¨
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Preliminary Proxy Statement
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¨
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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x
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Definitive Proxy Statement
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¨
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Definitive Additional Materials
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¨
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Soliciting Material Pursuant to §240.14a-12
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BAKER HUGHES, a GE company
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(Name of registrant as specified in its charter)
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(Name of person(s) filing proxy statement, if other than the registrant)
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Payment of Filing Fee (Check the appropriate box):
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x
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No fee required.
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¨
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1
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(3
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4
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Proposed maximum aggregate value of transaction:
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(5
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Total fee paid:
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¨
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Fee paid previously with preliminary materials.
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¨
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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Date Filed:
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Sincerely,
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Lorenzo Simonelli
Chairman, President & Chief Executive Officer
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Notice of 2019 Annual Meeting of Stockholders
|
WHEN
|
Friday, May 10, 2019
9:00 a.m. Central Daylight Time
|
How to Vote in Advance
|
||
WHERE
|
2001 Rankin Road
Baker Street Conference Room
Houston, Texas 77073
|
EVEN IF YOU PLAN TO ATTEND THE MEETING IN PERSON, WE URGE YOU TO VOTE IN ADVANCE OF THE MEETING USING ONE OF THESE VOTING METHODS
|
||
AGENDA
|
Proposal 1
|
The election of directors
|
)
|
Registered Holders
1-855-658-0965
Beneficial Holders
1-800-454-8683
|
Proposal 2
|
An advisory vote related to the Company’s executive compensation program
|
|||
Proposal 3
|
The ratification of KPMG LLP as the Company’s independent registered public accounting firm for fiscal year 2019
|
:
|
Registered Holders
www.proxypush.com/BHGE
Beneficial Holders
www.proxyvote.com
|
|
|
Such other business as may properly come before the meeting and any reconvened meeting after an adjournment thereof
|
+
|
Mail your signed proxy card or voting instruction to the address listed on the envelope
|
|
WHO CAN VOTE
|
Holders of Baker Hughes, a GE company Class A Common Stock and Class B Common Stock at the close of business on March 15, 2019
|
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCK HOLDERS TO BE HELD ON MAY 10, 2019
Baker Hughes, a GE company's 2019 Proxy Statement and 2018 Annual Report are available on the Internet:
Registered Holders
www.proxydocs.com/BHGE
Beneficial Holders
www.proxyvote.com
|
||
MEETING ATTENDANCE
|
Photo identification and evidence of share ownership are required to attend the meeting. You may find additional information under "General Information" on page
63
|
|||
DATE OF MAILING
|
A Notice of Internet Availability of Proxy Materials will be mailed on or about March 25, 2019
|
|
By order of the Board of Directors,
|
|
|
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Lee Whitley
|
Houston, Texas, March 25, 2019
|
Associate General Counsel and Corporate Secretary
|
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CEO and Senior Management Succession Planning
|
|
Additional
Compensation Program Features and Policies
|
|
Grants of Plan-Based Awards
in 2018
|
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Compensation Committee Interlocks and Insider Participation
|
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2019 Annual Meeting Information
|
|
Date:
May 10, 2019
|
|
Time:
9:00 a.m.
Central Daylight Time
|
|
Place:
2001 Rankin Road
Baker Street Conference Room
Houston, Texas 77073
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Matters to be Voted Upon
|
NO.
|
PROPOSAL
|
BOARD RECOMMENDATION
|
PAGE REFERENCE (FOR MORE DETAIL)
|
1
|
The election of directors
|
FOR
each nominee
|
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2
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An advisory vote related to the Company’s executive compensation program
|
FOR
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3
|
The ratification of KPMG LLP as the Company’s independent registered public accounting firm for fiscal year 2019
|
FOR
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BHGE Ownership Structure
|
2018 Business Highlights
|
|
|||||
$23.9B
ORDERS
|
$22.9B
REVENUE
|
$0.7B
OPERATING INCOME
|
$1.4B
ADJUSTED OPERATING INCOME *
|
$1.8B
CASH FLOW FROM OPERATING ACTIVITIES
|
$1.2B
FREE CASH FLOW *
|
* Adjusted operating income and free cash flow are non-GAAP measures. A reconciliation of GAAP to non-GAAP measures is included in this Proxy Statement as Annex A.
