DEF 14A of General Electric Co
Filed Mar 13, 2025 · FY20240001308179-25-000114
General Electric Company
| Management Development & Compensation Committee Report | 53 | | CEO Pay Ratio | 54 | | Pay Versus Performance | 54 | | Independent Auditor | 57 | | PROPOSAL NO. 3 | 57 | | Ratification of Deloitte as Independent Auditor for 2025 | 57 | | Audit Committee Report | 57 | | Shareholder Proposal | 59 | | PROPOSAL NO. 4 | 59 | | Shareholder Proposal Requesting Vote on Severance Payments | 59 | | Submitting 2026 Proposals | 61 | | Voting and Meeting Information | 62 | | Voting Standards and Board Recommendations | 62 | | Meeting Information | 62 | | Voting Information | 62 | | Explanation of Non-GAAP Financial Measures and Performance Metrics | 65 | | Helpful Resources | 66 |
Election of Directors
Election of Directors
Election of Directors
| What are you voting on? At the 2025 Annual Meeting, 10 director nominees are to be elected to the GE Aerospace Board to hold office until the 2026 Annual Meeting and until their successors have been elected and qualified. | YOUR BOARD RECOMMENDS A VOTE FOR EACH NOMINEE | | | | All nominees are current GE Aerospace Board members who were elected by shareholders at the 2024 Annual Meeting. | |
Board Nominees
Board Nominees
Board Nominees
| TENURE | AGE | INDEPENDENCE | | 4.8 years average tenure | 64.2 years average age | All independent except for the CEO | | 3 Newer (1-2 years) | 7 60-64 years | 9 Independent | | 2 Medium-tenured (3-5 years) | 3 ≥65 years | 1 Not Independent | | 5 Longer-tenured (6+ years) | | | | Our Board term limit is 15 years | Our Board age limit is 75 years | All director nominees except our CEO are independent and meet heightened independence standards for our committees, as required |
Nominee Biographies
Nominee Biographies
Nominee Biographies
| | H. Lawrence Culp, Jr. Director Since: 2018 Age: 61 Birthplace: United States | | Chairman (since April 2024) and CEO (since June 2022), GE Aerospace, Evendale, OH and former Chairman and CEO, GE, Boston, MA (2018–2024) | | | Board Leadership | Chairman | | PRIOR BUSINESS EXPERIENCE • Senior Advisor, Bain Capital Private Equity, a global private equity firm (2017–2018) • Senior Lecturer, Harvard Business School (2015–2018) • Former CEO and President, Danaher (2001–2014), a global science and technology company operating in the healthcare, environmental and applied-end markets; joined Danaher subsidiary Veeder-Root in 1990, serving in a number of leadership positions within Danaher, including COO and, following his retirement, Senior Advisor (2014–2016) CURRENT PUBLIC COMPANY BOARDS • GE Aerospace • GE HealthCare PAST PUBLIC COMPANY BOARDS • Danaher • GlaxoSmithKline • T. Rowe Price Group OTHER POSITIONS • Member and former Chairman, Board of Visitors & Governors, Washington College • Member, Board of Trustees, Wake Forest University EDUCATION • Washington College • MBA, Harvard Business School | |
Nominee Biographies
| | Thomas Horton Director Since: 2018 Age: 63 Birthplace: United States INDEPENDENT | | Partner, Global Infrastructure Partners, an infrastructure investment fund, New York, NY (since 2019) | | | Board Leadership | Lead Director | | GE AEROSPACE COMMITTEE MEMBERSHIP • Governance PRIOR BUSINESS EXPERIENCE • Senior Advisor, Warburg Pincus LLC, a private equity firm focused on growth investing (2015–2019) • Chairman, American Airlines Group, one of the largest global airlines (formed following the merger of AMR Corporation and US Airways) (2013–2014) • Chairman and CEO, American Airlines (2011–2014) • Chairman and CEO, AMR (parent company of American Airlines) (2010–2013) • EVP and CFO, AMR (2006–2010) • Vice Chairman and CFO, AT&T (2002–2006) • SVP and CFO, AMR (2000–2002); joined AMR in 1985, serving in various finance and management roles CURRENT PUBLIC COMPANY BOARDS • GE Aerospace • Walmart PAST PUBLIC COMPANY BOARDS • EnLink Midstream • Qualcomm EDUCATION • Baylor University • MBA, Southern Methodist University | |
Nominee Biographies
| | Isabella Goren Director Since: 2022 Age: 64 Birthplace: Ukraine INDEPENDENT | | Former Chief Financial Officer of American Airlines and AMR Corporation, a global airline, Fort Worth, TX (2010-2013) | | | Board Leadership | Chair: Audit Committee | | GE AEROSPACE COMMITTEE MEMBERSHIP • Audit (Chair) PRIOR BUSINESS EXPERIENCE • CFO, American Airlines and AMR Corporation (2010-2013) • Senior Vice President, Customer Relationship Marketing, American Airlines (2006-2010) • Vice President, American Airlines (1998-2006) • President, AMR Services (1996-1998) • Previously served in various management positions at American Airlines (1986-1996) • Chemical Engineer, Dupont (1983-1985) CURRENT PUBLIC COMPANY BOARDS • GE Aerospace • Marriott International PAST PUBLIC COMPANY BOARDS • Gap • LyondellBasell Industries OTHER POSITIONS • Director, MassMutual • Member of the Advisory Board, The University of Texas at Austin, Cockrell School of Engineering • Member of the Executive Board, Lyle School of Engineering, Southern Methodist University EDUCATION • University of Texas at Austin • MBA, Southern Methodist University | |
Nominee Biographies
| | Stephen Angel Director Since: 2022 Age: 69 Birthplace: United States INDEPENDENT | | Chairman and Former CEO, Linde, a global industrial gases and engineering company, Dublin, Ireland (since 2022) | | | Board Leadership | Chair: Compensation Committee | | GE AEROSPACE COMMITTEE MEMBERSHIP • Compensation (Chair) PRIOR BUSINESS EXPERIENCE • CEO, Linde (2018-2022) • President & CEO, Praxair (subsequently Linde) (2007-2018) • President & COO, Praxair (2006-2007) • EVP, North America, Europe and Asia, Praxair (2001-2006) • Previously held various roles at General Electric (1979-2001) CURRENT PUBLIC COMPANY BOARDS • GE Aerospace • GE Vernova • Linde PAST PUBLIC COMPANY BOARDS • PPG Industries • Praxair OTHER POSITIONS • Director, Stoke Space Technologies • Member of The Business Council EDUCATION • North Carolina State University • MBA, Loyola College | |
Nominee Biographies
| | Catherine Lesjak Director Since: 2019 Age: 66 Birthplace: Canada INDEPENDENT | | Former Chief Financial Officer, HP, a global technology company, and its predecessor, Hewlett-Packard, Palo Alto, CA (2007-2018) | | | Board Leadership | Chair: Governance & Public | | | Affairs Committee | | GE AEROSPACE COMMITTEE MEMBERSHIP • Governance (Chair) • Audit PRIOR BUSINESS EXPERIENCE • Interim Chief Operating Officer, HP (2018–2019) • Interim CEO, Hewlett Packard (2010) • Senior Vice President and Treasurer, HP (2003–2007) • Previously served in various leadership positions within the financial organization at HP and Hewlett Packard, including as Global Controller, Software Solutions; Controller and Credit Manager for Commercial Customers; and as Manager, Financial Operations, Enterprise Marketing and Solutions (joined Hewlett Packard in 1986) CURRENT PUBLIC COMPANY BOARDS • GE Aerospace • GE HealthCare • PROS Holdings PAST PUBLIC COMPANY BOARDS • SunPower OTHER POSITIONS • Board, Haas School of Business, University of California, Berkeley EDUCATION • Stanford University • MBA, University of California, Berkeley | |
Nominee Biographies
| | Sébastien Bazin Director Since: 2016 Age: 63 Birthplace: France INDEPENDENT | | Chairman and CEO, AccorHotels, a global hotel company, Paris, France (since 2013) | | | GE AEROSPACE COMMITTEE MEMBERSHIP • Compensation • Governance PRIOR BUSINESS EXPERIENCE • CEO, Europe Colony Capital, a private investment firm (1997–2013) • Group Managing Director, CEO and General Manager, Immobilière Hôtelière (1992–1997) • Began career in 1985 in U.S. finance sector, becoming Vice President, M&A, PaineWebber CURRENT PUBLIC COMPANY BOARDS • GE Aerospace • AccorHotels PAST PUBLIC COMPANY BOARDS • Banyan Tree Holding • Carrefour • Huazhu Group OTHER POSITIONS • Vice Chairman, Supervisory Board, Gustave Roussy Foundation, cancer research funding • Chairman, Safar Ventures • Director, Riyadh School of Tourism and Hospitality EDUCATION • Sorbonne University • MA (Economics), Sorbonne University | |
Nominee Biographies
| | Margaret Billson Director Since: 2023 Age: 63 Birthplace: United States INDEPENDENT | | Former President and CEO of BBA Aviation, plc’s Global Engine Services Division, and its predecessor Aftermarket Services Division, an aviation services company, London, England (2009-2016) | | | GE AEROSPACE COMMITTEE MEMBERSHIP • Audit PRIOR BUSINESS EXPERIENCE • President and CEO of BBA Aviation, plc’s Global Engine Services Division and its predecessor Aftermarket Services Division (2009-2016) • President, Airplane Division and Chief Operating Officer, Eclipse Aviation (2005-2008) • Vice President, General Manager, Honeywell Aerospace (2003-2005) • Vice President, Engineering & Program Management, Honeywell Aerospace (1997-2003) • Previously served in various management positions at Douglas Aircraft Company, a division of the McDonnell Douglas Corporation (1984-1996) CURRENT PUBLIC COMPANY BOARDS • GE Aerospace PAST PUBLIC COMPANY BOARDS • Arconic • CAE • SkyWest EDUCATION • Embry-Riddle Aeronautical University • MEng, Aerospace, Aeronautical and Astrological Engineering, California State University, Long Beach | |
Nominee Biographies
| | Thomas Enders Director Since: 2023 Age: 66 Birthplace: Germany INDEPENDENT | | Former CEO of Airbus SE, a global aerospace company, and its predecessor EADS NV, Blagnac, France (2005-2019) | | | GE AEROSPACE COMMITTEE MEMBERSHIP • Compensation PRIOR BUSINESS EXPERIENCE • CEO of Airbus SE and its predecessor EADS NV (2005-2019) • Head of the Defense and Security Systems Business, EADS NV (2000-2005) • Multiple positions at DaimlerChrysler Aerospace (1991-2000) • Planning Staff, German Federal Ministry of Defense (1989-1991) • Researcher, German Council on Foreign Relations and International Institute for Strategic Studies (1988-1989) CURRENT PUBLIC COMPANY BOARDS • GE Aerospace • Lilium • Linde • Lufthansa PAST PUBLIC COMPANY BOARDS • Knorr Bremse OTHER POSITIONS • President, German Council on Foreign Relations (DGAP) • Director, Helsing EDUCATION • PhD, University of Bonn • University of California, Los Angeles | |
Nominee Biographies
| | Edward Garden Director Since: 2017 Age: 63 Birthplace: United States INDEPENDENT | | Chairman and CEO, Garden Investments, an investment management firm, New York, NY (since 2023) | | | GE AEROSPACE COMMITTEE MEMBERSHIP • Audit • Compensation PRIOR BUSINESS EXPERIENCE • Chief Investment Officer and Founding Partner, Trian Fund Management (2005-2023) • Vice Chairman and Director, Triarc Companies (subsequently The Wendy’s Company and previously Wendy’s/Arby’s Group) (2004-2007) and Executive Vice President (2003-2004) • Managing Director, Credit Suisse First Boston (1999-2003) • Managing Director, BT Alex Brown (1994-1999) CURRENT PUBLIC COMPANY BOARDS • GE Aerospace • Middleby PAST PUBLIC COMPANY BOARDS • Family Dollar Stores • Invesco • Janus Henderson Group • Legg Mason • Pentair • The Bank of New York Mellon • The Wendy’s Company EDUCATION • Harvard College | |
Nominee Biographies
| | Darren McDew Director Since: 2023 Age: 64 Birthplace: United States INDEPENDENT | | Retired Four-Star General, United States Air Force, and Former Commander of U.S. Transportation Command, Scott Air Force Base, Illinois (2015-2018) | | | GE AEROSPACE COMMITTEE MEMBERSHIP • Audit • Governance PRIOR GOVERNMENT EXPERIENCE • Four-star general who served for 36 years in the United States military before retiring in October 2018. • Commander, U. S. Transportation Command, the single manager for global air, land and sea transportation for the U.S. Department of Defense from 2015 to 2018. • Held various leadership roles across the U. S. Military, including Vice Director for Strategic Plans and Policy for the Joint Chiefs of Staff, Military Aide to the President, Director of Air Force Public Affairs, and Chief of Air Force Senate Liaison Division. CURRENT PUBLIC COMPANY BOARDS • GE Aerospace • Abbott Laboratories • Parsons Corporation OTHER POSITIONS • Director, United Services Automobile Association (USAA) • Board of Governors, Boys and Girls Club of America EDUCATION • Virginia Military Institute • MS, Aviation Management, Embry-Riddle Aeronautical University | |
The Lead Director’s Role
The Lead Director’s Role The lead director has the following responsibilities (and may also perform other functions at the Board’s request), as detailed in the Board’s Governance Principles:
The Lead Director’s Role
| • | Board leadership — provides leadership to the Board in any situation where the Chairman’s role may be perceived to be in conflict, and chairs Board meetings in the absence of the Chairman |
The Lead Director’s Role
| • | Board agenda, schedule & information — approves the agenda (with the ability to add agenda items), schedule and information sent to directors and calls additional meetings, as needed |
The Lead Director’s Role
| • | Leadership of independent director meetings — calls and leads independent director meetings, which are regularly scheduled (in addition to the numerous informal sessions that occur throughout the year) without any management directors or GE Aerospace employees present |
The Lead Director’s Role
| • | Chairman-independent director liaison — regularly meets with the Chairman and serves as liaison between the Chairman and the independent directors (although every director has direct access to the Chairman) |
The Lead Director’s Role
| • | Shareholder communications — makes himself/herself available as the primary Board contact for direct communication with our significant shareholders |
The Lead Director’s Role
| • | Board governance processes — works with the Governance Committee to guide the Board’s governance processes, including the annual Board self-evaluation and the annual Chairman’s evaluation |
The Lead Director’s Role
| • | Board leadership structure review — oversees the Board’s periodic review and evaluation of its leadership structure |
The Lead Director’s Role
| • | Committee chair selection — advises the Governance Committee in choosing committee chairs |
The Lead Director’s Role
| | CHAIRMAN OF THE BOARD & CEO | | | LEAD DIRECTOR elected solely by independent directors | | | CHAIRS The chairs of our Audit, Compensation and Governance committees are independent |
The Lead Director’s Role
| Considerations in selecting current lead director: THOMAS HORTON | |
The Lead Director’s Role
| Mr. Horton was first elected to our Board at the 2018 Annual Meeting. During his tenure on our Board, he has established strong working relationships with his fellow directors and garnered their trust and respect. Furthermore, he has demonstrated strong leadership skills, independent thinking and a deep understanding of our businesses and their industries. The independent directors’ decision to select Mr. Horton as lead director took into account the tenures and capabilities of each independent director, along with a potential candidate’s willingness and ability to serve as lead director, understanding that the position entails significant responsibility and time commitment. The Board considered that Mr. Horton also serves as lead independent director for Walmart. However, in reviewing Mr. Horton’s time commitment at Walmart, the independent directors noted that Walmart has three separate positions for CEO, chairman, and lead independent director, which mitigated concerns about Mr. Horton’s ability to dedicate sufficient time to the role as GE Aerospace’s lead director under the circumstances. |
Director Compensation for 2024
Director Compensation for 2024 The compensation program for independent directors was designed to achieve the following goals:
Director Compensation for 2024
| • | Fairly pay directors for the work required at a company of GE Aerospace’s size and scope, as benchmarked against our peer group; |
Director Compensation for 2024
| • | Align directors’ interests with the long-term interests of GE Aerospace shareholders; and |
Director Compensation for 2024
| • | Be simple, transparent and easy for shareholders to understand. |
2024 Annual Director Compensation
2024 Annual Director Compensation Our independent directors received annual 2024 compensation as shown in the 2024 Director Compensation Table on page 24. GE AEROSPACE DIRECTOR COMPENSATION PROGRAM. In connection with our launch as an independent public company, we adopted the GE Aerospace 2024 Non-Employee Director Compensation Plan, effective May 7, 2024 (the GE Aerospace Director Compensation Program). Our independent directors receive compensation under this program as show in the table below.
