Share Owner Proposal No. 7
The Amalgamated Bank LongView Collective Investment Fund, 15 Union Square, New York, NY 10003-3378, has notified GE that it intends to submit the following proposal at this year's meeting:

"Resolved: The shareholders of General Electric Company ('GE' or the 'Company') urge the Board of Directors to adopt a policy that some portion of future stock option grants to senior executives shall be performance-based. 'Performance-based' stock options are defined as 1) indexed options, whose exercise price is linked to an industry index; 2) premium-priced stock options, whose exercise price is above the market price on the grant date; or 3) performance-vesting options, which vest when the market price of the stock exceeds a specific target.

"Supporting Statement: As shareholders, we support compensation policies for senior executives that provide challenging performance objectives and motivate executives to achieve long-term shareholder value. GE presently uses some performance-based parameters in awarding stock options, but they are neither indexed to a peer group nor 'premium-priced.' We believe that current policies are deficient in that respect.

"The 2000 pay award to former Chairman John F. Welch, Jr. illustrates the need for clearer standards. Mr. Welch received a raise in each of the following categories: salary and bonus, stock options, long-term compensation and 'other' compensation. His total compensation for 2000 was estimated to have been at least $125 million, and his share of the total stock options granted to GE employees increased from 3.7% in 1999 to 6.5% in 2000.

"Executive compensation expert Graef Crystal calculates that Mr. Welch's pay for 2000 increased 80% over 1999, even though the value of GE stock declined 6% during 2000. Prior to 2000 the Board's Compensation Committee justified Mr. Welch's compensation by citing aggregate increases in total shareholder value throughout his tenure. To the extent that the Board was using aggregate growth in market capitalization, however, it is difficult to square an 80% pay hike with a 6% loss of shareholder value. Moreover, Mr. Welch's stock options were not indexed to relative performance, only absolute performance.

"Although Mr. Crystal credits Mr. Welch's pay levels during his entire tenure as 'outstanding,' this recent experience indicates the need for more consistent standards with a greater emphasis on performance-based compensation.

"In our view, standard stock options give windfalls to executives who are lucky enough to hold them during a bull market and penalize executives who hold them during a bear market. Investors and market observers, including Warren Buffett, Alan Greenspan and Al Rappaport, criticize standard options on the ground that they inappropriately reward mediocre or poor performance. Mr. Buffett has characterized standard stock option plans as 'really a royalty on the passage of time,' and all three favor the use of indexed options.

"Performance-based options tie compensation more closely to company performance, not the stock market. Premium-priced and performance-vesting options encourage senior executives to set and meet ambitious but realistic performance targets. Indexed options may have the added benefit of discouraging repricing in the event of an industry downturn.

"We urge shareholders to vote FOR this proposal."

Your Board of Directors recommends a vote AGAINST this proposal.
This proposal urges the Board to adopt a policy that some portion of future stock option grants to senior executives shall be "performance-based," which it defines as indexed options, where the exercise price is linked to an industry index; premium-priced stock options, where the exercise price is above the market price on the grant date; or performance-vesting options, which vest when the market price of the stock exceeds a specific target. Very few major companies use any of these forms of so called "performance-based" options. The Management Development and Compensation Committee of GE's Board, which consists entirely of non-employee directors, has granted stock options to nearly 40,000 employees to provide an incentive for superior performance leading to long-term increased shareowner value. Each option permits the employee, generally for a period of ten years, to buy a share of GE stock from the Company at the price of GE stock on the day the option is granted. These stock options, which generally do not vest until 3 and 5 years after grant, are inherently performance-based, because their value is directly linked to the price of GE stock over time and thus reflects the fundamental performance of the Company. Because the value of GE stock options is already directly linked to the price of GE stock, and therefore to share owner value, your Board believes the proposal is unnecessary, and recommends a vote against it.