|
Progress on 2018 Financial and Strategic Priorities
|
|
Developed "50-50-50," a comprehensive growth strategy that includes three core pillars:
|
- 50% improvement in core competitiveness
|
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- 50% improvement in productivity and efficiency
|
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- 50% increase in industrial yield
|
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Made significant progress on our 2018 financial priorities of growing market share, increasing margin rates and increasing free cash flow conversion
|
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Secured important wins and partnerships with key customers such as ADNOC, an integrated services contract with Equinor, an integrated services contract for the Marjan field in Saudi Arabia, a subsea contract for ONGC's 98/2 project in India, as well as Chevron's Gorgon Phase 2 in Australia, and a turbomachinery contract for LNG Canada
|
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Strengthened our portfolio through new strategic technology launches such as Subsea Connect and Aptara™ TOTEX-lite subsea system
|
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153
|
|
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NET ZERO CO
2
BY 2050
|
|
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Top 250
|
Perfect
HSE Days
|
|
Announced our commitment to reducing CO
2
equivalent emissions to net zero by 2050
|
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Wall Street Journal Best Managed Companies
|
Director Nominee Highlights
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COMMITTEE MEMBERSHIPS
(1)
|
|
|||
NAME
PRIMARY OCCUPATION
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AGE
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DIRECTOR SINCE
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AC
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CC
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GNC
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CNF
|
INDEPENDENT
|
W. Geoffrey Beattie *
Chief Executive Officer
Generation Capital
|
59
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2017
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M
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C
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YES
|
Gregory D. Brenneman
Executive Chairman
CCMP Capital Advisors, LLC
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57
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2017
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M
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M
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M
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YES
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Clarence P. Cazalot, Jr.
Former Executive Chairman, President and CEO
Marathon Oil Corporation
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68
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2017
|
|
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M
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C
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YES
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Gregory L. Ebel
Former Chairman, President and CEO
Spectra Energy Corp.
|
54
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N/A
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Not Applicable
|
YES
|
|||
Lynn L. Elsenhans
Former Executive Chairman, President and CEO
Sunoco, Inc.
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62
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2017
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C
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M
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M
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YES
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Jamie S. Miller
Senior Vice President and CFO
General Electric
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50
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2017
|
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M
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NO
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James J. Mulva
Former Chairman and CEO
ConocoPhillips
|
72
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2017
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M
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M
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YES
|
John G. Rice
Chairman
GE Gas Power
|
62
|
2017
|
|
C
|
|
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NO
|
Lorenzo Simonelli
Chairman, President and CEO
Baker Hughes, a GE company
|
45
|
2017
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Not Applicable
|
NO
|
Compensation Highlights
|
|
|
|
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|
|
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Align executive and stockholder interests
|
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Provide a significant portion of total compensation that is performance-based and at risk
|
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Attract and retain talented executives
|
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CEO
|
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OTHER NEOs
|
||||
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11%
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BASE SALARY
|
18%
|
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|
||
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17%
|
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Purpose
|
|
|
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Fixed cash income to retain and attract highly marketable executives in a competitive market for executive talent.
|
18%
|
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||
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72%
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PERFORMANCE-BASED SHORT-TERM INCENTIVE
|
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||
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Purpose
|
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64%
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Annual cash incentive program designed to motivate our executives to achieve annual financial goals and other business objectives and reward them accordingly.
|
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||
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Metrics
|
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|
||
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Revenue, Operating Income, Free Cash Flow, and Strategic Priorities
|
|
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|
||
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LONG-TERM INCENTIVE
|
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Purpose
|
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Annual equity incentive awards designed to further align the interests of our executives with those of our shareholders by facilitating significant ownership of BHGE stock by the officers.
|
|
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|
||
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Metrics
|
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|
||
|
|
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50% Performance Share Units—Relative TSR, Relative ROIC—3 Year Cliff Vesting
25% Restricted Stock Units—3 Year Ratable Vesting
25% Stock Options—3 Year Ratable
|
|
|
|
|
GENDER DIVERSITY
|
|
|
AREAS OF EXPERTISE
|
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AVERAGE DIRECTOR AGE
|
||||||||||||||||
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Global
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9
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59
|
|||
7
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||||
6
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Leadership
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9
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5
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||||
4
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Industry
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6
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3
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||||
2
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Finance
|
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9
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1
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Years Old
|
|||
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Independent
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6
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|
||||
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Male
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Female
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|
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "
FOR
" EACH NOMINEE.
