Compensation & Performance

GE’s citizenship strategy is integral to our business strategy, and the aim of both is to make money, make it ethically and make a difference.

Our compensation programs are designed to keep us on track for these strategic goals by enabling GE to attract, retain and motivate the world’s best talent to work together to create sustainable value. It is discretionary yet transparent, balanced and focused on the long term. Across our business, we strive to provide competitive and fair wages and benefits to all of our employees, each of whom makes important contributions to our success.

Executive compensation is overseen by the Management Development and Compensation Committee (MDCC). The committee’s primary responsibilities are: 1) establishing, reviewing and approving CEO compensation, and reviewing and approving other senior executive compensation; 2) monitoring GE’s management resources, structure, succession planning, development and selection process, as well as the performance of key executives; 3) reviewing incentive compensation arrangements to assure that incentive pay does not encourage unnecessary risk taking; and 4) reviewing and discussing, at least annually, the relationship between risk management policies and practices, corporate strategy and senior executive compensation.

Because GE has always taken the long view on corporate and executive performance, we use judgment and discretion rather than rely solely on formulaic results, and we do not reward executives for taking outsized risks that produce only short-term gains. Instead, we reward sustained performance over time by emphasizing multiyear performance awards, stock options and other equity with long vesting periods, requiring senior executives to own significant amounts of GE stock, and offering pension benefits that are only earned and become payable annually if an executive successfully works with the Company to age 60. Even our annual cash bonuses are intended to reward performance factors over many years as well as the achievement of annual performance, operating and risk goals and, as a result, are not characterized by year-to-year volatility between large payouts and declines tied to short-term performance.

At the beginning of each year, objectives are agreed on by our CEO and senior executives, based on the Company’s strategic goals and factors we believe create long-term shareowner value. Their performance is then assessed against these objectives at the end of the year. Because our compensation decisions are based on judgment and discretion, we take into account a range of both quantitative and qualitative factors in assessing performance, including reliability in delivering financial and growth targets, performance in the context of the economic environment, a track record of integrity and good judgment, adherence to Company values and the vision and ability to create further growth and lead others.