeting Information” on page 64


4     GE 2019 Proxy Statement


Table of Contents

Board Composition & Refreshment

Your vote is needed on Director Elections:
Election of the 10 nominees named in the proxy for the coming year
YOUR BOARD RECOMMENDS
A VOTE FOR EACH NOMINEE

Board Balance

SIGNIFICANT BOARD REFRESHMENT SINCE 2017 ANNUAL MEETING

   
Annual Board
Evaluation
+ Retirement Age + Term Limits    
Joining the Board Since the
2017 Annual Meeting

2017:
Flannery, Garden
2018: Culp, Horton, Seidman, Reynolds
2019: Lesjak
______________
7 new directors over last 2 years
15 retired directors
______________
Retiring from Board
2017: Immelt, Lane, McAdam
2018: Dekkers, Henry, Hockfield, Jung,
Lazarus, Mollenkopf, Rohr, Schapiro,
Flannery, Brennan
2019: Beattie, Mulva
Board Effectiveness

BOARD SIZE

Significantly reduced size in 2018 to enhance dialogue and promote accountability

Board Accountability
Annual director elections with majority voting standard
Proxy access on market terms at 3%, 3 years, 20% of Board, up to 20 shareowners can aggregate

 

TENURE
 
2.5 years average tenure
 
Newer (<3 years): 7
Medium-tenured (3-6 years): 1
Experienced (>6 years): 2
 
Our Board term limit is 15 years
 
INDEPENDENCE
   
Our Board is 90% independent
 
Independent: 9
Not Independent: 1
   
All director nominees except our CEO are independent, and meet heightened independence standards for our audit, compensation and governance committees

  

AGE
 
Median age is 57
 
<60 years: 6
60-70 years: 4
>70 years: 0
 
   
Our Board age limit is 75 years
 
 

DIVERSITY OF GENDER
AND BACKGROUND
   
Our policy is to build a cognitively diverse board representing a range of backgrounds
 
Female: 4 (40%)
Ethnically diverse: 2 (20%)
Born outside U.S.: 3 (30%)
   
The Board is committed to building upon its diversity in connection with future refreshment opportunities and to interviewing female and ethnically diverse candidates for all vacancies






      BOARD SKILLS AND EXPERIENCE
 
Our policy is to create an experienced board with expertise in areas relevant to GE
50%
INVESTOR
  
80%
INDUSTRY & OPERATIONS
80%
RISK MANAGEMENT
     
30%
TECHNOLOGY
20%
GOVERNMENT & REGULATORY
     
90%
FINANCE & ACCOUNTING
70%
GLOBAL

GE 2019 Proxy Statement     5


Table of Contents

Board Nominees

The Board recommends a vote for the 10 director nominees set forth below. The committee memberships indicate the composition of the committees of the Board as of the date of this proxy (other than retiring directors). For information on anticipated committee composition following the annual meeting, see “Board Committees” on page 21.

The Board is nominating two new directors on the 2019 slate: Catherine Lesjak and Paula Rosput Reynolds. Ms. Lesjak recently retired as the longtime CFO for technology leader HP, and she also has director experience in the renewable energy industry. Ms. Reynolds has executive experience in the power and insurance industries, and has served as a director in the aviation, oil and gas and several other industries.

Primary Qualifications and Attributes  
      Director
since
Other Public Company
Boards
GE Committees
Name & Primary Occupation Age A C F G
Sébastien Bazin
Chair & CEO,
AccorHotels
57 2016 AccorHotels,
Huazhu Group
H. Lawrence Culp, Jr.
Chair & CEO, General Electric
55 2018
Francisco D’Souza
CEO* and Vice Chairman,
Cognizant Technology Solutions
50 2013 Cognizant
Edward Garden
Chief Investment Officer
& Co-Founder, Trian
Fund Management
57 2017 Bank of New York Mellon
Thomas Horton
Senior Advisor, Warburg Pincus
& Former Chairman & CEO,
American Airlines
57 2018 Qualcomm, Walmart ⦿
Risa Lavizzo-Mourey
Professor, University of
Pennsylvania & Former
President & CEO, Robert
Wood Johnson Foundation
64 2017 Hess, Intel ⦿
Catherine Lesjak
Former CFO, HP
60 2019
NEW
SunPower
Paula Rosput Reynolds
CEO, PreferWest
62 2018
NEW
BAE Systems, BP,
CBRE Group and
TransCanada Pipelines
Leslie Seidman
Former Chair,
Financial Accounting
Standards Board
56 2018 Moody’s
James Tisch
President & CEO, Loews
66 2010 Loews and its
consolidated subsidiaries
INDEPENDENCE ATTENDANCE QUALIFICATIONS AND ATTRIBUTES A Audit Committee
All director nominees other than the CEO are independent
*    Mr. D’Souza will be stepping down as the CEO of Cognizant in April 2019, but will remain on its board as Vice Chairman.
All director nominees attended at least 75% of the meetings of the Board and committees on which they served in 2018 Industry & Operations Risk Management C Compensation Committee
Finance & Accounting Government & Regulatory F Finance Committee
Investor Global G Governance Committee
Technology Diversity Member
⦿ Chair
Financial Expert & Member

6     GE 2019 Proxy Statement


Table of Contents

Board & Committees

CHANGES TO OUR BOARD

Appointed a new Chairman and CEO, Larry Culp, in September 2018, upon the resignation of John Flannery from the Board. Mr. Culp had previously been appointed as lead director in June 2018, and was succeeded by Tom Horton in the role.

Added four new directors during the year: Larry Culp, Tom Horton, Paula Rosput Reynolds and Leslie Seidman. Added Cathie Lesjak as a new director in March 2019.

Reduced number of regularly scheduled Board meetings beginning in 2019 from 8 to 6 times per year to permit senior leadership to focus on management, while still holding regular Board calls every few weeks.


Full Board

Board Rhythm

Chair
Larry Culp
Lead Director
Tom Horton
6/year
Regular meetings

2+/year
Business visits for each director
1/year
Strategy session

1+/year
Governance & investor feedback reviews
1/year
Board self-evaluation

Calls
Regularly scheduled between meetings
2018 MEETINGS
15, including 4 meetings of the independent directors

Recent Focus Areas

 

Leadership transitions, particularly for the CEO
GE Capital and Insurance
Reviewing GE’s portfolio and future strategy
Sale of BioPharma business
Capital structure and liquidity, particularly reducing leverage and de-risking the balance sheet
Separation of Transportation, Baker Hughes, a GE company (BHGE), Healthcare and other business units
Business performance reviews, particularly in Power
Cybersecurity

Committees Prior to the Annual Meeting

Below is an overview of our committees as of the date of this proxy and their key oversight and focus areas. Mr. Beattie and Mr. Mulva, who are our two longest tenured directors, will be retiring from the Board at the time of the annual meeting. We anticipate that Ms. Seidman will Chair the Audit Committee after the annual meeting and that Ms. Lesjak will join the committee at its next meeting. The Board has decided to dissolve the Finance and Capital Allocation Committee at the time of the annual meeting and to reallocate its responsibilities to the full Board and Audit Committee. For more information, see “Board Committees” on page 21.

Audit

Finance & Capital Allocation

Chair: Geoff Beattie
Members: Jim Mulva,
Paula Rosput Reynolds &
Leslie Seidman

Oversight and Focus Areas

Financial reporting
Independent auditor
Goodwill recoverability
Insurance
Internal audit
Accounting policies
Compliance
Significant litigation and investigations
Chair: Jim Mulva
Members: Sébastien Bazin,
Ed Garden, Leslie Seidman &
Jim Tisch

Oversight and Focus Areas

Capital allocation
Financial risk
Investments and uses of cash
Portfolio assessment & M&A activity
GE Capital portfolio & risk

Governance &
Public Affairs

Management Development
& Compensation

Chair: Risa Lavizzo-Mourey
Members: Sébastien Bazin,
Frank D’Souza, Tom Horton &
Jim Tisch

Oversight and Focus Areas

Director recruitment
GE leadership structure
Board governance processes
Climate change-related risk
Political & lobbying strategy
Environmental, social & governance issues (including human rights & supply chain practices)
Chair: Tom Horton
Members: Geoff Beattie,
Frank D’Souza, Ed Garden &
Risa Lavizzo-Mourey

Oversight and Focus Areas

CEO and management succession
Talent recruitment and retention
CEO and senior executive performance evaluations & compensation
Incentive compensation programs

GE 2019 Proxy Statement     7


Table of Contents

Compensation

Your vote is needed on Management Proposal #1:
Advisory approval of our named executives’ compensation for 2018

YOUR BOARD RECOMMENDS
A VOTE FOR THIS PROPOSAL

EXECUTIVE COMPENSATION HAS EVOLVED TO PROVIDE A CLOSER CONNECTION BETWEEN PAY, PERFORMANCE AND ACCOUNTABILITY

A greater percentage of our leadership team’s compensation is paid in equity, rather than cash, compared to prior years.

We have reduced the number of goals in our compensation programs to focus our executives on our top priorities. Our annual bonuses focus on two goals — an earnings metric and a cash metric. Our 3-year PSUs granted in 2018 focused on relative TSR, due to the ongoing portfolio changes.

Our bonus program is focused on business performance. Bonuses are funded for each business (e.g., Power, Aviation) based solely on the business’s performance, rather than being based on company performance. Corporate bonus performance metrics continue to be based on company-wide results.


Compensation Profile
2018 COMPENSATION FRAMEWORK: PRIMARY ELEMENTS
  Salary Bonus PSUs Options RSUs LTPAs
Who receives All named executives               All named executives
except CEO
LTPA program
terminated in
2018


No payout
for final
performance
period
(2016-2018)
When granted Reviewed every
24 months
Annually in February or
March for prior year
Generally annually in the first quarter of each year
Form of delivery Cash Equity
Type of
performance
Short-term emphasis Long-term emphasis
Performance
period
Ongoing 1 year 3 years + 1 year additional holding period Generally 3-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
EPS and Free Cash Flow (Corporate execs)
Earnings and Free Cash Flow (Business execs)
GE TSR v. S&P 500 Stock price appreciation
What is
incentivized
Attract and
retain top talent
Deliver on annual
investor framework
Outperform peers Increase
stock price
Balance against
excessive risk taking
     
                                                                                          

Compensation
Changes
Implemented
in 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 the 2016-2018 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

8     GE 2019 Proxy Statement


Table of Contents

2018 Performance Award Results

2018 ANNUAL BONUSES (CASH)


2016 PERFORMANCE SHARE UNITS (EQUITY)


2016-2018 LONG-TERM PERFORMANCE AWARDS (CASH)


See “How Our Incentive Compensation Plans Paid Out for 2018” on page 32 for more information on how these plans work. Metrics denoted with a * are non-GAAP financial measures. For information on how we calculate the performance metrics, see “Explanation of Non-GAAP Financial Measures and Performance Metrics” on page 52.

**

The company no longer reports Industrial Operating + Verticals EPS.

GE 2019 Proxy Statement     9


Table of Contents

Compensation Decisions

2018 COMPENSATION FOR NEOs       2018 NEW CEO COMPENSATION
New hire equity PSU grant for Mr. Culp completely performance based (see right)
New hire equity grants and hiring bonus for Mr. Holston
Other than new hires and promotions, salary increases limited to 24-month cyclical increases
Bonus at target for partial-year service for Mr. Culp, based upon Compensation Committee discretion
Bonuses for Ms. Miller below target (80%) and Mr. Holston at full year target, based upon Compensation Committee discretion
No bonus for former CEO Flannery based on performance metrics
Bonus paid above target for Mr. Joyce and Mr. Murphy based on exceeding performance goals for the Aviation and Healthcare businesses, respectively
2016 PSUs cancelled due to failure to meet performance goals
2016-2018 LTPAs cancelled due to failure to meet performance goals
  Base Salary
 $2.5 million, effective upon his employment ($625,000 paid in 2018)
Salary based on prior CEO experience, track record in company transformation; inducement out of retirement
Annual Bonus
 $3.75 million annual target ($937,500 paid for 2018, at 100%)
Target bonus 150% of salary; consistent with prior CEO bonus targets
Inducement PSUs
 $13.7 million grant date fair value
Based on stock price appreciation over 4-year period
Equity inducement award reflects greater emphasis on equity for CEO role and reward for improving stock price
PSUs equal to a number of GE shares ranging from 2.5 million to 7.5 million shares, based on GE stock price appreciation
Performance period of October 1, 2018 to September 30, 2022
No payout for stock price appreciation less than 50%
Beginning in 2019, equity award will consist of $15 million in PSUs

2018 SUMMARY COMPENSATION

Name &
Principal Position
     Year       Salary       Bonus       PSUs &
RSUs
     Stock
Options
      LTPAs       Pension &
Deferred
Comp.
      All Other
Comp.
      SEC Total
Larry Culp* 2018 $ 625,000 $ 937,500 $ 13,740,000 N/A $ 0 $ 86,662 $ 9,665 $ 15,398,827
Chairman & CEO
Jamie Miller* 2018 $ 1,450,000 $ 1,160,000 $ 4,334,060 N/A $ 0 $ 0 $ 457,618 $ 7,401,678
SVP & CFO 2017 $ 1,335,417 $ 0 $ 1,810,930 $ 519,000 $ 0 $ 1,154,778 $ 237,736 $ 5,057,861
John Flannery* 2018 $ 1,500,000 $ 0 $ 13,800,104 ** N/A $ 0 $ 62,127 $ 1,281,059 $ 16,643,290
Former Chairman & CEO 2017 $ 1,737,500 $ 0 N/A $ 2,076,000 $ 0 $ 3,255,222 $ 1,931,881 $ 9,000,603
Michael Holston* 2018 $ 1,095,000 $ 3,000,000 $ 6,731,334 $ 2,400,000 $ 0 $ 224,393 $ 64,989 $ 13,515,716
SVP & General Counsel
David Joyce 2018 $ 1,550,000 $ 2,415,000 $ 3,382,585 N/A $ 0 $ 0 $ 175,146 $ 7,522,731
Vice Chair & 2017 $ 1,450,000 $ 1,385,000 $ 695,240 $ 692,000 $ 0 $ 673,996 $ 264,930 $ 5,161,166
CEO Aviation 2016 $ 1,333,333 $ 1,524,000 $ 6,212,431 $ 750,000 $ 0 $ 2,523,853 $ 239,240 $ 12,582,857
Kieran Murphy* 2018 $ 1,135,814 $ 1,703,721 $ 2,608,677 $ 1,670,000       $ 0 $ 118,580 $ 53,373 $ 7,290,165
SVP & CEO Healthcare
* Under applicable SEC rules, we have excluded Mr. Murphy’s compensation for 2016 and 2017 and Ms. Miller and Mr. Flannery’s compensation for 2016 as they were not named executives during those years. Mr. Culp and Mr. Holston were first employed by the company in 2018.
** For Mr. Flannery, PSU amounts include $11.5 million attributable to the grant date fair value of his 2018 PSU awards, most of which were cancelled upon his separation. The value of the PSU awards for which he remained eligible, as of the date of his separation agreement, was $2.3 million.
For Mr. Murphy, all cash amounts (including salary and bonus) were originally paid in British pounds and converted for purposes of this presentation at an exchange rate of $1.3363 per £1.00, the 2018 average noon buying rate certified for custom purposes by the U.S. Federal Reserve Bank of New York set forth in the H.10 statistical release of the Federal Reserve Board.