2024 Annual Director Compensation
| All independent directors | | | • Annual cash retainer | $140,000 | | • Restricted stock units (RSUs) | $185,000 | | Lead director | $50,000 | | Audit Committee chair | $30,000 | | Compensation Committee chair | $25,000 | | Governance Committee chair | $20,000 |
2024 Annual Director Compensation
| • | Time of payment. Quarterly cash installments in arrears (subject to a deferral election) and annual grant of RSUs on the date of the Annual Meeting |
2024 Annual Director Compensation
| • | Limit on director compensation. $1,000,000 annually, including cash earned & equity granted (regardless of any deferral election) |
2024 Annual Director Compensation
| • | HOW RESTRICTED STOCK UNITS WORK. Each RSU is equivalent to one share of GE Aerospace stock and will fully vest on the one-year anniversary of the grant date. To calculate the number of RSUs to be granted, we divide the target value of the RSUs by the average closing price of GE Aerospace stock for the 30 days preceding and including the grant date. RSUs accumulate quarterly dividend-equivalent payments in the form of additional RSUs. RSUs are settled within two weeks of vesting unless the director has elected for deferred settlement (in which case RSUs are settled one year after the Director leaves the Board). |
2024 Annual Director Compensation
| • | HOW CASH RETAINER DEFERRALS WORK. Directors may elect to defer some or all of their cash retainers into an interest account and/or into phantom stock units (Phantom Units). Interest accounts under the GE Aerospace Director Compensation Program are credited with interest monthly based on the prior calendar month’s average yield for U.S. Treasury notes and bonds with maturities from 10 to 20 years. Phantom Units are equal in value to a share of GE Aerospace stock and are fully vested upon grant, but do not have voting rights. If a director elects to defer into Phantom Units, the number of Phantom Units to be granted is calculated by dividing the cash retainer deferred by the average closing price of GE Aerospace stock for the 30 days preceding and including the grant date (which is the date the cash retainer would have been paid). Phantom Units accumulate quarterly dividend-equivalent payments in the form of additional Phantom Units. The Phantom Units are paid out in cash beginning one year after the director leaves the Board. Directors may elect to take their Phantom Units payments as a lump sum or in payments spread out for up to 10 years. |
2024 Annual Director Compensation
GE DIRECTOR COMPENSATION PROGRAM. Prior to May 7, 2024, directors were compensated under the General Electric 2003 Non-Employee Director Compensation Plan, Amended and Restated as of December 2018 (the GE Director Compensation Program). Under the GE Director Compensation Program, directors received the following annual amounts, which were payable at least 60% in deferred stock units (DSUs) and 40% in cash: (i) $275,000 for all directors, (ii) $50,000 for the lead director, (iii) $35,000 for members of the Audit Committee, (iv) $25,000 for members of the Compensation Committee, and (v) $10,000 for members of the Governance Committee. Directors could elect to defer some or all of the cash portion and instead receive additional DSUs.
2024 Annual Director Compensation
| • | HOW DEFERRED STOCK UNITS WORK. Each DSU under the GE Director Compensation Program is equal in value to a share of GE stock and is fully vested upon grant but does not have voting rights. To calculate the number of DSUs that were granted, we divided the target value of the DSUs by the average closing price of GE stock for the 20 days preceding and including the grant date. DSUs accumulate quarterly dividend-equivalent payments, which are reinvested into additional DSUs. The DSUs will be paid out in cash |
2024 Annual Director Compensation
beginning one year after the director leaves the Board. Directors could elect to take their DSU payments as a lump sum or in payments spread out for up to 10 years.
2024 Annual Director Compensation
| • | TREATMENT OF DEFERRED STOCK UNITS IN CONNECTION WITH THE SPIN-OFFS. In connection with the spin-offs of GE HealthCare in January 2023 and GE Vernova in April 2024 (each a Spin-Off Company), each then-current or former director of GE that held outstanding DSUs denominated in GE stock as of the spin-offs retained his or her GE-denominated DSUs and received additional DSUs from GE denominated in shares of the Spin-Off Company common stock based on the shareholder distribution ratio utilized for the spin-off. As this treatment was consistent with the manner in which GE shareholders received Spin-Off Company common stock, it promoted alignment with GE shareholders for directors through the execution of our business separations. |
2024 Annual Director Compensation
OTHER COMPENSATION. Our independent directors may also receive the following benefits:
2024 Annual Director Compensation
| • | MATCHING GIFT PROGRAM. Independent directors may participate in the GE Aerospace Foundation’s Matching Gifts Program (and previously, the GE Foundation’s Matching Gifts Program) on the same terms as GE Aerospace employees. Under this program, the GE Aerospace Foundation matches for each participant up to $5,000 for annual contributions to approved charitable organizations. |
2024 Annual Director Compensation
| • | INCIDENTAL BOARD MEETING EXPENSES. The company occasionally provides travel and sponsors activities for spouses or other guests of the directors in connection with Board meetings. No such expenses were incurred during 2024. |
No Additional Director Compensation for Independent Directors
No Additional Director Compensation for Independent Directors Independent directors do not receive any cash incentive compensation or pension benefits. We ceased granting stock options to directors in 2002, and no independent director had stock options outstanding as of the most recent fiscal year-end. Directors who are company employees do not receive any compensation for their services as directors.
2024 Director Compensation Table
2024 Director Compensation Table This table shows the compensation that each director, other than Mr. Culp, earned for his or her 2024 Board and committee service. For Mr. Culp’s compensation refer to the Summary Compensation Table on page 38.
2024 Director Compensation Table
| NAME OF DIRECTOR | CASH FEES | STOCK AWARDS | ALL OTHER COMP | TOTAL | | Stephen Angel | $0 | $414,727 | $0 | $414,727 | | Sébastien Bazin | $0 | $401,886 | $0 | $401,886 | | Margaret Billson | $130,879 | $258,887 | $0 | $389,766 | | Thomas Enders | $130,495 | $258,275 | $0 | $388,770 | | Edward Garden | $134,368 | $264,352 | $0 | $398,720 | | Isabella Goren | $153,951 | $264,396 | $5,000 | $423,347 | | Thomas Horton | $170,462 | $269,861 | $5,000 | $445,323 | | Catherine Lesjak | $148,835 | $266,581 | $5,000 | $420,416 | | Darren McDew | $132,275 | $261,072 | $0 | $393,347 | | Paula Rosput Reynolds* | $32,352 | $50,368 | $0 | $82,720 | | Jessica Uhl** | $7,154 | $11,135 | $220,136 | $238,425 |
2024 Director Compensation Table
| * Ms. Rosput Reynolds served as our director until April 2, 2024, at which point she transitioned from the GE Board to the GE Vernova board. The amounts reported represent pro-rata compensation earned for her 2024 service as a director. |
2024 Director Compensation Table
| ** Ms. Uhl served as our director until April 2, 2024. She joined GE Vernova as President on January 22, 2024, at which point she ceased to be compensated as a GE director and became entitled to receive an annual salary of $1,100,000, an annual bonus target at 100% of her salary, and an annual grant of long-term equity incentive awards valued at $3,750,000. Ms. Uhl was also eligible to participate in executive benefits consistent with other officers of her level at GE Vernova. The amounts reported for Ms. Uhl represent pro-rated compensation earned for her Board service until January 22, 2024 and her role as President until the GE Vernova spin-off on April 2, 2024. |
2024 Director Compensation Table
CASH FEES. Amount of cash compensation earned in 2024 for Board and committee service. STOCK AWARDS. Aggregate grant date fair value of DSUs, RSUs and Phantom Units granted in 2024, as calculated in accordance with SEC rules, including amounts that the directors deferred into DSUs and Phantom Units in lieu of all or a part of their cash compensation. Grant date fair value is calculated by multiplying the number of DSUs, RSUs and Phantom Units granted by the closing price of the company’s stock on the grant date (or the last trading day prior to the grant date), which was $175.53 for March 28, 2024 grants, $167.97 for May 6, 2024 grants, $168.78 for May 7, 2024 grants, $158.97 for June 30, 2024 grants, $188.58 for September 30 grants and $166.79 for December 31, 2024 grants. The table below shows the cash amounts that the directors deferred into DSUs and Phantom Units in 2024 and the number of DSUs, RSUs (all of which were unvested as of 2024 fiscal year-end) and Phantom Units accrued as of 2024 fiscal year-end.
2024 Director Compensation Table
| | CASH DEFERRED INTO | | # PHANTOM UNITS | #RSUS ACCRUED AT | | | DSUS AND PHANTOM | # DSUS ACCRUED AT | ACCRUED AT 2024 | 2024 FISCAL | | DIRECTOR | UNITS IN 2024 | 2024 FISCAL YEAR-END | FISCAL YEAR-END | YEAR-END | | Stephen Angel | $212,101 | 6,619 | 630 | 1,169 | | Sébastien Bazin | $199,313 | 26,050 | 534 | 1,169 | | Margaret Billson | $59,588 | 474 | 0 | 1,169 | | Thomas Enders | $59,011 | 471 | 0 | 1,169 | | Edward Garden | $64,822 | 14,270 | 0 | 1,169 | | Isabella Goren | $64,895 | 4,135 | 0 | 1,169 | | Thomas Horton | $70,129 | 15,574 | 0 | 1,169 | | Catherine Lesjak | $66,989 | 11,870 | 0 | 1,169 | | Darren McDew | $61,681 | 1,519 | 0 | 1,169 | | Paula Rosput Reynolds | $48,527 | 13,950 | 0 | 0 | | Jessica Uhl | $10,730 | 1,142 | 0 | 0 |
2024 Director Compensation Table
| * Represents DSUs denominated in company stock. Does not include DSUs denominated in GE HealthCare or GE Vernova stock which were received as a result of the spin-offs. See Spin-Off Equitable Adjustments on page 34 for additional information. |
2024 Director Compensation Table
ALL OTHER COMPENSATION. Includes contributions to approved charitable organizations under the GE Aerospace Foundation Matching Gifts Program. For Ms. Uhl, this amount also includes pro-rated compensation for her role as President of GE Vernova from January 22, 2024 until the GE Vernova spin-off on April 2, 2024, which consisted of $213,388 in base salary and $6,748 in RSP company matching contributions.
Advisory Approval of Our Named Executives’ Compensation
| Salary Deferrals | | | GE Aerospace Restoration Plan | | | Nonqualified Deferred Compensation Table | | | Pension Benefits | 46 | | GE Aerospace Pension Plan | | | GE Aerospace Supplementary Pension Plan | | | GE Aerospace Excess Benefits Plan | | | Pension Benefits Table | | | Potential Termination Payments | 48 | | Equity Awards | | | Pension Benefits | | | Deferred Compensation | | | Life Insurance Benefits | | | Other Executive Compensation Policies & Practices | 52 | | Roles and Responsibilities in Succession Planning and Compensation | | | Our Policies on Compensation Consultants | | | Clawbacks and Other Remedies for Potential Misconduct | | | Compensation Risk Assessment | | | Stock Ownership and Equity Grant Policies | | | Tax Deductibility of Compensation | | | Compensation Committee Interlocks and Insider Participation | | | Management Development & Compensation Committee Report | 53 |
Key Compensation Program Elements
| | Fixed | Performance-Based / At-Risk | | | | | | Short-Term Incentive | | Long-Term Equity-Based Incentive (generally 3-year vesting) | | | | Component | SALARY | ANNUAL BONUS | PERFORMANCE STOCK UNITS | STOCK OPTIONS | RESTRICTED STOCK UNITS | | Link to Shareholder Value | Provides base pay level aligned with roles, responsibilities and individual performance to attract and retain top talent | Incentivizes delivery on annual investor framework Serves as key compensation vehicle for differentiating performance each year | Focus on achievement of financial performance goals aligned with our operating and strategic plans, with a relative TSR modifier based on three-year return from stock price appreciation and dividends Provide a significant stake in the long-term financial success of GE Aerospace that is aligned with shareholder interests, and promote employee retention | Reward stock price appreciation over time | Provide for additional ownership stake in the company, and promote employee retention |
Peer Group and Benchmarking
Peer Group and Benchmarking DETERMINING OUR PEER GROUP. In reviewing and determining the compensation benchmarking peer group each year, the Compensation Committee considers the following factors:
Peer Group and Benchmarking
| • | Industry – companies operating in similar or comparable industry spaces and with comparable operational scope |
Peer Group and Benchmarking
| • | Size – companies that are comparable to GE Aerospace in terms of revenues, market capitalization and number of employees |
Peer Group and Benchmarking
| • | Investment Peers – U.S. public companies whose performance is monitored regularly by the same market analysts who monitor GE Aerospace |
Peer Group and Benchmarking
| 2024 PEER COMPANIES | | | 3M | L3Harris | | American Airlines | Lockheed Martin | | Boeing | Northrop Grumman | | Caterpillar | Parker-Hannifin | | Delta Airlines | RTX | | Emerson Electric | Textron | | FedEx | TransDigm | | General Dynamics | United Airlines | | Honeywell | |
Peer Group and Benchmarking
The Compensation Committee approved the new 2024 peer group effective upon the spin-off of GE Vernova in April 2024. This peer group is tailored to consider the industry, size and investment peers of GE Aerospace. As a result, Cisco, Deere, DuPont, Ford, General Motors, HP, IBM, Intel, Johnson Controls and United Parcel Service were removed and American Airlines, Delta Airlines, Emerson Electric, FedEx, L3Harris, Parker-Hannifin, Textron, TransDigm and United Airlines were added to the peer group. HOW WE USE THE PEER GROUP. The Compensation Committee uses the peer group to assess the pay level of our executives, pay mix, compensation program design and pay practices. The peer group is also used as a reference point when assessing competitiveness of the executives’ pay, although compensation decisions are also supplemented by input from the company’s compensation consultant and are impacted by principles of internal equity, succession planning and other internal GE Aerospace dynamics.
Target Annual Program Compensation
| | | ANNUAL BONUS | | | TOTAL TARGET | | 2024 CURRENT NAMED EXECUTIVES | BASE SALARY | TARGET | TARGET AMOUNT | TARGET EQUITY | PROGRAM COMP. | | Culp | $2,000,000 | 200% | $4,000,000 | $15,250,000 | $21,250,000 | | Ghai | $955,000 | 120% | $1,146,000 | $6,000,000 | $8,101,000 | | Stokes | $1,400,000 | 100% | $1,400,000 | $5,000,000 | $7,800,000 | | Meisner | $800,000 | 100% | $800,000 | $3,500,000 | $5,100,000 | | Phillips | $800,000 | 100% | $800,000 | $3,500,000 | $5,100,000 |
Bonuses under the Annual Executive Incentive Plan
Bonuses under the Annual Executive Incentive Plan We provide annual cash incentive opportunities to our named executives under the GE Aerospace Annual Executive Incentive Plan (AEIP). The financial performance metrics and targets for awards under the AEIP are designed to drive company and business performance, based on our operational and financial priorities.
How We Determined 2024 AEIP Bonuses for Our Named Executives
How We Determined 2024 AEIP Bonuses for Our Named Executives For our named executives, individual target award percentages were set between 100–200% of base salary, based on their respective positions and alignment with peer compensation practices. Each year, the Compensation Committee evaluates and sets AEIP performance metrics and targets for the total company and the businesses during the first quarter of the performance year. Following the conclusion of the performance year, the Compensation Committee assesses total company and business performance against applicable performance metrics to determine the AEIP bonus payouts. The CEO may also provide perspective to the Compensation Committee about business or individual performance for the year, although the CEO has no role in the Compensation Committee’s determination of his own compensation. For 2024, bonuses paid to our named executives under the AEIP were determined quantitively based on the named executive’s base salary, target award percentage, achievement of applicable total company or business financial performance targets and a safety modifier. The Compensation Committee has the ability under the AEIP to apply discretion at the business or individual levels when appropriate, and for 2024, the Committee applied negative discretion to adjust total company and Commercial Engines & Services performance downward as described on page 31.
