Good morning. Welcome to GE's 2016 annual meeting. I'm Jeff Immelt, Chairman of the Board of GE, and here with me today are Jeff Bornstein, our CFO, and Alex Dimitrief, our General Counsel. Each year, we hold our shareholders meeting in a city that's important to GE and its shareowners. This year, it's Jacksonville, Florida, and we're very proud to be here. We have more than 1,000 employees in Jacksonville. Our businesses are doing great work here. Last year we announced Jacksonville would host one of GE's first intelligent city pilots using lighting technology and sensors to increase the energy efficiency for the local government. Also, in 2014, we announced we would invest $70 million to develop a new oil and gas manufacturing facility here, bringing jobs and technology to this city. We do business in Jacksonville because we like it and its people.
This week, we announced a $250,000 grant to the Agape Community Health Network to support and improve cardiovascular health in the community. It's easy to be uncertain as an investor today. The global economy is long on volatility and short on economic leadership. GE remains a good investment. In a complicated world, we're simpler and more competitive. In an uncertain world, we're skilled in managing through tough cycles. In a riskier world, we have cultural strength and a lot of cash. We're tested. Companies that think they're perfect can get you in trouble. GE is not perfect, but we make progress every day. In 2015, we continued to take strong actions to make GE better. We transformed our portfolio by exiting most of financial services while completing the purchase of Alstom, our largest industrial deal.
This ends a period in which we refocused GE as a high-tech leader. To do so, we sold more than half the company where we lack competitive advantage and rebuilt our core franchises. At the same time, we accelerated our transformation as a leader in the Industrial Internet to become a digital industrial company. In the Industrial Internet, we see the next great wave of productivity for the company and for our customers. Our team knows exactly what they need to do in the future and are compensated to execute. They also have a competitive advantage that capitalizes on our unique depth and expertise. We call this the GE Store. The GE Store captures our ability to share knowledge, technology, and capabilities across GE. A culture of simplification is essential to win in the future.
We're leaving the world of silos and spreadsheets to a world of agile teams that are mission-based. We're acknowledging that speed and simplification are synonymous with quality and innovation. Achieving a culture of simplification is a strategic imperative at GE and will define our leadership. GE is part of an economic ecosystem that's the most competitive in the world. We're all proud to work at GE, a purposeful company that makes a difference in the world. We insist on being more than what we are today. Some companies are retreating, we're moving forward, and we're committed to deliver for you. Now to our order of business. I'm advised that this meeting is properly convened, we have a quorum, and that the proposed resolutions presented in the proxy statement are filed as part of these proceedings.
We received proxies representing over 75% of the outstanding shares eligible to vote. The Management Proxy Committee has voted these shares in accordance with shareowner wishes. It's now my privilege to introduce the members of your board of directors and director nominees who are with us today. I'm going to ask the directors to stand briefly as I introduce them so you can see who they are. Andrea Jung, President and Chief Executive Officer of Grameen America, director since 1998. Shelly Lazarus, Chairman Emeritus, Ogilvy & Mather, director since 2000. Shelly's chair of our Governance and Public Affairs Committee. Bob Lane, former Chairman and Chief Executive Officer of Deere, director since 2005. Susan Hockfield, President Emerita of MIT, director since 2006. Susan is co-chair of the Technology and Industrial Risk Committee. Jim Mulva, former Chairman and Chief Executive Officer, ConocoPhillips, since 2008.
Geoff Beattie , former chief executive of The Woodbridge Company, director since 2009. Jeff is chairman of the GE Capital Committee. Jim Tisch, President and Chief Executive Officer, Loews Corporation, since 2010. Jack Brennan, Chairman Emeritus of Vanguard, a director since 2012. Jack is our lead director and chair of the Management Development and Compensation Committee. Frank D'Souza, Chief Executive Officer, Cognizant, director since 2013. Mary Schapiro, former chairman of the SEC, a director since 2013. Mary is chair of our Audit Committee. Jim Rohr, executive chair, former chief executive, PNC Financial, since 2013. We also have one of our new director nominees in attendance this year, Sébastien Bazin, chairman of Accor. He'll be joined by Lowell McAdam, chairman and CEO of Verizon, and Peter Henry, dean of the NYU Stern School as new directors. I'd also like to acknowledge three directors who are not standing for re-election.
Dr. Bob Swearingen is here today. Bob, thank you for all your great service to the company. Really appreciate it. Also, Sandy Warner, who's not standing. He was a director since 1992, and Jim Cash since 1997. Both of them have been fantastic directors, and we owe them a great debt of gratitude. I'd also like to ask John Rice, key shareowner, Beth Comstock to stand. They're vice chairman of GE and do great work for you every day. Agenda item number two is just a brief update on operations of the company. What I thought I'd do is just kind of give you a sense of where we are in the world and how the company is doing.
We live in a world of slow growth and volatility and populism. In that world, we have to keep investing and being more competitive and fast in order to be successful. In that context, last year, we really performed very well for investors. Organic growth was up 3%. Our earnings per share were up 19% at a time when the U.S. GDP growth was only slightly above 2%. We've got good margins, good returns, strong cash flow. We returned $33 billion to investors in buyback and cash. Really on the metrics that we look at in 2015, the company had really a pretty good year, and we're off to a good start again in 2016. I think about the company in 5 levels. Our portfolio, the source of our competitiveness, which is the GE Store. Really the transformation to become a digital industrial company, a culture of simplification.
How do we make sure we're competitive in the 21st century? How do we deliver good returns to our investors? I'm going to go through each one of these pillars just briefly for you this morning. Last year, we took on a lot in the GE portfolio. If we were at this meeting last year in Oklahoma City, we had just announced the transformation of GE Capital, and in the last year, we've signed almost $200 billion of deals and received cash. We paid that back to dividends to the company, which again almost all that has gone forward to our investors. At the same time, we completed the acquisition of Alstom, which we think will be transformative in our power business and energy connection business, and by 2018 should deliver $0.15-$0.20 a share for investors.
We've really pivoted the portfolio to being one that's really fundamentally a high-tech industrial company with financial service business that really only supports our industrial assets. Underlying the company is what we call the GE Store. This is how you create breadth as a strength, how you make size a strength for investors and for customers, and not a weakness. We've got really an integrated way we think about using our scale and spreading ideas and creating solutions for our customers, where every business inside GE adds to the store and every business can utilize capability from the store. We think this is a true strength of your company as we stand here today. A good example of that is we're launching what's called the LEAP engine. This goes into narrow-body aircraft.
A lot of you flew here on a Boeing 737 or an Airbus A320. We have about 75% market share of these engines, but a lot of the strength that came into these engines come from our global research center, our technology that we have across the company, manufacturing science that we develop centrally. This is a great strength of your company is to launch these products. This product probably will be a $1 billion or $2 billion investment, but we'll have $100 billion of revenue in the next 25 or 30 years, and these are things that only GE can do for our customers.
