8-KLeadership Changes

GENERAL ELECTRIC CO 8-K Report, Executive Changes (Mar 20, 2013)

Filed March 20, 2013For Securities:GE

Summary

General Electric (GE) filed an 8-K on March 20, 2013, disclosing the approval of long-term performance awards for approximately 1,000 leaders, including its five named executive officers. These awards, granted under the 2007 Long-Term Incentive Plan, are tied to the company's overall performance over a three-year period from 2013 through 2015. The payout structure is performance-based, contingent on achieving specified goals across four equally weighted metrics: cumulative operating earnings per share, cumulative total cash generation, 2015 Industrial earnings as a percentage of total Company earnings, and 2015 return on total capital. The awards are payable in cash, with potential for stock payout at the discretion of the Management Development and Compensation Committee (MDCC), and are subject to forfeiture if employment terminates before the end of the performance period. The MDCC retains the ability to adjust metrics for extraordinary items and claw back awards in cases of misconduct.

Key Highlights

  • 1GE approved long-term performance awards for approximately 1,000 leaders, including its five named executive officers.
  • 2Awards are for the performance period of 2013 through 2015.
  • 3Payout is contingent on achieving specific goals across four equally weighted performance metrics: cumulative operating EPS, cumulative total cash generation, 2015 Industrial earnings % of total, and 2015 return on total capital.
  • 4Awards are payable in cash (or stock at MDCC's discretion).
  • 5Payouts are prorated based on performance levels (threshold, target, maximum).
  • 6Awards are subject to forfeiture if employment terminates before December 31, 2015.
  • 7The MDCC has the right to adjust metrics for extraordinary items and claw back awards in cases of misconduct.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose the approval and terms of long-term performance awards granted by General Electric to its executive officers and other key leaders. These awards are designed to incentivize performance and align executive compensation with the company's strategic goals over a multi-year period.

Executive compensation will be determined based on the achievement of specific performance goals set for four equally weighted metrics over the 2013-2015 period. These metrics include cumulative operating earnings per share, cumulative total cash generation, the proportion of Industrial earnings to total company earnings in 2015, and the return on total capital in 2015. The payout amounts will vary based on whether threshold, target, or maximum performance levels are met.

Yes, there are several conditions. The awards are subject to forfeiture if the executive's employment terminates before December 31, 2015. Additionally, the company's Management Development and Compensation Committee can adjust the performance metrics for extraordinary items and has the right to seek reimbursement of awarded amounts if an executive engages in conduct that results in material inaccuracies in financial statements or performance metrics, particularly in cases of fraudulent misconduct.