|
|
|
GREGORY D. BRENNEMAN
AGE
:
57
DIRECTOR SINCE:
2017
COMMITTEES:
Conflicts (Member)
Compensation (Member)
Governance & Nominating (Member)
|
|||||
|
|
|
|
|
|
|
|
BIOGRAPHY:
Mr. Brenneman has served as a director of the Company since July 2017. He has served as Executive Chairman of CCMP Capital Advisors, LLC since 2016, Chief Executive Officer from 2015 to 2016 and Chairman from 2008 to 2016. He has also served as Chairman and Chief Executive Officer of TurnWorks, Inc., a private equity firm, since 1994. He served on Baker Hughes Incorporated’s Board of Directors from 2014 through July 2017 and served on the boards of Automatic Data Processing, Inc., Milacron Holdings Corp and Francesca’s Collections within the last five years.
|
|||||||
|
|
|
|
|
|
|
|
He currently serves on the board of directors of The Home Depot, Inc. and PQ Corporation. Mr. Brenneman is a Non-GE Director nominee pursuant to the terms of the Stockholders Agreement.
|
|||||||
|
|
|
|
|
|
|
|
SKILLS & QUALIFICATIONS:
|
|||||||
Mr. Brenneman has extensive leadership and financial experience in public companies, including his service as a former chief executive officer and director of other public companies.
|
|
|
|
GREGORY L. EBEL
AGE
:
54
DIRECTOR SINCE:
N/A
COMMITTEES:
N/A
|
|
|
|
BIOGRAPHY
:
Mr. Ebel served as Chairman, President and CEO of Spectra Energy Corp. from January 1, 2009 to February 27, 2017. He was the Group Executive and Chief Financial Officer of Spectra Energy Corp. from January 2007 to January 2009 and was the President of Union Gas Limited from January 2005 until January 2007. Mr. Ebel served as the Vice President, Investor & Shareholder Relations of Duke Energy Corporation from November 2002 until January 2005.
|
||
|
|
|
He currently serves as the Chairman of Enbridge, Inc. and The Mosaic Company. Mr. Ebel is a Non-GE Director nominee pursuant to the terms of the Stockholders Agreement.
|
||
|
|
|
SKILLS & QUALIFICATIONS:
|
||
Mr. Ebel has leadership experience through his roles as a chairman of a board and former president and chief executive officer of a publicly traded energy company.
|
|
|
|
LYNN L. ELSENHANS
AGE
:
62
DIRECTOR SINCE:
2017
COMMITTEES:
Audit (Chair)
Conflicts (Member)
Governance & Nominating (Member)
|
|||||
|
|
|
|
|
|
|
|
BIOGRAPHY:
Ms. Elsenhans has served as a director of the Company since July 2017. She was the Executive Chairman of Sunoco, Inc. from January 2009 until May 2012, and Chief Executive Officer and President from August 2008 until March 2012. She also served as Chairman of Sunoco Logistics Partners L.P. from October 2008 until May 2012, and Chief Executive Officer from July 2010 until March 2012. Ms. Elsenhans worked at Royal Dutch Shell for more than 28 years where she held a number of senior roles, including Executive Vice President, Global Manufacturing from 2005 to 2008. She served on Baker Hughes Incorporated’s Board of Directors from 2012 to July 2017 and was a director of Flowserve Corporation within the last five years.
|
|||||||
|
|
|
|
|
|
|
|
Ms. Elsenhans is a member of the Board of Directors of GlaxoSmithKline and Saudi Aramco. She is a Non-GE Director nominee pursuant to the terms of the Stockholders Agreement.
|
|||||||
|
|
|
|
|
|
|
|
SKILLS & QUALIFICATIONS:
|
|||||||
Ms. Elsenhans has extensive leadership experience through her positions as a former chair and chief executive officer of a publicly traded energy company as well as her many years of leadership experience at a global oil and gas company.