Reduce Minimum Number of Directors

Your vote is needed on Management Proposal #2:
Approve an amendment to the company’s Certificate of Incorporation to reduce the minimum required number of directors for our Board from ten to seven.

YOUR BOARD RECOMMENDS
A VOTE FOR THIS PROPOSAL

REDUCING THE MINIMUM REQUIRED NUMBER OF DIRECTORS UNDER GE’S CERTIFICATE OF
INCORPORATION FROM TEN TO SEVEN DIRECTORS

Consistent with the Board’s decision in 2017 to reduce the size of the Board to a lower number of directors, the Board recommends also amending the Certificate of Incorporation to reflect this objective
The Board expects to continue to target a size of approximately 12 directors
Lowering the minimum required number of directors to seven will assure that the Board continues to have a sufficient number of directors to provide strategic oversight, while ensuring that the company remains in compliance with its Certificate of Incorporation, particularly during times of transition

10   GE 2019 Proxy Statement


Table of Contents

Audit

Your vote is needed on Management Proposal #3:
Ratification of our selection of KPMG as independent auditor for 2019.

See “Audit” on page 57 for more information.

YOUR BOARD RECOMMENDS
A VOTE FOR THIS PROPOSAL

AUDIT COMMITTEE RESPONSE TO 2018 RATIFICATION VOTE
Actions the Audit Committee has overseen and directed since the 2018 ratification vote have included:
1 PRIORITIZING DISCUSSION OF ALTERNATIVES AT COMMITTEE MEETINGS. The Audit Committee considered a variety of potential actions, including an audit tender process, audit partner rotations and an audit firm rotation, at meetings throughout the past year.
2 ENGAGING WITH GE SHAREOWNER BASE. Shareowners expressed a full range of views about the continued engagement of KPMG as our independent auditor, which the Audit Committee has considered. Our lead director also participated directly in two of the meetings.
3 ADOPTING NEW PROCEDURES TO SUPPORT READINESS FOR POTENTIAL AUDITOR ROTATION. The procedures require pre-approval for certain types of non-audit engagements with audit firms (other than KPMG) that would need to establish independence to serve as GE’s independent auditor in the future.
4 BALANCING POTENTIAL BENEFITS OF AUDITOR ROTATION WITH TIMING CONSIDERATIONS. The Audit Committee believes that there are significant benefits in terms of audit quality, the efficient use of resources and our timely execution of planned portfolio actions from retaining an audit firm that knows the company well during this time of transition.
5 PLANNING TO MOVE FORWARD WITH AUDIT TENDER PROCESS. The Audit Committee is preparing for a formal tender process following completion of the 2019 audit. The ultimate timing will be based on progress toward completing portfolio actions and circumstances at the time.

IN ENGAGING KPMG FOR 2019, WE ALSO CONSIDERED:

KPMG PERFORMANCE, AUDIT QUALITY, RISKS AND FEES:       KPMG’S INDEPENDENCE, INCLUDING THE FOLLOWING CONTROLS:
KPMG’s performance on GE audit, including results of internal, worldwide survey
KPMG’s capability & expertise in handling the breadth and complexity of our worldwide operations
External data on audit quality & performance, including the number of audit restatements compared to other Big 4 firms
KPMG’s known legal and regulatory risks, including an interview with KPMG’s chairman and discussion of current PCAOB oversight matters
Appropriateness of KPMG’s fees on an absolute basis and relative to peer firms
Thorough Audit Committee oversight … regular private meetings with KPMG, committee evaluation of lead audit partner performance
Rigorous limits on non-audit services … Audit Committee pre-approval required, certain types of services prohibited
Strong internal KPMG independence processes … internal quality reviews, large number of KPMG partners (~400)
Robust regulatory framework … KPMG subject to PCAOB inspections, Big 4 peer reviews and PCAOB/SEC oversight

KPMG FEES
(in millions)     Audit(1)     Audit-related(2)     Tax(3)     All Other     Total
2018 $92.2 $40.3 $0.8 $0.0 $133.3
2017 $95.8 $45.4 $1.7 $0.0 $142.9
(1)  Audit and review of financial statements for GE and BHGE 10-Ks/10-Qs, internal control over financial reporting audit, statutory audits; year-over-year decrease primarily driven by lower expense in 2018 associated with carve-out audits, although carve-out audit expenses remained high in 2018 relative to historical baseline.
(2)  Assurance services, M&A due diligence and audit services; year-over-year decrease primarily driven by lower costs for carve-out audits in 2018, which included GE Healthcare ($16.0 million) and GE Transportation ($8.6 million), compared to the costs for carve-out audits in 2017, which included GE Oil & Gas ($30.0 million), the Water business ($4.3 million), and Industrial Solutions ($8.1 million).
(3)  Tax compliance and tax advice/planning.
FEES INCLUDE:
Two public company audits (GE and BHGE)
Significant expense for carve-out audits driven by portfolio actions, including audits for GE Healthcare, GE Transportation and other businesses
1,400+
statutory
audits globally
~400
partners

2019 Shareowner Proposals

Your vote is needed on two proposals

YOUR BOARD RECOMMENDS A VOTE AGAINST THESE PROPOSALS

See page 60 for further information

GE 2019 Proxy Statement   11


Table of Contents

Governance

Election of Directors

What are you voting on?

At the 2019 annual meeting, ten directors are to be elected to hold office until the 2020 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 2018 annual meeting except for Paula Rosput Reynolds, who was appointed to the Board in December 2018, and Catherine Lesjak, who was appointed to the Board in March 2019.

YOUR BOARD RECOMMENDS A VOTE FOR EACH NOMINEE


Sébastien Bazin H. Lawrence Culp, Jr.

DIRECTOR SINCE: 2016
AGE: 57
BIRTHPLACE: FRANCE
INDEPENDENT

DIRECTOR SINCE: 2018
AGE: 55
BIRTHPLACE: UNITED STATES

Qualifications
Acquired
Qualifications
Acquired
Chairman and CEO, AccorHotels, a global hotel company, Paris, France (since 2013) Chairman and CEO, General Electric, Boston, MA (since September 2018)
PRIOR BUSINESS EXPERIENCE
CEO, Europe Colony Capital, a private investment firm (1997–2013)
Group Managing Director, CEO and General Manager, Immobilière Hôtelière (1992–1997)
Began career in 1985 in U.S. finance sector, becoming Vice President, M&A, PaineWebber
CURRENT PUBLIC COMPANY BOARDS
General Electric
AccorHotels
Huazhu Group (formerly known as 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
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 25 for more information.
PRIOR BUSINESS EXPERIENCE
Senior Advisor, Bain Capital Private Equity, a global private equity firm (2017-2018)
Senior Lecturer, Harvard Business School (2015-2018)
Senior Advisor, Danaher, designer, manufacturer and marketer of industrial and consumer products (2014–2016)
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
CURRENT PUBLIC COMPANY BOARDS
General Electric
PAST PUBLIC COMPANY BOARDS
GlaxoSmithKline
Danaher
T. Rowe Price Group
OTHER POSITIONS
Member and former Chairman, Board of Visitors & Governors, Washington College
Member, Board of Trustees, Wake Forest University
EDUCATION
Washington College
MBA, Harvard

12   GE 2019 Proxy Statement


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Francisco D’Souza Edward P. Garden Thomas W. Horton

DIRECTOR SINCE: 2013
AGE: 50
BIRTHPLACE: KENYA
INDEPENDENT

DIRECTOR SINCE: 2017
AGE: 57
BIRTHPLACE: UNITED STATES
INDEPENDENT

DIRECTOR SINCE: 2018
AGE: 57
BIRTHPLACE: UNITED STATES
INDEPENDENT

Qualifications
Acquired

Qualifications
Acquired

Qualifications
Acquired

CEO and Vice Chairman, Cognizant Technology Solutions Corporation, a multinational IT company, Teaneck, NJ (since 2007, retiring as CEO in April 2019)

Chief Investment Officer and Founding Partner, Trian Fund Management, L.P., an investment management firm, New York, NY (since 2005)

Senior Advisor, Industrials and Business Services Group, Warburg Pincus LLC, a private equity firm focused on growth investing, New York, NY (since 2015)

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
Chairman, IT and Electronics Governors community, World Economic Forum
Board Co-Chair, New York Hall of Science
Trustee, Carnegie Mellon University
International Advisory Panel Member, Banco Santander
EDUCATION
University of Macau
MBA, Carnegie Mellon University
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)
Managing Director, Credit Suisse First Boston (1999–2003)
Managing Director, BT Alex Brown (1994–1999)
CURRENT PUBLIC COMPANY BOARDS
General Electric
The Bank of New York Mellon (Chairman of Human Resources and Compensation Committee)
PAST PUBLIC COMPANY BOARDS
The Wendy’s Company
Family Dollar Stores
Pentair, an industrial manufacturing company
EDUCATION
Harvard College
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)
Chairman and CEO, American Airlines (2011–2014)
Chairman and CEO, AMR (parent company of American Airlines) (2010–2013)
EVP and CFO, AMR (2006–2010)
Vice Chairman and CFO, AT&T (2002–2006)
SVP and CFO, AMR (2000–2002); joined AMR in 1985, serving in various finance and management roles
CURRENT PUBLIC COMPANY BOARDS
General Electric
Qualcomm
Walmart (lead director)
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

GE 2019 Proxy Statement   13


Table of Contents

Risa Lavizzo-Mourey Catherine Lesjak Paula Rosput Reynolds

DIRECTOR SINCE: 2017
AGE: 64
BIRTHPLACE: UNITED STATES
INDEPENDENT

DIRECTOR SINCE: 2019
AGE: 60
BIRTHPLACE: CANADA
INDEPENDENT

DIRECTOR SINCE: 2018
AGE: 62
BIRTHPLACE: UNITED STATES
INDEPENDENT

Qualifications
Acquired

Qualifications
Acquired

Qualifications
Acquired

Professor, University of Pennsylvania, Philadelphia, PA (since 2018) and Former President and CEO, Robert Wood Johnson Foundation, Princeton, NJ (2003–2017)

Former Chief Financial Officer, HP, a global technology company, and its predecessor, Hewlett-Packard, Palo Alto, CA (2007-2018)

President and CEO, PreferWest LLC, a business advisory firm, Seattle, WA (since 2009)

PRIOR BUSINESS EXPERIENCE
SVP, Robert Wood Johnson Foundation, largest U.S. philanthropic organization dedicated to healthcare (2001–2003)
PRIOR ACADEMIC EXPERIENCE
Sylvan Eisman Professor of Medicine and Health Care Systems (1995–2001), Director, Institute on Aging (1994–2002), Chief of Geriatric Medicine (1986–1992), University of Pennsylvania Medical School
PRIOR GOVERNMENT EXPERIENCE
Advisory Committee Member, President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry (1997–1998)
Deputy Administrator, Agency for Health Care Research and Quality (1992–1994)
Co-Chair, White House Health Care Reform Task Force, Working Group on Quality of Care (1993–1994)
Advisory Committee Member, Task Force on Aging Research (1985–1992)
Advisory Committee Member, National Committee for Vital and Health Statistics (1988–1992)
CURRENT PUBLIC COMPANY BOARDS
General Electric
Hess, a global, independent energy company
Intel, a semiconductor manufacturing company
PAST PUBLIC COMPANY BOARDS
Genworth Financial
Beckman Coulter
OTHER POSITIONS
Trustee, Smithsonian Institution Board of Regents
Board of Fellows, Harvard Medical School
Member, National Academy of Medicine
EDUCATION
U. of Washington & SUNY Stony Brook
MD, Harvard Medical School
MBA, University of Pennsylvania
PRIOR BUSINESS EXPERIENCE
Interim Chief Operating Officer, HP (2018-2019)
Interim CEO, Hewlett Packard (2010)
Senior Vice President and Treasurer, HP (2003-2007)
Previously served in various leadership positions within the financial organization at HP and Hewlett Packard, including as Global Controller, Software Solutions; Controller and Credit Manager for Commercial Customers; and as Manager, Financial Operations, Enterprise Marketing and Solutions (joined Hewlett Packard in 1986)
CURRENT PUBLIC COMPANY BOARDS
General Electric
SunPower, a vertically integrated solar power company
OTHER POSITIONS
Board, Haas School of Business, University of California, Berkeley
Board of Advisors, Resource Area for Teaching (RAFT), a teaching non-profit
EDUCATION
Stanford University
MBA, University of California, Berkeley
PRIOR BUSINESS EXPERIENCE
Vice Chairman and Chief Restructuring Officer, American International Group (2008-2009)
Chairman, President and CEO, Safeco Insurance Company of America (2005-2008)
Chairman and CEO, AGL Resources (1998-2005)
CEO, Duke Energy Power Services, Duke Energy (1995-1998)
Previously served in various leadership positions at Associated Power Services, Pacific Gas Transmission Co. and Pacific Gas and Electric Company
CURRENT PUBLIC COMPANY BOARDS*
General Electric
CBRE Group, a commercial real estate and investment company
BAE Systems, an aerospace and defense technology company
BP, a global oil and gas company
TransCanada, an energy infrastructure company

PAST PUBLIC COMPANY BOARDS
Air Products & Chemicals
Anadarko Petroleum
Circuit City Stores
Coca-Cola Enterprises
Delta Air Lines
OTHER POSITIONS
Trustee, Seattle Cancer Care Alliance
EDUCATION
Wellesley College
*For discussion of Ms. Reynold’s board commitments following the annual meeting, see “How We Applied to Reynolds” on page 25.