How We Selected Targets for the 2024 AEIP
How We Selected Targets for the 2024 AEIP The Compensation Committee establishes targets and performance levels that are designed to be rigorous but realistic and informed by our annual financial performance goals and external guidance. For 2024, the target performance for each metric required meaningful growth compared to the prior year. The target, threshold and maximum performance levels for each performance measure are set with reference to annual financial performance goals for the total company and businesses that our CEO and CFO establish, and the Compensation Committee approves the performance levels for compensation purposes. Targets for the 2024 AEIP are inclusive of the impact of the spin-off of GE Vernova in April 2024, reflecting standalone GE Aerospace financials. Failure to achieve threshold on any one metric would result in no payout for that metric; and failure to achieve threshold on all metrics would result in no payout for the AEIP bonus. For the 2024 AEIP, named executives could receive between 0% and 200% of their target award based on financial performance, subject to an additional safety modifier of 10 percentage points.
How We Performed Against Annual Bonus Targets for 2024 AEIP
How We Performed Against Annual Bonus Targets for 2024 AEIP The following charts set forth the results for total company and Commercial Engines & Services (CES) performance under the AEIP for 2024. As reflected in more detail below, we had strong financial performance in 2024, with total company and CES operating profit and free cash flow near or exceeding maximum performance levels. For additional information on company performance in 2024, see Launching GE Aerospace on page 2.
How We Performed Against Annual Bonus Targets for 2024 AEIP
| (1) Financial results were calculated based on the predetermined formulas and targets. We delivered strong financial results in 2024, but we did not achieve the underlying operational performance needed to meet engine delivery and services expectations for our customers. As a result, the Compensation Committee applied a downward adjustment at the total company and CES levels for our operational performance. Total company financial performance was adjusted from 174% to 165%, and CES financial performance was adjusted from 160% to 143%. |
How We Performed Against Annual Bonus Targets for 2024 AEIP
| (2) Based on 2024 safety performance against targets for the following metrics: injury and illness total recordable rate (0.50), serious incidents (0) and fatalities (0). |
How We Performed Against Annual Bonus Targets for 2024 AEIP
| (3) Final result for CES reflects 30% total company and 70% CES weighting plus the safety modifier. |
How We Performed Against Annual Bonus Targets for 2024 AEIP
| * Non-GAAP Financial Measure. For information on how these metrics are calculated, see Explanation of Non-GAAP Financial Measures and Performance Metrics on page 65. |
How We Performed Against Annual Bonus Targets for 2024 AEIP
| ** The company does not report free cash flow at the segment level for Commercial Engines & Services. |
Long-Term Incentive Compensation
Long-Term Incentive Compensation
How We Determine Award Amounts
How We Determine Award Amounts As part of our annual compensation program, we use a mix of long-term incentive compensation awards: PSUs, stock options and RSUs. Each component of our long-term incentive program supports our pay-for-performance objectives: PSUs incentivize achievement of long-term financial and operating goals, stock options align management with shareholders by providing value only if the stock price rises, and RSUs serve as a retention incentive and provide additional alignment with shareholders. In determining award mix and amounts, the Compensation Committee evaluates each executive’s overall compensation relative to the market for similar talent, the mix of cash versus equity as a percentage of the executive’s overall compensation, the executive’s expected future contribution to the success of the company and the retentive value of such awards. In 2024, Mr. Culp’s annual equity incentive was granted 100% as PSUs. For our other named executives, annual equity incentive awards for 2024 were weighted approximately 50% as PSUs, 30% as stock options and 20% as RSUs. Beginning in 2025, Mr. Culp’s annual equity incentive will have the same weighting of 50% as PSUs, 30% as stock options and 20% as RSUs for alignment with the rest of his senior leadership team and with the market; see Compensation Actions for 2024 for Our Current Named Executives on page 35 for additional information.
Performance Stock Units
Performance Stock Units HOW OUR PERFORMANCE STOCK UNITS WORK. PSU awards are designed to focus our named executives on long-term financial and operating goals for the company overall. Our PSU awards have formulaically determined payouts that are earned only if the company achieves specified performance levels over the relevant performance period. Early each year the Compensation Committee selects the performance metrics and targets for our PSU awards to be granted that year. The Compensation Committee chooses performance metrics that it believes align with the company’s long-term strategic objectives and contribute to the creation of long-term shareholder value. The Compensation Committee then monitors company performance against the performance metrics during the performance period, and following the conclusion of the performance period, the Compensation Committee certifies the final levels of achievement. The certified achievement levels determine the percentage of the target number of PSUs under the award that a named executive will earn. Certification below the threshold amount for both financial metrics will result in cancellation of the PSUs. 2022 PSUs. As previously reported in the company’s 2023 proxy statement, the threshold levels of performance for the 2022 PSUs were not met, and in February 2023 the Compensation Committee cancelled the 2022 PSUs with no payout. 2023 AND 2024 PSUs. While we have adopted a new PSU design for 2025 as described below, the PSUs granted in 2023 and 2024 are based on adding together the financial results for each year of a three-year performance period. Performance is measured against the following financial metrics: adjusted earnings per share (50% weighting) and free cash flow (50% weighting); with results interpolated for performance between threshold (25%), target (100%) and maximum (175%). For the 2023 PSUs, performance against the financial metrics is measured separately for each calendar year during the three-year performance period, with each year weighted equally. Because of the significant period of transformation amidst executing two spin-offs when these PSUs were granted in 2023, the grant agreements provide for targets to be set early within each year in the three-year performance period. For the 2024 PSUs, performance against the financial metrics is measured separately for each calendar year during the three-year performance period, with each year weighted as follows: 2024 (50% weighting); 2025 (30% weighting); and 2026 (20% weighting). The targets against which the company’s performance is measured for each year were fixed at the time the grant was awarded. The PSU financial performance result is also subject to modification of +/- 20% based on three-year relative TSR versus the S&P 500 Industrials Index, but in no event will the total payout under the PSUs exceed 175% of the target amount. For the 2023 PSUs, the target, threshold and maximum levels for relative TSR are the 35th, 55th and 80th percentile performance versus the S&P 500 Industrial Index, respectively. For the 2024 PSUs, the threshold, target and maximum performance levels for relative TSR are the 25th, 50th and 75th percentile performance versus the S&P 500 Industrial Index, respectively. The change to the relative TSR performance levels was made in consideration of the shift that began in 2024 to the use of multiyear financial goals set at the time of PSU grant. The Compensation Committee considered the rigor of our new multi-year financial goals as well as the increased challenge of maintaining relative outperformance on a multi-year basis in determining the new TSR performance levels.
Performance Stock Units
| ANNUAL PROGRAM HIGHLIGHT – 2025 PSU DESIGN. For 2025 we adopted a new PSU design, which measures cumulative performance over a three-year performance period (2025–2027). Performance is measured against the following cumulative three-year financial metrics, which were fixed at the time the grant was awarded: adjusted earnings per share (50% weighting) and free cash flow (50% weighting); the financial performance result is also subject to modification of +/- 20% based on three-year relative TSR versus the S&P 500 Industrials Index. This design enhancement focuses on long-range performance, and was enabled by the completion of the company’s multi-year strategic transformation. |
EVOLUTION OF PSU DESIGN THROUGH SPIN-OFFs
EVOLUTION OF PSU DESIGN THROUGH SPIN-OFFs Financial Metrics: Adjusted Earnings Per Share (50% weighting) and Free Cash Flow (50% weighting) Relative TSR (vs. S&P 500 Industrials Index): +/- 20% Modifier HOW WE SELECTED TARGETS AND METRICS FOR OUR OUTSTANDING PSUs. The Compensation Committee chose total company adjusted earnings per share and free cash flow as metrics for all years of our currently outstanding PSUs to incentivize and focus management on both profitability and cash generation, which are important financial priorities for GE Aerospace, and these are the same financial measures that management uses to report the company’s financial results each quarter and when providing an annual financial outlook for the year (see Explanation of Non-GAAP Financial Measures and Performance Metrics on page 65). These are financial metrics that help align all leaders who receive the PSUs to a uniform set of performance targets at the total company level, in contrast to the metrics used in our AEIP that include elements of business-level performance for employees aligned to individual businesses. Beginning with the new design for the 2025 PSUs, the incentive provided by these financial metrics in the PSUs is differentiated further from the AEIP because the PSUs measure performance on a cumulative basis over a three-year period. The three-year TSR modifier also measures relative performance over a multiyear period using a metric that is important to investors. The Compensation Committee establishes targets and performance levels that are designed to be rigorous but realistic and informed by our internal financial performance goals and external guidance. The target, threshold and maximum performance levels for each financial performance measure are set with reference to total company performance goals that our CEO and CFO establish. While the company does not publicly disclose the specific adjusted EPS and free cash flow targets due to the proprietary nature and competitive sensitivity of that information, we account for changes to our financial goals based on performance over time. For example, the 2025 PSU targets established early this year reflect higher performance levels than the PSU targets set in early 2024, reflecting the company’s strong financial performance in 2024 and informed by our most recent internal financial performance goals and external guidance for 2025.
Stock Options and Restricted Stock Units
Stock Options and Restricted Stock Units WE USE STOCK OPTIONS AND RSUs TO FOCUS ON LONG-TERM VALUE CREATION. We believe that awards of stock options and RSUs effectively focus our named executives on delivering long-term value to our shareholders. We consider stock options to be performance-based because the stock options have value only to the extent that the price of GE Aerospace stock appreciates after the award has been granted. This directly aligns payout with outcomes for our shareholders. Additionally, stock options vest over a multi-year period, and the executives must remain employed by the company on the date of the award’s restriction lapse. This helps reinforce the long-term retention of our executives and incentivizes executives to pursue growth that would result in stock price appreciation over the long-term. RSU awards reward and retain the named executives by offering them the opportunity to receive GE Aerospace stock if they remain employed by the company on the date that an award’s restrictions lapse, and provide additional alignment with shareholders. 2024 STOCK OPTIONS AND RSUs. The annual awards of stock options and RSUs granted in 2024 will vest in two equal installments on the second and third anniversary of the grant date.
Our Policy on Dividend Equivalents
Our Policy on Dividend Equivalents Our awards of PSUs and RSUs are entitled to receive dividend equivalents or dividends, as applicable, and these are only paid out on the shares actually received under the terms of such awards. Stock options are not entitled to receive any dividend equivalents or dividends.
Annual Program Compensation for 2024
| | | | 2024 ANNUAL EQUITY | | | OTHER EQUITY | | | | | | NAME | SALARY | ANNUAL BONUS | ANNUAL STOCK AWARDS | ANNUAL STOCK OPTIONS | TOTAL ANNUAL PROGRAM COMP. | CEO INCENTIVE GRANT | 2024 PORTION OF 2023 PSUS | SPIN-OFF EQUITABLE ADJUSTMENTS | OTHER SEC COMP. | SEC TOTAL | | Culp | $2,250,000 | $6,781,250 | $15,000,068 | N/A | $24,031,318 | $49,326,642 | $13,720,227 | $234,945 | $1,641,453 | $88,954,586 | | Ghai | $916,042 | $1,887,000 | $3,295,993 | $1,427,982 | $7,527,017 | N/A | $1,683,917 | $285,291 | $111,934 | $9,608,159 | | Stokes | $1,400,000 | $2,226,000 | $3,462,002 | $1,499,977 | $8,587,979 | N/A | $2,286,944 | $1,070,009 | $142,433 | $12,807,364 | | Meisner | $800,000 | $1,400,000 | $2,423,402 | $1,049,978 | $5,673,380 | N/A | N/A | $68,402 | $67,604 | $5,809,386 | | Phillips | $800,000 | $1,400,000 | $2,423,402 | $1,049,978 | $5,673,380 | N/A | N/A | $27,322 | $69,604 | $5,770,306 |
Annual Program Compensation for 2024
This disclosure should not be interpreted as the Summary Compensation Table. It is intended to provide additional context and insights beyond the required compensation figures. Refer to the Summary Compensation Table on page 38 for additional information. ANNUAL PROGRAM COMPENSATION FOR 2024. For details related to Salary, Annual Bonus (Non-Equity Incentive Plan Compensation), Annual Stock Awards (Stock Awards) and Annual Stock Options (Stock Options), see the Summary Compensation Table. OTHER EQUITY. The following elements of equity compensation were not part of annual program compensation in 2024, but they have values that are recognized in 2024 for SEC reporting purposes in the Stock Awards and Stock Options columns in the Summary Compensation Table.