Now, you saw Owen, which is really part of our transition from a kind of industrial company to a digital industrial company, and we think this is the transition that every company has to make, and GE is in the forefront as we look at that. The way to think about that from an investor standpoint or from a customer standpoint is businesses need productivity, and productivity has trailed recently. Industrial companies like CSX, who's a local Jacksonville company, they need more productivity, and they just haven't been able to generate the amount that they want to achieve. For CSX, one mile of velocity, just really small change in productivity is worth an immense improvement in terms of their customer service and earnings. In many ways, GE has the applications that can provide that kind of productivity.
We sit here at a time when the physics of a product are matching with the internet and analytics of technology, and we can turn that into growth for us and productivity for our customers. We play on a bunch of different levels. We can measure machines remotely. We can improve visibility for our customers on the factory floor. We can improve uptime so trains aren't late and planes aren't late. If you have to go get your knee examined by an MR scanner or an X-ray machine, those images can be readily available to the orthopedic surgeon, to the radiologist across the hospital. We can measure the analytics around each one of these products and turn them into better outcomes for our customers. This business for us is in excess of $6 billion and growing almost 30% a year.
This is quite a substantial change for your company and one that I think most companies are going to have to go through. We're playing on a bunch of different levels. Your company, GE, almost a 140-year-old company, now has kind of a cloud-based operating system. In that regard, we'll compete with IT companies in the future for really winning in the future. We develop software applications really based in California, but doing those all over the country. We are really investing in what we call the digital twin, which takes every asset we have and provides kind of an analytical model for it, and we're driving digitization across our company. We think this is going to deliver more productivity for us and more productivity for our customers as we go forward. This is an exciting change for your company.
It's also impacting the factory floor. GE is a big manufacturer. We're a good manufacturer. We do manufacturing as one of our core competencies. We're using kind of the ability to push forward in digitization and analytics to make our factories more competitive. We're launching new materials. When we launch new products like the jet engine I showed you, they have brand-new materials, more automation, advanced analytics, which are also helping our factories be more productive, and what's called additive manufacturing, which allows us to make complicated parts with no scrap. This is really, again, helping the company be faster growth and more competitive in a slow-growth world, and I think that's the kind of company you want to see GE continue to drive and be. GE's made a big commitment to manufacturing globally, but also in the U.S. We've opened 15 new factories since 2010.
We have 65 applicants or more for every job opening. The average wage in the U.S. is $28 an hour. The last agreement we had for the first time in our history, we had 100% ratification by our locals and 82% vote by all the members. Quite a watershed that shows how we're working across the company from a manufacturing and a capability standpoint. We made a transition with our retirees to put into healthcare exchanges. This gives all of GE retirees access to a more competitive healthcare world where there are 40 million people that are out there buying insurance and buying capability all the time. This is something that really every company in the U.S. is making these kinds of changes in their benefits plan. We provide financial assistance both from a drug standpoint and from an out-of-pocket standpoint.
More than 160,000 retirees have been engaged in this, and the surveys we're doing show eight in 10 kind of understand and are accepting and are satisfied with the process. These are always hard changes, but these are things that are really important for the company as we go forward. Lastly, just changing the GE culture to be simpler, driven by beliefs, and faster, to be more competitive as we look forward in the future. This is really a critical framework for the company in terms of how you stay competitive in the 21st century. You have a company in GE that sells in 185 countries, that can compete in China and win, can compete in India and win, can leverage across Europe and Russia and Africa and every place.
This kind of culture and the changes we drive are really making the company so that you can be in this room five, 10, 15, 20 years from now, 30 years from now, 50 years from now, and still see a company that's thriving and advancing and moving forward. We've announced the move this year to Boston. We think this is going to allow us to remain lean with a smaller headquarters. It allows us to really use our centrifugal force to be in a sea of ideas and generate ideas and really help us promote this kind of change. We're excited by that move of a robust and smaller headquarters for GE in a city that's got more than 50 universities and tremendous diversity and tremendous technical talent. We're looking forward to that.
From a financial standpoint, people that are investing in GE right now can look out over the next couple of years and see a very clear walk to hit in excess of $2 a share by 2020. This has to do with using the GE Capital proceeds to buy back stock, reduce our float. The Alstom earnings, which are very clear and measurable, and we're making good progress on those, and just sustaining our industrial growth the way we have over the last four or five years. You do those things, you get north of $2 a share by 2020 or by 2018, and then we have additional balance sheet strength to do acquisitions or buy back additional shares in the future.
There's really no industrial company that can start at $1.30 the way we did in 2015 and march up a path of double-digit earnings growth each and every year over the next few years, and do it in a way that they control all the levers that you need to control to achieve that growth. We're quite unique in that regard. From an investor standpoint, look, this is, over the last five years, we've exceeded the S&P and common benchmarks for the company. We've done so last year. I think we're quite confident 2016 will continue to be a good year for the company. We ended 2015 as the eighth most valuable company in the world, and we still think the best days are ahead for GE. We like the strategy and the position of where we are. Recap. We've transformed the portfolio.
Lots of heavy lifting your team did last year to position the company. We've got a real competitive advantage in the GE Store, we're the first digital industrial company and looking forward to driving competitive position in that. That's just a little bit of an update on the company. Now what I'm going to do is move on to discussion of other matters that are in the proxy. The independent inspectors of election for this year's meeting are representatives of IVS Associates. The inspectors have taken oath of office required by law. If you've already voted by proxy, there's no need to vote by ballot today. You'll find a ballot on your seat. We'll take up the election of directors and management and shareholder proposals. After the election of directors and management proposals are introduced, there'll be an opportunity for discussion.
After the shareholder proposals are introduced, there'll be a chance to discuss those. There'll be time later on in the meeting for discussion of other business matters, first we'll go to the proxy. The first matter is the election of directors. I've placed before the meetings of service directors for the coming year 16 individuals whose names and biographies appear on pages 11 through 16 of the proxy. Each of these nominees has received the overwhelming majority of the 7 billion shares voted by proxy. Next on the agenda is the proposal to approve our named executives' compensation. Your board of directors recommends a vote for the approval of our named executives' compensation. To move on to the proposal to ratify the selection of KPMG as independent auditors for 2016, we have with us today John V. Meyer, Larry Bradley, Tom Canfora, who represent KPMG.
Your board of directors recommends a vote for the ratification of KPMG as independent auditors. Now that's the management proposals. Again, plenty of time to speak during the shareholder proposals if you'd like to speak about any one of those. If not, we'll just push on to the shareholder proposals. Should we go on to shareholder proposals? We got mic two.
Yeah. This has to do with the election of the directors.
Yep. You're scheduled to speak as well on shareholder proposal two, right?
That's absolutely right.
Okay, great.
I'm doing that for someone else.
Okay, great.
