GE 2009 Annual Report Download - page 25

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GE has always taken the long-term view. The Company has
successfully weathered many economic cycles over its 130-year
history by hiring, training and developing disciplined leaders
who focus on achieving our long-term strategies, thoughtfully
managing risks, and creating and preserving shareowner value.
It is this discipline and focus that drives the enduring success
of the Company.
Many of our top executives have spent most or all of their careers
here. They have unparalleled domain expertise and are deeply
invested in and committed to the Company. Our compensation
programs don’t reward them for taking outsized risks that produce
short-term gains. We reward our executives for consistently
making smart decisions over the course of their careers here that
carefully balance risk and return, advance the Company’s strategic
objectives and deliver long-term results for shareowners.
While we focus on long-term performance, we do not ignore
current performance. We evaluate annual performance in
the context of progress made against our long-term strategies,
results relative to annual objectives and actions to manage
risk and preserve shareowner value. Our compensation programs
provide for variable rewards depending on performance.
Importantly, because we take the long view, good years do not
result in extravagant payouts and in bad years compensation
is appropriately adjusted weighing the year’s performance and
long-term performance. We believe this balanced approach
is critical to attracting and retaining the best people for the
Company’s long-term success.
That said, GE did not perform as well in 2009 as it has historically,
and that is reflected in this year’s payouts.
To Our Shareowners:
As head of the Management Development and
Compensation Committee of GE’s Board of
Directors, I have written to you each of the last
two years, and I write again this year, because
I believe it is important to explain to you how
we think about executive compensation — and
to share our perspective on how GE measures
performance, how we motivate and reward
our executives, and how we work to insure our
compensation programs are aligned with the
long-term interests of our shareowners.
We believe our compensation for 2009 appropriately balances the
earnings decline against the tough, smart decisions made by
GE’s senior management, a proven team that we believe is among
the best in the world. These decisions helped the Company
successfully weather one of the worst economic downturns any
of us has ever seen.
In 2009, GE took strong actions to rightsize our financial business,
focus on core strengths and continue to increase liquidity. We
further simplified our business portfolio and continued to build
our unmatched global infrastructure business. We transformed
NBCU into a multi-platform media business and announced an
agreement to move it into a partnership with Comcast to create
a more valuable media enterprise. None of this could have
happened without a strong management performance by GE
Chief Executive Officer Jeff Immelt and the leadership team.
While we expect economic conditions to remain challenging
in 2010, the Board is confident that GE has the right executive
compensation systems in place to foster the management
performance that is central to creating long-term shareowner value.
Sincerely,
Ralph S. Larsen
Chairman, Management Development
and Compensation Committee
February 19, 2010
GE 2009 ANNUAL REPORT 23