14   GE 2019 Proxy Statement


Table of Contents

Leslie Seidman James Tisch

DIRECTOR SINCE: 2018
AGE: 56
BIRTHPLACE: UNITED STATES
INDEPENDENT

DIRECTOR SINCE: 2010
AGE: 66
BIRTHPLACE: UNITED STATES
INDEPENDENT

Qualifications
Acquired

Qualifications
Acquired

Former Chairman, Financial Accounting Standards Board (FASB), independent organization responsible for financial accounting and reporting standards, Norwalk, CT (2010–2013)

President and CEO, Loews Corp., a diversified holding company with subsidiaries involved in energy, insurance, packaging and hospitality, New York, NY (since 1998)

PRIOR BUSINESS EXPERIENCE
Board Member, FASB (2003–2013)
Financial reporting consultant (1999–2003)
Staff Member, FASB (1994–1999)
Vice President, Accounting Policy, JP Morgan (1987–1994)
Auditor, Arthur Young (1984–1987)
CURRENT PUBLIC COMPANY BOARDS
General Electric
Moody’s, provider of credit ratings, research and analytical tools (chairman, Audit Committee)
OTHER POSITIONS
Founding Director, Pace University Center for Excellence in Financial Reporting (since 2014)
Board of Governors, Financial Industry Regulatory Authority (FINRA), financial services industry regulator
Advisor, Idaciti, developer of financial reporting and analysis software
Certified Public Accountant (Inactive)
EDUCATION
Colgate University
MS (Accounting), New York University
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*
OTHER POSITIONS
Director, Mount Sinai Medical Center, a leading U.S. hospital
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
*     Directorships held in his capacity as President and CEO of Loews. See “Limits on Director Service on Other Public Boards” on page 25 for more information.

Our director nominees’ primary experiences, qualifications and attributes are highlighted in the following matrix. The matrix is intended as a high-level summary and not an exhaustive list of each director’s skills or contributions to the Board.

Bazin Culp D’Souza Garden Horton Lavizzo-
Mourey
Lesjak Reynolds Seidman Tisch

Industry & Operations Experience

Finance & Accounting Experience

Investor Experience

Technology Experience

Risk Management Experience

Government & Regulatory Experience

Global Experience

Ethnic/Gender Diversity

GE 2019 Proxy Statement   15


Table of Contents

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.

Over the past two years, the Board has undertaken significant refreshment efforts to better align the Board to the company's long-term strategy and to bring new perspectives to the Board. As a result, of the ten nominees proposed for election, seven are new to the Board in the last two years. We expect to continue to target a Board size of approximately 12 directors, and will continue to seek director candidates whose experiences support the company’s future strategy and industry focus.


DIRECTOR RECRUITMENT PROCESS       DIRECTOR “MUST-HAVES”       HOW YOU CAN RECOMMEND A CANDIDATE

CANDIDATE RECOMMENDATIONS

From shareowners, management, directors & search firms

Leadership experience
Highest personal & professional ethics
Integrity & values
A passion for learning
Inquisitive & objective perspective
A sense of priorities & balance
Talent development experience

RECRUITMENT PRIORITIES GOING FORWARD

Industry expertise
Capital allocation expertise
Technology expertise
Cognitive diversity

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

HOW WE REFRESH THE BOARD

Board evaluation. Each year, the Board assesses its effectiveness through a process led by its lead director. See “How We Evaluate the Board’s Effectiveness” on page 22.
Term limits. The Board has a 15-year term limit for independent directors.
Age limits. With limited exceptions, directors may not be renominated to the Board after their 75th birthday.

See the Board’s Governance Principles (see “Helpful Resources” on page 67) for more information on these policies.

GOVERNANCE COMMITTEE

Reviews qualifications & expertise, tenure, regulatory requirements & cognitive diversity
Reviews independence & potential conflicts
Discusses & together with other directors such as the Lead Director, interviews candidates
Recommends nominees to the Board

BOARD OF DIRECTORS

Discusses, analyzes independence & selects nominees

SHAREOWNERS

Vote on nominees at annual meeting


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 high personal integrity and character, diversity of thought and expertise in areas relevant to GE. The committee seeks directors who possess extraordinary leadership qualities and demonstrate a practical understanding of organizations, processes, 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.
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 is committed to using refreshment opportunities to strengthen its cognitive diversity. 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. The committee reviews its effectiveness in balancing these considerations when assessing the composition of the Board.
Complying with regulatory requirements and the Board’s independence guidelines. The 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.

16   GE 2019 Proxy Statement


Table of Contents

BOARD SKILLS AND EXPERIENCE

Industry & Operations Experience
We have sought directors with management and operational experience in the industries in which we compete. For example, in the last two years we have added directors with power, aviation, insurance and healthcare expertise.

     

Global Experience
We seek directors with global business experience because GE’s continued success depends on continuing to grow our businesses outside the U.S. For example, in 2018, 62% of our revenue was attributable to activities outside the United States.

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

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.

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.

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

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 our products become more reliant on digital applications.


DIRECTOR RECRUITMENT PROCESS. Our Governance Committee, together with the full Board is responsible for establishing criteria, screening candidates and evaluating the qualifications of persons who may be considered for service on our Board. The Governance Committee considers all 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 identify potential candidates. Ms. Reynolds was recommended for the Board by a third-party search firm, and Ms. Lesjak was recommended by a member of management.

The following describes the Board’s selection process:

Succession planning: the Governance Committee prioritizes experiences and attributes to support the current and long-term needs of the company, within the context of the current Board structure, diversity, and mix of skills and experience.

Identification of candidates: the Governance Committee engages in a search process to identify qualified director candidates, which process may include the use of an independent search firm, and assesses candidates’ skills, experience and background and their alignment with the company’s portfolio and strategy.

Interviewing candidates: director candidates are typically interviewed by the Chairman and CEO, Governance Committee Chair and other members of the Governance Committee, as well as other members of the Board and management, as necessary.

Decision and Nomination: after determining that the director candidate meets the priorities established by the Governance Committee and will serve in the best interests of the company and its shareowners, the Governance Committee recommends, and the full Board approves director candidates for appointment to the Board and election by shareowners.

Election: the shareowners consider the nominees and elect directors by majority vote to serve one-year terms.

During 2018 and continuing into 2019, the Governance Committee engaged a third-party search firm to identify qualified director candidates. In light of the broader GE portfolio review and Board self-evaluation, the Governance Committee asked the search firm to focus on candidates with relevant industry experience and finance and accounting expertise, with additional focus on female and otherwise diverse candidates.


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 67). As discussed in last year’s proxy statement, following the Board’s self-evaluation and in light of the broader GE portfolio review, assessment of trends with peer companies, and taking into account investor feedback, the Board, upon the recommendation of the committee, reduced its size from 18 to 12 directors for the 2018 proxy slate. We anticipate that we will continue to target a Board size

of approximately 12 directors, though this number may fluctuate from time to time during director transitions and as we continue to assess the company’s strategic priorities. Consistent with this objective, we are also asking shareowners to approve an amendment to our Certificate of Incorporation that would lower the minimum required number of directors on the Board (see “Reduction of Minimum Number of Directors” on page 56).


GE 2019 Proxy Statement   17


Table of Contents

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 12) other than Mr. Culp are independent. Messrs. Beattie and Mulva, who are not standing for reelection, are also independent. Former directors Messrs. Brennan, Dekkers, Henry, Mollenkopf and Rohr and Mses. Hockfield, Jung, Lazarus and Schapiro were independent throughout the period they served on our Board. Mr. Flannery, as our former CEO and chairman, 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 (see “Helpful Resources” on page 67), the Board considers all relevant facts and circumstances when making an independence determination.
Applying the guidelines in 2018. In assessing director independence for 2018, 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 Finance and Capital Allocation Committee (the Finance Committee), are independent and also satisfy applicable committee-specific independence requirements.



RELATIONSHIPS AND TRANSACTIONS CONSIDERED FOR DIRECTOR INDEPENDENCE

GE Transaction & 2018 Magnitude
Director/nominee       Organization       Relationship      

Sales to GE
<1% of other
company’s
revenues or
<$1 million
(whichever
is greater)

     

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
Garden Triland Partners LP Brother is executive & owner N/A N/A
Tisch Loews (and its
consolidated subsidiaries)
President & CEO
All directors Various charitable
organizations
Executive, director or trustee

Charitable contributions from GE
<1% of the organization’s revenues

18   GE 2019 Proxy Statement


Table of Contents

Board Leadership Structure

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 2018, there were eight regularly scheduled Board meetings. Beginning in 2019, we expect that the Board will hold six regularly scheduled in-person meetings per year, with regularly scheduled calls between meetings. A significant portion of the Board’s oversight responsibilities is carried out through its independent committees.

Board Leadership Structure
GE believes that independent board oversight is an essential component of strong corporate performance. We also believe that the decision as to whether the positions of Chairman and CEO should be combined or separated, and whether an executive or an independent director should serve as the Chairman should be based upon the circumstances facing the company. Maintaining flexibility on this policy allows the Board to choose the leadership structure that will best serve the interests of the company and its shareowners at any particular time.

WHY OUR BOARD LEADERSHIP STRUCTURE IS APPROPRIATE FOR GE AT THIS TIME. 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. The Board regularly reviews its leadership structure, and during the company’s recent CEO transition in September 2018, the Board discussed whether to continue to combine or to split the Chairman and CEO roles (as it did leading up to the CEO transition in June 2017). After considering various stakeholder perspectives, the Board determined that appointing Mr. Culp as Chairman and CEO and appointing Mr. Horton as lead director was in the best interests of the company and its shareowners. In the Board’s view, this structure allows Mr. Culp to drive strategy and agenda setting at the Board level, while maintaining responsibility for executing on that strategy as CEO. At the same time, our lead director Mr. Horton works with Mr. Culp to set the agenda for the Board and also exercises additional oversight on behalf of the independent directors. The Board will continue to 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. Tom Horton, former chairman and CEO of American Airlines, was elected as the lead director in September 2018. Under the Board’s Governance Principles, Mr. Horton also serves as chair of the Compensation Committee. In the event of Mr. Horton’s incapacity, the chair of the Governance Committee would serve as the lead director until the independent directors selected a new lead director.

The Lead Director’s Role
The lead director 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

   Chairman of the Board & CEO
Lead Director elected solely by Independent Directors

Lead Director
also serves as: Compensation Committee Chair

The chairs of our Audit, Finance and Governance Committees are also independent
   

CONSIDERATIONS IN SELECTING CURRENT LEAD DIRECTOR

Tom Horton

Mr. Horton was elected to our Board at the 2018 annual meeting. During his tenure on our Board, he has established strong working relationships with his fellow directors and garnered their trust and respect. As a relatively new director, he brings a fresh perspective to the Board. Furthermore, he has demonstrated strong leadership skills, independent thinking and a deep understanding of our businesses and their industries.

The Board’s decision to select Mr. Horton as lead director took into account the tenures and capabilities of each independent director along with a potential candidate’s willingness and ability to serve as lead director, understanding that the position entails significant responsibility and time commitment. The Board considered that Mr. Horton also serves as lead independent director for Walmart. However, the fact that Walmart also has a separate board chairman mitigated concerns about Mr. Horton’s ability to dedicate sufficient time to the role as GE’s lead director.


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Board Operations

Full Board

Chairman
Larry Culp

     

Lead Director
Tom Horton


Members
Bazin         D’Souza         Lavizzo-Mourey         Reynolds
Beattie Garden Lesjak Seidman
Culp Horton Mulva Tisch

15 meetings in 2018
(including 4 independent director meetings)


In 2018 and the first few months of 2019, the Board focused on:

Leadership transitions, particularly for the CEO
Reviewing GE’s portfolio and future company strategy
Capital structure and liquidity, particularly reducing leverage and de-risking the balance sheet
Business performance reviews, particularly in Power
GE Capital and Insurance
Sale of BioPharma business
Separation of Transportation, BHGE and Healthcare
Cybersecurity

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.

7 BUSINESS VISITS IN 2018

UNITED STATES
Additive, Cincinnati, Ohio         Healthcare, Milwaukee, Wisconsin
Aviation, Cincinnati, Ohio Power, Greenville, South Carolina
GE Capital, Norwalk, Connecticut Power, Atlanta, Georgia
 
ASIA
Healthcare, Beijing, China

A Typical GE Board Meeting

During 2018, the Board held 8 regularly scheduled, in-person meetings, with 7 special meetings. Beginning in 2019, we expect the Board to hold 6 in-person meetings per year.

