March 23, 2004

The General Electric Proxy Statement

In anticipation of the April 28th annual shareholders meeting, I just received my copy of the General Electric proxy statement in the mail. Below are some interesting tidbits:

1. Severance Pay – As publicized last week, GE will now allow shareholders to approve any severance packages for the Named Executive Officers if a severance package is worth more than 2.99 times an executive’s salary and bonus. However, GE doesn’t currently enter into employment agreements nor severance arrangements with its NEOs.

Interestingly, I can’t find this development mentioned in the proxy statement – instead, it’s a new #10 in GE’s Management and Compensation Committee’s Key Practices. These Key Practices were attached as an appendix to last year’s proxy statement, but not this year.

This development is also noteworthy because the Teamsters Affiliates Pension Plan had a similar shareholder proposal on GE’s ballot last year that was narrowly defeated. So GE probably took this action in response to that voting result.

2. Number of Shareholder Proposals – The GE proxy statement includes 15 shareholder proposals that collectively run 20 pages. Nearly a third of the entire proxy statement! Last year, GE had 13 shareholder proposals.

3. Voluntary Reporting of Quasi-Business Use of Aircraft – In footnote 2 of the Summary Compensation Table, GE discloses the incremental value of the personal use of aircraft by the chair and vice chair – even though that use is considered by GE to be a business expense (because GE’s updated executive security program requires that those two officers use company aircraft for personal travel). So this detailed information is available in a footnote, but not included in the “Other Annual Compensation” column.

4. Format of Proxy Statement – It’s printed on 5″ by 8″ tissue paper with one-eight margins. This baby is compact and light-weight. It’s not easy to read – but the online version of the proxy statement is quite nice. Clearly the way to go to save trees!

Demystifying Delisting of Securities

I have always found the deregistration of a company’s securities to be quite confusing (and when I was in Chief Counsel’s office in Corp Fin, it was a common question from callers).

Learn how to better understand this process from my interview with M. Ridgway Barker and Randi-Jean G. Hedin on Guidelines for Delisting.