Good morning, fellow share owners. My name is Bill Freeda, and I am here this morning to vote against Jeffrey Immelt and to urge all of you to do the same. I do not take this position lightly, but in my opinion, Mr. Immelt's word cannot be trusted. At the conclusion of last year's share owners meeting, the chairman said, and I quote, "I'd like to say to the retirees" Thanks for coming. We listened to you. We honor your service. Thanks for being here." Jeff, based on your actions, you could not have made a more disingenuous statement. In the GE pensioner handbook, dated as recently as January 1st, 2012, it states that GE expects and intends to continue the GE Medicare benefit plans in this handbook indefinitely. Somehow, it does not seem to me that breaking that promise honors our service.
Full disclosure, that section continues, "Reserving the right to terminate, amend, or replace the benefit programs at any time for any reason." That section also gives specific examples of when taking such an extreme measure would be necessary. The chairman and his surrogates never seem to mention that. As Mr. Immelt knows full well, that provision was never meant to cut the legs out from under long-term loyal employees and retirees who had earned coverage under GE's post-65 Medicare supplement plans or were entitled to special benefits protection. That, however, is the legal position GE is taking in the two lawsuits it is currently facing. Of course, the decision of legality will not be resolved here today. Fellow share owners, let us not confuse legal and illegal with right or wrong. Make no mistake about it, this action that GE has taken is wrong.
We can point to times in this country's history when actions may have been legal, but were still wrong. As I look at our own board of directors today, I am reminded that less than 100 years ago, Susan Hockfield, Andrea Jung, Shelly Lazarus, and Mary Schapiro were not able to vote. That may have been legal, but who here today would claim that it was right?
In Chairman and CEO Immelt's statement of integrity dated January 2002, he says, "Nothing, not making the numbers, competitiveness, or direct orders from a superior, should ever compromise your commitment to integrity." Again, in his statement of integrity dated June 2005, Mr. Immelt says, "Do not allow anything, not making the numbers, competitive instincts, or even a direct order from a superior, to compromise your commitment to integrity." In his most recent letter to share owners, dated February 26, 2016, the chairman says, "We, GE, act with unyielding integrity." "We do what we say we are going to do." Not so much. All of Chairman Immelt's words need to be viewed against the background of GE's termination of its post-65 retirement medical benefits. Not for new employees. Not for employees hired after 2005. But for long-term, loyal members of the GE family.
Some of these family members retired more than 30 years. Some in their mid-80s and 90s. That is how Jeffrey Immelt honors the service of GE's retirees. It does baffle me how Mr. Immelt can claim that breaking a decades-long promise to the people on whose shoulders he stands is not a violation of GE's integrity policy. More likely, he simply doesn't care. Then, of course, there was Mr. Immelt's compelling defense of his shameful act. "Everybody's doing it." Really, Jeff? Thanks for the trip down memory lane. I haven't heard that whiny excuse since my children were eight. Here we are today, hearing that very defense from the General Electric Company, its chairman, CEO, and his surrogates. There is currently a television commercial that ends, "Do you know what GE is?" Perhaps it should continue. Yes, I do.
GE is a company that abandons its long-term family members at a time in their lives they are most vulnerable. GE is a company that treats its retirees as obsolete equipment in a plant it closed. GE is a company that not only abandoned its retirees, but its integrity policy. Having worked in television for more than 42 years, I have a tendency to recall lines of dialogue. In an episode of "Blue Bloods," one of the characters describes his grandchild's teacher as never uncertain and seldom right. That, fellow share owners, in a nutshell, sums up Mr. Immelt's tenure as GE's chairman and CEO. As I said when I began, I am not voting for Jeff Immelt today because I do not trust what he says.
My concern, fellow share owners, is will current employees, prospective employees, stock analysts, investors, customers, or vendors ever believe what Chairman Immelt says in the future? Thank you.
Thank you, Bill. Should we go on to share owner proposal number 1? I believe Maureen,
No, I'd like to-
Okay. Okay, Kevin. You're going to go. Thank you. Hey, Kevin. How you doing?
Good. Not bad.
Good. Good to see you again.
Yeah. Good to see you. Be able to see you, anyways.
Yeah.
My name is Kevin Maher . I'm a share owner for many years. This happens to be my 22nd annual meeting that I've attended and speaking out for the retirees. I came up, I am voting against every one of the board of directors. It's the first time I've ever done that. I've done it in print, it's because of what happened with the retirees. I came across an old bag that GE came out with, okay, many years ago. On the bottom, it says, "Keeping the promise," and that's the GE logo. Now I have to turn it around because that certainly has been now reduced to nothingness. This is a letter that was to President Obama, Senator Warren, Markey, Representatives Moulton, and Governor Charlie Baker in Massachusetts. By the way, I'll say some good things. Congratulations coming to Massachusetts. We're welcoming you to come in.
We get a chance to spend more time together.
The rumor was you were coming to Boston because you wanted to be closer to me.
You can count on that.
The Wall Street Journal has reported that many large corporations have eliminated their over-65 benefits. See attached list. All of your board of directors has been given a copy of this whole packet. All have eliminated health care for those who have retired, and they are predicting that 90% of all American companies will attempt to eliminate these benefits. At General Electric, I estimate that there are about 15,000 GE retirees in Massachusetts who have lost their group insurance. They are all on fixed incomes. The experience of enrolling in an individual plan has bordered on what I call elder abuse, and this board needs to hear some of these things that has happened to them.
Because GE retirees number in the hundreds of thousands throughout the country, the corporation is saving billions of dollars and putting the cost of medical insurance on the backs of GE retirees and taxpayers. The Wall Street Journal reported that GE saved $3.3 billion by ending their retirees' health insurance on January 1st, 2015. How would our elected politicians feel if they had to pay for their fantastic health benefits that Congress has provided them? If you were not assured of your medical benefits, might you reconsider retiring? The shift of this burden onto GE retirees will reduce their standard of living throughout the country. Many retirees have confessed to me the stress that the change has caused them. One elderly gentleman, age 88, says he and his wife have spent many hours worrying about how to pay for the increased cost.
He and his seven brothers fought in World War II and said that they didn't fight for GE to take away their benefits. Others have told me about their physical distress. Nearly all feel that they have been held hostage by the OneExchange for hours on end. OneExchange has been hired by GE to administer the individual insurance options. Another couple, Arthur Murray and his wife, Mary Ann, for example, said on October 16th, 2015, they spent over five hours on the phone with the OneExchange, then three hours on the phone in my office on November 3rd until they were finally enrolled. There appears to be a clear example of elder abuse. Any reasonable person would conclude that to spend eight hours on the phone to register for health insurance is abusive.