BEFORE THE MEETING
Board committee chairs: prep meetings with management, auditors and outside advisors

Management:
internal prep meetings

THURSDAY (DAY 1)
Daytime: Board committee meetings Evening: Business presentations & dinner (Board interacts directly with senior business managers)
FRIDAY (DAY 2)

Early morning:
independent directors’ breakfast session

Late morning:
full Board meeting (including reports from each committee chair) followed by an executive session

AFTER THE MEETING
Management: follow-up sessions to discuss & respond to Board requests


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Board Committees                    

COMMITTEE COMPOSITION

Listed below are the current members of each committee. We anticipate that after the annual meeting, the Finance Committee will be dissolved and its responsibilities will be reallocated to the Board and Audit Committee. This decision was made in light of the smaller Board size and the desire to involve the entire Board early on in key discussions on capital allocation and strategic priorities.

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

Financial acumen. Mses. Reynolds and Seidman and Messrs. Beattie and Mulva are “audit committee financial experts” (per SEC rules), and each of these directors are “financially literate” (per NYSE rules). After the annual meeting, we expect that Ms. Seidman will become the Audit Committee Chair. We expect that Ms. Lesjak will join the Audit Committee at its next meeting. The Board has determined that Ms. Lesjak is also an “audit committee financial expert” and that she is “financially literate.”

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 below. For more detail, see the Governance Principles and committee charters (see “Helpful Resources” on page 67).


Audit       Finance &
Capital Allocation
   

Chair:
Geoff Beattie

Members
Mulva
Reynolds*
Seidman

12 meetings in 2018

*Ms. Reynolds joined the Audit Committee in February 2019.
     
Key Priorities for 2018
New revenue recognition standard
Goodwill recoverability
Insurance
Long-term service agreement accounting
Financial reporting changes
Oversight of significant litigation and investigations
Key Oversight Responsibilities
Independent auditor engagement
Financial reporting and accounting standards
Internal audit functions
Disclosure and internal controls
Enterprise risk management
Compliance and integrity programs

Chair:
Jim Mulva

Members
Bazin
Garden
Seidman
Tisch

14 meetings in 2018

     
Key Priorities for 2018
Portfolio assessment and M&A activity
GE Capital portfolio and risk
Funding options for Insurance
Investments and uses of cash
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

Management
Development &
Compensation

Chair:
Risa Lavizzo-Mourey

Members
Bazin
D’Souza
Horton
Tisch

9 meetings in 2018

Key Priorities for 2018
Reviewing GE’s leadership structure
Identifying new directors for GE and in connection with portfolio transactions
Board governance processes
Political/lobbying strategy
Environmental, human rights and supply chain practices
Key Oversight Responsibilities
Director recruitment
Board committee structure and membership
Annual Board self-evaluation
Conflict-of-interest reviews
Director compensation
Environmental, social and governance issues
Political spending and lobbying disclosure

Chair:
Tom Horton

Members
Beattie
D’Souza
Garden
Lavizzo-Mourey

14 meetings in 2018

Key Priorities for 2018
Overseeing the CEO succession process
Succession for other senior management
Recruitment and retention of critical talent
Ongoing review of employee benefit programs
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

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Board Governance Practices

Our Board seeks to operate with the highest degree of effectiveness, supporting a dynamic boardroom culture of independent thought and intelligent debate on critical matters. We take a comprehensive, year-round view of corporate governance and our adoption of best practices impacts our leadership structure, Board composition and recruitment, director engagement, and accountability to shareowners. Our Board and committee evaluation process allows for annual assessment of our Board practices and the opportunity to identify areas for improvement.



 

How We Evaluate the Board’s Effectiveness

ANNUAL EVALUATION PROCESS

The Governance Committee oversees and approves the annual formal Board evaluation process and determines whether it is appropriate for the evaluations to be conducted by the lead director or an independent consultant each year. In 2018, the evaluation process was conducted by Mr. Culp while he was lead director.

EVALUATION QUESTIONNAIRES

Directors completed written questionnaires focusing on the performance of the Board and each of its committees.

INDIVIDUAL INTERVIEWS

The lead director conducted a one-on-one interview with each member of the Board focused on:

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

DISCUSSION OF RESULTS

The lead director reviewed the questionnaire and interview responses with the full Board.

USE OF FEEDBACK

The Board and each of its committees developed plans to take actions based on the results, as appropriate.

CHANGES IMPLEMENTED

Based on the 2018 evaluation process, the Board has changed its practices in the following ways:

Reducing the number of scheduled in-person meetings, adding supplementary, periodic Board calls
Changing the format of information presented at meetings
Dissolving the Finance Committee and reallocating its responsibilities to the full Board and Audit Committee
The 2018 evaluation process also informed our Board and committee composition, which includes prioritization of the director skills and experience criteria to meet the anticipated needs of GE’s portfolio.

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Key Board Responsibilities

Oversight of 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 of Directors

The Board has oversight for risk management at GE with a focus on the most significant risks facing the company, including strategic, operational, financial, legal and compliance, and cybersecurity 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.

 
 
          
                     
                           

AUDIT COMMITTEE

Oversees risks related to:

policies and processes relating to the financial statements, financial reporting processes, regulatory, compliance and litigation risks and auditing
the company’s enterprise risk management program and risk assessment
the annual audit plan for the company’s internal audit function, prioritizing audit focus areas based on their potential risk

FINANCE COMMITTEE

Oversees risks related to:

the company’s capital allocation framework, including sources and uses of cash and capital generation and allocation versus targets and plans
capital structure
the competitive landscape for GE’s products and services
significant exposures related to customers, counterparties or projects

GOVERNANCE COMMITTEE

Oversees risks related to:

the company’s governance structure and processes
related-person transactions
public policy activities and positions on corporate social responsibilities
the company’s environmental, health and safety compliance and related risks, including climate change
reputational and other risks to the GE brand

COMPENSATION COMMITTEE

Oversees risks related to:

management resources and structure, including retention, recruitment and succession planning
executive compensation to confirm that pay arrangements do not encourage excessive risk taking
the relationship between risk management policies and practices, corporate strategy and senior executive compensation

With the dissolution of the Finance Committee in April 2019, we expect the risk areas overseen
by that committee to transition to the full Board and the Audit Committee.

 
 
 
                                                                                                        
 

Management

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.

 

Oversight of Corporate Strategy
The Board has oversight responsibility for management’s establishment and execution of corporate strategy. During 2018, the Board conducted several in-depth reviews of the company’s overall strategy. As GE continues to transform its portfolio and operations, the Board works with management to respond to a dynamically changing environment. Elements of strategy are addressed in every regularly-scheduled Board meeting and embedded in the focused expertise of the Board committee meetings. At all of these reviews, the Board engages with senior management regarding operational objectives, the competitive landscape, market challenges, economic trends and regulatory developments. At meetings occurring throughout the year, the Board also assesses the company’s budget and financial allocation plan, mergers and acquisitions, and performance for alignment to our strategic plan.

Oversight of Succession Planning and Human Capital Management
The Board believes that human capital management and succession planning, including diversity and inclusion initiatives are important to the company’s success. Our Board’s involvement in leadership development and succession planning is ongoing, and the Board provides input on important decisions in each of these areas. The Board has primary responsibility for succession planning for the CEO and oversight of other senior management positions. The Compensation Committee oversees the development of the process, and the Board meets regularly with high-potential executives.

Oversight of Environmental, Social and Governance (ESG) Matters
The Board and its committees oversee the execution of GE’s sustainability strategy and initiatives as part of their oversight of the company’s business strategy and risk management. In particular, the Governance Committee assists the Board in its oversight of corporate social responsibilities, significant public policy issues, climate change-related trends, environmental, health & safety (EHS) matters and political contributions.


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How We Get Feedback from Investors

Our Investor Engagement Program
We conduct extensive governance reviews and investor outreach throughout the year involving our directors, senior management, investor relations and legal departments. This helps management and the Board understand and focus on 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 2018, our lead director participated in discussions with a number of our largest investors to discuss the recent CEO transition and 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 2018, we sought feedback from investors on a number of issues, and the Board decided to:

Critically review the company’s strategy and portfolio, narrowing our focus to strengthen our businesses to improve top-line and bottom-line performance;
Take action to reduce the company’s leverage and debt outstanding;
Continue our ongoing Board refreshment, adding directors with relevant industry experience and skill sets;
Simplify our executive compensation programs to increase focus on fewer key performance metrics; and
Lay the groundwork for going to bid for our independent auditor.

Investor Outreach and Our 2018 Say-On-Pay Vote
At our 2018 annual meeting, 92% 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. This feedback indicated that investors were supportive of the following actions by the Compensation Committee:

Declining to pay bonuses to senior Corporate leaders in 2017;
Shifting our pay programs to deliver a greater percentage of executive compensation in the form of equity rather than cash;
Eliminating the cash-based long-term performance awards program; and
Simplifying the performance metrics used across our compensation programs.

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.

After considering these factors, and based on additional feedback from our investors, the committee decided to take the following actions to increase management accountability and more closely align management’s interests with shareowners:

Continuing to deliver a greater percentage of executive compensation in the form of equity rather than cash;
Tying annual bonuses for leaders within the businesses to their results, rather than company-wide performance;
Continuing to grant Performance Share Units (PSUs) across our senior executive ranks; and
Tying Mr. Culp’s inducement grant of PSUs to a recovery of GE’s share price over a four-year period.



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 67).


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Other Governance Policies & Practices

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

BOARD/COMMITTEE MEETINGS. In 2018, 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. All 12 of our director nominees for 2018 attended the 2018 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 67).

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 Absent special circumstances should not serve as lead director, chairman or CEO of another public company

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 Chairman and CEO of AccorHotels. In addition to serving as the Chairman of Accor, he serves on the board of Huazhu Group Limited (formerly known as China Lodging Group), in

which Accor owns a stake. Accor and Huazhu Group have also entered into a strategic alliance pursuant to which Huazhu Group is the master franchiser for Accor’s economy hotel business in China.

HOW WE APPLIED TO REYNOLDS. Ms. Reynolds is in compliance with GE’s policy on public board service as she serves on five public company boards as of the date of this proxy, including GE. However, we currently expect that she will not stand for reelection to two of those boards this spring to ensure she is able to dedicate ample time to the GE Board. Following a brief transition period, we expect that she will only serve on two public company boards in addition to GE and as a result will serve on no more than three audit committees (she currently serves on three audit committees in addition to GE).

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 approximately 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 HORTON. In appointing Mr. Horton as lead director, the Board considered the fact that Mr. Horton is also the lead director for Walmart, and for a brief period during 2018, was also the lead director at Qualcomm (a position in which he no longer serves). In reviewing Mr. Horton’s time commitment at Walmart, the Board noted that Walmart separates the roles of Chairman and CEO, mitigating the potential time commitment of the lead director. The Board determined that Mr. Horton could serve in both roles under the circumstances.

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

Policy oversight. A yearly review of GE’s political spending policies and lobbying practices.
Budget oversight. Approval of GE’s annual budget for political activities.
Reporting. Issuance of a yearly report on the company’s political spending, which is updated bi-annually and made available on our ESG website (see “Helpful Resources” on page 67).

INCREASED TRANSPARENCY. In 2018, the Governance Committee decided to further enhance the company’s political spending disclosures by disclosing the names of all trade associations receiving more than $50,000 from the company, including the portion of the company’s payment used for lobbying or political expenditures, as well as any contributions to 501(c)(4)s, beginning with contributions made in 2018. Political spending by the company has declined in recent years, and in 2018 no corporate funds were contributed to political campaigns, committees or candidates for public office.


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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 67.

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 67), in the course of reviewing and approving or ratifying a disclosable related person transaction, the committee considers the factors in the box below.

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 2018. 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 2018 for reimbursable expenses, overhead, and profit were $358,000.

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 executive officers and directors (other than Mr. Garden whose filings are made on his behalf by personnel at Trian Fund Management, L.P. (Trian)) by monitoring transactions and completing and filing Section 16 reports on their behalf.

TIMELINESS OF 2018 REPORTS. Based solely on a review of the reports filed for fiscal 2018 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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Common Stock & Total Stock-Based Holdings Table
The following table includes all GE stock-based holdings, as of December 31, 2018, 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 Bazin         0     48,962
W. Geoffrey Beattie 885,062 1,051,492
Francisco D’Souza 151,500 235,757
Edward Garden 70,851,055 70,872,144
Thomas Horton 0 15,558
Risa Lavizzo-Mourey 15,000 44,719
Catherine Lesjak 0 0
James Mulva 4,105 192,484
Paula Rosput Reynolds 15,800 18,645
Leslie Seidman 0 25,675
James Tisch 3,540,000 3,662,843
Total 75,462,522 76,167,919
 
Common Stock
Named Executives Stock Options Total
Larry Culp 598,392 0 5,612,280
Jamie Miller 303,647 1,175,000 2,251,114
John Flannery 688,641 2,920,000 3,968,974
Michael Holston 0 0 1,253,800
David Joyce 678,902 3,684,000 4,678,350
Kieran Murphy 96,674 424,999 1,628,474
Total 2,366,256 8,203,999 19,392,992
 
Current Directors & Executives Common Stock Total
As a group (20 people) 86,720,023 98,782,878
 
5% Beneficial Owners Common Stock
BlackRock, Inc. 534,092,757
The Vanguard Group 652,363,722
Total 1,186,456,479

PERCENTAGE OWNERSHIP

No director or named executive owns more than one-tenth of 1% of the total outstanding shares of GE common stock, other than Mr. Garden, who may be deemed to indirectly beneficially own 0.8% of our outstanding shares as a result of his affiliation with Trian (see note 1 below).
BlackRock and Vanguard own 6.1% and 7.5%, 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 2016 that were ultimately cancelled in February 2019. As described under “Director Compensation” on page 54, 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 (885,062),(2) Culp (598,392), Garden (70,851,055),(3) Mulva (4,105), Reynolds (4,300) 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. Flannery). This row includes: (1) 8,866,699 shares that may be acquired under stock options that are or will become exercisable within 60 days, (2) 445,145 RSUs that vest within 60 days, and (3) 75,882,914 shares over which there is shared voting and investment power. Current directors and executive officers as a group own approximately 1.0% of GE’s total outstanding shares, including those shares owned by 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 463,419,559 10,057,066
Shared voting power 0 1,948,789
Sole investment power 534,092,757 640,522,717
Shared investment power 0 11,841,005

The foregoing information is based solely on a Schedule 13G/A filed by BlackRock with the SEC on February 5, 2019, and a Schedule 13G/A filed by Vanguard with the SEC on February 11, 2019, as applicable.

