GE 2002 Annual Report Download - page 43
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Please find page 43 of the 2002 GE annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.42 GE 2002 ANNUAL REPORT
GOVERNANCE
MEETINGS
The GE board held 13 meetings in 2002. In December,
the board voted to increase GE’s quarterly dividend
for the 27th consecutive year. The Audit Committee,
composed of outside directors, held seven meetings
to review the activities and independence of GE’s
external auditors and the activities of GE’s internal audit
staff. It also reviewed GE’s financial reporting process,
financial and disclosure controls, and compliance with
key GE policies and applicable laws. The Management
Development and Compensation Committee, composed
of outside directors, reviewed in nine meetings all execu-
tive compensation plans, policies and practices,
changes in executive assignments and responsibilities,
and key succession plans. The Nominating and
Corporate Governance Committee, in three meetings,
developed and recommended for approval by the full
board the governance principles that the board adopted,
effective January 1,2003. These principles, and related
materials, are published in the Governance section
of the GE website at www.ge.com. The committee
also reviewed board candidates and recommended
the structure and membership of board committees.
Three new independent directors —A.G.Lafley, Ralph
S. Larsen and Robert J. Swieringa — joined the board
in 2002. The Public Responsibilities Committee, in one
meeting, evaluated environmental compliance. The
board determined that the functions of its Finance,
Operations, and Technology and Science committees
would be most effectively performed by the full board,
and therefore dissolved the committees.
KEY GOVERNANCE ACTIONS TAKEN BY GE
IN 2002 INCLUDE:
•GE’s test of “independence” for members of
the Management Development and Compensation
Committee and the Nominating and Corporate
Governance Committee is stricter than required by
new regulations.
•GE has appointed a presiding director who will lead
independent meetings of non-employee directors at
least three times a year.
•Each non-employee director will visit two of GE’s
businesses each year without the presence of corpo-
rate management so that directors can have direct
exchanges with operating leadership.
•The responsibilities of the Audit Committee will
increase, and it will meet at least seven times per year.
•To help further align directors’ interests with those of
share owners, the equity portion of directors’ pay will be
in Deferred Stock Units (DSUs), replacing stock options.
DSUs will be 60% of the annual director compensation
and will not pay out until one year after a director leaves
the board. When directors exercise existing stock options,
they will be subject to the same one-year holding period
that applies to GE senior management.
PAOLO FRESCO AND SCOTT MCNEALY
Paolo Fresco retired from the GE board in 2002 after more than 30 years with the company, including 12 years as
director. Paolo’s vision and decisions, both as vice chairman and member of the board, were critical to GE’s
growth as a global company. He has a true international view and is at home in cultures and with diverse people
everywhere. His broad perspective, great judgment and worldly wisdom will be deeply missed by GE.
Scott McNealy also retired from the board in 2002. As a pioneer in information technology, Scott has helped
guide the digital transformation of GE, bringing a fresh and passionate voice from his industry to our board and our
business leaders. We will all miss Scott’s bluntness, irreverence, insight — and most of all, his vision.