|
|
|
JAMIE S. MILLER
AGE
:
50
DIRECTOR SINCE:
2017
COMMITTEES:
Governance & Nominating (Member)
|
|||||
|
|
|
|
|
|
|
|
BIOGRAPHY:
Ms. Miller has served as a director of the Company since July 2017. She currently serves as the Senior Vice President and Chief Financial Officer of GE. Ms. Miller previously served as the Senior Vice President, GE and President and Chief Executive Officer, GE Transportation from October 2015 to October 2017 and Senior Vice President, Chief Information Officer for GE from April 2013 to September 2015. Ms. Miller joined GE in April 2008 as Vice President, Controller and Chief Accounting Officer and held this position until April 2013. Prior to joining GE, Ms. Miller served as the Senior Vice President and Controller of WellPoint, Inc. (now Anthem) and was a partner at PricewaterhouseCoopers LLP.
|
|||||||
|
|
|
|
|
|
|
|
Ms. Miller is a GE Director nominee pursuant to the terms of the Stockholders Agreement.
|
|||||||
|
|
|
|
|
|
|
|
SKILLS & QUALIFICATIONS:
|
|||||||
Ms. Miller has extensive leadership experience in various businesses and functions across GE and with other firms. She also has global business experience and technological, financial and accounting experience.
|
|
|
|
JAMES J. MULVA
AGE
:
72
DIRECTOR SINCE:
2017
COMMITTEES:
Audit (Member)
Compensation (Member)
|
|
|
|
BIOGRAPHY:
Mr. Mulva has served as a director of the Company since July 2017. He was the Chairman and Chief Executive Officer of ConocoPhillips from October 2004 until his retirement in June 2012. He is the former Chairman of the American Petroleum Institute. Mr. Mulva previously served on the board of Statoil.
|
||
|
|
|
Mr. Mulva currently serves on the boards of GE and General Motors Company. Mr. Mulva is a GE Director nominee pursuant to the terms of the Stockholders Agreement.
|
||
|
|
|
SKILLS & QUALIFICATIONS:
|
||
Mr. Mulva has extensive leadership experience, global business experience, significant background in the oil and gas industry, as well as his public and private company board experience.
|
|
|
JOHN G. RICE
AGE
:
62
DIRECTOR SINCE:
2017
COMMITTEES:
Compensation (Chair)
|
|||||
|
|
|
|
|
|
|
|
BIOGRAPHY:
Mr. Rice has served as a director of the Company since July 2017. He has served as Chairman, GE Gas Power since December 2018. He was the Vice Chairman of GE until March 2018 and was the CEO, GE Global Growth Organization from November 2010 until December 2017. He served in other various leadership positions across GE, including Vice Chairman, GE and President and CEO of GE Technology Infrastructure from 2007 until November 2010, Vice Chairman of GE’s industrial and infrastructure businesses from 2005 until 2007 and President and CEO of GE Energy from 2000 until 2005.
|
|||||||
|
|
|
|
|
|
|
|
Mr. Rice currently serves as a director of Li and Fung. Mr. Rice is a GE Director nominee pursuant to the terms of the Stockholders Agreement.
|
|||||||
|
|
|
|
|
|
|
|
SKILLS & QUALIFICATIONS:
|
|||||||
Mr. Rice has extensive leadership experience in various businesses across GE, including global business experience and experience with global energy and infrastructure markets.
|
|
|
|
LORENZO SIMONELLI
AGE
:
45
DIRECTOR SINCE:
2017
COMMITTEES:
N/A
|
|
|
|
BIOGRAPHY:
Mr. Simonelli
has served as Chairman of the Board of Directors of the Company since October 2017, and as a Director and as Chief Executive Officer of the Company since July 2017. Before joining the Company in July 2017, Mr. Simonelli was the Senior Vice President, GE and President and Chief Executive Officer, GE Oil & Gas from October 2013 to July 2017. Before joining GE Oil & Gas, he was the President and Chief Executive Officer of GE Transportation from July 2008 to October 2013. Mr. Simonelli joined GE in 1994 and held various finance and leadership roles from 1994 to 2008.
|
||
|
|
|
SKILLS & QUALIFICATIONS:
|
||
Mr. Simonelli has extensive leadership experience in businesses and functions, including as the Chief Executive Officer of BHGE, in addition to his global experience, financial experience and extensive background in the oil and gas industry.