I wonder if the parents of Jeff Immelt, Jeff's father was a GE retiree, had a similar experience. John Lynch, who some say was the architect of this massive change, was given a golden parachute of 500,000 shares of GE stock. Just so everyone knows, at the current dividend rate of $0.23 per share, that's about $432,000 a year we're going to be paying him. Was this his reward? I wonder if Jeff Immelt notified President Obama that he intended to eliminate the over-65 health insurance of 165,000 GE retirees. On January 1st, 2015, 65,000 salaried employees lost their group insurance. On January 1st, the union-affected retirees lost theirs. People retired because they were promised benefits for life, then GE reneged on those commitments. The shift in liability from a healthy corporation to those least able to afford the change is immoral.
Might this be the result of GE spending the most money in U.S. history to lobby Congress for their own interests? Or was the shift in liability merely an unintended consequence of their lobbying efforts? What can be done about this abuse of power? Such changes will clearly lower standard of living of retirees and having a negative effect on taxpayers.
Thanks.
I'm almost done.
Thanks, Kevin.
Veterans who were enrolled in company plans, for example, will now be forced to seek their medical insurance from taxpayers, veterans' insurances, and Medicaid.
Thanks, Kevin.
you look at the packet, these are actual life experiences. I can tell you from personal experiences with having been going into people's homes, 93-year-old widows. It's the most disastrous, and I've been involved with GE for 55 years.
Thanks, Kevin.
It's the most disastrous thing I've ever seen that's happened.
Thanks, Kevin.
One more comment.
Martin, let's go to Maureen O'Brien. She's going to propose number 1. Maureen, are you here?
No. three speakers. one more comment.
You've got two proposals, Mr. Harangozo. Okay, please.
Good morning. My name is Martin Harangozo. I'm grateful to be a shareholder. I love this company, people, and products. I have purchased shares for over 25 years. I'm not a stock renter or a day trader. It is a pleasure to meet the Board of Directors. They are well-dressed, and they look nice. What is not so clear to me is what it is that they do. I believe the most significant correspondence the Board has with its shareholders is a communication of the dividend. In 2009, GE shareholders were told that management would protect the dividend. This did not happen. The Board declared the dividend for 2009 that is still not being paid, and it's seven years later.
I would like at least half the shareholder presentation to be by the board, explaining how they arrived at the 2009 dividend and why they fell short, and what the recovery plan is to make good on the promise. I say, let's hear it from the board. Let's give the board a chance to share their plan. I'm also suspicious regarding the wise trades of our CEO. Just before Immelt became CEO, he sold his shares near the all-time high of $60. Once the stock fell, he purchased shares at a fraction of the price he sold them, that is around $9. Considering options, Immelt is now up over 2,000% on his money. Shareholders are still underwater from the share price of when Immelt sold his shares, and also later when he became CEO.
While Immelt has claimed he has skin in the game, it is important to understand that Immelt shed his skin near the top, then grew his skin when the share price fell, like a long snake. I would like the board to present a plan that brings shareholders the same wealth as the CEO to incentivize sustained growth for all, instead of volatility that enriches the CEO at shareholder expense. Thirdly, I find the relationship between the company and the shareholders to be too hostile. For example, Welch wrote, the employee who shares GE values and misses his numbers usually gets a second chance, sometimes a third. GE counsel, Gibson & Dunn, told the company six times that my shareholder proposals were not good for the proxy. It is surprising that with Ms. Schapiro on the board, you are wrong so often on my proposals.
After being wrong six times, let's stop paying money to Gibson & Dunn and use that money to pay the dividend. Thank you.
Thank you. Just, Martin, I want you to know, I've never sold a share of stock as CEO of GE. Never have, never will, period. Let's go to proposal number one and have Maureen O'Brien that's here today to do number one.
Good morning, fellow share owners and members of the board. My name's Maureen O'Brien. I'm here on behalf of the City of Philadelphia Public Employee Retirement System. I hereby move shareholder proposal one, asking our company to provide a report on its state and federal lobbying expenditures, including indirect funding of lobbying through trade associations. Transparency and accountability in corporate spending to influence public policy are in the best interest of GE shareholders. GE spent $36 million in 2014 and 2015 on federal lobbying activities, according to disclosure reports. There is incomplete disclosure about spending at the state level, where our company also lobbies extensively. GE lobbied in 20 states in 2014 and 2015. For example, in California, spending more than $380,000. GE states that its state lobbying reports are publicly available, but obtaining state lobbying information in 20 different states is not a simple task.
Finding state lobbying disclosure has been described by an expert as, quote, "Nearly impossible," given, quote, "The Byzantine manner in which the data is captured and made available online," end quote, which effectively buries the information at many states. GE claims producing a lobbying report would impose unnecessary administrative burden and costs. GE is required to report its lobbying, so it already has the information. GE simply needs to disclose it to shareholders at a minimal cost, rather than leaving it buried in a maze of impenetrable disclosures. Corporations contribute millions to trade associations that lobby indirectly on their behalf, without specific disclosure or accountability. GE share owners face a trade association blind spot as our company fails to even disclose its trade association memberships. It does not disclose its trade association payments, nor the portion of those payments used for lobbying. These amounts can be quite large.
For example, many companies belong to the U.S. Chamber of Commerce, which is the largest lobbying group in Washington, D.C., spending more than $1.2 billion on lobbying since 1998. Research shows GE sits on the boards of the Business Roundtable and the National Association of Manufacturers and belongs to the Chamber of Commerce. For 2015, these groups spent $121 million on federal lobbying. Share owners currently have no way to know GE's trade association memberships or contributions being used to lobby on its behalf. Why should GE intentionally keep in the dark about how and why they are spending shareholder money?
Proxy adviser ISS supports this proposal, noting that GE, quote, "Does not disclose its trade association memberships or the portion of dues and other payments used for lobbying purposes," end quote. Publicly available data does not provide a complete picture of GE's lobbying expenditures. GE's board and its share owners need complete disclosure to be able to evaluate the use of corporate assets for lobbying and any risks the spending may pose. We hope that you vote for our proposal.
Thank you very much. Thanks. Proposal number two is on the independent chair, and I think, Bill, you're up again.
Jack Nicholson said in "The Shining," "I'm back." This is a proposal sponsored by Kenneth Steiner of Great Neck, New York. Shareholders request our board of directors to adopt as policy and amend our governing documents as necessary to require the chair of the board of directors, whenever possible, to be an independent member of the board. The board would have the discretion to phase in this policy for the next CEO transition implemented so it does not violate any existing agreement. If the board determines that a chair who is independent when selected is no longer independent, the board shall select a new chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as chair. This proposal requests that all necessary steps be taken to accomplish the above.
A board of directors is less likely to provide rigorous, independent oversight of management if the chairman is the CEO, as in the case with our company. Having a board chairman who is independent of the company and its management is a practice that will promote greater management accountability to shareholders and lead to a more objective evaluation of management. According to the Millstein Center for Global Markets and Corporate Ownership, the independent chair curbs conflicts of interest, promotes oversight of risk, manages the relationship between the board and CEO, serves as a conduit for the regular communication with share owners, and is a logical next step in the development of an independent board. An independent director serving as chairman can help ensure the functioning of an effective board. Please vote to enhance shareholder value. Thank you.
