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 Dimitryop, our General Counsel. Each year we hold our Shareowners' 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 and 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 $70,000,000 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, but GE remains a good investment. In a complicated world we're simpler and more competitive, In an uncertain world we're skilled and managing through tough cycles. And in a risky 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 continue 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. And 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 lacked competitive advantage and rebuild 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.
Achievement of 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 do something 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've received proxies representing over 75% of the outstanding shares eligible to vote and the management proxy committee has voted these shares in accordance with sharing our 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 'ninety eight Shelly Lazarus, Chairman Emeritus, Olga Villan Mather, Director since 2000. Shelly is Chair of our Governance and Public Affairs Committee. Bob Lane, Former Chairman and Chief Executive Officer, Dear, Director since 2005 Susan Hockfield, President Emeritus of MIT, Director since 2006.
Susan is Co Chair of the Technology and Industrial Risk Committee Jim Mobile, former Chairman and Chief Executive Officer, ConocoPhillips since 'eight Jeff Beatty, former Chief Executive of The Woodbridge Company, a Director since 'nine Jeff as 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 Compensation Committee Frank D'Souza, Chief Executive Officer Cognizant, Director since 2013 Mary Shapiro, former Chairman of the SEC and Director since 2013 Mary as Chair of our Audit Committee Jim Moore, Executive Chair and former Chief Executive PNC Financial since 2013. We also have one of our new director nominees in attendance this year, Sebastian Bizen, Chairman of ACOR. He'll be joined by Lowell McAdams, Chairman and CEO of Rice and then Peter Henry, Dean of the NYU Stern School as new directors. I'd also like to acknowledge 3 directors who are not standing for reelection. Doctor.
Bob Swanger is here today. Bob, thank you for all your great service to the company. Really appreciate it. And also, Sandy Warner, who's not standing, he was the Director since 'ninety two and Jim Cash since 'ninety seven. Both of them have been fantastic Directors and we owe them a great debt of gratitude.
And I'd also like to ask John Rice, Keesharing and Beth Konslick to stand, their Vice Chairman of GE, and do great work for you every day. So agenda item number 2 is just a brief update on operations of the company. And 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. And 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 $33,000,000,000 to investors in buyback and cash. So 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 G Store really the transformation to become a digital industrial company culture of simplification, how do we make sure we're competitive in the 21st century? And then how do we deliver good returns to our investors?
And 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 $200,000,000,000 of deals and received cash. We paid that back to dividends to the company, which again, almost all of 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 to $0.20 a share for investors. So 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 G Store, and this is how you create breadth as a strength, how you make size as strength for investors and for customers and not a weakness. And so 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. And 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. And so this is a great strength of your company is to launch these products.
This product probably will be $1,000,000,000 or $2,000,000,000 investment, but we'll have $100,000,000,000 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. So industrial companies like CSX, who is a local Jacksonville company, they need more productivity and they just haven't been able to generate the amount that they want to achieve. And 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. And in many ways, GE has the applications that can provide that kind of productivity.
So 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. And 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 radiologists across the hospital. We can measure the analytics around each one of these products and turn them into better outcomes for our customers. And this business for us is in excess of $6,000,000,000 and growing almost 30% a year. So 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. We actually your company, GE, almost 140 year old company, now has kind of a cloud based operating system. So 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.
So 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. Now it's also impacting the factory floor. GE is a big manufacturer. We're a good manufacturer.
We view 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. So 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. Now GE has made a big commitment to manufacturing globally, but also in the United States. We've opened 15 new factories since 2010. We have 65 applicants or more for every job opening. The average wage in the United States is $28 an hour.
And 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. So 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 health care exchanges. This gives all of your retirees access to a more competitive health care world where there are 40,000,000 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 8 in 10 kind of understand and are accepting and are satisfied with the process. So these are always hard changes, but these are things that are really important for the company as we go forward.