(1) For Mr. Garden, this column refers to the 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, 38,719,539 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, 68,672 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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Environment, Social and Governance (ESG)

How We Work
GE delivers innovative solutions and services to provide essential infrastructure for the world. We work with the highest integrity, a compliance culture and respect for human rights while also improving the impact of our technology and environmental footprint. Our advanced technology improves lives and offers our customers world class, efficient solutions to power communities, improve the healthcare ecosystem, and transport people across the globe.

ESG Framework

GOVERNANCE

The Governance Committee oversees GE’s ESG program.

CLIMATE

We believe that GE is uniquely positioned to contribute to efforts to reduce greenhouse gas emissions. As the company that has led the way in innovation for over a century, GE can deliver technology for the world to meet the emissions reduction targets called for by the 2015 Paris Agreement and achieve the long-term goal of sustainable development. With a global installed base of almost 70,000 aircraft engines, more than 7,000 gas turbines, more than 40,000 onshore wind turbines and more than 4 million healthcare systems, GE products and services improve lives, protect the environment, and give our customers world class and efficient solutions. We also lead by example—reducing our greenhouse emissions by 27% and water use by 25% since 2011—as part of our longstanding commitment to environmental stewardship, human rights, and a culture of integrity and compliance.

Our innovative solutions help countries achieve their carbon reduction goals:


GE9x Engine
The GE9X jet engine will power Boeing’s long-range 777X and be the largest aircraft engine ever produced. It is designed to generate 10% less CO2 greenhouse gas emissions and 45% less smog-causing emissions than the GE90–115B engine it replaces.

 
Reservoir Energy Storage
GE’s Reservoir is a flexible, compact energy storage platform for the grid. As clean but variable power sources like wind and solar start to become a larger part of the energy matrix, energy storage can help keep the grid in balance and increase power availability. The fundamental building block for the platform is the 1.2-megawatt, 4 megawatt-hour Reservoir storage unit, which enables up to 15% longer battery lifecycle than previous systems and holds enough energy to provide power to a community of 120 homes for an entire day.


Haliade-X Offshore Wind Turbine
The Haliade-X 12-megawatt turbine will be capable of powering 16,000 homes and producing 67 gigawatt-hours per year, based on wind conditions of a typical German North Sea site. That represents 45% more energy than any other offshore wind turbine available today.

ENVIRONMENT, HEALTH & SAFETY (EHS)

EHS excellence is fundamental to who we are, and we are committed to protecting our people, our communities and the GE brand. We hold ourselves to the same high expectations and standards everywhere we work, and we assess the EHS impacts of our businesses globally before, during and after operations. We will report our 2018 greenhouse gas and water reduction progress in the second quarter of 2019 on GE’s ESG webpages (see “Helpful Resources” on page 67).

KEY INDICATORS

INJURY & ILLNESS
INCIDENT RATE(a)
   REPORTABLE
ENVIRONMENTAL EVENTS(b)
(a) Based on 100 employees working 200,000 hours annually.
(b) All reportable environmental events, including spills, releases, air and wastewater exceedances.

COMPLIANCE & INTEGRITY

Effective compliance depends on culture and leadership. We view our reputation for integrity and compliance as a competitive and recruiting advantage, and we expect our leaders from the top down to create a culture of compliance. We are committed to an open reporting environment in which employees are encouraged to promptly raise concerns without fear of retaliation. Our integrity policy, The Spirit & The Letter, details the expectations of everyone who works for or represents GE, in specific areas such as improper payments, working with governments, competition law, international trade compliance, cybersecurity and privacy and fair employment practices.

KEY INDICATORS

OPEN REPORTING POLICY
CONCERNS REPORTED
   DISCIPLINARY ACTIONS IN
RESPONSE(a)
(a) Actions in response to closed matters through January 2019. Actions correspond to year in which concern was reported, not necessarily year action was taken.

We view the number of concerns reported through our internal open reporting program (including, in some circumstances, increases in the number of concerns reported) as one of the best indicators of the GE culture of integrity. When employees report integrity concerns, they make GE stronger and help prevent small issues from becoming problems.


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HUMAN CAPITAL MANAGEMENT

Human capital management and succession planning, including diversity and inclusion initiatives, are key to GE's success. We need great ideas, innovation and leadership to stay current and relevant. GE is an equal opportunity employer, and we are committed to making employment decisions without regard to race, color, religion, national or ethnic origin, sex, sexual orientation, gender identity or expression, age, disability, protected veteran status or other characteristics protected by law. We seek to retain our employees through competitive compensation, benefits and challenging work experiences with increasing levels of responsibility.

In June 2018, we announced our plan to make our businesses the center of our operations and reduce corporate headquarters to focus on strategy and execution, capital allocation, talent development and governance. As part of that transition, we are seeking to find the right balance of skills and manpower both inside the company and sourced from third-parties.

Attracting and retaining key talent is a high priority for our Board. These efforts include assessing the allocation of talent across the company, better accountability, and better alignment of compensation. This period of transition presents challenges, but we believe these changes will empower our people, reduce complexity and increase employee satisfaction.

HUMAN RIGHTS & SUPPLY CHAIN

GE is proud to be a leader in promoting respect and support for human rights across our operations—from our supply chain to our products. We were among the first global brands to publish a Statement of Principles on Human Rights. We have been an active member of the UN Global Compact, the world’s leading corporate sustainability initiative, for over a decade. GE also co-founded the Global Business Initiative on Human Rights, a forum for multinationals to openly discuss human rights challenges and leverage best practices. At GE, we collaborate in

search of practical ways to address some of the world’s most complex human rights challenges. We drive better outcomes through our partnership with suppliers, peers, and other stakeholders. In particular, we are committed to efforts to prevent forced labor where we operate, including through an extensive global supply chain audit program and collaboration with global associations. Suppliers are critical partners in GE’s value chain. As a global company, our supply chain includes locations where environmental, health, safety, labor, human rights, and other practices could be problematic. Our Supplier Integrity Guide governs all facets of our relationships with suppliers and includes specific prohibitions against forced, prison or indentured labor and against subjecting workers to any form of compulsion, coercion or human trafficking.

PHILANTHROPY – GE FOUNDATION

The GE Foundation, the philanthropic organization of GE, is committed to transforming our communities and shaping the diverse workforce of tomorrow by leveraging the power of GE. The GE Foundation created the concept of a corporate matching gift program in 1954 to empower employees in their personal philanthropy and charitable giving. The program supports giving by employees by providing a 1:1 match, up to $5,000 per employee. Today, the GE Foundation Matching Gifts Program continues to serve as an important element of the Foundation’s portfolio, with gifts matched in 2018 totaling $59 million.

FOCUS AREAS

The GE Foundation is developing skills by bringing innovative learning in community health globally and science, technology, engineering and mathematics (STEM) education, scaling what works, and building sustainable solutions. For example, a $25 million commitment to Safe Surgery 2020 aims to improve surgical capacity, leadership and innovation in developing countries in Africa and Southeast Asia. In addition, the GE Foundation made a $25 million commitment to drive STEM education in Boston Public Schools to prepare students for the jobs of the future.


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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.

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 2020 annual meeting.

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

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

Overview of Our Executive Compensation Program

Although the executive compensation discussion in this proxy statement focuses on the compensation decisions for our named executives — Larry Culp (Chair & CEO), Jamie Miller (SVP & CFO), John Flannery (Former Chair & CEO), Michael Holston (SVP & General Counsel), David Joyce (Vice Chair, GE & CEO of Aviation), and Kieran Murphy (SVP, GE and CEO of Healthcare) — our executive compensation programs apply broadly across GE’s employee ranks. For 2018, approximately 3,600 executives received equity incentives and participated in our annual cash bonus plan, and a subset of our senior executives participated in our long-term performance award program, which concluded at the end of 2018. 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. 2018 was a year of extraordinary change as we addressed a variety of operational challenges and continued the transformational activities that commenced in 2017. In conjunction with these efforts, a change in leadership occurred under which our former Chairman and CEO, John Flannery, was replaced by Larry Culp, who at the time was serving as an independent member of our Board and lead director.  This leadership transition required some extraordinary compensation decisions, each of which is described in detail in the discussion that follows. The Compensation Committee believes that these decisions appropriately supported shareowner interests by treating the exiting CEO fairly in light of his 31-year career with GE, and by ensuring that our new CEO’s compensation is strongly tied to restoration of shareowner value.

In hiring Mr. Culp, the Board brought in the first external CEO in GE's history. During Mr. Culp's 14-year tenure as CEO of Danaher, the company delivered a total shareholder return of 545%, which compares to 119% for the S&P 500 over the same period. In the last year, GE has also brought in other senior executives with proven experience and strong track records, including a new general counsel from Merck, Michael Holston, and a new head of human resources from American

Express, Kevin Cox. Attracting top talent during a period of significant change was a key priority for GE, aimed at providing stability and restoring the market's confidence in the company's leadership. The committee believes that attracting the right executives during this time was paramount, that the pay packages are commensurate with the quality of the individuals and the level of compensation required to attract such talent, and that the compensation is appropriately performance-based to ensure alignment between management and shareowner interests over the long term.

While certain of our businesses performed very well, including Aviation and Healthcare, our overall results fell short of our expectations in 2018 due to poor performance in our Power business. David Joyce and Kieran Murphy received above-target bonuses for 2018, based on our new bonus structure that was put in place at the beginning of 2018 and the strong performance of the businesses that they lead. The performance metrics for the Corporate bonus pool were not met for 2018. As a result, no bonus was paid to Mr. Flannery. For our other Corporate named executives, the Compensation Committee exercised its discretion in granting a target or partial bonus, as further described below. Neither of our long-term performance programs that were based on the three-year performance period from 2016 to 2018 met the conditions for a payout and these awards were therefore forfeited in their entirety. These programs consisted of the 2016 PSUs, which would have paid out in stock, and the 2016-2018 long-term performance awards (LTPAs), which would have paid out in cash.

FOCUSED ALIGNMENT BETWEEN INVESTORS AND EXECUTIVES

The Compensation Committee believes that our executive compensation programs should focus our leadership team on the key metrics that are meaningful for investors and that are key contributors to the creation of sustainable shareowner value, rather than an exhaustive list of metrics across various different programs. We also foster shareowner alignment and a strong pay-for-performance culture by setting the metrics in our incentive compensation plans to create balance between our short- and long-term operating frameworks. We set target performance levels that are challenging but reasonably achievable if we meet our business objectives, and aligned with guidance provided to investors and our longer-term financial outlook. We set commensurately more challenging goals in association with above-target payouts.


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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 deliver sustained strong results over a multi-year performance periods, thereby encouraging both strong performance and supporting our talent retention objectives. The committee believes that most of our named executives’ compensation should be contingent on the company’s long-term stock price performance. Consistent with this belief, the committee terminated the cash-based LTPA program. Going forward, we expect to deliver a greater percentage of our executive compensation in the form of equity.

BALANCE BETWEEN OVERALL COMPANY AND BUSINESS UNIT RESULTS

The committee believes that our 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 our executives’ pay to overall company performance. The committee believes that there should also be clear accountability for the performance of each executive’s business. As a result, beginning in 2018, the committee decided to tie the annual cash bonus program for each top-tier business, as well as for each business’s leader, to the individual business’s results. Equity awards continue to incentivize our leaders to enhance GE’s overall performance, regardless of whether they are at Corporate or in one of the businesses.

COMPENSATION COMMITTEE JUDGMENT

Our compensation programs primarily focus on payouts that are tied to specific quantitative performance objectives. However, the committee retains the authority to exercise discretion, whether positive or negative, over our compensation programs. In 2018, the committee exercised its discretion by determining to pay bonuses to certain Corporate employees, notwithstanding the failure to meet the performance criteria set forth under the bonus plan. In making this decision, the committee took into account the considerable progress that had been made in executing on the company’s strategic plan, the fact that many of these employees had been asked to take on additional responsibilities, and the fact that most of the businesses other than Power performed well. By contrast, in 2017, the committee exercised its discretion by determining not to pay a bonus to most of our named executives and by cancelling the 2015 PSU awards, despite the fact that in each case partial achievement of the performance conditions would have entitled the recipients to a payout in the absence of the permitted discretion.

CONSIDERATION OF RISK

Our compensation programs are balanced and focused on the long term so that our named executives can achieve appropriate 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. In addition, our equity awards have specific holding requirements for senior executives, which discourages excessive risk taking by ensuring that pay remains subject to our share price performance even after it is earned. 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 2018
The table below sets forth the primary elements of our executive compensation programs. In 2017, the Compensation Committee decided to terminate the LTPA program, which concluded at the end of 2018.

