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 Related Content Download Adobe® Reader® Downloads 2004 Proxy Statement (714K PDF)		As discussed in the Compensation Committee Report beginning on page 20, stock options and stock appreciation rights (SARs) were granted in 2003 as incentives for superior performance that should create long-term shareowner value. Each stock option permits the employee, generally for a period of ten years, to purchase one share of GE stock from the company at the market price of GE stock on the date of grant. Over 36,000 current employees below the executive officer level hold one or more stock option grants under a broad-based stock option program initiated in 1989. This program is a vital element of our drive to identify, develop and motivate the high-potential leaders who will sustain our outstanding performance far into the 21st century. It also reinforces in the company the entrepreneurial environment and spirit of a small company by providing real incentives for these employees to sustain and enhance GE’s long-term performance. The committee believes that the superior performance of these individuals will contribute significantly to GE’s future success. The tables on the next page provide information, for the five most highly paid executive officers, on SARs and stock options granted last year; on previously granted SARs and stock options exercised last year; and on SAR and stock option holdings at the end of 2003. SARs and stock options generally expire ten years after the date of grant. SARs granted prior to 1996 were cash SARs which permitted the executive officer to receive an amount of cash, before tax, equal to the difference between the grant price of the SAR (which is equal to the closing price of our stock on the date of grant) and the highest closing price of our stock during a ten-business-day period that begins on the third business day following the public release of the company’s quarterly summary statement of sales and earnings in the quarter in which the SAR is exercised. No SARs were granted between 1996 and 2003, and the last outstanding cash SARs were exercised in 2003. SARs granted in 2003 are stock SARs which are payable only in stock and permit the executive to receive shares of GE stock from the company equal in value to the difference between the price of GE stock on the day the SARs were granted and the price on the day they were exercised, multiplied by the number of SARs exercised. These SARs are exercisable in five equal annual installments beginning one year after the grant date and have the same economic value to the executive, and the same cost to the company, as stock options. SARs Granted in 2003   Individual Grants in 2003   Grant Date Value Name of Executive Number of SARs Granted % of Total SARs and Options Granted Threshold Base Price Per Share Expiration Date     Grant Date Present Value1$ Jeffrey R. Immelt   0   na   na   na     na Dennis D. Dammerman   510,000   4.3%   $31.53   9/12/13     $4,798,295 Robert C. Wright   420,000   3.5%   $31.53   9/12/13     $3,951,537 Benjamin W. Heineman, Jr.   126,000   1.1%   $31.53   9/12/13     $1,185,461 Gary L. Rogers   0   na   na   na     na 1  These estimated hypothetical values are based on a Black-Scholes option pricing model in accordance with SEC rules. We used the following assumptions in estimating these values: potential SAR term, 10 years; risk-free rate of return, 3.53%; expected volatility, 34.66%; and expected dividend yield, 2.44%. Aggregated SARs/Stock Options Exercised in 2003, and December 31, 2003 SAR/Option Value       Number of SARs /Options      Value of SARs/Options1 Name of Executive   Number of SARs/ Options   $ Value Realized     Exercisable   Unexercisable     Exercisable   Unexercisable Jeffrey R. Immelt   192,0002   $4,176,576     1,986,500   2,062,500     $12,918,310   $3,144,000 Dennis D. Dammerman   0     na     2,549,999   2,440,000     $19,509,001   $2,672,400 Robert C. Wright   0     na     2,945,000   1,845,000     $32,959,686   $1,965,000 Benjamin W. Heineman, Jr.   180,0002   $3,597,750     1,449,500   634,000     $18,402,005   $   660,240 Gary L. Rogers   0     na     2,402,500   957,500     $30,567,222   $1,414,800 1  SAR and option values are based upon the difference between the grant prices of all SARs and options awarded in 2003 and prior years and the December 31, 2003 closing price for the company’s stock of $30.98 per share. 2  Messrs. Immelt and Heineman held these SARs and stock options for their ten-year term before exercising them.
GE.com Home - Investor Relations - 2003 Annual Report - Privacy Policy - Terms and Conditions *This is an interactive electronic version of GE's Notice of 2004 Annual Meeting and Proxy Statement, and it is intended to be complete and accurate. The contents of this version are qualified in their entirety by reference to the printed version. A reproduction of the printed version is available in PDF format on this Web site. Copyright General Electric Company 2004