Thank you, Bill. Proposal number three is, I think, going to be presented by Barbara Flaherty. This is the Holy Land Principles. Is Ms. Flaherty here today? Thank you.
Thank you.
How are you?
Very good, thank you.
Thank you.
Good morning, Mr. Chairman and everyone. My name is Barbara Flaherty. I'm the Executive Vice President of Holy Land Principles based in Washington, D.C., I rise to move resolution number 3 on the Holy Land Principles. The Holy Land Principles are pro-Jewish, pro-Palestinian, and pro-company. The principles do not call for quotas, reverse discrimination, divestment, disinvestment, or boycotts. The principles do not take any position on solutions to the Israeli-Palestinian issue. The principles do not try to tell the Palestinians or the Israelis what to do. The Holy Land Principles only call for fair employment by American companies in Palestine, Israel. Let me repeat that. The Holy Land Principles only call for fair employment by GE and the other American companies doing business in the Holy Land.
Regardless of what Americans think about the Palestinian-Israeli issue, one thing is certain: Americans expect American companies in the Holy Land, and wherever they are located, to practice fair employment. Our resolution calls on GE to set the standard by signing and implementing the Holy Land Principles, which are based on the very effective MacBride Principles for Northern Ireland, which addresses discrimination in the workplace. Initially, American companies resisted the MacBride Principles, but now 116 companies, including this excellent GE, to its credit, have signed the MacBride Principles. Why would GE or any American company refuse to sign the Holy Land Principles? Last year, GE, Corning, and Intel tried to get the SEC, the Securities and Exchange Commission, to exclude the Holy Land Principles resolution from their 2015 proxy material.
However, the SEC, standing for truth, justice, and the American way, ruled in favor of the Holy Land Principles each time. Therefore, you know the Holy Land Principles are intrinsically valid, inherently fair and reasonable, and in the best American tradition. This is GE's second chance to do the right thing. The Torah, the five books of the Old Testament, speaks of second chances to give people who did not fulfill their obligation the first time, a second chance to do so. Please avail of this second chance and please vote for Holy Land Principles. God bless America.
Thank you very much
The American way of fair employment. Thank you.
Thank you very much. Shareholder proposal number four and five. Four is on cumulative voting, and five is on performance-based options, is also Mr. Harangozo. Good to see you again.
I also am back. Thank you. Cumulative voting is recommended by Warren Buffett's mentor, Benjamin Graham, in a book, "Security Analysis," he co-authored with David Dodd. Nazi concentration camp survivor, Evelyn Y. Davis, placed this proposal on the GE proxy many times in previous years. I'm honored to stand on the shoulders of great people and great minds in presenting this cumulative voting proposal. Cumulative voting gives shareholders a company with more distinction capability in director elections. Directors provide oversight to the company on behalf of the shareholders. Oversight matters of interest to me are sustainability and transparency. I think of three key objectives of a company our size. The first is to live. Fortunately, the recipe to live is simple and clear. Peter Lynch wrote in "One Up on Wall Street," that, "A company with no debt cannot go bankrupt." The second objective would be to grow.
Here again, we have historical market momentum to help us. The market grew on average over 10% for the last 70 years. Indexing a quarter of our net earnings would ensure that portion of the company grows with the market. If the rest of the company underperforms the market, as our company has for over 16 years, indexing could be increased to 75% of retained earnings. This adjustment enables shareholders to tune the CEO to perfection. Finally, after the steps have been taken to live and grow, I find the third step is to shine. I like our mission statement that says in part that we do what few companies do. I would like to add numerical polish to this statement as companies can go broke doing what few companies do. To produce a number, I have examined the world we live in.
Former CEO Jack Welch wrote that leveraged aircraft leasing returns 30%. Leverage, however, implies debt and caution. Jeremy Siegel shows that the market bias towards certain fundamentals have grown over 17% in the last 50 years. Finally, Warren Buffett says a good business can grow money at 20%, and there are very, very few businesses that can do this. I would like to remind Buffett that there is only one original Dow company left with a heartbeat. Berkshire Hathaway grew money on average more than 21% for over 50 years. I find we should have a goal to grow money at 20% with a missed threshold of 15% and accept very few misses. We should have a goal at least that already accomplished. By the way, 15% can take a 50-year-old millionaire and transform him to a 100-year-old billionaire. There is hope for me.
In summary, the objectives to live, grow, and shine can be accomplished with no debt, indexing one quarter of net income, and plans to grow 20%. While sustainability and transparency are oversight matters of interest to me, I know there are other matters of interest to other shareholders. I urge all shareholders to vote for cumulative voting shareholder proposal number four.
Great. Thank you, Martin.
I-
Now you've got number 5 as well.
Yeah. I was asked to present a proposal for Mr. James Jensen. There was an emergency, and I got a phone call. The objective of this presentation is to give shareholders a company aligned to the stock performance experienced by management. The Wall Street Journal writer Jason Zweig, in the book, "The Intelligent Investor," revised edition, page 511, says, "No CEO deserves to make himself rich if he has produced poor results for you." The market is at near record highs, yet our stock, our dividends, and our earnings are trailing like a caboose. When the company underperforms the market, bonuses are paid. This is accomplished by taking the company nearly bankrupt, according to Forbes, and claiming a slight recovery as an outperformance to the market, sometimes referred to as a dead cat bounce.
Trading patterns show that Mr. Welch and Mr. Immelt made enormous amounts of money on options and trading GE stock. Collectively, they earned $hundreds of millions doing that. Welch and Immelt became rich utilizing the shareholders as useful idiots. Their inside trading, even if legal, is outperforming the buy and hold shareholders handsomely. There is currently no mechanism that will prevent this from becoming a common occurrence. Shareholders do not have the same inside control. We lose money. Welch told the Financial Times effectively that much of GE valuation was unsustainably driven by debt. Welch did not, however, return to the GE shareholders the $hundreds of millions he collected in creating that GE bubble. Welch and Immelt kept their money as shareholders lost their shirts. Immelt and Welch created wealth similar to that of Bernard Madoff, in that the temporary claimed earnings growth were not sustainable.
Unlike Madoff, the money Welch and Immelt earned fleecing the shareholders remained in their pockets. Given the size of the valuation declines and dividend declines, and Welch's acknowledgment that debt-driven profits are not sustainable, salary increases should only occur when profits increase, with debt simultaneously decreasing. Please vote yes for shareholder proposal number 5.
Thank you. You're done.
Mr. Immelt, my reference was to your options. You cashed in a lot of options just before you became CEO.
Never sold a share of stock while CEO of GE. That's the truth.
You sold options.
Proposal number six is Justin Danhof. Justin, welcome back to the meeting, on the human rights report. Welcome.