Compensation Profile
2018 COMPENSATION FRAMEWORK: PRIMARY ELEMENTS

Salary Bonus PSUs Options RSUs    LTPAs
Who receives All named executives All named executives except CEO

LTPA program
terminated in
2018

No payout
for final
performance
period
(2016-2018)

When granted Reviewed every 24 months Annually in February or March for prior year Generally annually in the first quarter of each year
Form of delivery Cash Equity
Type of performance Short-term emphasis Long-term emphasis
Performance period Ongoing 1 year 3 years + 1 year additional holding period Generally 3-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
EPS and Free Cash Flow (Corporate execs)
Earnings and Free Cash Flow (Business execs)
GE TSR v. S&P 500 Stock price appreciation
What is incentivized Attract and retain top talent Deliver on annual investor framework Outperform peers Increase stock price Balance against excessive risk taking

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How Our Incentive Compensation Plans Paid Out for 2018

This section provides an overview of how GE performed against the goals established under its 2018 annual bonus program, the 2016 PSUs, and the 2016-2018 Long-Term Performance Awards (LTPAs). The performance period for each of these programs concluded in 2018. See “Compensation Actions for 2018” on page 35 for amounts paid to the named executives as well as how we assessed their individual performance.

2018 Annual Bonuses
CORPORATE. Due to ongoing challenges in the Power business, neither of the performance metrics for the funding of the Corporate bonus pool were met for 2018, despite strong performance by several

of our businesses, most notably Aviation and Healthcare. As a result, no bonus was paid to our former Chairman and CEO, Mr. Flannery. The Compensation Committee applied its discretion to pay partial or target bonuses to Mr. Culp, Ms. Miller and Mr. Holston, based upon their significant efforts during the year, as further described below.

AVIATION AND HEALTHCARE. The bonus pools for Mr. Joyce and Mr. Murphy, our named executives in the Aviation and Healthcare businesses, respectively, were funded above target due to strong performance in each of those businesses, as described below. For each of these businesses, the bonus pool was based upon exceeding performance targets for earnings and free cash flow.


* Non-GAAP financial measures. For information on how these metrics are calculated, see “Explanation of Non-GAAP Financial Measures and Performance Metrics” on page 52.

FUNDING METRICS FOR THE ANNUAL BONUS POOL. In 2018, the Compensation Committee determined that it would simplify the metrics for the annual bonus program, which were previously determined across the company based on five financial goals and a series of strategic goals. Under this new program, bonuses were determined for each business unit based primarily on two financial goals (generally free cash flow and earnings per share or earnings) that were tailored to the business unit. For certain business units, additional metrics or funding criteria were also applied to individuals at different levels of seniority to help incentivize particular performance, such as cost cutting. For our Corporate named executive officers, the bonus pool performance metrics for 2018 continued to be based upon company-wide results.

HOW THE BONUS PROGRAM WORKS. We pay cash bonuses to our named executives each February or March for the prior year, if earned. At the beginning of each year or the time of hire, the company determines who is eligible to participate in the bonus plan and each individual’s target bonus as a percent of salary. Approximately 3,600 employees at the executive-band level and above are eligible to participate. For our named executives, target bonuses are typically set at 100-150% of salary. At the beginning of the year, the Compensation

Committee also sets the performance goals for each bonus pool. Separate bonus pools are set up for employees at Corporate (using company-wide metrics) and for each of the businesses (using metrics specific to that business that collectively roll up to the Corporate targets). The committee may set additional metrics or funding criteria for individuals at different levels of seniority.

In January or February following the completion of the performance period, the Compensation Committee assesses performance against the metrics for the prior year to determine the level of funding for each business’s bonus pool, including whether positive or negative discretion should be applied. Once the bonus pool is determined, payments are made at the individual level, with adjustments made as warranted by managers within the businesses based upon the eligible individual’s performance.

ADJUSTMENTS TO BONUS PROGRAM. The Compensation Committee maintains authority to adjust performance metrics under the bonus program. In April 2018, the committee provided an incremental incentive for each of the tier one businesses to meet additional free cash flow goals. This incremental incentive did not have any impact on the bonuses for the named executives.


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HOW WE EVALUATED BUSINESS PERFORMANCE AND ALLOCATED THE BONUS POOL

CORPORATE. For our Corporate named executives, Mr. Culp, Ms. Miller, Mr. Flannery and Mr. Holston, bonuses were evaluated based upon the achievement of performance goals for the company. Due to the failure to meet the company’s earnings per share and free cash flow targets for the year, the Compensation Committee did not pay a bonus to Mr. Flannery for 2018. However, the committee exercised its discretion in paying bonuses at target for Mr. Culp (pro rata, based on the portion of the year worked) and Mr. Holston (based on a full year), and a bonus at 80% of target for Ms. Miller. In exercising its discretion, the committee noted that the failure to meet the performance criteria was largely due to ongoing challenges in the Power business, notwithstanding strong performance across the rest of the businesses. The committee also took into account the considerable efforts of the team in redefining the company’s strategy and executing on a number of important initiatives. The committee noted that the issues relating to the failure to meet the

performance criteria pre-dated the arrival of Mr. Culp and Mr. Holston at the company, and Mr. Holston had forfeited a bonus with his prior employer by agreeing to join GE. The committee exercised discretion in granting a bonus to Ms. Miller in recognition of her considerable efforts during the year in developing and supporting the change in the company’s strategy and other initiatives.

AVIATION. Mr. Joyce’s performance was based upon the Aviation business, for which he is the CEO. The Aviation business performed strongly in 2018, and the business’s bonus pool was funded at 138% of target. The Aviation business exceeded its annual targets for both earnings and free cash flow.

HEALTHCARE. Mr. Murphy’s performance was based upon the Healthcare business, for which he is the CEO. The Healthcare business also performed strongly in 2018, and the business’s bonus pool was funded at 150% of target. The Healthcare business exceeded its annual targets for both earnings and free cash flow.


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2016 PSU Grants
2016 PSUs CANCELLED. PSUs typically have a three-year performance period and pay out in stock, based upon the achievement of certain performance metrics. In February 2019, the Compensation Committee determined that the company did not meet the total cash or the industrial profit margin targets for the PSUs, which were set in 2016 at the beginning of the three-year performance period. As a result, the awards were forfeited. The value forfeited by the named executives was $0.7 million, based on the closing price of GE stock of $10.04 on February 14, 2019, the date the committee made its determination.


2016-2018 Long-Term Performance Awards (LTPAs)
NO PAYOUT FOR 2016-2018 LTPAs. The LTPAs are a cash-based program that historically were granted once every three years, with payouts based on the achievement of five different performance goals over a three-year performance period. In February 2019, the Compensation Committee assessed the company’s performance against the five goals under the 2016-2018 LTPAs that were granted in March 2016, and determined that none of the goals were met. As a result, the 2016-2018 LTPAs were forfeited. In 2017, the Compensation Committee decided to terminate the LTPA program following the conclusion of the 2018 performance cycle. Below is a summary of the company’s performance against the LTPA goals.


HOW THE COMPENSATION COMMITTEE WOULD HAVE CALCULATED PAYOUTS. If the awards had paid out for the named executives, they would have paid as a multiple of the named executive’s final salary at the end of the performance period, plus average bonus over the three years of the performance period, with multiples set at 0.50X, 1.00X and 2.00X for threshold, target and maximum performance respectively. Payout multiples for other participants started at significantly lower levels. There were no payouts under the program for performance below the threshold level, and amounts would have been prorated for performance between the established levels.
____________________
(1)

For information on how these metrics are calculated, see “Explanation of Non-GAAP Financial Measures and Performance Metrics” on page 52.

(2)

Includes GE CFOA (Industrial CFOA plus dividends from GE Capital) plus proceeds from Industrial dispositions (after taxes), with BHGE on a dividend basis.

(3)

Includes Industrial segment profit plus adjusted Corporate operating costs (excludes non-operating pension costs, restructuring and other charges & gains).

(4)

This metric is no longer reported by the company.

(5) Industrial return on total capital.
(6)

Includes dividends plus share repurchases.

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Compensation Actions for 2018

Aligning CEO Pay with Investors

Larry Culp
CHAIRMAN & CEO (SINCE
SEPTEMBER 30, 2018)

AGE: 55
EDUCATION: WASHINGTON
COLLEGE; MBA, HARVARD
GE TENURE: <1 YEAR

     

PERFORMANCE ASSESSMENT. As the Chairman & CEO, Mr. Culp plays a central role in shaping the company’s strategy, establishing the framework against which performance is measured, and delivering on that performance. The Compensation Committee determined that although Mr. Culp was only in the CEO role for the last three months of 2018, he worked quickly and effectively during that time to execute on the company’s strategy. The committee decided not to use the formulaic criteria under the bonus program in determining Mr. Culp’s performance-based pay, in light of the fact that the criteria were established before Mr. Culp joined the company. By the time Mr. Culp was appointed as CEO, it had become clear that achieving the pre-determined criteria would be very difficult. Instead, the committee determined to pay Mr. Culp a pro-rated bonus at target, in recognition of his success in delivering on several key initiatives during a short timeframe since stepping in as CEO.


      2018 EARNED COMPENSATION

Base salary

  

$625,000 paid in 2018 (for partial year service, based on $2.5 million annual salary)

Annual bonus

$937,500 paid for 2018 (equal to 100% of target, based on $3.75 million annual target)

 

2018 GRANTED COMPENSATION

Inducement PSUs
$13.7 million grant date fair value
 
Earn out, if any, based on stock price appreciation through 2022, as described below

CEO TRANSITION

PAY STRUCTURE. Upon his appointment as CEO, Mr. Culp’s salary was set at $2,500,000 under his employment agreement. In setting his salary, the Compensation Committee took into consideration the fact that Mr. Culp had 14 years of experience as a highly successful public company CEO and the importance of attracting Mr. Culp to the role, particularly in light of the challenges facing the company. At the time of his appointment, Mr. Culp had been serving as a director since April 2018 and our lead director since June 2018, and was very familiar with the company and its strategy. His bonus target, which was set at 150% of salary, was consistent with the bonus target for Mr. Culp’s predecessor, and reflected the committee’s belief that the majority of Mr. Culp’s cash-based compensation should be contingent on performance. Under the terms of his employment agreement, Mr. Culp was also guaranteed an annual equity grant, solely in the form of PSUs, with a grant date fair value of $15 million, beginning in 2019, and to be awarded on the same terms as the PSUs granted to the company’s other senior executives. For additional detail on Mr. Culp’s employment agreement, see “Employment Agreement with Mr. Culp” on page 47.

INDUCEMENT GRANT. As an inducement to Mr. Culp to accept the role as Chairman and CEO, he was granted a one-time award of PSUs that will pay out as a number of GE shares if the company’s stock price appreciates significantly during the four-year performance period between October 1, 2018 and September 30, 2022. Achievement of the performance goal will be measured against a baseline price of $12.40 (the average closing price of the company’s stock for the 30 consecutive trading days prior to Mr. Culp’s appointment) as set forth in the table below. In setting these targets, the committee intended to set rigorous performance criteria for all of Mr. Culp’s equity compensation to further align him with shareowners.

 

No shares will be awarded if the threshold 50% appreciation level is not met, and if the 30 consecutive trading day average GE closing price is between the threshold, target and maximum levels, a proportionate number of shares between those levels will be earned. In the event of a spin-off of a business to GE shareowners (such as the spin-off of Wabtec shares in the Transportation merger), achievement of the performance goal will also factor in the performance of those securities from the spin date, and Mr. Culp’s PSU award will also be adjusted to pay out in shares of the spun-off entity (or, where infeasible, the company may adjust the PSU award or the performance targets to prevent the enlargement or diminution of the award) at the end of the performance period. The inducement award will be adjusted for any extraordinary dividends. Mr. Culp is also entitled to payment of the inducement award if (i) the company undergoes a change of control, (ii) he is terminated other than for cause, or (iii) he leaves the company for a good reason. For a discussion of these circumstances and the potential payout, see “Potential Termination Payments” on page 47.

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Compensation for Our Other Named Executives

Jamie Miller

AGE: 50
EDUCATION:
MIAMI UNIVERSITY
GE TENURE: 13 YEARS

     

CURRENT AND PRIOR ROLES
Senior Vice President & CFO (since November 2017); former President & CEO, GE Transportation; former Chief Information Officer, GE; former Controller, GE

PERFORMANCE ASSESSMENT
The committee exercised its discretion to grant Ms. Miller a bonus at 80% of target. In making this determination, the committee took into account her key role in developing and supporting the company’s strategic plan to reshape its portfolio structure, as well as her significant contributions toward: supporting the Board and CEO during the recent CEO transition, executing on the company’s strategy of mitigating financial risk and reducing its leverage, simplifying the company’s disclosures, reducing the size of the company’s Corporate operations, shifting resources back to the businesses, and the performance by divisions reporting to Ms. Miller, including GE Capital.

      2018 EARNED COMPENSATION

Base salary

  

$1.45 million (remained flat; last increase effective upon promotion to CFO in November 2017)

Annual bonus

$1.16 million paid (equal to 80% of target of $1.45 million)

2016 PSUs

$0 paid ($200,800 value cancelled)

2016-2018 LTPA

$0 paid

 

2018 GRANTED COMPENSATION

Equity grant

$4.3 million grant date fair value, approximately two-thirds as PSUs, and one-third as RSUs

         

John Flannery

AGE: 57
EDUCATION:
FAIRFIELD UNIVERSITY;
MBA, WHARTON
GE TENURE: 31 YEARS

     

CURRENT AND PRIOR ROLES
Former Chairman (October 2017-September 2018) & CEO (August 2017-September 2018); former President & CEO GE Healthcare

PERFORMANCE ASSESSMENT
The committee did not pay Mr. Flannery a bonus in light of his separation from the company and the failure to meet the company’s financial goals for the year.

SEVERANCE ARRANGEMENTS
In determining the amount of Mr. Flannery’s severance, his ongoing eligibility for certain equity awards, and his eligibility for the GE Supplementary Pension Plan upon reaching age 60, the committee took into account his 31 years of service to GE in a number of significant leadership roles, including substantially improving the performance of GE Healthcare. The committee determined that these arrangements were fair to Mr. Flannery, consistent with market practice and within the scope of historic GE practice.

