Our compensation programs are balanced and focused on the long term so that our named executives can achieve the highest compensation through consistent superior performance over sustained periods of time.
In addition, large amounts of compensation are usually deferred or realizable only upon retirement, providing strong incentives to manage for the long term while avoiding excessive risk-taking in the short term.
Why the Board recommends holding future say-on-pay votes EVERY YEAR.
We have engaged shareowners on this issue and, based on their feedback, we believe that a significant portion of our investors would prefer an annual say-on-pay vote.
Immelt may not earn all of the compensation that we are required to include in the Summary Compensation Table.
The Compensation Committee assessed GE’s performance on its strategic goals at 95% instead of 100% because, although the company overall had a good year, GE missed some of its key investor goals (organic revenue growth and margin expansion) and some key businesses, including Power, Oil & Gas and Energy Connections, experienced challenging business environments. We pay cash bonuses to our named executives each February or March for the prior year under a program designed to closely align incentive compensation and annual company results.
Here’s how the plan works: 2013 PSUs PAY OUT AT 100% AND 2014 PSUs PAY OUT AT 83%. Immelt earned 100% of the PSUs granted to him in 2013 and 83% of the PSUs granted to him in 2014.
See “Long-Term Performance Awards (LTPAs)” below for information on our 2016–2018 LTPAs. We granted bonuses to our named executives under a recently redesigned, more formulaic bonus program.
The size of the bonus pool was contingent on the achievement of specified financial and strategic performance metrics as shown below. Although the Compensation Committee had the authority under the terms of the bonus program to adjust the financial performance metrics, it did not make any such adjustments for 2016 (i.e., they were calculated the same way GE reported them for financial reporting purposes).