So 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. So this is really a critical framework for the company in terms of how you stay competitive in the 21st century. And 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. And so this kind of culture the changes we drive are really making the company so that you can be in this room 5, 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 the 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. And so 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. So 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 4 or 5 years. You do those things, you get north of $2 a share by 20 20 or by 2018. And then we have additional balance sheet strength to do acquisitions or buy back additional shares in the future. So 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.
So we're quite unique in that regard. And from an investor standpoint, look, this is over the last 5 years, we've exceeded the S and 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 8th most valuable company in the world, and we still think the best days are ahead for GE.
So 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 and we're the 1st digital industrial company and looking forward to driving competitive position in that. So that's just a little bit of an update on the company.
And now what I'm going to do is move on to discussion on other matters that are in the proxy. The independent inspectors of election for this year's meeting are representatives of IBS 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 shareholder proposals. After the election of directors and management proposals are introduced, there'll be an opportunity for discussion. And then after the shareowner proposals are introduced, there'll be a chance to discuss those. There'll be time later on the meeting for discussion of other business matters, but 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 in the proxy. Each of these nominees has received the overwhelming majority of the 7,000,000,000 shares voted by proxy. Next on the agenda is the proposal to approve our named executives' compensation. Your Board of Directors recommends to vote for the approval of our named executives' compensation and the move on the selection of KPMG as independent auditors for 2016. We have with us today John Vemeyer, Larry Bradley, Tom Canforata, who represent KPMG.
Your Board of Directors recommends vote for the ratification of KPMG as independent auditors. Now that's the mandatory 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 churner proposals. So I think should we go into churner proposals?
We got Mike 2.
Yes. This has to do with the election of the directors.
Yes. But
you're scheduled to speak as well on sharing a proposal
too, right? That's absolutely right.
I'm doing that for someone else.
Okay, great.
Good morning fellow share owners. My name is Bill Frieder and I'm here this morning to vote against Jeffrey Immelt and to urge all of you to do the same. I don't take this position lightly, but in my opinion, Mr. Immelt's word cannot be trusted. At the conclusion of last year's shareowners 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 1, 2012, it states that GE expects and intends to continue the GE Medicare benefit plans in this handbook indefinitely.
Somehow it doesn't 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. But 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-sixty 5 Medicare supplement plans or were entitled to special benefits protection. That however is the legal position GE is taking in the 2 lawsuits it is currently facing. Of course the decision of legality will not be resolved here today, But fellow shareowners, 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 we're 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, Rochelle Lazarus and Mary Shapiro were not able to vote. That may have been legal, but who here today would claim that it was right. In Chairman and CEO Ilmelt'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. And 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 and we do what we say we are going to do, not so much. Now all of Chairman Immelt's words need to be viewed against the background of GE's termination of its post-sixty five retirement medical benefits, not for new employees, not for employees hired after 2,005, 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 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 or more likely he simply doesn't care. And then of course there was Mr. Immelt's compelling defense of his shameful act. Everybody is doing it.
Really Jeff, Thanks for the trip down memory lane. I haven't heard that whining excuse since my children were 8. And 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 to close. 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 shareowners 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 shareowners 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 sharing our proposal number 1? I believe Maureen No, I'd like to Okay, Kevin, you're going to go thank you. Hey, Kevin, how are you doing?
Good. Not bad.
Good to see you again. Good to see you. Good to see you, yes. Thanks. Good to
see you, be able to see you anyway. Yes. My name is Kevin Meyer. I'm a chiar 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 and 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 and 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, and what's, was to President Obama, Senator Warren, Markie, Representatives Moulton and Governor Charlie Baker in Massachusetts. And 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.
