What is the primary purpose of these new performance awards?

The primary purpose of these long-term performance awards is to incentivize and reward approximately 1,000 company leaders, including executive officers, for achieving specific financial goals over a three-year period (2010-2012). This aims to drive long-term shareholder value and ensure executive alignment with the company's strategic objectives.

Are there any conditions that could lead to the forfeiture of these awards?

Yes, the awards are subject to forfeiture if an executive's employment terminates for any reason other than disability, death, or retirement before December 31, 2012. Additionally, the Board of Directors can seek reimbursement if an executive's conduct leads to material inaccuracies in the company's financial statements or performance metrics used for the award calculation.

How is the value of the award determined for each executive?

The final award amount is calculated by applying a multiplier (ranging from 0.75x at threshold to 2.00x at maximum performance) to the executive's base salary in effect in February 2013 and the discretionary bonus awarded in February 2013 for the 2012 performance period. The specific multiplier depends on the degree to which the performance metrics are met.

GE 8-K: Leadership Changes

Q: What specific financial metrics will determine the payout of these awards?

The payouts are based on four equally weighted business measurements: cumulative earnings per share (EPS), cumulative industrial cash flow from operating activities, ending net investment of GE Capital, and the industrial return on total capital for 2012. Achieving different levels (threshold, target, maximum) for these metrics will dictate the final award amount.

Summary

This 8-K filing from General Electric (GE) on February 19, 2010, announces the approval of long-term performance awards for approximately 1,000 company leaders, including the five named executive officers. These awards, granted under the 2007 Long-Term Incentive Plan, are contingent upon the company achieving specific financial goals over the three-year period from 2010 to 2012. The performance metrics are equally weighted across four key areas: cumulative earnings per share, cumulative industrial cash flow from operating activities, ending net investment of GE Capital, and 2012 industrial return on total capital. The payout structure for these awards is tied to achieving threshold, target, or maximum levels for these metrics, with multipliers applied to the executives' base salary and discretionary bonus in effect in February 2013. The awards are designed to incentivize long-term performance and retention, as they are subject to forfeiture if an executive's employment terminates before December 31, 2012, except in cases of disability, death, or retirement. The filing also includes provisions for the Board of Directors to seek reimbursement if an executive's conduct results in material inaccuracies in financial statements or performance metrics.

Key Highlights

1GE approved long-term performance awards for approximately 1,000 leaders, including its top five executive officers.
2Awards are granted under the 2007 Long-Term Incentive Plan.
3Payouts are contingent on achieving specified financial goals over the 2010-2012 performance period.
4Four equally weighted performance metrics: cumulative EPS, cumulative industrial cash flow, GE Capital ending net investment, and 2012 industrial return on total capital.
5Award amounts are based on a multiplier (0.75x to 2.00x) of 2013 base salary and 2012 bonus, dependent on performance levels.
6Awards are subject to forfeiture if employment terminates before December 31, 2012, barring death, disability, or retirement.
7The Board has the authority to seek reimbursement of awards in cases of conduct leading to material financial statement inaccuracies.

GENERAL ELECTRIC CO 8-K Report, Executive Changes (Feb 19, 2010)

Summary

Key Highlights

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