Annual Program Compensation for 2024
| • | CEO INCENTIVE GRANT. In connection with the new employment agreement to extend Mr. Culp’s leadership, the Compensation Committee approved a one-time equity performance award with a grant date of July 1, 2024 (the CEO Incentive Grant). The CEO Incentive Grant is exclusively performance based, in the form of PSUs, and this value reflects the grant date fair value of the award. Off-cycle grants are not a regular part of the compensation program, and this proxy statement provides additional information about this grant in several places, including: |
Annual Program Compensation for 2024
| • | 2024 PORTION OF 2023 PSUS. The 2023 PSUs are three-year awards made as part of annual program compensation for 2023. Performance against the financial metrics for these PSUs is measured separately for each calendar year during the three-year performance period, with targets set early within each of those years. While the full number of shares underlying the 2023 PSUs was determined when the Compensation Committee approved the annual grant in 2023, for accounting purposes the grant date for each calendar year portion does not occur until targets are set and therefore the value of the 2023 PSUs will be reflected across three proxy reporting years at target: the 2023 portion was reflected in the company’s proxy statement filed last year, the 2024 portion is reflected in this year’s proxy statement, and the 2025 portion will be reflected in next year’s proxy statement. See the Summary Compensation Table for additional information on the 2024 portion of the 2023 PSUs. |
Annual Program Compensation for 2024
| • | SPIN-OFF EQUITABLE ADJUSTMENTS. In the spin-offs of GE HealthCare (GEHC) in January 2023 and GE Vernova (GEV, and each of GEHC and GEV, a Spin-Off Company) in April 2024, GE shareholders were entitled to receive a distribution of Spin-Off Company common stock based on a shareholder distribution ratio announced by the GE Board. Because unvested equity awards held by GE employees were not eligible to receive a distribution of Spin-Off Company shares, equitable adjustments were required to preserve the pre-spin-off intrinsic value of those awards following the reduction in parent company stock price that occurred when stock of the Spin-Off Companies was distributed to shareholders in the spin-offs. In advance of both spin-offs, the Compensation Committee established conversion ratios to govern the adjustments. The approach for the applicable equitable adjustments was to align employees with their employer and roles relative to the spin-offs, and was designed to preserve the pre-spin-off value of the relevant employee equity awards. The outstanding post-spin-off GE Aerospace equity awards reflecting these equitable adjustments are generally subject to the same vesting conditions and other terms that were applicable prior to the spin-off, except that the annual 2023 PSUs held by GE Aerospace employees following the GEV spin-off measure the company’s relative TSR for the remainder of the performance period by adding together the company’s pre- and post-GEV spin-off relative TSR as two discrete periods. The equitable adjustments in connection with the GEV spin-off resulted in a modification expense for certain awards for accounting and disclosure purposes. See the Summary Compensation Table for additional information. |
New CEO Employment Agreement
New CEO Employment Agreement BACKGROUND. Mr. Culp’s prior employment agreement was set to terminate on August 17, 2024. On June 30, 2024, the Board approved a new employment agreement for Mr. Culp to extend his employment through December 31, 2027, or a later date as mutually agreed up to and through December 31, 2028. In approving this new contract, the Board considered the best interests of shareholders, the strong fit and benefit of Mr. Culp’s skills and experience to lead GE Aerospace today and the significant value creation under Mr. Culp’s leadership since he became GE Chairman and CEO in 2018, among other factors. SALARY. Mr. Culp’s salary was reduced to $2,000,000, effective July 1, 2024, compared to $2,500,000 under the prior agreement. BONUS. Mr. Culp’s bonus target was increased to 200% of salary, effective July 1, 2024, compared to 150% under the prior agreement. Together with the salary change, his annual cash pay mix is now more performance-based and at-risk. ANNUAL EQUITY AWARDS. Under his prior employment agreement, Mr. Culp was granted annual equity with a grant date fair value of $15 million in the form of PSUs. Under Mr. Culp’s 2024 employment agreement, starting in 2025, Mr. Culp is granted equity with a grant date fair value of $15.25 million, in the form of 50% PSUs, 30% options and 20% RSUs to align the mix of annual equity with other members of the senior leadership team and with the market. For GE Aerospace operating on a standalone basis, in contrast to the multi-business GE before the spin-offs, the Compensation Committee views the consistency of Mr. Culp’s annual equity incentives with the rest of his senior leadership team as a valuable point of alignment and integration for the more focused company today. CEO INCENTIVE GRANT. Mr. Culp also received a CEO Incentive Grant that is exclusively performance-based in the form of PSUs. The grant represents 310,289 shares of common stock at target, with 0% to 150% of the target PSUs eligible to become earned based on the compound annual growth rate for adjusted earnings per share (EPS CAGR) over four fiscal years ending with, and subject to the satisfaction of service conditions through, December 31, 2027 (with limited exceptions, as described under Potential Termination Payments). The EPS CAGR performance target levels are aligned with the long-term operating profit outlook of approximately $10 billion the company provided for 2028 at the GE Aerospace Investor Day on March 7, 2024. This represents strong growth in adjusted EPS over the performance period, with EPS growing more than operating profit, and an ambitious growth rate in comparison to industrial benchmarks. In determining the structure, amount and terms of the CEO Incentive Grant, the Compensation Committee and the Board considered the necessary incentives to retain Mr. Culp over an extended period while tying the value of the award directly to the company’s future operating performance. In particular, the Compensation Committee and the Board considered:
New CEO Employment Agreement
| • | The grant of PSUs is 100% performance-based, aligns Mr. Culp’s compensation with shareholder value and incentivizes continued long-term value creation. |
New CEO Employment Agreement
| • | The award agreement runs through 2027, the same period as Mr. Culp’s employment agreement, and provides a stronger retention incentive than simply increasing his annual compensation package would have. For the grant to vest, Mr. Culp needs to both achieve the performance target and fulfill the term of the contract in accordance with the service conditions. |
New CEO Employment Agreement
| • | The value of the award reflects consideration of the level of performance required for payout, peer benchmarks, the annualized value of the grant, Mr. Culp’s exceptional past performance and his ability to lead GE Aerospace to success at this critical time |
New CEO Employment Agreement
| | Rahul Ghai Age: 53 Education: Delhi University; MBA, Purdue University Tenure: 3 Years | | CURRENT AND PRIOR ROLES SVP, Chief Financial Officer (since August 2022); former Chief Financial Officer, Otis Elevators (2019-2021); former Chief Financial Officer, Harris Corporation (2015-2019) 2024 Performance Highlights As CFO, Mr. Ghai leads the company’s global Finance organization and financial activities, including accounting and controllership, financial planning and analysis, tax, investor relations, internal audit and treasury. Performance highlights during 2024 included: • Delivered significant increases across all key financial metrics in 2024, surpassing guidance, growing adjusted revenue* by 10%, operating profit* by 30%, adjusted EPS* by 56% and free cash flow* by 28%. • Established a capital allocation framework, targeting approximately $25 billion in available cash for deployment from 2024 to 2026, and returned more than $6 billion to shareholders in 2024, including $5 billion of share buyback and dividend of ~30% of net income. • Successfully launched GE Aerospace’s Finance organization, integrating teams and transitioning key systems and processes on a standalone basis. Changes to 2024 Compensation: The Compensation Committee approved an increase, based on peer benchmarking, to Mr. Ghai’s total compensation effective September 16, 2024, including base salary of $955,000, bonus target of 120%, and an annual equity grant of $6.0 million. | |
New CEO Employment Agreement
| | Russell Stokes Age: 53 Education: Cleveland State University Tenure: 28 Years | | CURRENT AND PRIOR ROLES SVP, Chief Executive Officer, Commercial Engines & Services (since July 2022); former President and Chief Executive Officer, GE Aviation Services (2020-2022); President and Chief Executive Officer at other former GE businesses (2013-2020) 2024 Performance Highlights As CEO of Commercial Engines & Services, Mr. Stokes leads an organization that manufactures jet engines for commercial aircraft and provides maintenance, component repair and overhaul services, including sales of replacement parts. Performance highlights during 2024 included: • Drove strong full-year results for Commercial Engines & Services with orders up 38%, revenue up 13% and operating profit growing 25% in the year. • Received more than 3,900 commercial engine orders in the year and increased the CES backlog by 12% year-over-year to $154 billion, 90% of which is in services. • Leveraged FLIGHT DECK to address supply chain constraints and drive improvements to meet robust customer demand, enabling CES services revenue growth of 17% from the first to second half of the year. | |
New CEO Employment Agreement
| * Non-GAAP Financial Measure. For information on how these metrics are calculated, see Explanation of Non-GAAP Financial Measures and Performance Metrics on page 65. |
New CEO Employment Agreement
| | Christian Meisner Age: 55 Education: Villanova; M.A., Labor & Industrial Relations, Michigan State Tenure: 1 Year | | CURRENT AND PRIOR ROLES SVP, Chief Human Resources Officer (CHRO) (since October 2023); former SVP & Chief Human Resources Officer, Kaiser Permanente (2020-2023); former Corporate Vice President, Talent & Integration, United Technologies (2019-2020); former Chief Human Resources Officer, Otis Elevator (2016-2019) 2024 Performance Highlights As CHRO, Mr. Meisner is responsible for leading the company’s global HR organization, including talent management, leadership development and learning, compensation and benefits and employee relations. Performance highlights during 2024 included: • Established the Human Resources function at GE Aerospace, leading critical efforts such as the staffing of senior positions, conducting the company’s first employee engagement survey, and working with the Compensation Committee to extend Mr. Culp’s leadership. • Launched the Takeoff Grant, a broad equity award to invest in our global workforce, including shop floor production workers, and make them owners of GE Aerospace. • Strengthened organization and talent review process resulting in additional rigor and action plans, tighter integration with compensation and development programs, and continuous talent conversations with senior management. | |
New CEO Employment Agreement
| | John Phillips, III Age: 47 Education: Duke; J.D., Chicago Tenure: 1 Year | | CURRENT AND PRIOR ROLES SVP, General Counsel & Secretary (since October 2023); former Deputy Counsel to the President and Legal Advisor to the National Security Council (2022-2023); former Vice President, Corporate Secretary, and Assistant General Counsel, Boeing (2021-2022); Vice President and Assistant General Counsel, Boeing Defense, Space & Security (2016-2020) 2024 Performance Highlights As General Counsel, Mr. Phillips leads the company’s global legal, compliance, corporate secretary and security organizations. Performance highlights during 2024 included: • Stood up the Legal & Compliance function and tailored corporate governance policies and practices for GE Aerospace as a standalone company, with more focused and in-depth discussions with the Board on key issues and risks. • Led management of the most significant legal issues facing the company, including resolution of significant commercial disputes and settlement of various legacy liabilities. • Strengthened compliance and regulatory programs and oversaw key geopolitical issues impacting the company, while driving actions to reduce exposure to legal and regulatory risks. | |
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| NAME & PRINCIPAL POSITION | YEAR | SALARY | STOCK AWARDS | STOCK OPTION | NON-EQUITY INCENTIVE PLAN COMP. | CHANGE IN PENSION VALUE & DEFERRED COMP. | ALL OTHER COMP. | SEC TOTAL | | H. Lawrence Culp, Jr. Chairman & CEO | 2024 | $2,250,000 | $78,281,883 | $0 | $6,781,250 | $1,325,765 | $315,688 | $88,954,586 | | | 2023 | $2,500,000 | $4,999,987 | $0 | $5,625,000 | $1,002,278 | $571,020 | $14,698,285 | | | 2022 | $2,500,000 | $5,000,021 | $0 | $525,000 | $151,653 | $21,350 | $8,198,024 | | Rahul Ghai* SVP, CFO | 2024 | $916,042 | $5,265,201 | $1,427,982 | $1,887,000 | $0 | $111,934 | $9,608,159 | | | 2023 | $900,000 | $2,529,166 | $0 | $1,374,332 | $0 | $102,994 | $4,906,492 | | Russell Stokes SVP, CEO, Commercial Engines & Services | 2024 | $1,400,000 | $5,971,540 | $2,347,391 | $2,226,000 | $3,788 | $138,645 | $12,087,364 | | | 2023 | $1,400,000 | $1,745,057 | $1,499,995 | $2,086,000 | $1,414,057 | $115,832 | $8,260,941 | | | 2022 | $1,400,000 | $2,549,063 | $1,140,001 | $1,652,000 | $3,217 | $113,422 | $6,857,703 | | Christian Meisner* SVP, CHRO | 2024 | $800,000 | $2,449,564 | $1,092,218 | $1,400,000 | $0 | $67,604 | $5,809,386 | | John Phillips, III* SVP, General Counsel & Secretary | 2024 | $800,000 | $2,433,881 | $1,066,821 | $1,400,000 | $0 | $69,604 | $5,770,306 | | L. Kevin Cox* Former SVP, CHRO, GE and Chief Admin. Officer, GE Aerospace | 2024 | $269,444 | $145,124 | $901,610 | $7,187,000 | $0 | $1,163,359 | $9,666,537 | | | 2023 | $1,000,000 | $2,133,283 | $1,049,990 | $2,980,000 | $509,609 | $41,820 | $7,714,702 | | Michael Holston* Former SVP, General Counsel & Secretary | 2024 | $404,167 | $29,404 | $194,751 | $7,129,000 | $0 | $1,802,859 | $9,560,181 | | | 2023 | $1,500,000 | $2,220,619 | $1,124,996 | $2,812,500 | $564,524 | $23,100 | $8,245,739 |
Summary Compensation Table
| * Under applicable SEC rules, we have excluded compensation for Messrs. Meisner and Phillips for 2022 and 2023 and compensation for Messrs. Ghai, Cox and Holston for 2022 as they were not named executives during those years. |
Summary Compensation Table
SALARY. Base salaries for our named executives. Each of the named executives contributed a portion of his salary to the GE Aerospace Retirement Savings Plan (RSP), the company’s 401(k) savings plan. STOCK AWARDS. The amounts reported as “Stock Awards” in the Summary Compensation Table reflect the company’s accounting value related to such awards in 2024, as described below, and do not in all cases reflect new grants or the actual value that the named executive will realize. The more detailed stock awards table below shows the components of the total amounts in the Summary Compensation Table.
Summary Compensation Table
| NAME | REGULAR 2024 ANNUAL STOCK AWARDS | CEO INCENTIVE GRANT | 2024 PORTION OF 2023 PSUS | SPIN-OFF EQUITABLE ADJUSTMENTS | | Culp | $15,000,068 | $49,326,642 | $13,720,227 | $234,945 | | Ghai | $3,295,993 | N/A | $1,683,917 | $285,291 | | Stokes | $3,462,002 | N/A | $2,286,944 | $222,594 | | Meisner | $2,423,402 | N/A | N/A | $26,162 | | Phillips | $2,423,402 | N/A | N/A | $10,479 | | Cox | N/A | N/A | N/A | $145,124 | | Holston | N/A | N/A | N/A | $29,404 |
Summary Compensation Table
Regular 2024 Annual Stock Awards. Reflects the grant date fair value of RSUs granted in 2024, and the grant date fair value of PSUs granted in 2024, based on target level performance. At maximum performance, the grant date fair value of the 2024 PSUs would have been as follows: Culp ($23,495,473), Ghai ($3,728,061), Stokes ($3,915,819), Meisner ($2,741,073) and Phillips ($2,741,073). Messrs. Cox and Holston did not receive any 2024 annual awards due to their separations. CEO Incentive Grant. Reflects the grant date fair value of the CEO Incentive Grant for Mr. Culp in connection with his new employment agreement, based on target level performance. At maximum performance, the grant date fair value would have been $73,990,043. see Compensation Actions for 2024 for Our Current Named Executives on page 35 for additional information. 2024 Portion of 2023 PSUs. The 2023 PSUs are three-year awards made as part of annual program compensation for 2023. Performance against the financial metrics for these PSUs is measured separately for each calendar year during the three-year performance period, with targets set early within each of those years. While the full number of shares underlying the 2023 PSUs was determined when the Compensation Committee approved the annual grant in 2023, for accounting purposes the grant date for the 2024 portion of the 2023 PSUs did not occur until 2024 when targets for the 2024 portion were set. As a result, the amount in the above table reflects the accounting value of the 2024 portion of the 2023 PSUs at target level as of June 2024. At maximum performance, the value of the 2024 portion of the 2023 PSUs would have been as follows: Culp ($24,010,398), Ghai ($2,946,855) and Stokes ($4,002,151). For Messrs. Cox and Holston, who separated from service in April 2024 before the performance targets were approved and communicated to then-current employees, this table (and the other tables) excludes their 2024 portion of the 2023 PSUs, which at target is 8,926 and 9,563 PSUs, respectively, because those grants were not considered to have a grant date for accounting purposes in 2024 but remain eligible for vesting pursuant to the retirement provisions described below. Spin-off Equitable Adjustments. Reflects the incremental fair value resulting from the equitable treatment of outstanding employee equity awards in the GE Vernova spin-off. Pursuant to accounting guidance prescribed under FASB ASC Topic 718, the treatment resulted in a grant modification expense, which in accordance with SEC rules is reportable as compensation. The incremental fair value is determined by comparing the aggregate fair value of the outstanding stock awards immediately before and after the modification. See Spin-Off Equitable Adjustments on page 34. STOCK OPTIONS. The amounts reported as “Stock Options” in the Summary Compensation Table reflect the company’s accounting value for such awards in 2024, as described below, and do not in all cases correspond to the actual value that the named executives will realize. See the 2024 Grants of Plan-Based Awards Table on page 41 for additional information.
Summary Compensation Table
| NAME | STOCK OPTIONS | SPIN-OFF EQUITABLE ADJUSTMENTS | | Culp | N/A | N/A | | Ghai | $1,427,982 | N/A | | Stokes | $1,499,977 | $847,415 | | Meisner | $1,049,978 | $42,240 | | Phillips | $1,049,978 | $16,843 | | Cox | N/A | $901,610 | | Holston | N/A | $194,751 |
Summary Compensation Table
Stock Options. Reflects the grant date fair value of stock options granted in 2024. Spin-off Equitable Adjustments. Reflects the incremental fair value resulting from the equitable treatment of outstanding employee equity awards in the GE Vernova spin-off. Pursuant to accounting guidance prescribed under FASB ASC Topic 718, the treatment resulted in a grant modification expense, which in accordance with SEC rules is reportable as compensation. The incremental fair value is determined by comparing the aggregate fair value of the outstanding awards immediately before and after the modification. See Spin-Off Equitable Adjustments on page 34. NON-EQUITY INCENTIVE PLAN COMPENSATION. The amounts reported under “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table include the below. AEIP. Reflects amounts earned under the AEIP. See the 2024 Grants of Plan-Based Awards Table on page 41 and Bonuses under the Annual Executive Incentive Plan on page 30 for additional information. Transaction Incentive Awards. For Messrs. Cox and Holston this also reflects their transaction incentive awards. As previously reported, the Compensation Committee granted these awards to Messrs. Cox and Holston in 2022 to further the objectives of incentivizing and retaining critical Corporate talent needed to establish three industry-leading independent companies. These transaction incentive awards were tied to the successful completion of the spin-offs and to individualized performance criteria. The awards were certified at maximum performance for both Messrs. Cox and Holston ($6.25 million), reflecting the evaluation of their leadership of critical aspects of the execution of both spin-offs, including recruiting senior management and directors for all three companies and managing significant human resources, legal, compliance, policy and other matters throughout the process. CHANGE IN PENSION VALUE & DEFERRED COMP. Sum of the change in pension value and above-market earnings on nonqualified deferred compensation, which break down as shown in the following table. Three named executives had a negative change in pension value, which is shown below and pursuant to SEC rules reported as $0 in the Summary Compensation Table.
Summary Compensation Table
| NAME | CHANGE IN PENSION VALUE | ABOVE MARKET EARNINGS | | Culp | $1,325,765 | $0 | | Stokes | $(20,276) | $3,788 | | Cox | $(81,297) | $0 | | Holston | $(68,664) | $0 |
Summary Compensation Table
Year-over-year changes in pension value generally are driven by changes in actuarial pension assumptions as well as increases in age, and any additional service and compensation (as applicable by plan). See Pension Benefits on page 46 for additional information, including the present value assumptions used in this calculation. Above-market earnings represent the difference between market interest rates calculated under SEC rules and the 6% to 14% interest contingently credited by the company on salary that the named executives deferred under various executive deferred salary programs in effect between 1991 and 2024. See Deferred Compensation on page 45 for additional information. ALL OTHER COMP. We provide our named executives with other benefits that we believe are reasonable, competitive and consistent with our overall executive compensation program. The costs of these benefits for 2024, minus any reimbursements by the named executives, are shown in the table below.