Well,
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 and you'll all of your Board of Directors has been given a copy of this whole packet. All have eliminated healthcare for those who have retired, But 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 put it 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 100 of 1000 throughout the country, the corporation is saving 1,000,000,000 of dollars in putting the cost of the medical insurance on the backs of GE retirees and taxpayers. The Wall Street Journal reported that GE saved $3,300,000,000 by ending their retirees' health insurance on January 1, 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 on the GE retirees will reduce their standard of living throughout the country. Many retirees have confessed to me the stress that change has caused them. 1 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 7 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 Anne, for example, said on October 16, 2015, they spent over 5 hours on the phone with the one exchange and then 3 hours on the phone in my office on November 3 until they were finally enrolled. There appears to be a clear example of elder abuse. Any reasonable person would conclude that to spend 8 hours on the phone to register for health insurance is abusive.
I wonder if the parents of Jeff Amell, Jeff's father was a GE retiree, had a similar experience. John Lynch who said 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 that 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 1, 2015, 65,000 salaried employees lost their group insurance. And then on January 1, the union affected retirees lost theirs. People retired because they were promised benefits for life and 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 interest? Was this 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.
I'm almost done. Veterans who were enrolled in company plans, for example, now be forced to seek their medical insurance from taxpayers, veterans insurances and Medicaid. Look, you look at the packet, these are actual life experiences. I can tell you from personal experiences, which haven't 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.
This is
the most disastrous thing I've ever seen. Thanks, Kevin.
One more comment.
Martin, let's go to Maureen O'Brien. She's going to propose number 1. Maureen, are you here? You've got 2 proposals here, Mr. Haringoza.
Okay, please.
Good morning. My name is Martin Haringoza. 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 2,009, GE shareholders were told that management would protect the dividend. This did not happen. The Board declared a dividend for 2,009 as still not being paid and it's 7 years later. I would like at least half the shareholder presentation to be by the Board explaining how they arrived at the 2,009 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 Emil 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, Emerald is now up over 2,000 percent on his money. Shareholders are still underwater from the share price of when Emerald sold his shares and also later when he became CEO. While Emerald has claimed he has skin in the game, it is important to understand that Emerald 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 and 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 Council Gibson and Dunn told the company 6 times that my shareholder proposals were not good for the proxy. It is surprising that with Ms.
Shapiro on the Board, you are wrong so often on my proposals. After being wrong six times, let's stop paying money to Gibson and 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 COG, never have, never will, period. So let's go to proposal number 1 and have Maureen O'Brien is here today to do number 1.
Good morning, fellow share owners and members of the Board. My name is Maureen O'Brien. I'm here on behalf of the City of Philadelphia Public Employee Retirement System. I hereby move shareholder proposal 1 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 $36,000,000 in 2014 2015 on federal lobbying activities according to disclosure reports. But there is incomplete disclosure about spending at the state level where our company also lobbies extensively. GE lobbied in 20 states in 2014 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 nearly impossible given the Byzantine manner in which the data is captured and made available online, which effectively buries the information at many states. GE claims producing a lobbying report would impose unnecessary administrative burden and costs, but 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 1,000,000 to trade associations that lobby indirectly on their behalf without specific disclosure or accountability. GE shareowners face a trade association blind spot as our company fails to even disclose its trade association memberships and 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, spending more than $1,200,000,000 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 $121,000,000 on federal lobbying, but share owners currently have no way to know GE's Trade Association memberships or contributions being used to lobby on its behalf. Our request for disclosure is not an outrageous demand, but instead a call for transparency and accountability in the spending of shareholder resources.
Why should GE intentionally keep in the dark about how and why they are spending shareholder money? Proxy Advisor, ISS supports this proposal, noting that GE does not disclose its trade association memberships or the portion of dues and other payments used for lobbying purposes. 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 that spending may pose. We hope that you vote for our proposal.
Thank you very much. Thanks. Proposal number 2 is on 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 out 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 As 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 Milstein Center For Corporate Governance and Performance, 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 shareowners 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, Bill. Proposal number 3 is, I think going to be presented by Barbara Flaherty. This is the Holy Land Principles. Is Ms. Flaherty here today?