Thanks, Jeff. I rise to move proposal six. I'm Justin Danhof of the National Center for Public Policy Research. Last spring, our CEO joined with a host of corporate leaders in distorting religious freedom laws, specifically regarding Indiana's effort to protect its citizens' deeply held religious beliefs. He wrote, quote, "I am very concerned about the potential impact of the Religious Freedom Restoration Act that could have on our company and our employees." End quote. Since that time, many more corporations have joined in this mob effort to squash religious liberty. Mr. Immelt was speaking on behalf of this company, writing on company letterhead. I'm sorry to say he was bending the truth. Here's the truth. The federal government and 31 states already have heightened religious freedom laws on the books.
Since you're not going to read about it in the press, I'll tell you, this is all that those laws do. They say that the government should not interfere with an individual's religious freedom unless doing so is necessary to reach an important government goal. Second, they say that if the government can reach this important goal in a way that does not abridge religious freedom, it should simply choose that other method. That's all these laws do. The federal religious freedom law was co-authored by none other than liberal icon Senator Ted Kennedy. Signed into law by President Bill Clinton. Its purpose is to protect religious rights, which of course, are civil rights. The state laws imitate the federal law, sometimes word for word. Mr. Immelt expressed concern that religious freedom laws will lead to discrimination in part against homosexual individuals.
These laws only require the government to avoid interfering with religious freedom if it can do so while still achieving important government goals. One of them is, of course, in every state of the union, outlawing discrimination. Mr. Immelt wrote this letter on GE's behalf, stating, "We have zero tolerance for discrimination of any kind." Our proposal takes you up on that. GE operates in many nations where homosexuality is actually outlawed. In some of these countries, homosexual acts are punishable by death. Women have almost no rights in numerous countries where GE does business. Just try getting a fair trial in some of these nations. Let us, as shareholders of GE, express our support for the company's zero tolerance on discrimination, as Mr. Immelt said, question why GE is operating in nations when doing so requires GE to discriminate and acquiesce to discrimination.
Could a woman at a GE facility in Saudi Arabia even work there without the permission of a male relative? I don't think so. If you're truly concerned about the persecution of homosexuals, Mr. Immelt, look to Riyadh and Tehran, not Indianapolis and Atlanta. Our proposal simply asks management to prepare a report that identifies GE's criteria for operating in regions with systematic human rights violations. If the company is worried about basic religious freedom laws in the Hoosier State and elsewhere, that would have a very negative impact on its employees and its companies, we simply must question why the company operates in regions with actual human rights violations and atrocities. Please join me in supporting proposal six.
Thank you, Justin. Welcome again. Item number four is balloting. Let's move on to item number four. You'll find a ballot on your seat. If you have a ballot ready to turn in, please hold it up and I'll ask the ushers to collect it. I don't see anybody there. Right there, guys. The Inspectors of Election are ready to announce the outcome of the voting. Let's go to the inspectors' report. Mr. Michael Barbera of IVS Associates will be presenting the report of inspectors. Mr. Barbera, do you have a report for us?
Yes, Mr. Chairman. The Inspectors of Election have completed an initial count of the votes cast at this meeting in person or by proxy. Proxies representing approximately 7 billion, 15 million shares, or 75.5% of the total shares eligible to vote were received. Other shares have been voted at this meeting by ballot or by proxy. On the basis of our initial count, the Inspectors of Election announce the following results. Directors received at least 5 billion favorable votes and all nominees have been elected. On the advisory approval of our named executives' compensation, for is 93.9% of shares voted, against 5.2%. Ratification of KPMG as independent auditor for 2016, for 94.1% of shares voted, against 2.8%. On the share owner proposals, the lobbying report, for is 23%, against 70.6%. Independent chair, for 22% of shares voted, against 77.3%. The Holy Land Principles, for 3.5% of shares voted, against 90.8%.
Cumulative voting, for 9.8% of shares voted, against 89.1%. Performance-based options, for 6.7% of shares voted, against 92.3%. The human rights report, for 2.6% of shares voted, against 89.4%. Mr. Chairman, this initial tally is subject to verification, and the final tabulation may reflect small changes in the vote I've announced. The final tabulation will be set forth in the formal report of the Inspectors of Election to the Secretary of the company, which will be made after the votes have been verified. This concludes our report.
Thank you. We're to item number six for some Q&A. The formal part of the meeting has ended. We've got a chance to hear from other members of the audience. We've already heard some extensive comments. We want to give other share owners who have not spoken a chance. If you wish to speak, just come to one of the microphones on the aisle, state your name, and ask your question. Let's go to the microphones. Let's start maybe on microphone number one. Please, microphone number one. Yes, sir.
My name is Craig Williams. It appears that I'll be adding my voice to some of the choir, but my statement in question timeout at a mere two minutes. My name is Craig Williams. I'm an aerospace engineer, currently living in a suburb of Cleveland, Ohio. I own 10,433 shares of common, and I'm here representing only myself. Both of my parents were lifelong salaried GE staff, my father being a mid-level manager.
I was motivated to fly down here and attend today's meeting because of the last few years of dealing with my mother's loss of GE's sponsored group health plan, like so many others. An aside to Ms. Susan Peters, a member of your staff, Ms. Gail Melakowski, has been most helpful and accommodating. Anyone who can deal with me on this subject deserves a bonus. In the past two years, I've had two prolonged episodes of dealing with the staff of OneExchange, which, with one exception, I have found to be incompetent. More importantly, since the passage of the so-called Affordable Care Act, my mother has lost her plan, mind you, not the policy, three times despite no significant change in her health status, which is excellent, and despite repeated assurances that we could keep our plans.
I have found the experiences to be aggravating and time-consuming on my part, and for my mother, who is 91 years old, unnerving. Please, spare me the line about Obamacare doesn't apply to Medicare. It's not merely a series of odd coincidences, and I am not that gullible. My question to you is, with the distinct possibility of changes in policies emanating from the White House following this November's election, would General Electric reconsider its decision to end the sponsorship of group health plans for retirees?
Again, our sense is you've got 40 million people in exchanges, which is more than 160,000. I think your comments on OneExchange we should take quite seriously and make sure that we can do everything in our power to make the process better. I really appreciate your voice and your coming here today. Thank you. Let me go to microphone number 2. Good morning. Morning, Ron.
Hi, Jeff. Ron Flowers. I'm president of the GE Retirees Group here in Erie. First of all, for the last speaker, ditto. Nice job. We've all run into that problem. It's downright terrible. At last year's shareholders meeting, I said that we will find out this coming year whether GE has a heart. We now know that it's nonexistent, GE couldn't care less about the people who built the foundation that they stand on. Last year, we were in Oklahoma City, which was at the end of the Trail of Tears, where tens of thousands of Indians died being forcibly marched from North and South Carolina to new Indian lands in Oklahoma. This year, GE has created their own Trail of Tears all across the country using over 100,000 GE retirees.