Summary Compensation Table
| NAME | LIFE INSURANCE PREMIUMS | COMPANY CONTRIBUTIONS TO SAVINGS PLANS | COMPANY CREDITS TO RESTORATION PLAN | SECURITY SERVICES | SEVERANCE BENEFITS | OTHER | TOTAL | | Culp | $0 | $24,150 | N/A | $291,291 | N/A | $247 | $315,688 | | Ghai | $0 | $24,150 | $87,784 | N/A | N/A | $0 | $111,934 | | Stokes | $113,707 | $22,425 | N/A | N/A | N/A | $2,513 | $138,645 | | Meisner | $0 | $24,150 | $40,354 | N/A | N/A | $3,100 | $67,604 | | Phillips | $0 | $24,150 | $40,354 | N/A | N/A | $5,100 | $69,604 | | Cox | $0 | $13,800 | N/A | N/A | $1,130,592 | $18,967 | $1,163,359 | | Holston | $0 | $13,800 | N/A | N/A | $1,788,787 | $272 | $1,802,859 |
Summary Compensation Table
Life Insurance Premiums. Taxable payments to cover premiums for universal life insurance policies the named executives own. These policies include: (1) Executive Life, which provides universal life insurance policies for the indicated named executives totaling up to $3 million in coverage at the time of enrollment and increased 4% annually thereafter; and (2) Leadership Life, which provides universal life insurance policies for the indicated named executives with coverage of 2X their annual pay (salary plus most recent bonus). Mr. Stokes is the only named executive who is eligible under these plans. Company Contributions to Savings Plans. Represents the company’s matching contributions to the named executives’ RSP accounts equaling up to 4% of eligible pay, and automatic contributions equaling 3% of eligible pay, up to the caps imposed under IRS rules. Company Credits to Restoration Plan. Represents the company’s accrued credits to the named executives’ Restoration Plan accounts equaling 7% of their annual earnings, which include base salary and up to one-half of eligible bonus payments, that exceed the IRS-prescribed limit. Security Services. Reflects incremental cost of providing personal security services as needed to address security concerns for our CEO. We believe providing this security to our CEO is necessary and appropriate given the nature of our business, and ensuring his safety is to the company’s benefit. Severance Benefits. Reflects the severance payments and benefits received by Messrs. Cox and Holston in connection with the termination of their employment without cause following the spin-off of GE Vernova, as previously disclosed in their separation agreements. For additional information regarding their separation, see Potential Termination Payments on page 48. Other. In addition, the amounts in this column reflect other benefits provided, none of which individually exceeded the greater of $25,000 or 10% of the total amount of personal benefits for the named executive. These other benefits included items such as: (1) car service fees; (2) annual physical examinations; (3) financial and tax planning services; (4) tax preparation services and related tax reimbursement resulting from interstate business travel and (5) incremental costs associated with personal use, including by guests accompanying the executive, of a company-leased aircraft. Our named executives are permitted to use an aircraft that is leased by the company for personal use, but, to the extent the named executives engaged in such use during 2024, all such use was reimbursed to the company at rates sufficient to cover the variable costs associated with those flights.
2024 Grants of Plan-Based Awards Table
2024 Grants of Plan-Based Awards Table The following table shows bonuses under our AEIP and equity awards (PSUs, stock options and RSUs) under the GE 2022 Long-Term Incentive Plan (2022 LTIP), a plan that shareholders approved in 2022, granted or deemed granted, to our named executives in 2024. This table also reflects the incremental fair value associated with treatment of equity awards in the spin-off of GE Vernova. For more information on each of the award types, see Long-Term Incentive Compensation on page 32.
2024 Grants of Plan-Based Awards Table
| | | | | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS | | | ESTIMATED FUTURE PAYOUTS UNDER PSUs | | | RESTRICTED | STOCK | OPTION EXERCISE | GRANT DATE FAIR VALUE OF | | NAME | GRANT | APPROVAL | AWARD | THRESHOLD | TARGET | MAXIMUM | THRESHOLD | TARGET | MAXIMUM | STOCK UNITS | OPTIONS | PRICE | AWARDS | | | DATE | DATE | TYPE | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($) | ($) | | Culp | | | AEIP | 0 | 3,875,000 | 8,137,500 | | | | | | | | | | 4/2/2024 | - | *(1) | | | | | | | | | | 234,945 | | | 5/1/2024 | 4/24/2024 | Annual Equity | | | | 9,611 | 96,105 | 168,184 | | | | 15,000,068 | | | 6/17/2024 | 4/24/2024 | 2024 Portion of 2023 PSUs** | | | | 7,650 | 76,504 | 133,882 | | | | 13,720,227 | | | | | CEO Incentive | | | | | | | | | | | | | 7/1/2024 | 6/30/2024 | Grant | | | | 155,145 | 310,289 | 465,434 | | | | 49,326,642 | | Ghai | | | AEIP | 0 | 1,078,158 | 2,264,133 | | | | | | | | | | 4/2/2024 | - | *(1) | | | | | | | | | | 285,291 | | | 5/1/2024 | 4/24/2024 | Annual Equity | | | | | | | | 23,603 | 159.70 | 1,427,982 | | | 5/1/2024 | 4/24/2024 | Annual Equity | | | | | | | 6,134 | | | 915,929 | | | 5/1/2024 | 4/24/2024 | Annual Equity | | | | 1,525 | 15,249 | 26,686 | | | | 2,380,064 | | | 6/17/2024 | 4/24/2024 | 2024 Portion of 2023 PSUs** | | | | 862 | 8,620 | 15,085 | | | | 1,683,917 | | Stokes | | | AEIP | 0 | 1,400,000 | 2,940,000 | | | | | | | | | | 4/2/2024 | - | *(1) | | | | | | | | | | 222,594 | | | 4/2/2024 | - | *(2) | | | | | | | | | | 847,415 | | | 5/1/2024 | 4/24/2024 | Annual Equity | | | | | | | | 24,793 | 159.70 | 1,499,977 | | | 5/1/2024 | 4/24/2024 | Annual Equity | | | | | | | 6,443 | | | 962,069 | | | 5/1/2024 | 4/24/2024 | Annual Equity | | | | 1,602 | 16,017 | 28,030 | | | | 2,499,933 | | | 6/17/2024 | 4/24/2024 | 2024 Portion of 2023 PSUs** | | | | 1,275 | 12,752 | 22,316 | | | | 2,286,944 | | Meisner | | | AEIP | 0 | 800,000 | 1,680,000 | | | | | | | | | | 4/2/2024 | - | *(1) | | | | | | | | | | 26,162 | | | 4/2/2024 | - | *(2) | | | | | | | | | | 42,240 | | | 5/1/2024 | 4/24/2024 | Annual Equity | | | | | | | | 17,355 | 159.70 | 1,049,978 | | | 5/1/2024 | 4/24/2024 | Annual Equity | | | | | | | 4,510 | | | 673,433 | | | 5/1/2024 | 4/24/2024 | Annual Equity | | | | 1,121 | 11,212 | 19,621 | | | | 1,749,969 | | Phillips | | | AEIP | 0 | 800,000 | 1,680,000 | | | | | | | | | | 4/2/2024 | - | *(1) | | | | | | | | | | 10,479 | | | 4/2/2024 | - | *(2) | | | | | | | | | | 16,843 | | | 5/1/2024 | 4/24/2024 | Annual Equity | | | | | | | | 17,355 | 159.70 | 1,049,978 | | | 5/1/2024 | 4/24/2024 | Annual Equity | | | | | | | 4,510 | | | 673,433 | | | 5/1/2024 | 4/24/2024 | Annual Equity | | | | 1,121 | 11,212 | 19,621 | | | | 1,749,969 | | Cox | | | AEIP | 0 | 535,519 | 1,124,590 | | | | | | | | | | 4/2/2024 | - | *(1) | | | | | | | | | | 145,124 | | | 4/2/2024 | - | *(2) | | | | | | | | | | 901,610 | | Holston | | | AEIP | 0 | 502,049 | 1,054,303 | | | | | | | | | | 4/2/2024 | - | *(1) | | | | | | | | | | 29,404 | | | 4/2/2024 | - | *(2) | | | | | | | | | | 194,751 |
2024 Grants of Plan-Based Awards Table
| * Reflects the incremental fair value associated with the treatment of outstanding (1) stock awards and (2) stock options in the GE Vernova spin-off, as described in the stock awards footnote of the Summary Compensation Table on page 38 and in Spin-Off Equitable Adjustments on page 34. |
2024 Grants of Plan-Based Awards Table
| ** Reflects the value of the 2024 portion of the 2023 PSUs. See the Summary Compensation Table for additional information. |
2024 Grants of Plan-Based Awards Table
ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS. Amounts shown are the threshold, target and maximum potential payouts under the AEIP for 2024. The payout under the 2024 AEIP can range from zero to 200% based on performance against the financial performance measures, subject to an additional +/- 10 percentage points based on achievement of the safety modifier. The actual 2024 AEIP payouts for our named executives are reported in the Summary Compensation Table in the Non-Equity Incentive Plan Compensation column. For more information on the AEIP, see Bonuses under the Annual Executive Incentive Plan on page 30. ESTIMATED FUTURE PAYOUTS UNDER PSUs. Amounts shown are the threshold, target and maximum number of PSUs that could be earned under the awards granted in 2024, which includes the 2024 PSUs, the 2024 portion of the 2023 PSUs and the CEO Incentive Grant. The payout of the 2024 PSUs and the 2024 portion of the 2023 PSUs can range from zero for below threshold performance to 175% for maximum level of achievement against both performance measures. The payout of the CEO Incentive Grant can range from zero for below threshold performance to a maximum of 150% of target, based on the maximum level of achievement of the performance measure. For more information on the 2024 PSUs and the 2024 portion of the 2023 PSUs see Performance Stock Units beginning on page 32. For more information on the CEO Incentive Grant see Compensation Actions for 2024 for Our Current Named Executives on page 35. OPTION EXERCISE PRICE. Stock option exercise prices reflect the closing price of the company’s stock on the grant date. GRANT DATE FAIR VALUE OF AWARDS. Generally, the aggregate grant date fair value of an award is the amount that the company expects to expense in its financial statements over the award’s vesting schedule.
2024 Grants of Plan-Based Awards Table
| • | For stock option awards, fair value is calculated using the Black-Scholes value of each option on the grant date, and reflects a one-year holding requirement (resulting in a $60.50 per unit value for the annual 2024 stock option grants). |
2024 Grants of Plan-Based Awards Table
| • | For RSU awards, fair value is generally calculated based on the closing stock price grant date (resulting in a $149.32 per unit value for the annual 2024 grants, which reflects a one-year holding requirement). |
2024 Grants of Plan-Based Awards Table
| • | For PSU awards, the actual value of units received will depend on the company’s performance, as described above. Fair value is calculated by multiplying the per unit value of the award ($156.08 for the 2024 PSUs which reflects a one-year holding requirement, $179.34 for the 2024 portion of the 2023 PSUs for Messrs. Culp and Stokes, which reflects a one-year holding requirement, $195.35 for the 2024 portion of the 2023 PSUs for Mr. Ghai, and $158.97 for the CEO Incentive Grant) by the number of units at target. The per unit value is based on the closing price of the company’s stock price on the grant date, and for the 2024 PSUs and 2024 portion of the 2023 PSUs, adjusted to reflect a projected impact of the relative TSR modifier using a Monte Carlo simulation. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
2024 Outstanding Equity Awards at Fiscal Year-End Table The following table shows the named executives’ stock awards and option grants as of year-end. It includes unexercised options (vested and unvested), RSUs and PSUs for which vesting conditions were not yet satisfied as of December 31, 2024. The vesting of PSUs is also subject to performance through the applicable performance periods, with vesting as shown on the schedule below. This table reflects outstanding equity award amounts following the spin-off of GE Vernova. See Spin-Off Equitable Adjustments on page 34.
2024 Outstanding Equity Awards at Fiscal Year-End Table
| NAME OF | GRANT | AWARD | NUMBER | PORTION | EXERCISE | EXPIRATION | MARKET | | EXECUTIVE | DATE | TYPE | OUTSTANDING | EXERCISABLE | PRICE | DATE | VALUE(1) | | Culp | 3/1/2023 | PSUs | 133,882(2) | | | | $22,330,179 | | | 5/1/2024 | PSUs | 168,184(3) | | | | $28,051,409 | | | 6/17/2024 | PSUs | 133,882(4) | | | | $22,330,179 | | | 7/1/2024 | PSUs | 465,434(5) | | | | $77,629,737 | | Ghai | 9/1/2022 | RSUs | 37,249(6) | | | | $6,212,761 | | | 9/1/2022 | RSUs | 15,239(7) | | | | $2,541,713 | | | 3/1/2023 | PSUs | 15,085(2) | | | | $2,516,027 | | | 3/1/2023 | RSUs | 28,771(7) | | | | $4,798,715 | | | 5/1/2024 | Options | 23,603(8) | 0 | $159.70 | 5/1/2034 | $167,345 | | | 5/1/2024 | RSUs | 6,134(8) | | | | $1,023,090 | | | 5/1/2024 | PSUs | 26,686(3) | | | | $4,450,958 | | | 6/17/2024 | PSUs | 15,085(4) | | | | $2,516,027 |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| NAME OF | GRANT | AWARD | NUMBER | PORTION | EXERCISE | EXPIRATION | MARKET | | EXECUTIVE | DATE | TYPE | OUTSTANDING | EXERCISABLE | PRICE | DATE | VALUE(1) | | Stokes | 9/11/2015 | Options | 11,841(9) | 11,841 | $123.31 | 9/11/2025 | $514,847 | | | 9/9/2016 | Options | 30,363(9) | 30,363 | $148.80 | 9/9/2026 | $546,230 | | | 9/6/2017 | Options | 40,483(9) | 40,483 | $123.16 | 9/6/2027 | $1,766,273 | | | 1/29/2018 | Options | 101,208(10) | 101,208 | $80.45 | 1/29/2028 | $8,738,299 | | | 3/19/2019 | Options | 57,545(10) | 57,545 | $52.38 | 3/19/2029 | $6,583,723 | | | 3/2/2020 | Options | 55,664(10) | 55,664 | $57.62 | 3/2/2030 | $6,076,839 | | | 3/1/2021 | Options | 39,512(10) | 39,512 | $67.39 | 3/1/2031 | $3,927,493 | | | 3/1/2022 | Options | 53,269(7) | 26,634 | $59.33 | 3/1/2032 | $5,724,287 | | | 3/1/2022 | RSUs | 6,103(7) | | | | $1,017,919 | | | 3/1/2023 | Options | 56,771(7) | 0 | $66.19 | 3/1/2033 | $5,711,163 | | | 3/1/2023 | PSUs | 22,313(2) | | | | $3,721,585 | | | 3/1/2023 | RSUs | 15,345(7) | | | | $2,559,393 | | | 5/1/2024 | Options | 24,793(8) | 0 | $159.70 | 5/1/2034 | $175,782 | | | 5/1/2024 | RSUs | 6,443(8) | | | | $1,074,628 | | | 5/1/2024 | PSUs | 28,030(3) | | | | $4,675,124 | | | 6/17/2024 | PSUs | 22,316(4) | | | | $3,722,086 | | Meisner | 12/1/2023 | Options | 31,499(8) | 0 | $96.36 | 12/1/2033 | $2,218,475 | | | 12/1/2023 | RSUs | 13,611(8) | | | | $2,270,179 | | | 5/1/2024 | Options | 17,355(8) | 0 | $159.70 | 5/1/2034 | $123,047 | | | 5/1/2024 | RSUs | 4,510(8) | | | | $752,223 | | | 5/1/2024 | PSUs | 19,621(3) | | | | $3,272,587 | | Phillips | 12/1/2023 | Options | 12,599(8) | 0 | $96.36 | 12/1/2033 | $887,348 | | | 12/1/2023 | RSUs | 5,444(8) | | | | $908,005 | | | 5/1/2024 | Options | 17,355(8) | 0 | $159.70 | 5/1/2034 | $123,047 | | | 5/1/2024 | RSUs | 4,510(8) | | | | $752,223 | | | 5/1/2024 | PSUs | 19,621(3) | | | | $3,272,587 | | Cox | 3/1/2021 | Options | 33,868(10) | 33,868 | $67.39 | 3/1/2031 | $3,366,479 | | | 3/1/2022 | Options | 49,062(7) | 49,062 | $59.33 | 3/1/2032 | $5,272,203 | | | 3/1/2023 | Options | 39,739(7) | 39,739 | $66.19 | 3/1/2033 | $3,997,743 | | | 3/1/2023 | PSUs | 15,619(2) | | | | $2,605,093 | | Holston | 3/1/2021 | Options | 31,045(10) | 31,045 | $67.39 | 3/1/2031 | $3,085,873 | | | 3/1/2022 | Options | 6,017(7) | 6,017 | $59.33 | 3/1/2032 | $646,587 | | | 3/1/2023 | Options | 42,578(7) | 42,578 | $66.19 | 3/1/2033 | $4,283,347 | | | 3/1/2023 | PSUs | 16,735(2) | | | | $2,791,231 |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (1) The market value of GE Aerospace awards of RSUs and PSUs is calculated by multiplying the closing price of GE Aerospace stock as of December 31, 2024 ($166.79) by the number of shares underlying each award. With respect 2024 PSUs and the 2024 portion of the 2023 PSUs, this value assumes satisfaction of the maximum-level payout for the awards based on year-end performance. For options, the market value is calculated by multiplying the number of shares underlying each award by the spread between the award’s exercise price and the closing price of GE Aerospace stock as of December 31, 2024. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (2) Scheduled to vest 100% on the third anniversary of the grant date. For Messrs. Culp, Cox and Holston, who became retirement eligible in October 2023, February 2024, and April 2023 respectively, the service condition was satisfied in accordance with the standard retirement eligibility provisions of the applicable grant agreements. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (3) Scheduled to vest 100% on the third anniversary of the grant date. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (4) Represents the 2024 portion of the 2023 PSUs. Scheduled to vest 100% on the third anniversary of the original grant date, March 1, 2023. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (5) Scheduled to vest 100% by 2028, or such earlier date, in accordance with the terms of the grant agreement. See Potential Termination Payments beginning on page 48 for additional details regarding events that determine the timing of vesting for the CEO Incentive Grant. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (6) Scheduled to vest one-third on each of the first, second and third anniversary of the grant date. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (7) Scheduled to vest 50% on each of the second and third anniversary of the grant date. For Messrs. Cox and Holston, who became retirement eligible in February 2024 and April 2023, respectively, vested in accordance with the standard retirement eligibility provisions of the applicable grant agreements. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (8) Scheduled to vest 50% on each of the second and third anniversary of the grant date. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (9) Vested 100% as of the fifth anniversary of the grant date. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (10) Vested 100% as of the third anniversary of the grant date. For Messrs. Cox and Holston, who became retirement eligible in February 2024 and April 2023, respectively, vested in accordance with the standard retirement eligibility provisions of the applicable grant agreements. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
Option Exercises and Stock Vested Table The following table shows the number of GE Aerospace shares the named executives acquired and the values they realized upon the exercise of options and vesting of stock awards during 2024. During the year, Messrs. Stokes, Cox and Holston exercised stock options, Messrs. Culp, Stokes, Cox and Holston had PSUs or performance shares that were earned, and Messrs. Ghai, Stokes, Cox and Holston had RSUs that vested. Values are shown before payment of any applicable withholding taxes or brokerage commissions. In 2024, named executives that remain employed by GE Aerospace were required to hold the stock that they receive following the exercise of stock options (less those shares that are withheld to satisfy the exercise price and pay taxes) for at least a year following exercise, regardless of whether their stock ownership requirements have been met. Current named executives also cannot sell net shares received as the result of the vesting of RSUs or PSUs or exercise of stock options until they have satisfied their stock ownership requirement. See Stock Ownership and Equity Grant Policies on page 52. Certain PSUs and RSUs granted are also subject to a one-year holding requirement following settlement, regardless of whether the executive has met his or her stock ownership requirements or remains employed by the company.