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 DC and 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 foreign their 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 their 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 McBride Principles for Northern Ireland, which addresses discrimination in the workplace. Initially, American companies resisted the McBride Principles, but now 116 companies including this excellent GE to its credit have signed the McBride principles.
So 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 15 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 5 books of the Old Testament speaks of 2nd chances to give people who did not fulfill their obligation the first time a second chance to do so. So please avail of this second chance and please vote for Holy Land principles. God bless America and the American way of their employment.
Thank you very much. Shareholder proposal number 45. So 4 is on cumulative voting and 5 is on performance based options is also Mr. Haringoza. So good to see you again.
I also am back. Thank you. Okay. Cumulative voting is recommended by Warren Buffett's mentor, Benjamin Graham, in our book Security Analysis, he co authored with David Dodd. Nazi concentration camp survivor Evelyn Davis placed his 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 3 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 1UP 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 a 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 3rd 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 returned 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. So I find we should have a goal to grow money at 20% with a miss threshold of 15% and accept 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 1 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 4.
Great. Thank you, Martin. Now you've got number 5 as well.
Yes. 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.
Wall Street Journal writer Jason Swagg in the book The Intelligent Investor revised this in Page 511 says no CEO deserves to make himself rich if he has poor produce 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. Emerald made enormous amounts of money on options and trading GE stock. Collectively, they earned 100 of 1,000,000 doing that. Welch and Emil became rich utilizing the shareholders as useful idiots. Their inside training, 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 and 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 100 of 1,000,000 he collected in creating that GE bubble. Welch and Emerald kept their money as shareholders lost their shirts.
Emerald and Wells created wells similar to that of Bernard Madoff in that the temporary claimed earnings growth were not sustainable. Yet unlike Madoff, the money Welch and Emerald earned fleecing to shareholders remained in their pockets. Given the size of the valuation declines and dividend declines and Walter's acknowledgment that debt free 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. And Mr.
Emil, my reference was to your options. You cashed in a lot of options just before you came became CEO. Never sold a share
of stock while CEO of GE. That's true. You sold options. Proposal number 6 is Justin Danoff. Justin, welcome back to the meeting and you're going to on the Human Rights Report.
Welcome.
Thanks, Jeff. I'm Justin Danoff of the National Center For Public Policy Research and I rise to move Proposal 6. 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, I am very concerned about the potential impact of the Religious Freedom Restoration Act that could have on our company and our employees. 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, and I'm sorry to say he was the truth. The federal government and 31 states already have heightened religious freedom laws on the books. And 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.
2nd, 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 and 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. Immold 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 the 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.
Raimo 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 and just try getting a fair trial in some of these nations.
Let us as shareholders of GE express our support for the company's 0 tolerance on discrimination as Mr. Amelst said and 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 want to see if you're truly concerned about the persecution of homosexuals, Mr.
Emil, look to Riyadh and Turan, 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, then we simply must question why the company operates in regions with actual human rights violations and atrocities. Please join me in supporting Proposal 6.
Thank you, Justin. Welcome again. Item number 4 is balloting. So let's move on to item number 4. 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. So the inspectors of election are ready to announce the outcome of the voting. Let's go to the inspector's report.
Mr. Michael Barbera of IBS Associates will be presenting the report of inspectors. Mr. Barbera, do you have a report for us?
Yes, Mr. Chairman. The inspectors of elections have completed an initial count of the votes cast at this meeting in person or by proxy. Proxies representing approximately 7,000,000,000 15,000,000 shares or 75.5 percent 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 announced the following results. Directors received at least $5,000,000,000 favorable votes and all nominees have been elected. On the advisory approval of our named executives' compensation, 4 is 93.9% of shares voted against 5.2 percent. 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, 4% is 23% against 70.6%.
Independent share, 4, 22% of shares voted against 77.3 percent. The Holy Land Principles for 3.5 percent of shares voted against 90.8 percent. The cumulative voting for 99.8 percent of shares voted against 89.1 percent performance based options for 6.7% of shares voted against 92.3 percent. The Human Rights report for 2.6 percent 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 review.