|
Skills and Experience
|
W. Geoffrey
Beattie
|
Gregory D. Brenneman
|
Clarence P. Cazalot
|
Gregory L. Ebel
|
Lynn L . Elsenhans
|
Jamie Miller
|
James J. Mulva
|
John Rice
|
Lorenzo Simonelli
|
Leadership
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
Business and strategic management experience from service in a significant leadership position, such as a chief executive officer, chief financial officer or other senior leadership position
|
|
|
|
|
|
|
|
|
|
Financial
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
Background and experience in finance, accounting, banking, capital markets, financial reporting or economics
|
|
|
|
|
|
|
|
|
|
Industry
|
|
|
ü
|
ü
|
ü
|
|
ü
|
ü
|
ü
|
Experience in the Company's business including oilfield services and oilfield equipment
|
|
|
|
|
|
|
|
|
|
Global
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
Global experience or international background, including in growth markets
|
|
|
|
|
|
|
|
|
|
Public Company and Corp. Governance Experience
|
ü
|
ü
|
ü
|
ü
|
ü
|
|
ü
|
|
|
Experience serving on the boards of other large, publicly traded companies
|
|
|
|
|
|
|
|
|
|
Independent
|
ü
|
ü
|
ü
|
ü
|
ü
|
|
ü
|
|
|
Satisfies the independence requirements of the NYSE and SEC
|
|
|
|
|
|
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|
|
Stockholders may also propose nominees for consideration by the Governance & Nominating Committee by submitting the names and other supporting information required under the Company’s Bylaws to:
|
Attn: Corporate Secretary
Baker Hughes, a GE company
17021 Aldine Westfield Road
Houston, Texas 77073
|
Recommendations for the 2020 Annual Meeting should be submitted after January 11, 2020 and no later than February 10, 2020.
|
Board Term Limits and Retirement Age
|
The Board has a 15-year term limit for all directors, other than the Company's CEO. Additionally, with limited exceptions, directors will not be nominated for election to the Board after his or her 75th birthday.
|
1
|
Evaluation of Board Composition
|
|
The Governance & Nominating Committee evaluates Board composition annually and identifies skills, experience and capabilities desirable for new directors in light of the Company's business and strategy.
|
|
ê
|
2
|
Identification of a Diverse Pool of Candidates
|
|
Identification of a diverse pool of potential director candidates using multiple sources such as independent search firms, director recommendations and stockholder recommendations.
|
|
ê
|
3
|
Comprehensive Candidate Review
|
|
Potential candidates are comprehensively reviewed and the subject of rigorous discussion during the Governance & Nominating Committee meetings and Board meetings. The candidates that emerge from this process are interviewed by members of the Governance & Nominating Committee and other Board members, including the Chairman. During these meetings, directors assess candidates on the basis of their skills and experience, their personal attributes and their expected contribution to the current mix of competencies and diversity of the Board. At the same time due diligence is conducted, we solicit feedback from other directors and persons outside the Company.
|
|
ê
|
4
|
Recommendation of Potential Director for Approval
|
|
The Governance & Nominating Committee recommends potential directors to the Board for approval. Stockholders vote on nominees at the annual meeting.
|
Board evaluations consider:
|
|
|
||
l
|
General board practices, including fostering a culture that promotes candid discussion
|
l
|
The Boards access to Company executives and operations
|
|
l
|
The adequacy and the number and length of Board and Committee meetings
|
l
|
The quality and scope of materials distributed in advance of the meetings
|
|
l
|
Suggestions for new skills and experiences for potential future candidates
|
l
|
The promotion of rigorous decision making by the Board and the Committees
|
|
l
|
Adequacy of information received, including access to non-management resources
|
l
|
The strategic planning process
|
|
l
|
Committee effectiveness
|
l
|
The overall function of the Board and its Committees
|
|
l
|
Peer review
|
l
|
Technology use
|
|
|
|
|
|
|
Feedback incorporated
|
|
|
||
The Board and each of its Committees, develops and executes plans to take actions based on the results, as appropriate. The Lead Director follows up with the Chairman and CEO and individual directors as needed.
