GE 2007 Annual Report Download - page 11

achieving annual cash from operating activities (CFOA) growth
of at least 10%. Our theory has been that business performance
drives stock performance and, in most periods, they move together.
Our business performance has been solid. CFOA growth has
averaged 21% over the last fi ve years. Our total shareholder
return over that same period has been a respectable 75%, but
we have trailed the S&P 500’s return of 83%. Accordingly, I will
receive only half of the performance shares allocated by the MDCC.
This is bad news for me, but good news for investors because
our performance is not yet fully refl ected in our stock price.
This will change. I am so confi dent in our performance that
I continue to buy GE stock in the open market, just like you do.
I, along with all of our leaders, am aligned with investors.
We believe in performance and long-term commitment to the
Company. In the toughest of times, you can count on us. That is
the way we are built, the way we grow, and the way we are paid.
We have averaged earnings growth of 11% over the
past 25 years, including 16% in 2007. We have increased our
dividend for 32 straight years. We invest and deliver: every day …
every quarter … every year … and we will in 2008. Thank you
for all of your support. Our best days are ahead.
Jeffrey R. Immelt
Chairman of the Board
and Chief Executive Offi cer
February 20, 2008
2–3X
gdp revenue
10%
earnings
20%
returns
great people and teams
operational excellence and
fi nancial discipline
leadership businesses growth as a process
STRATEGIC PRINCIPLES
We plan to press our advantage in the essential themes that
will shape our growth for decades: infrastructure technology,
emerging markets, environmental solutions, demographics,
digital connections, and creating value from origination. We love
the leadership position we are building, and it is already delivering
for you.
We will continue to earn the respect of the business world. We
regularly rank in the top fi ve of Barron’s and FORTUNE’s “Most
Admired” lists. In 2007, we were number one in Chief Executive
Magazine’s survey on the “20 Best Companies for Leaders.”
And, just this month, Fast Company ranked us the fourth most
innovative company in the world behind only Google, Apple, and
Facebook — not bad for a 130-year-old company!
Beyond this, we are committed to improving communication
around the Company and addressing things that may have
frustrated our investors, including accounting adjustments to our
historic fi nancial results. We will continue to improve our strong
model for controllership, and we have added regulatory resources
around the Company to anticipate key issues.
I want investors to see that GE is truly more than the “sum of
the parts.” The strength of GE is in the “totality.” It is the ability
to deliver in good times and bad. We do this because we invest
and deliver. We are winning in the essential themes; we have
built leadership businesses; we are a high-performance company;
and we develop great leaders.
I am compensated to deliver for you. In 2003, the GE Board’s
Management Development and Compensation Committee (MDCC)
decided to put all of my equity compensation in performance
shares that mature over fi ve years.
The performance shares pay out in a balanced fashion: 50%
based on total GE shareholder return versus the S&P 500’s return;
and 50% based on our operating performance as refl ected by
winning in the future
infrastructure technology
emerging markets
environmental solutions
demographics
digital connections
origination
ge 2007 annual report 9
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