The MDCC is an independent group of directors on the GE Board and has the primary responsibility to establish, review and approve the CEO’s compensation. In the GE Notice of 2007 Annual Meeting and Proxy Statement (Proxy), we review the details of our plan and the compensation of our senior leaders. I encourage you to review it.

At GE, we believe that goals and metrics drive behavior. On behalf of the Board, we annually set a number of financial, operational and strategic goals for our CEO that we believe create long-term shareowner value. These goals are cascaded throughout the organization. A common mission drives all of our great team’s behavior.

Our CEO’s execution versus these goals sets his incentive compensation for 2006 and the total variable compensation pool for the Company. Our job, as your advocate, is to not only be transparent, but also to use our judgment in compensating our leaders. We believe that the tone for performance and compensation starts at the top of an organization.

In 2006, Mr. Immelt received a base salary of $3.3 million. Based on his solid accomplishments, versus our goals, we paid him an incentive compensation of $5 million. In addition, we awarded Mr. Immelt 250,000 performance share units. The value of all of Mr. Immelt’s outstanding stock awards appears in the Proxy as being worth $7.4 million, but they are, in fact, largely worthless unless Mr. Immelt delivers on shareowner value and cash flow growth. In all, Mr. Immelt works without a contract and 70% of his compensation is at risk. Here is how he did in 2006.

Sincerely,

Ralph S. Larsen
Chairman, Management Development
and Compensation Committee

February 9, 2007

	financial objectives goal performance Revenues (in $ billions)   160–165     163.4     +10 % Earnings from Continuing Operations (in $ billions)   20–22     20.5 *   +12 % EPS ($ per share)   1.92 – 2.02     1.98 *   +15 % CFOA (in $ billions)   24 – 25     24.6     +14 % ROTC (%)   17 – 18     18.4     +180  bp strategic & operational goals   assessment Broad operating strength across the Company   Company had an excellent year; 11 of 14 reported businesses had earnings growth of 10%+ Sustain a strong balance sheet and high cash flow “Triple-A”-rated with more than $18 billion returned to shareholders through buyback and dividends Create a more valuable portfolio Board supports offensive portfolio moves to improve GE Drive 8% organic growth High-performance growth initiative is delivering results … achieved 9% in 2006 Retain an excellent team and a strong culture Metrics on retention remain excellent … 95%+ senior managers retained Manage risk and reputation GE remains one of the most admired companies … FORTUNE (#1), Barron’s (#2) and Financial Times (#2) Lead the Board activities GE has an excellent track record on governance Sustain high levels of investor communication More than 350 investor meetings held annually

*	Including effects of January, 2007 restatement, earnings from continuing operations and EPS were $20.7 and $1.99, respectively.

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