2024 Outstanding Equity Awards at Fiscal Year-End Table
| | OPTION AWARDS* | | STOCK AWARDS* | | | | NUMBER OF SHARES ACQUIRED ON | VALUE REALIZED | NUMBER OF SHARES ACQUIRED | VALUE REALIZED | | NAME | EXERCISE | ON EXERCISE | ON VESTING** | ON VESTING | | Culp | 0 | $0 | 1,981,724 | $333,343,753 | | Ghai | 0 | $0 | 52,487 | $9,095,472 | | Stokes | 62,446 | $2,364,984 | 118,488 | $19,563,319 | | Meisner | 0 | $0 | 0 | $0 | | Phillips | 0 | $0 | 0 | $0 | | Cox*** | 370,199 | $46,826,981 | 116,088 | $17,955,538 | | Holston*** | 64,802 | $5,536,784 | 43,017 | $6,800,773 |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| * Subject to stock ownership requirement for current named executives; dollar amount represents pre-tax value realized. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| ** As described under Spin-Off Equitable Adjustments on page 34, equitable adjustments were required to preserve the pre-spin-off intrinsic value of outstanding equity awards. The amounts reported in the table above include the vesting of GE Aerospace shares that were adjusted in that manner, as applicable. For Mr. Culp, the table includes vesting of GE Aerospace shares under his Leadership Performance Shares granted in August 2020; the terms of that grant provided for the treatment in a spin-off, so no further adjustments were made. In 2024, the following spin-off-related awards vested that are not included in the table above: 649,340 GEHC and 435,719 GEV stock awards vested for Mr. Culp for a value of $55,507,141 and $80,435,906, respectively; 26,375 GEHC stock awards vested for Mr. Cox for a value of $2,354,690; and 6,269 GEHC stock awards vested for Mr. Holston for a value of $572,234. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| *** Mr. Cox became retirement eligible (five years of service and over 60 years old) in February 2024 and Mr. Holston became retirement eligible in April 2023. As a result, options and RSUs held by Messrs. Cox and Holston for more than one year vested in accordance with the retirement eligibility provisions of their applicable grant agreements. In addition, RSUs granted to Mr. Cox on September 30, 2020 vested in connection with his separation as described under Potential Termination Payments on beginning on page 48. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
Equity Compensation Plan Information The following table provides information regarding outstanding equity awards and shares available for future issuance under all of GE Aerospace’s equity plans as of December 31, 2024. The number of shares available for future issuance increased compared to the prior year, primarily as a result of the GE Vernova spin-off, including forfeiture of unvested equity awards upon employee departures (which were returned to the pool) and equitable adjustments made to the share pool in accordance with provisions of the 2022 LTIP. This table reflects the treatment of outstanding equity awards and GE Aerospace’s equity plans in 2024 in connection with the GE Vernova spin-off. See Spin-Off Equitable Adjustments on page 34 for more information.
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (IN THOUSANDS EXCEPT PER SHARE $ AMOUNTS, AS OF 12/31/2024) | SHARES TO BE ISSUED UPON EXERCISE OR SETTLEMENT | WEIGHTED AVERAGE EXERCISE PRICE | SHARES AVAILABLE FOR FUTURE ISSUANCE | | Plans approved by shareholders (2007 LTIP and 2022 LTIP) | | | | | Options | 10,917 | $91.78 | (a) | | RSUs | 3,607 | (b) | (a) | | PSUs | 1,104 | (b) | (a) | | Total | 15,628 | $91.78 | 80,834 |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (a) Total shares available for future issuance under the 2022 LTIP amounted to 80.8 million shares as of December 31, 2024. Following approval of the 2022 LTIP, no shares remained available for future issuance under the 2007 LTIP. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (b) Not applicable. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
Deferred Compensation We offer certain deferred compensation programs and arrangements for executives. Bonus Deferrals ELIGIBILITY AND DEFERRAL OPTIONS. For 2022 and prior performance years, U.S. employees in our executive band and above, including the named executives, could elect to defer all or a portion of their annual bonus payment and be credited with earnings (or losses) on those deferrals under the options shown below. Participants may change their earnings option up to four times per year. The company makes all decisions regarding the earnings options that are offered and the measures for calculating earnings under those options. Among our named executives, only Messrs. Culp and Stokes participated in our bonus deferral programs. TIME AND FORM OF PAYMENT. Participants can elect to receive their deferred amounts upon separation from service either in a lump sum or in 10 to 20 annual installments. Participants may not withdraw any deferred amounts prior to separating from service.
2024 Outstanding Equity Awards at Fiscal Year-End Table
| EARNINGS OPTION | TYPE OF EARNINGS | ACCOUNT BALANCE FOR EARNINGS CALCULATION | EARNINGS AMOUNT* | WHEN EARNINGS CREDITED | | GE Aerospace Stock Units** (based on GE Aerospace stock value) | Dividend-equivalent income | Units in account on NYSE ex-dividend date | Quarterly dividend declared for GE Aerospace stock or the S&P 500, as applicable | Quarterly | | S&P 500 Index Units (based on S&P 500) | | | | | | Deferred Cash Units (cash units) | Interest income | Daily outstanding account balance | Prior calendar months average yield for U.S. Treasury Notes and Bonds issued with maturities of 10 years and 20 years | Monthly |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| * None of the bonus deferral options provide for above-market interest as defined by the SEC. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| ** In connection with the GE HealthCare spin-off in January 2023 and the GE Vernova spin-off in April 2024, participants who held GE stock units received a distribution of GE HealthCare stock units and GE Vernova units respectively. On the one-year anniversary of the respective spin, any remaining GE HealthCare stock units and GE Vernova stock units were converted to cash units. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
Salary Deferrals ELIGIBILITY. In prior years, we periodically offered eligible employees in our executive band and above the opportunity to defer their salary payments (the last such plan was offered in 2010 for 2011 salary). Individuals who were named executives at the time a deferred salary program was offered were not eligible to participate. Among our named executives, only Mr. Stokes has participated in our salary deferral programs. INTEREST INCOME. These programs provide accrued interest on deferred amounts (including an above-market interest rate as defined by the SEC) ranging from 6% to 14% compounded annually. TIME AND FORM OF PAYMENT. Our deferred salary programs have required participants to elect to receive deferred amounts either in a lump sum or in 10 to 20 annual installments. Participants may not withdraw any deferred amount prior to separating from service. GE Aerospace Restoration Plan ELIGIBILITY. U.S. employees who become U.S. executives on or after January 1, 2021, accrue benefits under the GE Aerospace Restoration Plan (the Restoration Plan), instead of any benefits under the GE Aerospace Supplementary Pension Plan (including the Executive Retirement Benefit) (see Pension Benefits on page 46 for information regarding the GE Aerospace Supplementary Pension Plan). As of December 31, 2024, Messrs. Ghai, Meisner and Phillips accrued benefits under the Restoration Plan. BENEFIT FORMULA. Restoration Plan participants are credited with 7% of their annual earnings, which include base salary and up to one-half of eligible bonus payments, which exceed the IRS-prescribed limit applicable to tax-qualified plans ($345,000 for 2024). EARNINGS OPTIONS AND VESTING. The annual credits are notionally invested as elected by the participant in earnings options that generally mirror the investment options available under the broad-based tax qualified RSP. Participants may change their election up to 12 times per quarter. The company makes all decisions regarding the earnings options that are offered and the measures for calculating earnings under those options. Earnings are currently credited daily. Participants generally vest in their Restoration Plan accounts after three years of service. TIME AND FORM OF PAYMENT. Vested amounts under the Restoration Plan are paid in a lump sum, generally in July of the year following the year of a participant’s separation from service. Nonqualified Deferred Compensation Table The table below shows amounts credited to the named executives’ accounts under nonqualified deferred compensation plans and plan balances as of December 31, 2024. No withdrawals or distributions from these plans were made in 2024. Messrs. Cox and Holston did not participate in any nonqualified deferred compensation plans prior to their separation on April 7, 2024.
2024 Outstanding Equity Awards at Fiscal Year-End Table
| | | | AGGREGATE EARNINGS IN LAST FISCAL YEAR | | | AGGREGATE BALANCE AT LAST FISCAL YEAR-END | | | | NAME | EXECUTIVE CONTRIBUTIONS IN 2024 | COMPANY CREDITS IN 2024 | DEFERRED BONUS PROGRAM | DEFERRED SALARY PROGRAM | RESTORATION PLAN | DEFERRED BONUS PROGRAM | DEFERRED SALARY PROGRAM | RESTORATION PLAN | | Culp | $0 | N/A | $535,287 | N/A | N/A | $2,681,439 | N/A | N/A | | Ghai | $0 | $87,784 | N/A | N/A | $10,491 | N/A | N/A | $176,937 | | Stokes | $0 | N/A | $171 | $9,665 | N/A | $4,044 | $123,372 | N/A | | Meisner | $0 | $40,354 | N/A | N/A | $0 | N/A | N/A | $40,354 | | Phillips | $0 | $40,354 | N/A | N/A | $0 | N/A | N/A | $40,354 |
2024 Outstanding Equity Awards at Fiscal Year-End Table
EXECUTIVE CONTRIBUTIONS IN 2024. Amounts represent compensation deferred during 2024. COMPANY CREDITS IN 2024. Amounts represent accrued company credits in the Restoration Plan in 2024. AGGREGATE EARNINGS IN 2024. Reflects earnings on each type of deferred compensation listed in this section that were credited to the named executives’ deferred compensation account during 2024. The earnings may be positive or negative, depending on the named executive’s investment choice, and are calculated based on the account balance attributable to each earnings option as of December 31, 2024; minus that amount as of December 31, 2023; minus any contributions during the year. See Summary Compensation Table beginning on page 38 for the above-market portion of these earnings in 2024. AGGREGATE BALANCE AT DECEMBER 31, 2024. The fiscal year-end balance reported in the table above includes $1.4 million for deferred bonus for Mr. Culp that was previously reported in the Summary Compensation Table, $76,869 for the GE Restoration Plan that was previously reported in the Summary Compensation Table for Mr. Ghai, and $14,282 for deferred salary for Mr. Stokes that was previously reported in the Summary Compensation Table. No amounts for Messrs. Meisner or Phillips were previously reported in the Summary Compensation Table. Pension Benefits The company provides retirement benefits to certain named executives based in the United States under the same GE Aerospace Pension Plan (the Pension Plan) and GE Aerospace Supplementary Pension Plan (the Supplementary Pension Plan) in which other eligible U.S. employees participate. The Pension Plan is a funded, tax-qualified plan. The Supplementary Pension Plan is an unfunded, unsecured obligation of the company and is not qualified for tax purposes. GE Aerospace Pension Plan The Pension Plan is a funded, broad-based tax-qualified retirement program for U.S.-based employees that is closed to new participants. Among our named executives, only Mr. Stokes is eligible for benefits under this plan, which are fully vested. Effective January 1, 2021, participants with salaried benefits (including Mr. Stokes) stopped accruing benefits (and making contributions) under this plan. For Mr. Stokes, the plan benefits are based primarily on a formula that provided an annual benefit accrual equal to 1.45% of earnings (generally base salary and up to one-half of bonus payments) for the applicable year up to a covered compensation amount and 1.9% of earnings in excess of covered compensation, subject to tax code limitations and plan terms. The accumulated benefit is payable after retirement on a monthly basis for life with a guaranteed minimum benefit of five years. The plan also provides for Social Security supplements and spousal joint and survivor annuity options. The normal retirement age as defined in this plan is 65; however, employees who began working at GE prior to 2005, including Mr. Stokes, may retire at age 60 without any reduction in benefits. GE Aerospace Supplementary Pension Plan The Supplementary Pension Plan is an unfunded and non-tax-qualified retirement program for eligible executives that is closed to new participants and provides the benefits described below. Messrs. Ghai, Meisner and Phillips are not eligible to participate in this plan. Supplementary Pension Benefit. The Supplementary Pension benefit is an annuity benefit above amounts available under the Pension Plan for eligible executives (including Mr. Stokes, who is the only named executive eligible for this benefit). Effective January 1, 2021, participants stopped accruing this benefit and began accruing the Executive Retirement Benefit described below for their future credited service. Employees generally must remain continuously employed until age 60 in order to vest in a Supplementary Pension benefit. The annual Supplementary Pension benefit, when combined with certain amounts payable under other pension programs and Social Security, will equal 1.75% of earnings credited for retirement benefits multiplied by the number of years of credited service (through 2020), up to a maximum of 60% of such earnings credited for retirement benefits. The earnings credited for retirement benefits are the named executive’s average annual compensation (base salary and bonus) for the highest 36 consecutive months out of the last 120 months prior to December 31, 2020. The Supplementary Pension benefit would be provided after retirement as monthly payments for life (with a guaranteed minimum benefit of five years). The plan also provides for spousal joint and survivor annuity options. The normal retirement age under the plan is 65; however, executives eligible for this benefit who began working at the company prior to 2005 may retire at age 60 without any reduction in benefits. Executive Retirement Benefit. The Executive Retirement Benefit equals, for each year of credited service, a percentage (generally 18% for a named executive, but ranging from 10% to 18% depending on a participant’s role) of average annual compensation (base salary and bonus) for the highest 36 consecutive months out of the last 120 months prior to retirement. Messrs. Culp, Cox and Holston are eligible to receive the Executive Retirement Benefit after retirement as 10 equal annual installment payments. In connection with their separations on April 7, 2024, Messrs. Cox and Holston began receiving payouts of this benefit. Mr. Stokes began accruing an Executive Retirement Benefit beginning January 1, 2021, when he stopped accruing additional Supplementary Pension benefits. Executives eligible for this benefit may retire at age 60 but are subject to a reduction in benefits of up to 25% for retirement prior to age 65. GE Aerospace Excess Benefits Plan The GE Aerospace Excess Benefits Plan (the Excess Benefits Plan) is an unfunded and non-tax-qualified retirement program that is offered to employees whose benefits under the Pension Plan are limited by certain tax code provisions. Effective January 1, 2021, participants stopped accruing benefits under this plan. Benefits payable under this plan are equal to the amount that would be payable under the terms of the Pension Plan disregarding tax code limitations, minus the amount actually payable under the Pension Plan taking those limitations into account, and are generally payable at the same time and in the same manner as permitted under the Pension Plan. Pension Benefits Table The table below shows the present value of the accumulated benefit as of December 31, 2024, for the named executives under each plan, as calculated based upon the assumptions described below. Although SEC rules require us to show this present value, the named executives are not entitled to receive these amounts in a lump sum.