Thank you. So that's we're to item number 6 for some Q and A. The formal part of the meeting has ended. So 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 shareowners 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. So let's go to the microphones. Let's start maybe on microphone number 1 or is there please microphone number 1. Yes, sir.
My name is Craig Williams. It appears that I'll be adding my voice to some of the choir, but my statement and question time out at a mere 2 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 sponsored group health plan like so many others. And aside to Ms. Susan Peters, a member of your staff, Ms. Gail Nalikowski has been most helpful and accommodating.
And anyone who can deal with me on this subject deserves a bonus. In the past 2 years, I've had 2 prolonged episodes of dealing with the staff of 1 exchange, which with one exception, I have found to be incompetent. More importantly, since the passage of so called Affordable Care Act, my mother has lost her plan 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. And please spare me the line about Obamacare doesn't apply to Medicare. It's not merely a series of odd coincidences and I'm not that gullible. So 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?
So again, our sense is you've got 40,000,000 people in exchanges, which is more than 160,000. I think your comments on one exchange, we should take quite seriously and make sure that we can do everything in our power to make the process better. And I really appreciate your voice and your coming here today. Thank you. Let me go to microphone number 2.
Good morning. Good morning, Ron.
Hi, Jeff. This is Ron Flowers. I'm President of the GE Retirees Group here in Erie. First of all, for the last speaker, ditto, nice job, because 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. Well, we now know this is non existent and 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 which end trying to figure out where we are going to get 1,000 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 $2.50 $3.50 $4.50 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. So when you're prescribed the drug, what are you supposed to do? Tell a doctor, well, 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. But many, many people are running into situations where 2 drugs, 3 drugs will wipe out 2, 3, 4, 5, 6 months of their pension. Their pension is gone for 5, 6 months.
That's just not right, just not right. Won't even talk about one exchange. Previous speaker did a very good job. You mentioned eighty-twenty, 80% like the 20% didn't, that's a fake figure. There's too many people that were pushed by one exchange into Medicare Advantage plans that are cheaper and doesn't fit the people.
What about somebody in advantage plan that 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 our last negotiation, GE said that the average retiree's wage or average retiree's income is $800 a month. Dollars 800 a month. You get 2 or 3 bad prescriptions and it wipes that out and it keeps wiping it out. Let's talk about the eightytwenty. Eightytwenty is right now, the people are young, all these people that you shoved into this are getting older by the year.
And that eightytwenty is going to go seventy-thirty, sixty-forty and pretty soon you're going to have about 10%, 15% across the country. Thank
you.
So I just one final comment. Your next Board meeting. Please go in and congratulate yourselves, puffed up chess, congratulations, pat yourself on the back. You took 3 point $3,000,000,000 out of the pockets of the old and the sick and the dying. Thank you, Ron.
Thank you. Microphone number 1.
[SPEAKER MARTIN PEREZ DE SOLAY:]
Thank you very much. Thank you. Good
morning. My name is Jairuso Mondoroku and my name is Adao Sakai Mondoroku and we are leadership from the Munduruku indigenous people, from the Tapajas Basin in the Brazilian Amazon. We have traveled 4 days to come here. My people are under threat because of proposed mega dam project in our river, the Sao Luis do Tapajos dam. This project would flow to 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 project. At the same time, GE has the potential to be a part of the energy solution for Brazil being the biggest wind producer. Also, the Brazilian Indigenous Affairs agent, 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. ESG 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.
Hello. My name is Antonio Amelo. I am the leader of the Xingu Alive Forever movement, the Xingu River and the Brazilian Amazon. And 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 Monchi 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 Monchi 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 Shingle River's fish, which occurred without even minimal mitigation and compensation for these peoples. Belo Monchi 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 health care 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 Bello Monchi's contributions to clean, sustainable energy. GE now bears direct responsibility for Bello Bello Monchi'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 Monchi 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. Again, we'll take all these into consideration. Thank you. Dennis? Good morning.
