To Our Shareowners:

As Presiding Director of the GE Board of Directors, I write to share our perspective on corporate governance and compensation. I will talk first about our overarching philosophy, and then I will focus on a few areas—independent Board oversight; talent development, performance and compensation; strategy and risk oversight—and I will finish with how we as a Board ensure that GE governance retains an important business-building advantage.

GE takes a long-term view of governance. We consider it to be the foundation upon which we build our leadership culture and reputation for integrity, which in turn provides investors with competitive returns over the long term. We believe that the Board is best positioned to oversee management, and that investors should have fair means to propose directors and elect them by a majority vote, and use other appropriate tools to hold us accountable for company performance.

Fourteen of our 16 directors are independent of management. We seek director candidates with diverse backgrounds, demonstrated leadership qualities, sound judgment, and domain expertise in fields relevant to GE’s businesses. For example, last year we added Loews CEO Jim Tisch, an expert in global finance and leader of one of the largest diversified corporations in the United States. The Chairman and the independent Presiding Director provide Board leadership. This model recognizes that in most instances the Chairman speaks for the Company and the Board, but still provides the benefits of independent Board oversight . As GE’s Presiding Director, I work with the Chairman and all of GE’s independent directors to shape and monitor strategy and set the Board’s agenda. I coordinate with the chairpersons of the Board’s committees to ensure that committees and the Board are functioning to our collective expectations, and that directors are receiving the information they require.

Successful governance depends first on the skill, dedication and integrity of the Company’s leaders and the strength of internal management processes. The Board reviews the performance of senior executives each year and has succession plans in place for key positions to ensure continuity of leadership. GE has sound practices for developing management talent, developing and executing strategy, managing risk and complying with the spirit and letter of laws and regulations.

Compensation is a critical element in leadership development. We reward long-term performance. Our approach is not formula-driven but instead depends on our view of an executive’s performance and potential over many years. We design compensation to encourage balanced risk-taking with a mix of cash and equity and long- and short-term incentives.

Strategy and risk oversight also are core Board functions. Each July we conduct a comprehensive review of GE strategy and monitor and discuss progress throughout the year. While the full Board is responsible for risk oversight, we allocate responsibility for various risk matters to Board committees with specific competence in those areas. To enhance risk oversight, in February 2011 we formed a Risk Committee of the GE Board that oversees GE’s and GE Capital’s risk assessment and risk management structures and processes.

We make certain our view stays current. At least once a year we conduct a comprehensive review of governance trends and evaluate GE’s framework for possible changes. We ask management to solicit the views of the Company’s large shareholders on governance matters at least twice a year and report to us on their findings. Directors also meet with shareholders to discuss governance matters. I met recently with large investors to discuss executive compensation and Board structure issues. We have made changes to our governance policies and practices based on investor input.

While we strive to continually improve our governance practices, we avoid making changes simply because they are deemed fashionable or expedient. We base our decisions on our collective experience and judgment about what will work best for GE. We consider the interaction of all parts of our corporate governance structures to ensure that they work together in a way that produces long-term value for you, our shareowners, without undesirable cost or bureaucracy. Finally, the independent directors of GE are committed to continue working on your behalf and being transparent in explaining why we believe our approach works for our company. I would encourage you to learn more on GE'S Web site at http://www.ge.com/company/governance/index.html.

Sincerely,

Ralph S. Larsen
Presiding Director
February 25, 2011