2024 Outstanding Equity Awards at Fiscal Year-End Table
| | | PRESENT VALUE OF ACCUMULATED BENEFIT | | | | | | NAME | NUMBER OF YEARS CREDITED SERVICE | PENSION PLAN | SUPPLEMENTARY PENSION | EXECUTIVE RETIREMENT BENEFIT | EXCESS BENEFITS PLAN | PAYMENT DURING LAST FISCAL YEAR | | Culp | 6 | N/A | N/A | $4,942,498 | N/A | $0 | | Ghai | N/A | N/A | N/A | N/A | N/A | N/A | | Stokes* | 24 | $917,493 | $8,871,010 | $1,007,862 | $0 | $0 | | Meisner | N/A | N/A | N/A | N/A | N/A | N/A | | Phillips | N/A | N/A | N/A | N/A | N/A | N/A | | Cox** | 5 | N/A | N/A | $1,806,544 | N/A | $247,497 | | Holston** | 6 | N/A | N/A | $2,301,378 | N/A | $315,290 |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| * Mr. Stokes’ credited service is limited to 24 years under the Pension Plan and the Supplementary Pension benefit, as no further accruals of those benefits are permitted effective January 1, 2021. For purposes of the Executive Retirement Benefit, Mr. Stokes’ credited service is limited to his service on or after January 1, 2021 (four years as of December 31, 2024). |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| ** In connection with their separations on April 7, 2024, Messrs. Cox and Holston began receiving payouts of their Executive Retirement Benefit. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
NUMBER OF YEARS OF CREDITED SERVICE. No further accruals of benefits under the Pension Plan and the Supplementary Pension benefit are permitted for service after 2020. For purposes of the Executive Retirement Benefit, Mr. Stokes’s credited service is limited to service after 2020 (when the Supplementary Pension benefit accrual ceased). PRESENT VALUE OF ACCUMULATED BENEFIT. The accumulated benefit is based on years of service and earnings (base salary and bonus) considered by the plans for the period through December 31, 2024. If applicable, it also includes the value of contributions made by the named executives throughout their careers. For purposes of calculating the present value, we assume that the named executives other than Messrs. Cox and Holston will remain in service until the age at which they may retire without any reduction in benefits. We also assume that benefits are payable under the available forms of annuity consistent with the assumptions described in the Postretirement Benefit Plans notes in GE Aerospace’s financial statements in our Annual Report on Form 10-K for 2024, including the statutory discount rate assumption of 5.67% for the Pension Plan and 5.64% for the Supplementary Pension Plan and Excess Benefits Plan. The postretirement mortality assumption used for present value calculations for U.S. beneficiaries is the Pri-2012 Healthy Retiree mortality table projected to 2016, adjusted for the company’s experience and factoring in projected generational improvements. In connection with their separations on April 7, 2024, Messrs. Cox and Holston began receiving payouts of their Executive Retirement Benefit in 10 equal annual installment payments. Potential Termination Payments In this section, we describe and quantify certain compensation that would have been payable under existing compensation plans and arrangements had a named executive’s employment terminated on December 31, 2024 (or, with respect to Messrs. Cox and Holston, the compensation payable upon their separation on April 7, 2024). For this calculation, we have used each named executive’s compensation and service levels as of the applicable date (and, where applicable, the company’s closing stock price on that date). Since many factors (e.g., the time of year when the event occurs, the company’s stock price and the named executive’s age) could affect the nature and amount of benefits a named executive could potentially receive, any amounts paid or distributed upon a current named executive’s actual termination of employment may be different from those shown below. The amounts described below are in addition to benefits generally available to salaried employees, such as distributions under the RSP. U.S. EXECUTIVE SEVERANCE PLAN. In order to standardize the severance payments available to U.S. executives who are not otherwise subject to an employment agreement providing a different amount, we adopted the GE Aerospace U.S. Executive Severance Plan (the U.S. Severance Plan) effective January 1, 2021. Eligible executives who experience an employer-initiated termination of employment that is not for cause, and who are not offered a suitable position, receive between 6 to 18 months of base salary (based on their career band), which is paid in a lump sum. The base salary amount is reduced by the estimated amount, if any, of the Executive Retirement Benefit and/or Supplementary Pension payable to the executive for the corresponding number of months. Outplacement services are also provided for the same period. To receive a benefit under the plan, the executive must enter into a separation agreement and release in a form acceptable to the company, which may also include cooperation, confidential information, non-disparagement, non-competition, non-solicitation and other covenants. With respect to our current named executives, Messrs. Ghai, Stokes, Meisner and Phillips are eligible to participate under the plan at the 18-month level. Assuming a termination date of December 31, 2024, the amount each eligible named executive would have been entitled to receive under the U.S. Executive Severance Plan is: Ghai ($1,432,500), Stokes ($2,100,000), Meisner ($1,200,000), and Phillips ($1,200,000). Under the plan, the following terms have the meanings set forth below:
2024 Outstanding Equity Awards at Fiscal Year-End Table
| • | Cause generally means: (i) breach of any confidentiality, non-solicitation, non-competition or other material provision of an agreement with the company, (ii) conduct that has the potential to cause material harm to the company, (iii) an act of dishonesty, fraud, embezzlement or theft, (iv) conviction of, or plea of guilty or no contest to, a felony or crime involving moral turpitude, or (v) failure to comply with the company’s policies and procedures. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| • | Suitable position generally means a position providing at least 80% of the executive’s base salary and annual incentive award opportunity. If the position is with the company, rather than a successor employer in a business disposition or other third-party in an outsourcing arrangement, the position must also be within 50 miles of the executive’s job location and in the same career band. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
EMPLOYMENT AGREEMENT WITH MR. CULP. In July 2024, we entered into a new employment agreement with Mr. Culp to extend the term of his employment to December 31, 2027, or such later date as mutually agreed by the parties up to and through December 31, 2028. His new employment agreement provides for an annual base salary of $2.0 million effective July 1, 2024, an annual bonus target opportunity of 200% of his salary effective July 1, 2024, and, starting in 2025, annual long-term equity incentive awards with a grant date fair value of $15.25 million. In connection with the extension of his employment, his prior Leadership Performance Share Award granted in August 2020 became vested in August 2024 due to meeting the service and performance conditions; the award achieved maximum performance. Pursuant to the new employment agreement, in July 2024, he received a grant of PSUs with a target of 310,289 shares (the CEO Incentive Grant). This award will be eligible to be earned in an amount between 0 and 150% of target, depending on performance, based on the compound annual growth rate for adjusted earnings per share, over four fiscal years ending with, and subject to satisfaction of service conditions through, December 31, 2027. Under his employment agreement, Mr. Culp receives other benefits given to senior executives of the company. Mr. Culp is also subject to a non-compete agreement, which terminates 12 months after termination of his employment. He is also subject to a non-solicitation clause covering the same period as his non-compete agreement. Under the terms of his employment agreement, if Mr. Culp’s employment terminates for any reason other than an involuntary termination without cause or a resignation for good reason, he would be entitled to the balance of his prior year’s annual bonus (to the extent earned, but not paid). Assuming a termination date of December 31, 2024, Mr. Culp would not have been entitled to any amount with respect to these benefits. Additionally, if Mr. Culp is terminated without cause or resigns for good reason, he would be entitled to cash severance equal to two times the sum of his annual salary plus target bonus, payable in bi-weekly installments over a two-year period, subject to any delay required by tax regulations. Assuming a termination date of December 31, 2024, Mr. Culp would have been entitled to severance payments totaling $12,000,000. This severance would be subject to his providing a release to the company and his ongoing compliance with perpetual confidentiality and non-disparagement provisions and the non-compete and non-solicitation provisions under his employment agreement. Under the award agreement for the CEO Incentive Grant, Mr. Culp would forfeit his award if he voluntarily separated from the company without good reason prior to December 31, 2027. Mr. Culp is entitled to vesting as a result of termination of employment earlier than the end of the performance period ending December 31, 2027 in the circumstances described below. The Board and Compensation Committee carefully considered these termination provisions in connection with the new employment agreement with Mr. Culp, and these provisions are intended to provide flexibility to the Board in CEO succession planning and allow for a smooth transition of leadership, as needed.
2024 Outstanding Equity Awards at Fiscal Year-End Table
| • | Death or Disability or Termination Without Cause or Resignation for Good Reason: the greater of (i) the amount determined based on actual performance for the performance period or (ii) the target amount, and in either event, if such termination occurs before December 31, 2026, prorated based on length of service during the period from July 1, 2024 through December 31, 2027. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| • | Change in Control Termination (Termination Without Cause or Resignation for Good Reason In Connection With, or Within 12 Months Following, a Change in Control): the greater of (i) the amount determined based on actual performance for the performance period ending on the date of the change in control or (ii) the target amount. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
See Equity Awards on page 50 regarding the value of the equity treatment. For purposes of Mr. Culp’s employment agreement and the CEO Incentive Grant, the following terms have the meanings set forth below:
2024 Outstanding Equity Awards at Fiscal Year-End Table
| • | Cause generally means (i) the willful and continued failure of Mr. Culp to substantially perform his assigned duties for more than 30 days after the company notifies Mr. Culp of such failure, (ii) willfully engaging in conduct that is materially injurious to the company, including violating company policies, or (iii) the commission of a felony or crime involving dishonesty related to the company. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| • | Change in control has the meaning given in the 2022 LTIP, which generally means (i) the acquisition of more than 50% of the company’s stock or voting power by any person, or (ii) the reorganization, merger, consolidation, sale or disposition of all or substantially all of the assets of the company, unless more than 50% of the surviving entity is controlled by the shareholders immediately prior to such event, in substantially the same proportions as their ownership immediately prior to the event. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| • | Good reason generally means, without his consent or as otherwise provided in the employment agreement, (i) a reduction in Mr. Culp’s compensation rights, (ii) failure to renominate Mr. Culp to the Board or removing him from the position of CEO, (iii) materially reducing Mr. Culp’s duties and responsibilities, (iv) assigning Mr. Culp duties that are materially inconsistent with his position or duties that materially impair his ability to function as CEO, (v) relocation of his principal office, except as provided in the employment agreement, or (vi) a material breach of Mr. Culp’s employment agreement by the company. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
OFFER LETTER AGREEMENT WITH MR. GHAI. We entered into an offer letter agreement with Mr. Ghai in connection with his promotion to GE Senior Vice President and Chief Financial Officer effective in September 2023. Mr. Ghai is subject to a 12-month non-compete and non-solicitation covenant. Under the offer letter, in the event Mr. Ghai’s employment is terminated by the company other than for cause, by Mr. Ghai for good reason, as a result of his death or disability, or in connection with a change in control of the company that does not result in Mr. Ghai receiving a comparable offer of employment with the purchaser, Mr. Ghai is eligible for the following benefits: (i) vesting of his sign-on equity awards granted in connection with his commencement of employment in 2022, (ii) vesting of all other equity awards that he has held for at least one year if such termination occurs on or before December 31, 2026, (iii) the lump sum cash payment provided under the U.S. Executive Severance Plan (as described and quantified above), and (iv) a pro-rata AEIP payment for the year of termination if such termination occurs after March 31 of such year. See Equity Awards on page 50 regarding the value of the equity treatment. Under Mr. Ghai’s offer letter, the following terms have the meanings set forth below:
2024 Outstanding Equity Awards at Fiscal Year-End Table
| • | Cause generally means Mr. Ghai’s (i) willful failure to perform his duties (other than any such failure resulting from incapacity due to disability) or comply with any valid and legal directive of the company or the Board that is consistent with his position, (ii) engagement in dishonesty, illegal conduct, or misconduct, which, in each case, materially harms or is reasonably likely to materially harm the company, (iii) conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) or a crime that constitutes a misdemeanor involving moral turpitude, (iv) willful or grossly negligent unauthorized disclosure of confidential information, (v) material breach of any material obligation under the offer letter or other agreement with the company which materially harms or is reasonably likely to materially harm the company, or (vi) willful material failure to comply with company policies. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| • | Change in control generally occurs when (i) a person or entity acquired ownership of GE stock or of the GE Aerospace |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| business that, together with prior holdings, constitutes at least 50% of the total fair market value or total voting power of the outstanding shares of GE or the GE Aerospace business or (ii) there is a sale of substantially all of the assets of GE or of the GE Aerospace business. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| • | Good reason generally means any of the following without Mr. Ghai’s written consent (i) a reduction in his target compensation or failure to pay compensation when due, (ii) any material breach by the company of the offer letter or any other agreement with Mr. Ghai, or (iii) a material, adverse change in his title, authority, duties, responsibilities or reporting relationships (other than temporarily while he is incapacitated or as required by applicable law). |
2024 Outstanding Equity Awards at Fiscal Year-End Table
OFFER LETTER AGREEMENTS WITH MESSRS. MEISNER AND PHILLIPS. We entered into offer letter agreements in August 2023 with Messrs. Meisner and Phillips in connection with their respective appointments as Senior Vice President and Chief Human Resources Officer of GE Aerospace and Senior Vice President and General Counsel of GE Aerospace. They are subject to 12-month non-compete and non-solicitation covenants. Under the offer letters, in the event the named executive’s employment is terminated by the company other than for cause, by the named executive for good reason, as a result of his death or disability, or in connection with a change in control of the company that does not result in the named executive receiving a comparable offer of employment with the purchaser, the named executive is eligible for the following benefits: (i) vesting of his sign-on equity grant, (ii) vesting of his annual equity awards granted in 2024 and 2025, (iii) the lump sum cash payment provided under the U.S. Executive Severance Plan (as described and quantified above), and (iv) a pro-rata AEIP payment for the year of termination if such termination occurs after March 31 of such year. See Equity Awards on page 50 regarding the value of the equity treatment. For purposes of the severance provisions under the offer letters with Messrs. Meisner and Phillips, the terms for cause and good reason generally have the same meanings as set forth above for Mr. Ghai’s offer letter. SEPARATION AGREEMENTS WITH MESSRS. COX AND HOLSTON. Each of Mr. Cox and Mr. Holston separated without cause on April 7, 2024, following the spin-off of GE Vernova, pursuant to separation agreements. Pursuant to the separation agreements, upon signing a release of claims, each executive received the severance benefits provided under the U.S. Executive Severance Plan (as described above for an 18-month period), with the lump sum cash payment amounts set forth in the Summary Compensation Table. Each executive also remained eligible for a pro-rated 2024 AEIP bonus based on actual performance, and payment of the full amount of his transaction incentive award, based on actual performance, both of which are reflected in the Summary Compensation Table. In addition, pursuant to the terms of the underlying plans, each executive received partial subsidization of continued medical, dental and vision coverage under COBRA for 6 months and coverage for premium payments under the company’s basic life insurance plan for 12 months. Mr. Cox also received acceleration of his RSUs granted on September 3, 2020 and scheduled to vest September 3, 2024, which had a value of $9,349,623 on the separation date. Each separation agreement also includes cooperation, confidential information, non-disparagement, non-competition, non-solicitation and other covenants. Also see Deferred Compensation on page 45 and Pension Benefits on page 46 regarding other post-employment benefits, including the Executive Retirement Benefit, which began being paid out 10 annual installment payments of $247,497 and $315,290, for Messrs. Cox and Holston respectively, following their separation beginning in 2024. SHAREHOLDER APPROVAL OF SEVERANCE BENEFITS. In February 2025, the Board adopted a new cash severance approval policy that replaced our existing severance approval policy. Under the new policy, the company will not enter into any new employment agreement or severance agreement with any of the company’s officers subject to Section 16 of the Exchange Act or establish any new severance plan or policy covering any executive officer that provides for cash severance benefits exceeding 2.99 times the sum of the executive officer’s base salary plus target annual bonus opportunity, without seeking shareholder ratification of such agreement, plan, or policy. Under this policy, “cash severance benefits” include cash payments in connection with the termination of the executive officer’s employment. Certain payments are excluded from this policy, including the payment of equity-based awards, settlements of claims asserted against the company by an executive officer, payments for services provided following termination, and distributions made from the company’s benefit programs. Refer to our Governance Principles (see Helpful Resources on page 66) for the full policy. Equity Awards The following table shows the intrinsic value of the company’s equity awards that would have vested or become exercisable if each of our current named executives had died, become disabled, retired or separated from the company as of December 31, 2024. Intrinsic value is based upon the company’s stock price on that date (minus the exercise price in the case of stock options). Amounts shown assume the achievement of all applicable performance objectives at target level, except where actual achievements levels have been determined. Our named executives generally are not entitled to benefits if they leave voluntarily (without good reason) or are terminated for cause (other than benefits already accrued) unless they satisfy the conditions for retirement eligibility. None of our named executives’ equity awards would have vested or become exercisable upon a single-trigger change in control.
