General Electric 2004 Proxy Statement

GE.com - 2003 Annual Report


	Notice of 2004 Annual Meeting of Shareowners Proxy Statement Election of Directors Corporate Governance Board of Directors and Committees Information Relating to Directors, Nominees and Executive Officers Compensation Committee Report Contingent Long-Term Performance Incentive Awards Stock Options and Stock Appreciation Rights Summary Compensation Table Five-Year Financial Performance Graph Retirement Benefits Audit Committee Report Independent Auditor Ratification of Selection of Independent Auditor Proposal to Add a Revenue Measurement to Executive Officer Performance Goals for Long-Term Performance Awards Shareowner Proposals Additional Information Appendix: Governance Principles Advance Registration


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Our board of directors currently consists of 16 directors, 12 of whom are independent directors under the requirements set forth in the New York Stock Exchange listing rules and GE’s independence guidelines. During 2003, the board consisted of 17 directors. In anticipation of his retirement later this year, and after more than 37 years of outstanding service to the company, Gary L. Rogers stepped down from the board and from his role as a Vice Chairman in December 2003. He will continue to serve the company as a senior advisor until he retires this December. In addition, after 20 years of outstanding service to the company as a GE director, including two years as the board’s first presiding director, Andrew C. Sigler will retire from the board this month and did not stand for re-election to the board. Accordingly, the size of the board will be reduced to 15 directors upon Mr. Sigler’s retirement. Ralph S. Larsen will succeed Mr. Sigler as chairman of the management development and compensation committee and presiding director.

In October 2003, we entered into an agreement to acquire Amersham plc, a leader in medical diagnostics and life sciences, and we expect the acquisition to be completed in the first half of 2004 after required approvals. The company has agreed to appoint Sir William Castell, the chief executive of Amersham plc, to the board as a Vice Chairman after the completion of the acquisition because of his broad business experience and extensive industry knowledge. He will also become the CEO of GE Healthcare, the combination of the Amersham and GE Medical businesses. As of the date of this proxy statement, we cannot be certain that we will be able to complete the Amersham plc acquisition prior to the annual meeting. Consequently, we are not nominating him as a director for election at the annual meeting. Instead, if the acquisition is completed, the board intends to appoint him to the board after the annual meeting, thereby increasing the size of the board to 16.

Sir William Castell is 56 and is a graduate of the City of London College. He joined Amersham plc in 1989 as Chief Executive and was knighted in June 2000 for services to the life sciences industry.

The board held 13 meetings during 2003. The average attendance by directors at scheduled board and committee meetings was over 95%. It is the board’s policy that directors should attend our annual meeting of shareowners absent exceptional cause. Last year, all directors attended the annual meeting.

The four standing committees of the board are the audit committee, the management development and compensation committee, the nominating and corporate governance committee and the public responsibilities committee. The board has appointed only independent directors to the audit, compensation and nominating committees.

Audit Committee.
The members of the audit committee are directors Warner, who chairs the committee, Cash, Gonzalez, Langone, Sigler and Swieringa. Ms. Fudge left the committee in February 2004. This committee is primarily concerned with the accuracy and effectiveness of the audits of our financial statements by our internal audit staff and by our independent auditor. Its duties include: (1) selecting the independent auditor; (2) reviewing the scope of the audit to be conducted by them, as well as the results of their audit; (3) approving audit and non-audit services provided to the company by the independent auditor; (4) reviewing the organization and scope of our internal system of audit, financial and disclosure controls; (5) overseeing our financial reporting activities, including our annual report, and the accounting standards and principles followed; and (6) conducting other reviews relating to compliance by employees with GE policies and applicable laws. There were 11 meetings of the audit committee during 2003. The committee’s report appears on page 34.

Management Development and Compensation Committee.
The members of the management development and compensation committee are directors Larsen, who chairs the committee, Gonzalez, Jung, Nunn, Sigler and Warner. Mr. Nunn replaced Mr. Langone on the committee in February 2004. This committee has two primary responsibilities: (1) to monitor our management resources, structure, succession planning, development and selection process as well as the performance of key executives; (2) to review and approve executive compensation. It also oversees the GE 1990 Long-Term Incentive Plan and the Incentive Compensation Plan. This committee met nine times during 2003. The committee’s report to shareowners begins on page 20.

Nominating and Corporate Governance Committee.
The members of the nominating and corporate governance committee are directors Gonzalez, who chairs the committee, Jung, Lafley, Langone, Larsen, Lazarus, Sigler and Warner. This committee’s responsibilities include the selection of director nominees for the board and the development and annual review of our governance principles. The committee also annually reviews director compensation and benefits, oversees the annual self-evaluations of the board and its committees and makes recommendations to the board concerning the structure and membership of the other board committees. This committee held four meetings during 2003.

This committee will consider all shareowner recommendations for candidates for the board, which should be sent to the Nominating and Corporate Governance Committee, c/o Benjamin W. Heineman, Jr., Secretary, General Electric Company, Fairfield, CT 06828. The committee’s minimum qualifications and specific qualities and skills required for directors are set forth in Section 3 of GE’s governance principles, at page 65. In addition to considering candidates suggested by shareowners, the committee considers potential candidates recommended by current directors, company officers, employees and others. The committee screens all potential candidates in the same manner regardless of the source of the recommendation. The committee’s review is typically based on any written materials provided with respect to the potential candidate. The committee determines whether the candidate meets the company’s minimum qualifications and specific qualities and skills for directors and whether requesting additional information or an interview is appropriate.

Public Responsibilities Committee.
The members of the public responsibilities committee are directors Nunn, who chairs the committee, Cash, Dammerman, Fudge, Immelt, Lazarus, Penske and Wright. The purpose of the committee is to review and oversee our positions on corporate social responsibilities and public issues of significance which affect investors and other key GE stakeholders. The committee met three times last year to review litigation matters and GE’s policies on charitable contributions and to conduct its committee self-evaluation. Other issues within the jurisdiction of the committee, including the company’s position on legislative and regulatory matters, were discussed at meetings of the full board.

Meetings of Non-Employee Directors.
The non-employee directors meet without any management directors or employees present at least three times each year. The presiding director, who is also the chairman of the management development and compensation committee, presides at these meetings. Last year, the non-employee directors met three times to discuss board policies, processes and practices.