|
||||
CORPORATE GOVERNANCE HIGHLIGHTS
|
|
ü
|
Lead Director
|
ü
|
Independent Conflicts Committee to review related party transactions
|
ü
|
Active stockholder engagement
|
ü
|
Significant stock ownership guidelines for executives and directors
|
ü
|
No pledging or hedging of Company stock
|
ü
|
Diverse board in terms of gender, experience and skills
|
ü
|
Annual election of directors
|
ü
|
Active board engagement in managing talent and long-term succession planning for executives and directors
|
ü
|
Mandatory director retirement age of 75 and 15-year term limits
|
Total 2018 Investor Outreach
|
> 50% of Class A Shares Outstanding
|
||
|
Broad range of governance and business topics
|
||
ü
|
Business strategy and execution
|
ü
|
Compensation practices
|
ü
|
Board refreshment
|
ü
|
Risk oversight
|
ü
|
Sustainability
|
ü
|
Culture/human capital
|
|
Lead Independent Director Duties:
|
||||
|
|
advises the Governance & Nominating Committee on the selection of committee chairs
|
|
guides the Board’s governance processes, including the annual board self-evaluation, succession planning and other governance-related matters
|
|
|
approves the agenda, schedule and information sent to the directors for Board meetings
|
|
leads the annual chairman/CEO evaluation,
|
||
W. Geoffrey Beattie
|
|
works with the chairman/CEO to propose an annual schedule of major discussion items for the Board’s approval
|
|
provides leadership to the Board if circumstances arise in which the role of the chairman/CEO may be, or may be perceived to be, in conflict
|
|
Lead Independent Director
|
|
leads meetings of the independent directors and regularly meets with the chairman/CEO for a discussion of matters arising from these meetings
|
|
serves as a liaison on Board-related issues between the chairman/CEO and the independent directors
|
|
|
|
calls additional meetings of the independent directors or the entire Board as deemed appropriate
|
|
|
|
|
|
|
|
|
|
The Board has determined that the current structure, with a combined CEO and Chairman of the Board and an independent Lead Director, is in the best interests of the Company and our stockholders. The combined role of CEO and Chairman provides an effective balance between management of the Company and director participation in our board process and allows for management to focus on the execution of our strategic and business plans. As indicated above, our independent Lead Director was elected by the independent Board members and has a clear set of comprehensive duties that provide an effective check on management.
|
|||||
|
|
|
|
|
AUDIT COMMITTEE
|
|
Number of Meetings in 2018:
11
|
|
The responsibilities of the Audit Committee include:
|
|
l
|
assisting the Board of Directors in overseeing matters relating to the accounting and reporting practices of the Company;
|
l
|
reviewing the adequacy of the Company’s disclosure controls and internal controls;
|
l
|
reviewing the quarterly and annual financial statements of the Company;
|
l
|
reviewing the performance of the Company’s internal audit function;
|
l
|
reviewing and pre-approving the current year audit and non-audit services;
|
l
|
overseeing the Company’s compliance programs related to legal and regulatory requirements;
|
l
|
selecting and hiring the Company’s independent registered public accounting firm; and
|
l
|
overseeing risks related to financial reporting, internal controls, compliance and legal matters.
|
|
|
|
|
|
COMPENSATION COMMITTEE
|
|
Number of Meetings in 2018:
8
|
|
The responsibilities of the Compensation Committee include:
|
|
l
|
establishing the Company general compensation philosophy in consultation with senior management;
|
l
|
assisting the Board in developing and evaluating potential candidates for executive positions and developing executive succession plans;
|
l
|
overseeing risks related to compensation practices and CEO and management succession;
|
l
|
reviewing and approving the corporate goals and objectives of the compensation of the CEO and other officers;
|
l
|
reviewing the Company’s non-equity incentive compensation, equity incentive compensation and other stock-based plans; and
|
l
|
recommending changes in such plans to the Board; reviewing levels of stock ownership by officers; and evaluating incentive compensation arrangements.
|
|
|
|
|
|
GOVERNANCE & NOMINATING COMMITTEE
|
|
Number of Meetings in 2018:
5
|
|
The responsibilities of the Governance & Nominating Committee include:
|
|
l
|
identifying qualified individuals to become Board members;
|
l
|
determining the composition of the Board and its committees;
|
l
|
monitoring a process to assess Board effectiveness;
|
l
|
reviewing and implementing the Company’s Governance Principles;
|
l
|
overseeing Health, Safety & Environment;
|
l
|
overseeing risks related to the Company’s governance structure and processes and risks arising from related party transactions; and
|
l
|
overseeing the Company’s positions on corporate social responsibilities and public issues of significance which affect investors and other key stakeholders.