Pension Benefits
Pension Benefits The table below shows the pension benefits that would have become payable under the applicable pension plan(s) (as described under Pension Benefits on page 46) if the current named executives had died, become disabled, voluntarily terminated or retired as of December 31, 2024.
POTENTIAL TERMINATION PAYMENTS TABLE (PENSION BENEFITS)
POTENTIAL TERMINATION PAYMENTS TABLE (PENSION BENEFITS)
POTENTIAL TERMINATION PAYMENTS TABLE (PENSION BENEFITS)
| NAME | LUMP SUM UPON DEATH | ANNUAL BENEFIT UPON DEATH | ANNUAL BENEFIT UPON DISABILITY | ANNUAL BENEFIT UPON VOLUNTARY TERMINATION | ANNUAL BENEFIT UPON RETIREMENT | | Culp | N/A | $634,095 | N/A | N/A | $634,095 | | Ghai | N/A | N/A | N/A | N/A | N/A | | Stokes | $6,590,203 | $233,727 | $1,204,979 | $90,047 | N/A | | Meisner | N/A | N/A | N/A | N/A | N/A | | Phillips | N/A | N/A | N/A | N/A | N/A |
POTENTIAL TERMINATION PAYMENTS TABLE (PENSION BENEFITS)
LUMP SUM UPON DEATH. Reflects the Supplementary Pension benefit payable in a lump sum based on whichever of the following has a higher value: (1) the 50% survivor annuity that the spouse would have received under this plan if the participant had retired at age 60 and elected the spousal 50% joint and survivor annuity option prior to death, or (2) five years of pension distributions under this plan. ANNUAL BENEFITS UPON DEATH. Reflects 10 annual installment payments of the Executive Retirement Benefit and/or the annual amount payable for the life of the surviving spouse under the Pension Plan. Under the Pension Plan, the benefit is payable either as an annuity, as if the participant had elected the spousal 50% joint and survivor annuity option prior to death, or an immediate lump-sum payment based on five years of pension distributions, in each case based upon the accrued benefit. For participants age 60 or older, over age 50 with 15 years of service, or under age 50 with 30 years of service, the spousal annuity payment is immediate; otherwise the spousal annuity is payable when the participant would have reached age 60.
Deferred Compensation
ticipant would have reached age 60. Deferred Compensation The named executives are entitled to receive the vested amount in their deferred compensation accounts if their employment terminates. Between the termination event and the date that distributions are made, these accounts would continue to increase or decrease in value based on changes in the value of the named executive’s earnings option. Therefore, amounts received by the named executives would differ from those shown in the Nonqualified Deferred Compensation Table on page 46. See Deferred Compensation on page 45 for information on the available distribution types under each plan. ANNUAL BENEFITS UPON DISABILITY. Reflects the 50% joint and survivor annuity under the Pension Plan and the Supplementary Pension benefit, and/or 10 annual installment payments as the Executive Retirement Benefit if the participant has at least 15 years of service. Participants who are disabled after age 60 are eligible to retire and amounts are shown in the Retirement column. ANNUAL BENEFITS UPON VOLUNTARY TERMINATION. Reflects the 50% joint and survivor annuity payable at age 60 under the Pension Plan for Mr. Stokes; does not include any payments under the Supplementary Pension Plan (either the Supplementary Pension benefit or the Executive Retirement Benefit) because they are forfeited upon voluntary termination before age 60. Participants who terminate employment after age 60 are eligible to retire and amounts are shown in the Retirement column. ANNUAL BENEFITS UPON RETIREMENT. Reflects 10 annual installment payments as the Executive Retirement Benefit
CEO Pay Ratio
CEO Pay Ratio As a result of the employee population changes in connection with the spin-off of GE Vernova in April 2024, we determined that a new median employee should be selected. HOW WE IDENTIFIED THE MEDIAN EMPLOYEE. To identify the median employee, we identified our total employee population as of December 31, 2024, and, in accordance with SEC rules, excluded the CEO and employees from certain countries representing in aggregate less than 5% of our employee base*, to arrive at the initial median employee. We then used annualized salary data converted to U.S. dollars, including target bonus award payments to identify the 20 employees with salaries directly above and below the initial median employee. Once we identified this narrowed pool, we re-ranked the consideration pool of employees to find the median employee. We then calculated the median employee’s total compensation in accordance with SEC rules to use as the basis for the pay ratio. Foreign exchange rates were translated to the U.S. dollar equivalent based on rates as of December 31, 2024. RATIO OF CEO PAY TO MEDIAN EMPLOYEE PAY. Our median employee earned $69,553 in total compensation for 2024. The total 2024 compensation reported for Mr. Culp as reported under SEC Total in the Summary Compensation Table on page 38 was $88,954,586. Based upon total compensation for 2024, we calculated that our ratio of CEO to median employee pay was 1,279 to 1. Our median employee is employed in United States.
CEO Pay Ratio
| * These 34 countries and their headcounts as of the calculation date were: Argentina (2), Australia (112), Belgium (6), Chile (5), Colombia (4), Czech Republic (519), Denmark (2), France (43), Germany (476), Hong Kong (6), Indonesia (5), Ireland (25), Israel (5), Japan (52), Luxembourg (3), Morocco (2), Netherlands (19), Norway (1), Panama (1), Philippines (1), Portugal (2), Qatar (52), Republic of Korea (103), Romania (152), Saudi Arabia (11), South Africa (2), Spain (16), Sweden (83), Switzerland (4), Taiwan (122), Thailand (2), Türkiye (524), United Arab Emirates (201), and Vietnam (4), for a total of 2,567 employees. As of December 31, 2024, using the methodology required by the rule governing this disclosure, GE Aerospace had approximately 28,000 U.S. employees and approximately 25,000 employees in other countries, for a total of approximately 53,000 employees globally factored into the sample before the country exclusions listed above. |
Pay Versus Performance
Pay Versus Performance In accordance with Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationships between compensation actually paid to named executives and company performance. In this section, we refer to “compensation actually paid” and other terms used in the applicable SEC rules. For information concerning the company’s compensation philosophy and how the company aligns executive compensation with its financial and operational performance, refer to the Incentive Compensation starting on page 41. We refer collectively to awards of RSUs, PSUs, performance shares and stock options as equity awards in this Pay versus Performance section.
Pay Versus Performance
| | | | | | VALUE OF INITIAL FIXED $100 INVESTMENT BASED ON: | | | | | YEAR(1) | SUMMARY COMPENSATION TABLE FOR PEO(1) | COMPENSATION ACTUALLY PAID TO PEO(1)(2) | AVERAGE SUMMARY COMPENSATION TABLE TOTAL FOR NON-PEO NAMED EXECUTIVES(1) | AVERAGE COMPENSATION ACTUALLY PAID TO NON-PEO NAMED EXECUTIVES(1)(2) | TOTAL SHAREHOLDER RETURN | PEER GROUP TOTAL SHAREHOLDER RETURN(4) | NET INCOME ($M)(5) | COMPANY-SELECTED PERFORMANCE MEASURE: FREE CASH FLOW ($M)(5)(6) | | 2024 | $88,954,586 | $284,666,600(3) | $8,750,322 | $16,162,691(3) | $307 | $176 | $6,556 | $6,089 | | 2023 | $14,698,285 | $182,548,275 | $7,708,170 | $24,033,475 | $186 | $150 | $9,443 | $5,150 | | 2022 | $8,198,024 | $(23,798,500) | $8,969,318 | $3,579,820 | $95 | $127 | $292 | $4,758 | | 2021 | $22,663,449 | $21,302,944 | $8,584,656 | $7,655,599 | $107 | $134 | $(6,591) | $1,889 | | 2020 | $73,192,032 | $115,891,919 | $14,595,432 | $15,948,471 | $97 | $111 | $5,546 | $635 |
Pay Versus Performance
| (1) The named executives included in the above table were: |
Pay Versus Performance
| YEAR | PRINCIPAL EXECUTIVE OFFICER (PEO) | NON-PEO NAMED EXECUTIVES | | 2024 | H. Lawrence Culp, Jr. | Rahul Ghai, Russell Stokes, Christian Meisner, John Phillips, III, L. Kevin Cox, Michael Holston | | 2023 | H. Lawrence Culp, Jr. | Rahul Ghai, Carolina Dybeck Happe, Russell Stokes, Michael Holston, L. Kevin Cox | | 2022 | H. Lawrence Culp, Jr. | Carolina Dybeck Happe, John Slattery, Peter Arduini, Russell Stokes | | 2021 | H. Lawrence Culp, Jr. | Carolina Dybeck Happe, John Slattery, Russell Stokes, Kieran Murphy | | 2020 | H. Lawrence Culp, Jr. | Carolina Dybeck Happe, Jamie Miller, Kieran Murphy, John Slattery, Scott Strazik |
Pay Versus Performance
| (2) The assumptions we used to calculate the values for RSUs, PSUs and performance shares included in the calculation of compensation actually paid did not differ materially from those used to calculate grant date fair value for such awards. The assumptions we used to calculate the value for stock options did not differ materially from those used to calculate grant date fair value for such awards; we used a Black-Scholes value as of the applicable year-end or vesting date(s), determined using the same methodology we use to determine grant date fair value, except that we used (a) the closing stock price on the applicable revaluation date as the current market price and (b) a reduced expected life, given applicable time lapsed since grant date. |
Pay Versus Performance
| (3) The 2024 compensation actually paid to our PEO and the average compensation actually paid to our non-PEO named executives reflects the following adjustments required by the applicable SEC rules from Total compensation reported in the Summary Compensation Table: |
Pay Versus Performance
| | PEO | AVERAGE OF NON- PEOs | | TOTAL REPORTED IN 2024 SUMMARY COMPENSATION TABLE | $88,954,586 | $8,750,322 | | Less, value of equity awards reported in the Summary Compensation Table | 78,281,883 | 3,887,581 | | Add, year-end value of equity awards granted in 2024 that are unvested and outstanding | 116,952,636 | 4,709,631 | | Add, change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | 8,881,470 | 3,007,613 | | Add, fair market value of equity awards granted in 2024 and that vested in 2024 | - | - | | Add, change in fair value (from prior year-end) of prior year equity awards that vested in 2024 | 148,795,556 | 3,547,838 | | Less, prior year-end fair value of prior year equity awards that failed to vest in 2024 | - | - | | Add, dividends and dividend equivalent payments paid during 2024 on unvested equity awards | - | - | | Less, change in present value of accumulated pension plan benefits reported in the Summary Compensation Table | 1,325,765 | 631 | | Add, service cost for defined benefit and pension plans | 690,000 | 35,500 | | Add, prior service cost for defined benefit and pension plans | - | - | | Compensation Actually Paid for Fiscal Year 2024 | $284,666,600 | $16,162,691 |
Pay Versus Performance
Certain columns may not add due to the use of rounded numbers.
Pay Versus Performance
| (4) As permitted by SEC rules, the peer group referenced for purposes of “Peer group total shareholder return” is that of the S&P 500 Industrials Index, which is the industry index reported in our Annual Report on Form 10-K for 2024 in accordance with Regulation S-K Item 201(e). For GE Aerospace and our peer group, the TSR for each year reflects what the cumulative value of $100 would be, including reinvestment of dividends, if such amount were invested on December 31, 2019. |
Pay Versus Performance
| (5) For 2020, 2021 and 2022, the financial performance results included in the table reflect our financial performance prior to the spin-off of GE HealthCare and do not reflect the reclassification of our HealthCare business into discontinued operations or the adoption of certain accounting standards updates. For 2020, 2021, 2022 and 2023, the financial performance results included in the table reflect our financial performance prior to the spin-off of GE Vernova and do not reflect the reclassification of our GE Vernova business into discontinued operations. | | (6) Free cash flow is the financial measure from the tabular list of Most Important Financial Measures below, which represents the most important performance measure used to link compensation actually paid to our named executives in 2024 to the company’s performance. Free cash flow is a non-GAAP financial measure. For information on why the company reports free cash flow and how it is calculated, refer to the Explanation of Non-GAAP Financial Measures and Performance Metrics on page 65. |
RELATIONSHIPS BETWEEN COMPENSATION ACTUALLY PAID AND FINANCIAL PERFORMANCE MEASURES
RELATIONSHIPS BETWEEN COMPENSATION ACTUALLY PAID AND FINANCIAL PERFORMANCE MEASURES In accordance with Item 402(v) of Regulation S-K, the company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table. The calculation of compensation actually paid in each of the years shown reflects required adjustments to equity award valuations under SEC rules, which were in turn impacted by our stock price performance and cancellation of performance-based awards that did not meet their established thresholds. When the committee selected performance measures in support of the design of our 2024 executive compensation program, it focused on factors that it believes will further the company’s and business units’ goals for the year, align with GE Aerospace’s long-term strategic objectives and contribute to the creation of long-term shareholder value, including our ability to generate free cash flow, adjusted revenue growth and operating profit (as applicable), as well as our adjusted earnings per share and operational measures such as safety performance. For more information about these factors and decisions that impacted the 2024 compensation of our named executive officers, see the Compensation Discussion & Analysis section of this proxy statement. The chart below depicts compensation actually paid and the cumulative TSR of GE Aerospace and the S&P 500 Industrials Index for the five years shown. A significant portion of our executive compensation program comprises equity awards, and compensation actually paid for such years was most strongly affected by our stock price performance, as reflected in the equity award valuations required by SEC rules. For 2024, our stock price increased 69% year over year, compared to 16% for our peer group, the S&P 500 Industrials Index, resulting in our TSR increasing by more than 1.5x for 2024 and our five-year total TSR ending significantly higher than that of our peer group. This performance resulted in a substantial increase in our PSU award valuations included in the calculation of compensation actually paid for 2024, including the value of unvested and outstanding equity awards granted in 2024 and the change in value of prior year equity awards that vested in 2024. Conversely, our TSR performance being below that of the peer group for 2020, 2021 and 2022 adversely affected our named executives’ equity award compensation in two of the years shown. Under those awards’ respective terms, our TSR performance resulted in the cancellation of the 2020 PSU awards, which had no payout due to three-year TSR performance, and a downward adjustment to the value of the 2021 PSU awards, for which three-year TSR performance is a modifier. Net income is not a financial performance measure that we use in the compensation program design for our named executives. Accordingly, there is not a direct relationship between the compensation actually paid to our named executives and net income. In addition, a meaningful portion of incentive compensation for our named executives who are leaders of a business is tied to the financial performance of that business, rather than enterprise-wide performance measures such as net income. A significant portion of our compensation program is linked to our free cash flow performance for the total company and the applicable business, as described in the Compensation Discussion & Analysis section of this proxy statement. While our free cash flow performance improved sequentially in each of the five years shown, there is not a direct relationship with compensation actually paid because compensation actually paid more strongly reflects the required adjustments for equity award valuations under SEC rules.