Almost daily, I am still trying to help retirees who have been forced to get new insurance are being devastated by drug costs. These are forced changes, not that they wanted, not that they asked for. I have talked to many who are at wit's end trying to figure out where we are going to get thousands of dollars to pay for drug costs. One drug, if they get prescribed, can wipe out $1,000 in a year. I have people that I've talked to and worked with that last year they paid $250, $350, $450 for insurance for drugs. This year, they hit the donut hole of $3,300 already, and they'll be close to $5,000 by July. This is obscene. When you're a retiree, you have nowhere to get any more money. You have to do with what you got.
When you're prescribed a drug, what are you supposed to do? Tell the doctor, "Even though it's going to save my life, I can't take it because I can't afford it"? That's not an option. It shouldn't be an option. GE has a catastrophic insurance that will help out after a certain point. Many people are running into situations where two drugs, three drugs will wipe out two, three, four, five, six months of their pension. Their pension's gone for five, six months. That's just not right. Just not right. Won't even talk about OneExchange. Previous speaker did a very good job. You mentioned 80-20. 80% like the 20% didn't. That's a fake figure. There's too many people that were pushed by OneExchange into Medicare Advantage plans that are cheaper and doesn't fit the people.
What about somebody in an advantage plan they were pushed into and they have kids out of town? They have grandkids out of town. They don't have any insurance coverage if they go see them. The GE insurance program before this was nationwide. That's how it should be. In that last negotiation, GE said that the average retiree's income is $800 a month. $800 a month. You get two or three bad prescriptions and it wipes that out, and it keeps wiping it out. Let's talk about the 80-20. 80-20 is right now. The people are young. All these people that you shoved into this are getting older by the year, and that 80/20 is going to go 70/30, 60/40, and pretty soon you're going to have about 10, 15% across the country.
Microphone. Thank you.
Just one final comment. Your next board meeting, please go in and congratulate yourselves. Puffed up chest, congratulations. Pat yourself on the back. You took $3.3 billion out of the pockets of the old and the sick and the dying.
Thank you, Ron. Thank you. Microphone number one.
My name is Jairo Saw Munduruku. I'm representing the Munduruku people of Alto Tapajós. Advisor to the chief and I come to introduce myself as one of the representatives of the Munduruku people of the State of Pará, Brazil. Good day.
Thank you very much.
Good day, Mr. Chairman. I also came from Pará, representing the Munduruku people of Pará. My name is Adauto Akai Munduruku , head of the Munduruku warrior people.
Thank you.
Good morning. My name is Jairo Saw Munduruku, and my name is Adauto Akai Munduruku, and we are leadership from the Munduruku Indigenous people, from the Tapajós Basin in the Brazilian Amazon. We have traveled four days to come here. My people are under threat because of proposed mega-dam project in our river, the São Luiz do Tapajós dam. This project would flood our land and force us from an area we have lived for centuries. This project would violate human rights. Prior to GE merger with Alstom's hydropower business to create GE Renewables, Alstom was reportedly in discussions to participate, enable, and profit off of this destructive project. With its purchase of Alstom, GE is now involved in destructive mega-dam projects. At the same time, GE has the potential to be a part of the energy solution for Brazil, being the biggest wind producer.
The Brazilian Indigenous Affair agents, FUNAI, has just recognized last week the traditional occupation of the Munduruku people to our land. It would be unconstitutional in Brazil to remove us from our traditional territory. This project is illegal and violates human rights. Is GE prepared to bear responsibility for violating customary human rights and the destruction of nature brought by destructive mega dams in globally important ecosystems like the Amazon?
Thank you for coming today. We certainly will take into consideration everything that you've said, and I really appreciate your attendance today. Thank you. Microphone number 2.
Good day, ladies and gentlemen. I'm Antônia Melo of the Xingu Alive Forever Movement. I come from far away, from the Xingu River in Altamira, in the state of Pará, in the Amazon, to bring here a message from the massacred peoples of the Xingu River with Belo Monte to Alstom.
Hello, my name is Antônia Melo. I am the leader of the Xingu Alive Forever Movement, the Xingu River in the Brazilian Amazon. I have come today to bring a message, because I have been personally impacted by the actions of Alstom, which is now part of GE. I present the voice of the Xingu's people who have been massacred by the construction of the Belo Monte Dam. This dam that Alstom profited off of and made possible, violated environmental and human rights legislation and international treaties that enshrine the rights of indigenous and traditional peoples. Brazilian federal prosecutors have classified Belo Monte as ethnocide because of the way it led to the loss of indigenous peoples' way of life.
It forced relocation of fisher folk and the loss of their livelihoods and food security through the massive kill-off of the Xingu River's fish, which occurred without even minimal mitigation and compensation for these peoples. Belo Monte means the destruction of the river, its fauna, flora, and peoples. It means injustice, the increase in violence, drugs, criminality, the lack of basic public services like healthcare and sanitation. It means corruption. This project was only possible due to the technical support of international equipment suppliers like Alstom and now GE. In spite of its environmental and human rights disasters I've detailed here, Alstom's CEO had the audacity to brag about Belo Monte's contributions to clean, sustainable energy. GE now bears direct responsibility for Belo Monte's irreversible impacts. GE also inherited Alstom's record of rampant corruption for which it is being investigated in Brazil and all around the world.
The investigation into the corruption scandal that has brought about the impeachment of President Dilma Rousseff confirmed that corruption was crucial in making Belo Monte a reality. Have you told your investors about the endemic corruption surrounding infrastructure development in Brazil and Alstom's record on corruption or involvement in projects tied to corruption?
Thank you very much for coming today. We'll take all these into consideration. Thank you, Dennis.
Jeff.
So-
Dennis Rocheleau .
Okay. Good morning.
Good morning, Jeff. At the risk of proving Alinsky's Rules, I offer these observations to the board. Joseph Anthony Mangino is a 98-year-old GE shareowner who retired from GE with 40 years of service. Joe was the longtime business agent of IUE Local 301 at the Schenectady Works. I am proud to call him my friend. I retired with 36 years of service from GE in 2004 as the chief labor negotiator at corporate headquarters. At age 74, I am still willing to listen to my elders. Joe and I disagree about a number of things: politics, economics, and many collective bargaining issues. However, we agree that GE is an iconic enterprise, although it can occasionally misstep, as it did, in our opinion, when, under false pretenses, it exposed its retirees to the insufficient mercies of private exchanges for Medicare supplementary coverage.
Joe would probably express his objections in more pungent language than I. The phrase bait and switch would definitely be invoked. Let me tell our story in my terms. In 2008, I appeared at my first GE annual meeting to raise some concerns about corporate governance. When I attempted to reach shareowners with a proxy proposal, the company fought me every step of the way. GE probably paid the law firm of Gibson, Dunn & Crutcher well over $100 thousand to keep my ideas off the proxy. I persisted. On 4/24/2013, my proposal on director term limits was presented to this body. I asked for a 15-year term for a broad class of existing independent directors and a 10-year limit for directors elected beginning in 2014.