Good morning, Jeff. At the risk of proving Walensky's Law, I offer these observations to the Board. Joseph Anthony Mangino is a 98 year old GE share owner 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 MidaCare supplementary coverage. Joe would probably express his objections in more pungent language than I.
The phrase bait and switch would definitely be invoked, but 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 share owners with a proxy proposal, the company fought me every step of way. GE probably paid the law firm of Gibson, Dunn and Crutcher well over $100 to keep my ideas off the proxy, but I persisted. On Fourtwenty Fourthirteen, 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 arbitrary scheme for establishing term limits is counterproductive to GE's ability to retain qualified, experienced and effective directors. 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 company's conduct had shifted prior to that 2013 annual meeting and I did not speak in support of my proposal, but instead address GE's unwarranted attack on retiree healthcare announced in September of 2012.
For over 3 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 Bakkes more than $1,000,000 to fight us, the retirees GE supposedly values. The company loudly proclaimed commitment to integrity, both the spirit and the letter receive scant recognition in this debate.
Instead, we are bombarded with the elusive concept of competitiveness and the dim recollections 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 this 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 2 years ago. Now 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 2 year limitation transition period for existing directors. That sounds very much like what I proposed 3 years ago and which the company denigrated. We cannot afford to wait for a similar recognition of air on the company's part regarding retiree healthcare. Not just a lot of money, but lives are at stake. Morgan Lewis employs excellent and assures attorneys and GE's pockets are deep enough to fund their litigating this to debt.
Our lawyers at Dupray, Schwartz and Gayhagen, 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 epistatic SEB. 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 100 of 1,000 of salaried hourly and retired salaried people. GE can be GE must be better than that. And 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. Gordy Aderz 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 Gordy in 1973 national negotiations when Gordy headed IUE Local 805 in Tall City, Indiana. My friends Gordy and his wife Mary also a 31 year service GE retiree will soon celebrate 50 years of marriage.
They have kept their bows to each other. GE must keep its perceived promises. Thanks, Dan. So, Dan.
Thank you. Thank you. Thank you, Dennis. Listen, we've heard from many people today. Let me okay, there we go.
Hi. Good morning. How are you?
Hi. My name is Jack Richards and I worked for 34 years at General Electric Company in your favorite city in Boston.
It sounds like you have that certain accent.
But I now live in Fort Lauderdale.
Okay, great. Welcome.
Okay. And I just want 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 1 nickel for insurance. And I had a great insurance company by the name of AvMed.
And if I went to my PPO, it would cost me 0. And if I went to somebody outside of that, a specialist, it would probably cost me $30 okay? So now as of January 1, 2016, I get assigned by your organization, number 1, whatever they call it, right? And they assigned me to AvedMed, they assigned me to a healthcare organization. And now when I go to these same doctors, my cost is triple, okay?
And I was I have the gout, sorry to hear that, but I do have the gout. And my gout medicine was costing me $5 and now they're trying to charge me $170 for the same exact medicine, okay? So 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. And 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. And this is really a disaster for those types of people. And also, I never met Dennis Bischlod 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. And I think the Board of Directors should intrinsically look at these decisions they have made and the types of people they've destroyed.
And when you got a guy like a dentist, having the guts to stand up and tell you exactly what is going on, I hope you pay attention. And when you get to Boston, maybe you'll a lot of people will visit you and tell you all these problems they're having. And I hope you will you 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. So look, that's 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 8th most valuable company in the world, number 10 for Fortune Most Admired, number 1 Best Company for Leaders. The stock has outperformed all the indices over the last 5 years. We paid out more in dividends since 2,001 than the 120 years combined.
We executed one of the largest portfolio transformations in history last year. We have a $316,000,000,000 backlog in a slow growth world. We've got great market positions in a $2,000,000,000,000 installed base. We built the 1st business process center in Saudi Arabia with 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 8 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 is adjourned. Thank you.