 

      2018 EARNED COMPENSATION

Base salary

  

$1.5 million paid (based on partial year service; remained flat at $2 million, with his last salary increase effective upon his promotion to CEO in August 2017)

Annual bonus

$0 paid (equal to 0% of target of $3 million)

2016 PSUs

$0 paid ($271,080 value cancelled)

2016-2018 LTPA

$0 paid

 

2018 GRANTED COMPENSATION

Equity grant

$13.8 million: $11.5 million grant date fair value, delivered as PSUs; $2.3 million grant date fair value attributable to the modification of existing PSU awards to maintain partial eligibility post-separation

Severance payment

$4.25 million payable over 12-month period, subject to compliance with non-compete and other obligations

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Michael Holston

AGE: 56
EDUCATION:
NOTRE DAME;
JD, VILLANOVA
GE TENURE: <1 YEAR

     

CURRENT AND PRIOR ROLES
Senior Vice President, General Counsel & Secretary (since April 2018); former Executive Vice President and General Counsel, and Chief Ethics and Compliance Officer, Merck & Co. (2012-2018); former Executive Vice President, General Counsel and Secretary, Hewlett-Packard (2007-2011)

PERFORMANCE ASSESSMENT
The committee exercised its discretion to pay Mr. Holston a full year’s bonus at target, in light of the fact that he forfeited a bonus opportunity with his prior employer by joining GE mid-year. In addition, the committee recognized Mr. Holston’s significant contributions toward the company and the execution of the strategic plan, as well as supporting the Board and CEO during the recent CEO transition, and restructuring Corporate resources.

      2018 EARNED COMPENSATION

Base salary

  

$1.5 million, effective upon the commencement of his employment

Annual bonus

$1.5 million paid (equal to 100% of $1.5 million target for full year)

New hire bonus

$1.5 million

 

2018 GRANTED COMPENSATION

New hire equity grant

$6.1 million: $2.4 million grant date fair value stock option grant, and $3.7 million grant date fair value RSU grant

Equity grant

$3.1 million grant date fair value, delivered equally between PSUs and RSUs


David Joyce

AGE: 62
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 exceeding its financial goals for the year, particularly for earnings and free cash flow, while also delivering on the business’s strategic goals for the year, including shipping over 1,100 LEAP engines. In assessing Mr. Joyce’s salary, the committee took into account his significant responsibilities as head of the Aviation business and oversight for other initiatives as Vice Chairman, including the company’s Additive efforts.

      2018 EARNED COMPENSATION

Base salary

  

$1.75 million (increased 21% in September 2018 after a 24-month interval since his last salary increase)

Annual bonus

$2.415 million paid (equal to 138% funding for the Aviation business and a personal bonus target at 100% of base salary)

2016 PSUs

$0 paid ($271,080 value cancelled)

   

2016-2018 LTPA

   

$0 paid

 

2018 GRANTED COMPENSATION

Equity grant

$3.4 million grant date fair value, delivered equally between PSUs and RSUs


Kieran Murphy

AGE: 56
EDUCATION:
UNIVERSITY COLLEGE
DUBLIN; M.A. MARKETING,
UNIVERSITY OF
MANCHESTER INSTITUTE OF
SCIENCE AND TECHNOLOGY

GE TENURE:
11 YEARS

     

CURRENT AND PRIOR ROLES
Senior Vice President, GE and President & CEO, GE Healthcare (since 2017); former President and CEO, GE Life Sciences (2011-2017); former CEO and Executive Director, Whatman plc (2007-2008)

PERFORMANCE ASSESSMENT
The committee recognized Mr. Murphy’s contribution toward the strong performance of the Healthcare business in exceeding its financial goals for the year, particularly for earnings and free cash flow, while also leading GE Healthcare as it undertook significant efforts toward preparing for separation as a standalone company.

      2018 EARNED COMPENSATION

Base salary

  

$1.1 million (£850,000)

Annual bonus

$1.7 million paid (£1.275 million) (equal to 150% funding for the Healthcare business and a personal bonus target at 100% of base salary)

2016-2018 LTPA

$0 paid

 

2018 GRANTED COMPENSATION

Equity grant

$2.6 million grant date fair value, delivered equally between PSUs and RSUs

Special retention grant

$1.7 million grant date fair value, delivered as stock options, awarded in January 2018

GE 2019 Proxy Statement   37


Table of Contents

Summary Compensation

Summary Compensation Table

Name &
Principal Position
     Year       Salary       Bonus       PSUs &
RSUs
     Stock
Options
      LTPAs       Pension &
Deferred
Comp.
      All Other
Comp.
      SEC Total
Larry Culp* 2018 $ 625,000 $ 937,500 $ 13,740,000 N/A $ 0 $ 86,662 $ 9,665 $ 15,398,827
Chairman & CEO
Jamie Miller* 2018 $ 1,450,000 $ 1,160,000 $ 4,334,060 N/A $ 0 $ 0 $ 457,618 $ 7,401,678
SVP & CFO 2017 $ 1,335,417 $ 0 $ 1,810,930 $ 519,000 $ 0 $ 1,154,778 $ 237,736 $ 5,057,861
John Flannery* 2018 $ 1,500,000 $ 0 $ 13,800,104 ** N/A $ 0 $ 62,127 $ 1,281,059 $ 16,643,290
Former Chairman & CEO 2017 $ 1,737,500 $ 0 N/A $ 2,076,000 $ 0 $ 3,255,222 $ 1,931,881 $ 9,000,603
Michael Holston* 2018 $ 1,095,000 $ 3,000,000 $ 6,731,334 $ 2,400,000 $ 0 $ 224,393 $ 64,989 $ 13,515,716
SVP & General Counsel
David Joyce 2018 $ 1,550,000 $ 2,415,000 $ 3,382,585 N/A $ 0 $ 0 $ 175,146 $ 7,522,731
Vice Chair & 2017 $ 1,450,000 $ 1,385,000 $ 695,240 $ 692,000 $ 0 $ 673,996 $ 264,930 $ 5,161,166
CEO Aviation 2016 $ 1,333,333 $ 1,524,000 $ 6,212,431 $ 750,000 $ 0 $ 2,523,853 $ 239,240 $ 12,582,857
Kieran Murphy* 2018 $ 1,135,814 $ 1,703,721 $ 2,608,677 $ 1,670,000       $ 0 $ 118,580 $ 53,373 $ 7,290,165
SVP & CEO Healthcare
* Under applicable SEC rules, we have excluded Mr. Murphy’s compensation for 2016 and 2017 and Ms. Miller and Mr. Flannery’s compensation for 2016 as they were not named executives during those years. Mr. Culp and Mr. Holston were first employed by the company in 2018.
** For Mr. Flannery, PSU amounts include $11.5 million attributable to the grant date fair value of his 2018 PSU awards, most of which were cancelled upon his separation. The value of the PSU awards for which he remained eligible, as of the date of his separation agreement, was $2.3 million.
For Mr. Murphy, all cash amounts (including salary and bonus) were originally paid in British pounds and converted for purposes of this presentation at an exchange rate of $1.3363 per £1.00, the 2018 average noon buying rate certified for custom purposes by the U.S. Federal Reserve Bank of New York set forth in the H.10 statistical release of the Federal Reserve Board.

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. Executives are generally eligible for salary increases at 24-month intervals. The amount of any increase is affected by current salary and amounts paid to peers within and outside the company. Each of the named executives, other than Mr. Murphy, contributed a portion of his or her salary to the GE Retirement Savings Plan (RSP), the company’s 401(k) savings plan. The salary amount for Mr. Flannery is through his departure on September 30, 2018.

BONUS. Amounts earned under our annual cash bonus program and, in the case of Mr. Holston, for a $1.5 million signing bonus in connection with the negotiation of his employment. 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 “2016 PSU Grants” on page 34, the 2016 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. Joyce, $721,081 reported as compensation for him in 2016). 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 in the case of performance-based awards. For market-based PSU awards, including all of the PSUs granted in 2018, aggregate grant date fair value assumes performance at target.

For Mr. Flannery, the 2018 amounts reported under PSUs & RSUs represent 800,000 PSUs granted in February 2018 with a grant date fair value of $11.5 million. Under the terms of his separation agreement, most of these PSUs were cancelled. The fair market value of the PSU awards for which Mr. Flannery remained eligible post-separation, as of the date of his separation agreement (which also includes his 2016 PSUs), is $2.3 million. See the Long-Term Incentive Compensation Table on page 40 for additional information on the 2018 grants.

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. Certain stock options granted to Mr. Flannery in 2017 were subsequently cancelled upon his departure from the company. See the Long-Term Incentive Compensation Table on page 40 for additional information on 2018 grants.

LTPAs. No amounts were earned under our Long-Term Performance Awards (LTPAs), a cash-based incentive plan arrangement that we historically granted only once every three or more years, due to the failure to meet the performance goals under the plan. The LTPA program has been terminated following the conclusion of the most recent performance cycle, which ended in 2018. For more information, see 2016-2018 Long-Term Performance Awards (LTPAs) on page 34.


38   GE 2019 Proxy Statement


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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
Culp             $ 86,662           $ 0
Miller $ 0 $ 0
Flannery $ 0 $ 62,127
Holston $ 224,393 $ 0
Joyce $ 0 $ 0
Murphy $ 118,580 $ 0

Year-over-year changes in pension value generally are driven by changes in actuarial pension assumptions as well as increases in service, age and compensation. See “Pension Benefits” on page 45 for additional information, including the present value assumptions used in this calculation. Above-market earnings represent the difference between market interest rates calculated under SEC rules and the 6% to 14% interest contingently credited by the company on salary that the named executives deferred under various executive deferred salary programs in effect between 1991 and 2018. 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 2018, 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
Culp N/A        $ 9,665     $ 0  $ 0           $ 0     $ 0     $ 0    $ 0   $ 9,665
Miller      $ 46,879 $ 9,625 $ 0 $ 21,751 $ 2,672 $ 231,041 $ 145,153 $ 497 $ 457,618
Flannery $ 126,501 $ 9,625 $ 3,979 $ 0 $ 0 $ 12,672 $ 2,049 $ 1,126,233 $ 1,281,059
Holston N/A $ 19,250 $ 0 $ 0 $ 0 $ 37,003 $ 7,363 $ 1,373 $ 64,989
Joyce $ 125,353 $ 9,625 $ 13,257 $ 22,370 $ 0 $ 0 $ 0 $ 4,541 $ 175,146
Murphy $ 35,734 N/A $ 0 $ 17,639 $ 0 $ 0 $ 0 $ 0 $ 53,373

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 indicated 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 indicated named executives with coverage of 2X their annual pay (salary + most recent bonus). As of January 1, 2018, these plans were closed to new employees and employees who were not already employed at the relevant band level, including Mr. Culp and Mr. Holston.

Retirement Savings Plan. For Ms. Miller and Messrs. Flannery and Joyce, represents GE’s matching contributions to the named executives’ RSP accounts equaling 3.5% of pay, up to the caps imposed under IRS rules. Messrs. Culp and Holston are eligible for matching contributions equaling 4% of pay, and automatic contributions equaling 3% of pay, up to the caps imposed under IRS rules. Mr. Murphy is based outside the United States and is ineligible for this program.

Personal Use of Aircraft. Amounts reflect the incremental cost to GE for the named executives’ personal use of company owned or leased aircraft (including aircraft that is subject to fractional ownership). Where the named executive used company aircraft, costs were calculated 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. Where the travel was on aircraft that is leased or subject to fractional ownership, the cost reflects the variable costs invoiced to the company for the flight.

Leased Cars. Expenses for the leased cars program, such as leasing and management fees, administrative costs and maintenance costs. This program was discontinued at the end of 2018 for all GE officers. Mr. Murphy did not participate in the leased cars program, but received a monthly car allowance.

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, including reimbursement of expenses in 2018 for moves that occurred in prior periods. 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.

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. For Mr. Flannery, this amount includes (a) $46,301 for car service, and (b) $1,062,500 of his $4,250,000 severance benefits that were granted to him under the terms of his separation agreement and that accrued during 2018. The majority of this severance amount is payable six months after separation in accordance with Rule 409A under the Internal Revenue Code.

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


GE 2019 Proxy Statement   39


Table of Contents

Long-Term Incentive Compensation

Overview of Long-Term Incentive Compensation
Historically, GE provided the CEO and other senior leaders with 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 2018 performance cycle. For 2018, both Mr. Culp and Mr. Flannery were awarded PSUs, and neither of them received LTPAs, stock options or RSUs.

Annual Equity Incentive Awards
GE typically uses a different equity compensation structure for the CEO than for other senior leaders. For the last several years, equity awards for our CEO have generally been weighted toward PSUs, with occasional stock option grants. In recent years, we have expanded the number of senior leaders receiving PSU awards to drive greater accountability among these individuals for company-wide results. Our senior leaders have historically received a mix of PSUs, RSUs and stock options, with greater emphasis in recent years on PSUs and RSUs.

How we determine award amounts. 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. In 2018, our annual equity incentive awards were targeted to be equally weighted (by approximate accounting value) between PSUs and RSUs for most of our senior leaders, with the exception of Mr. Flannery and Ms. Miller. Mr. Flannery's equity award as CEO was targeted to be weighted 2/3 PSUs and 1/3 stock options (with no grant of stock options in 2018 due to an option grant late in 2017). Ms Miller's equity award as CFO was targeted to be weighted 2/3 PSUs and 1/3 RSUs. The Compensation Committee did not award PSUs in 2017, and only RSU and option awards were made while the committee considered the appropriate performance metrics and targets for the PSUs. As a result, the annual equity grants to our named executives in 2018 have a higher total grant date fair value than they otherwise would have.

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 particular goals, including long-term operating goals. PSUs have formulaically determined payouts that convert into shares of GE stock only if the company achieves specified performance goals. Operating goals were not included in the 2018 PSUs due to the anticipated portfolio changes and difficulty in defining operating metrics that would be meaningful over a three-year period. See page 43 for information regarding the performance conditions for outstanding PSUs.