GE recommended against my proposal, arguing that my, quote, "Arbitrary scheme for establishing term limits is counterproductive to GE's ability to retain qualified, experienced, and effective directors." Unquote. I want to emphasize that the company never engaged me in any dialogue to refine my proposal, to understand my thinking, or to explore any mutually agreeable resolution of our differences. Expensive legal resistance was GE's favorite strategy. However, my interest in the company's conduct had shifted prior to that 2013 annual meeting, I did not speak in support of my proposal, but instead addressed GE's unwarranted attack on retiree healthcare announced in September 2012. For over three years, I have sought constructive dialogue on this issue and the open disclosure of relevant financial data.
When my every initiative was ignored or rebuffed, I filed a lawsuit in federal court to challenge this affront to the reasonable expectations of tens of thousands of retirees. Once again, the company did not choose to explore the possibility of a mutually advantageous settlement of our differences. Instead, it will probably pay the law firm of Morgan, Lewis & Bockius more than $1 million to fight us, the retirees GE supposedly values. The company loudly proclaimed commitment to integrity, both the spirit and the letter, receives scant recognition in this debate. Instead, we are bombarded with the elusive concept of competitiveness and the dim recollection of HR executives whose grasp of benefits accounting is shockingly feeble. Thus, profit maximization and reflexively imitative behavior in a disturbing demonstration of Gresham's law drives all discourse about a suitable settlement out of the marketplace of acceptable ideas.
As an aside, I wonder how this concern for so-called competitiveness squares with GE paying $225,000 to Hillary Clinton to speak briefly at its management meeting in Boca Raton two years ago. Let me attempt to close the loop. Page 17 of this year's guide to GE proxy statement states, and I quote, "How we build a board that is right for GE, how we refresh the board, term limits. In September 2015, the board adopted a 15-year term limit for independent directors with a two-year transition period for existing directors." That sounds very much like what I proposed three years ago, which the company denigrated. We cannot afford to wait for a similar recognition of error on the company's part regarding retiree healthcare. Not just a lot of money, but lives are at stake.
Morgan Lewis employs excellent and assured attorneys, GE's pockets are deep enough to fund their litigating this to death. Our lawyers at Despres, Schwartz & Geoghegan , although not as highly compensated, are equally competent and passionately committed to securing equity for retirees. Yes, we can continue to litigate, but at what cost to the company's reputation and the retirees' well-being? At bottom, this is not about personalities, about whether GE HR executives did sloppy staff work or whether I am an apostatic SOB. No, this is about higher principles than profit. It is about honorable conduct. It is about fair treatment for loyal and credulous retirees. It is to invoke an old negotiations phrase that Joe Mangino and I know well, to do right voluntarily.
As it now stands, GE's rebranding as the digital industrial could be somewhat crudely characterized as a towering middle finger extended to hundreds of thousands of salaried, hourly, and retired salaried people. GE can be, GE must be better than that. The first step is to engage in open, honest dialogue starting now. A reasonable settlement would serve everyone's best interests. I end my remarks as I began them. Gordie Eiders is an 88-year-old GE shareowner and a retiree with over 31 years of GE service who has recently experienced some significant health issues. I first met Gordie in 1973 national negotiations when Gordie headed IUE Local 805 in Tell City, Indiana. My friends Gordie and his wife Mary, also a 31-year service GE retiree, will soon celebrate 50 years of marriage. They have kept their vows to each other. GE must keep its perceived promises to them.
Thank you.
Thank you. Thank you, Dennis. Listen, we've heard from many people today. Let me Okay, here we go.
Hi.
Morning. How are you?
Hi. My name is Jack Richards, I worked for 34 years at General Electric Company in your favorite city, in Boston.
It sounds like you have that certain accent.
I now live in Fort Lauderdale.
Okay, great. Welcome.
Okay. I just wanted to tell you a little bit about my experience, but I want the board of directors to understand exactly where I'm coming from. As I say, I live in Fort Lauderdale, and if you live in certain areas in Florida, you probably have the best insurance of anybody in the United States because I had an HMO, and I didn't have to pay $0.05 for insurance. I had a great insurance company by the name of AvMed. If I went to my PPO, it would cost me zero. If I went to somebody outside of that, a specialist, it would probably cost me $30. Okay? Now, as of January 1st, 2016, I get assigned by your organization, number 1, whatever they call it, right? They assigned me to AvMed, they assigned me to a healthcare organization.
Now when I go to these same doctors, my cost is triple. Okay? I have the gout, sorry to hear that, but I do have the gout. My gout medicine was costing me $5, and now they're trying to charge me $170 for the same exact medicine. Okay? Everything has tripled and quadrupled based on what you assigned me to, and I cannot get back into my insurance company that I had before AvMed, which was fabulous. Also, just to let you know, Jeff, that you're going up to Boston, and we have retirees in Boston that are on pension, and they're making $400 a month.
Now, they are going to have to make decisions whether they buy food or whether they get on the medical. This is really a disaster for those types of people. Also, I never met Dennis Rocheleau before, and for a man who worked in corporate to stand up and take a position that he has for the General Electric retirees, something's got to be wrong here. I think the board of directors should intrinsically look at these decisions they have made and the types of people they've destroyed. When you've got a guy like a Dennis having the guts to stand up and tell you exactly-
Great
what is going on, I hope you pay-
Thank you
I hope you pay attention. When you get to Boston, maybe a lot of people will visit you and tell you all these problems they're having.
I look forward to it.
I hope you will have an open door for these people.
I look forward to it. Dennis is a good guy.
Thank you very much.
Thank you very much. Look, we've heard from a lot of people today. I'll just conclude the meeting and thank the people of Jacksonville. Before I do, I just want to make a few points. GE is the eighth most valuable company in the world, number 10 for Fortune Most Admired, number one best company for leaders. The stock has outperformed all the indices over the last five years. We've paid out more in dividends since 2001 than the 120 years combined. We executed one of the largest portfolio transformations in history last year. We have a $316 billion backlog in a slow-growth world. We've got great market positions in a $2 trillion installed base. We built the first business process center in Saudi Arabia with 3,000 women. 3,000 women in Saudi Arabia. We're the leader in digitization. We're one of the country's biggest manufacturers.
We had 100% contract ratification in 2015, the first time in history. We have high retention and strong culture. We've been voted the most ethical company in the world by Ethisphere Magazine for the last eight years. Yesterday, I received an email from a friend of mine that I worked with in healthcare in the late 90s. His name is Paul. He worked for GE for 42 years. He said, "Jeff, thank you for the note. It means a great deal to me. It's been an honor to have a career with GE. I want to thank you personally for a wonderful high-integrity company that provides an outstanding work environment. I will dearly miss the people and technology. I was energized every day by my talented, hardworking, globally-minded, diverse teammates, and the medical breakthroughs we were delivering to our partners." He was a good guy. This is a great company.
The meeting's adjourned. Thank you.