Long-Term Incentive Compensation Table
The following table — also known as the Grants of Plan-Based Awards Table — shows PSUs, RSUs and stock options granted to our named executives in 2018. Each of these awards, other than the PSU award to Mr. Culp, was approved under the 2007 Long-Term Incentive Plan, a plan that shareowners approved in 2007, 2012 and 2017. Mr. Culp’s PSU award was a one-time inducement grant made outside the terms of the plan.

Estimated Future Payouts Under
Performance Share Units (#)
Restricted
Stock Units
(#)
Stock
Options
(#)
Stock
Option
Exercise
Price
Grant Date
Fair Value of
Awards
Name       Grant Date       Award Type       Threshold       Target       Maximum                        
Culp 12/31/2018 New Hire 2,500,000 5,000,000 7,500,000   $ 13,740,000
Miller 2/26/2018 Annual Equity 50,000 200,000 350,000 $ 2,871,060
2/26/2018 Annual Equity 100,000 $ 1,463,000
Flannery 2/26/2018 Annual Equity 200,000 800,000 1,400,000 $ 11,484,240
10/29/2018 Separation Modification 88,396 360,333 617,083 $ 2,315,864
Holston 4/24/2018 Annual Equity 25,475 101,900 178,325 $ 1,572,480
4/24/2018 Annual Equity 101,900 $ 1,493,854
4/24/2018 New Hire 800,000      $ 14.68 $ 2,400,000
4/24/2018 New Hire 250,000 $ 3,665,000
Joyce 2/26/2018 Annual Equity 29,175 116,700 204,225 $ 1,675,264
2/26/2018 Annual Equity 116,700 $ 1,707,321
Murphy 1/29/2018 Retention 500,000 $ 16.28 $ 1,670,000
2/26/2018 Annual Equity 22,500 90,000 157,500 $ 1,291,977
2/26/2018 Annual Equity 90,000 $ 1,316,700

PERFORMANCE SHARE UNITS. The named executives, other than Mr. Culp, were granted PSUs in 2018 that could convert into shares of GE stock at the end of the three-year performance period based on GE’s Total Shareholder Return (TSR) versus the S&P 500, from the beginning of the performance period of February 26, 2018 through December 31, 2020. The 2018 PSUs are eligible to 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%

Performance below threshold results in no PSUs being earned. The named executives may receive between 0% and 175% of the target number of PSUs granted. Dividend equivalents are paid out only on shares actually received.

For Mr. Culp, the amounts above for PSUs reflect an inducement grant that the Board approved in connection with Mr. Culp’s hiring as CEO. Under the terms of the award, the PSUs will pay out (except in the case of termination of employment by the company for cause or by Mr. Culp without good reason, and subject to proration in certain events) as a number of GE shares ranging from 2.5 million to 7.5 million shares,


40   GE 2019 Proxy Statement


Table of Contents

based on a GE stock price appreciation target ranging from 50% to 150% using the highest average closing price over 30 consecutive trading days during the four-year performance period from October 1, 2018 to September 30, 2022, with no payout for stock price appreciation of less than 50%. The performance target is measured against a baseline of $12.40. See “Inducement Grant” on page 35 for additional information.

For Mr. Flannery, amounts reported for PSUs reflect his February 2018 PSU grant, which was modified in connection with his departure, at which point 466,667 of the original 800,000 PSUs were cancelled. Amounts for Mr. Flannery under “Separation Modification” reflect the potential threshold, target and maximum number of PSUs that could be earned under pre-existing PSU awards for which Mr. Flannery continued to be eligible following his separation from the company. This represents his 2016 PSU award (target 27,000 PSUs), which was subsequently cancelled in February 2019 for failure to meet the performance targets, and his 2018 PSU award (target 333,333 PSUs), which remains outstanding (see “Separation Agreement with Mr. Flannery” on page 48).

RESTRICTED STOCK UNITS. The number of RSUs granted in 2018, which will vest in three equal annual installments, with the first installment (33%) vesting one year from the grant date, unless subject to accelerated vesting for retirement-eligible recipients. Dividend equivalents are paid out only on shares actually received. For Mr. Holston, the “New Hire” RSUs were intended to partially compensate him for equity awards he forfeited when he left his prior employer to join GE.

STOCK OPTIONS. The number of stock options granted in 2018, which, for Mr. Holston, will vest in three equal annual installments, with the first installment (33%) becoming exercisable one year from the grant date. These stock options were intended to partially compensate Mr. Holston for equity awards he forfeited when he left his prior employer to join GE. For Mr. Murphy, the stock options granted in 2018

vest in one tranche on the third anniversary of the grant date, unless the GE stock price closes at or above $20.35 prior to July 29, 2019, in which case half of the options will be subject to accelerated vesting on that date. See the Outstanding Equity Awards Table below and “Potential Termination Payments” on page 47 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 $3.00 per unit value for the grant made to Mr. Holston and a $3.34 per unit value for the grant made to Mr. Murphy).
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 $14.63 per unit value for the February 2018 grants and a $14.66 per unit value for the April 2018 grants) because dividend equivalents on unvested RSUs (granted after 2013) are accrued and paid out only if and when the award vests.
For PSUs, the actual value of units received will depend on the company’s performance, as described above. Fair value is calculated by multiplying the per unit value of the award ($2.75 for Mr. Culp’s inducement grant, $15.43 for Mr. Holston’s April 2018 grant, and $14.36 for the February 2018 grants) by the number of units at target. The per unit value is based on the closing price of the company’s stock on the grant date, adjusted to reflect the probability of achieving the performance conditions, using a Monte Carlo simulation that includes multiple inputs such as stock price, performance period, volatility and dividend yield.

Outstanding Equity Awards Table
The following table — also known as the Outstanding Equity Awards at Fiscal Year-End Table – shows the named executives’ stock and option grants as of year-end. It includes unexercised stock options (vested and unvested) and RSUs and PSUs for which vesting conditions were not yet satisfied as of December 31, 2018.

OUTSTANDING EQUITY AWARDS TABLE

Name of
Executive
    Grant Date     Award
Type
    Number
Outstanding*
    Portion
Exercisable*
    Exercise
Price*
    Expiration
Date
    Market Value     Vesting Schedule
Culp 12/31/2018 PSUs 5,000,000    $ 37,850,000 100% in 2022, subject to performance
Total 5,000,000 $ 37,850,000  
Miller 9/7/2012 Options 325,000 325,000      $ 21.59 9/7/2022 $ 0
9/13/2013 Options 350,000 350,000 $ 23.78 9/13/2023 $ 0
7/24/2014 RSUs 15,000 $ 113,550 100% on 7/24/2019
9/5/2014 Options 400,000 320,000 $ 26.10 9/5/2024 $ 0 100% on 9/5/2019
9/11/2015 Options 150,000 90,000 $ 24.95 9/11/2025 $ 0 50% in 2019 and 2020
9/11/2015 RSUs 12,000 $ 90,840 50% in 2019 and 2020
7/28/2016 RSUs 30,000 $ 227,100 33% in 2019, 2020 and 2021
9/9/2016 Options 150,000 60,000 $ 30.11 9/9/2026 $ 0 33% in 2019, 2020 and 2021
9/9/2016 RSUs 12,000 $ 90,840 33% in 2019, 2020 and 2021
9/9/2016 PSUs 20,000 $ 151,400 100% in 2019, subject to performance
7/27/2017 RSUs 50,000 $ 378,500 50% in 2020 and 2022
9/6/2017 Options 150,000 30,000 $ 24.92 9/6/2027 $ 0 25% in 2019, 2020, 2021 and 2022
9/6/2017 RSUs 16,800 $ 127,176 25% in 2019, 2020, 2021 and 2022
2/26/2018 RSUs 100,000 $ 757,000 33% in 2019, 2020 and 2021
2/26/2018 PSUs 200,000 $ 1,514,000 100% in 2021, subject to performance
Total 1,980,800 1,175,000 $ 3,450,406

GE 2019 Proxy Statement   41


Table of Contents

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       $ 0
6/10/2010 Options 350,000 350,000 $ 15.68 6/10/2020 $ 0
6/9/2011 Options 450,000 450,000 $ 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 450,000 450,000 $ 26.10 12/31/2020 $ 0
9/11/2015 Options 150,000 150,000 $ 24.95 12/31/2020 $ 0
9/9/2016 Options 160,000 160,000 $ 30.11 12/31/2020 $ 0
9/9/2016 PSUs 27,000 $ 204,390 100% in 2019, subject to performance
9/6/2017 Options 360,000 360,000 $ 24.92 12/31/2020 $ 0
2/26/2018 PSUs 333,333 $ 2,523,331 100% in 2021, subject to performance
Total 3,280,333 2,920,000 $ 2,727,721
Holston 4/24/2018 RSUs 101,900 $ 771,383 33% in 2019, 2020 and 2021
4/24/2018 PSUs 101,900 $ 771,383 100% in 2021, subject to performance
4/24/2018 Options 800,000 0 $ 14.68 4/24/2028 $ 0 33% in 2019, 2020 and 2021
4/24/2018 RSUs 250,000 $ 1,892,500 33% in 2019, 2020 and 2021
Total 1,253,800 0 $ 3,435,266
Joyce 6/10/2010 Options 650,000 650,000 $ 15.68 6/10/2020 $ 0
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 20,000 $ 151,400 50% in 2019 and 2020
7/28/2016 RSUs 150,000 $ 1,135,500 100% on 12/31/2019
9/9/2016 Options 200,000 200,000 $ 30.11 9/9/2026 $ 0
9/9/2016 PSUs 27,000 $ 204,390 100% in 2019, subject to performance
9/6/2017 Options 200,000 200,000 $ 24.92 9/6/2027 $ 0
2/26/2018 RSUs 116,700 $ 883,419 100% on 2/26/2019
2/26/2018 PSUs 116,700 $ 883,419 100% in 2021, subject to performance
Total 4,114,400 3,684,000 $ 3,258,128
Murphy 9/7/2012 Options 100,000 100,000 $ 21.59 9/7/2022 $ 0
9/13/2013 Options 80,000 80,000 $ 23.78 9/13/2023 $ 0
7/24/2014 RSUs 5,000 $ 37,850 100% on 7/24/2019
9/5/2014 Options 1,873 1,498 $ 26.10 9/5/2024 $ 0 100% on 9/5/2019
9/5/2014 Options 98,127 78,501 $ 26.10 9/5/2024 $ 0 100% on 9/5/2019
9/11/2015 Options 125,000 75,000 $ 24.95 9/11/2025 $ 0 50% in 2019 and 2020
9/11/2015 RSUs 10,000 $ 75,700 50% in 2019 and 2020
7/28/2016 RSUs 30,000 $ 227,100 33% in 2019, 2020 and 2021
9/30/2016 Options 150,000 60,000 $ 29.62 9/30/2026 $ 0 33% in 2019, 2020 and 2021
2/10/2017 RSUs 20,000 $ 151,400 25% in 2019, 2020, 2021 and 2022
6/9/2017 RSUs 100,000 $ 757,000 50% in 2020 and 2022
9/6/2017 Options 150,000 30,000 $ 24.92 9/6/2027 $ 0 25% in 2019, 2020, 2021 and 2022
9/6/2017 RSUs 16,800 $ 127,176 25% in 2019, 2020, 2021 and 2022
1/29/2018 Options 500,000 0 $ 16.28 1/29/2028 $ 0 100% on 1/29/2021 (50% subject to
vesting in 2019 for performance)
2/26/2018 RSUs 90,000 $ 681,300 33% in 2019, 2020 and 2021
2/26/2018 PSUs 90,000 $ 681,300 100% in 2021, subject to performance
Total 1,566,800 424,999 $ 2,738,826
* Amounts presented in the tables above do not reflect an adjustment that was made by the Compensation Committee to the equity awards for the named executives (other than Mr. Culp's PSU grant) as a result of the merger of GE Transportation and Wabtec and the subsequent spin-off of Wabtec shares to GE shareowners on February 25, 2019. This anti-dilutive adjustment was made to preserve the value of the awards following the spin-off. Subsequent to the spin-off, all amounts under “Number Outstanding” and “Portion Exercisable” were subject to an adjustment by multiplying the number shown by 1.04038. Amounts under the “Exercise Price” column were subject to an adjustment by multiplying the number shown by 0.96118.

MARKET VALUE. The market value of RSUs and PSUs is calculated by multiplying the closing price of GE stock as of December 31, 2018 ($7.57) (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 31, 2018.

VESTING SCHEDULE

Options vest on the anniversary of the grant date in the years shown in the table. The table reflects accelerated vesting for Mr. Flannery’s stock options, but an expiration date of no later than December 31, 2020, per the terms of his separation agreement. Awards that were forfeited by Mr. Flannery upon his separation are no longer reflected above. The table shows an accelerated stock option vesting schedule for Mr. Joyce because his awards qualified for retirement-eligible


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Table of Contents

accelerated vesting between 2018 and 2021. See “Potential Termination Payments” on page 47 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, 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 “2016 PSU Grants” on page 34 for details on the performance conditions for the 2016 grants, which were cancelled by the committee. See the table below for details on the performance conditions for the 2018 grants. The 2018 PSU grants (other than the inducement grant to Mr. Culp) are also subject to a one-year holding requirement, regardless of whether the executive has met his or her stock ownership requirements. No PSU grants were made in 2017.


2018 PSUs (ALL NAMED EXECUTIVES OTHER THAN MR. CULP)
 
(2018–2020)
Performance goal       How Measured       Weighting

     
Threshold
Earn 25%


     
Target
Earn 100%
      Maximum
Earn 175%
Relative TSR* Cumulative vs. S&P 500 100% 35th percentile 55th percentile 80th percentile
* The Compensation Committee has the authority to adjust this metric for extraordinary items.

2018 INDUCEMENT PSUs (ONLY FOR MR. CULP)
             
(2018–2022)