|
CONFLICTS COMMITTEE
|
|
Number of Meetings in 2018:
13
|
|
The responsibilities of the Conflicts Committee include:
|
|
l
|
reviewing and approving Related Party Transactions above certain materiality or dollar thresholds, including transfers or acquisitions of Company Common Stock by GE or its representatives or affiliates or the negotiation of any disputes between the Company and GE;
|
l
|
reviewing and approving any material amendment or modification of the Stockholders Agreement, any material waiver of any or all of the Company’s rights under the Stockholders Agreement, or enforcement of the Company’s and BHGE LLC’s rights under the Stockholders Agreement and other agreements with GE in connection with the Transactions; and
|
l
|
overseeing risks related to Related Party Transactions.
|
|
|
CASH COMPENSATION
|
|
EQUITY COMPENSATION
|
|
Directors' Annual Retainer
|
|
$100,000
|
(1)
|
$175,000
|
(2)
|
|
|
|
|
|
|
|
|
AUDIT
|
|
OTHER COMMITTEES
|
|
Committee Chairman
|
|
$20,000
|
|
$15,000
|
|
Other Committee Members
|
|
$10,000
|
|
$5,000
|
|
NAME
|
FEES EARNED OR PAID IN CASH
(1)
($)
|
|
STOCK AWARDS
(2)
($)
|
|
ALL OTHER COMPENSATION
(3)
($)
|
|
TOTAL
($)
|
|
W. Geoffrey Beattie
|
125,000
|
|
174,974
|
|
2,213
|
|
302,187
|
|
Gregory D. Brenneman
|
115,000
|
|
174,974
|
|
2,213
|
|
292,187
|
|
Clarence P. Cazalot, Jr.
|
120,000
|
|
174,974
|
|
2,213
|
|
297,187
|
|
Martin S. Craighead
|
105,000
|
|
174,974
|
|
2,213
|
|
282,187
|
|
Lynn L. Elsenhans
|
130,000
|
|
174,974
|
|
2,213
|
|
307,187
|
|
Jamie S. Miller
|
—
|
|
—
|
|
—
|
|
—
|
|
James J. Mulva
|
115,000
|
|
174,974
|
|
2,213
|
|
292,187
|
|
John G. Rice
(4)
|
86,250
|
|
174,974
|
|
—
|
|
261,224
|
|
Lorenzo Simonelli
|
—
|
|
—
|
|
—
|
|
—
|
|
(1)
|
Messrs. Beattie, Brenneman, Mulva and Rice elected to receive their 2018 BHGE director fees in Class A Common Stock and defer delivery under the BHGE Non-Employee Director Deferral Plan (the "Deferral Plan") adopted on August 1, 2017. Mr. Rice was not eligible to participate in the Deferral Plan until his retirement from GE on March 31, 2018.
|
(2)
|
On May 11, 2018, each BHGE director other than Mr. Simonelli and Ms. Miller received an RSU award. Messrs. Beattie, Brenneman, Mulva and Rice elected to defer delivery of their RSU award under the BHGE Non-Employee Director Deferral Plan adopted on August 1, 2017.
|
(3)
|
This column includes dividend equivalents paid during the year ended December 31, 2018 on unvested RSU awards.
|
(4)
|
Mr. Rice retired from GE on March 31, 2018 and was entitled to receive BHGE director compensation after that date. He re-joined GE as Chairman of GE Gas Power in December 2018 and is entitled to receive director compensation as an independent contractor of GE.
|
(5)
|
The following table shows the aggregate number of stock awards and option awards outstanding for each director as of December 31, 2018.
|
NAME
|
AGGREGATE STOCK AWARDS OUTSTANDING AS OF DECEMBER 31, 2018
(#)
|
|
AGGREGATE OPTION AWARDS OUTSTANDING AS OF DECEMBER 31, 2018
(#)
|
|
W. Geoffrey Beattie
|
4,893
|
|
—
|
|
Gregory D. Brenneman
|
4,893
|
|
—
|
|
Clarence P. Cazalot, Jr
|
4,893
|
|
9,277
|
|
Martin S. Craighead
|
4,893
|
|
583,280
|
|
Lynn L. Elsenhans
|
4,893
|
|
13,117
|
|
Jamie S. Miller
|
—
|
|
—
|
|
James J. Mulva
|
4,893
|
|
—
|
|
John G. Rice
|
4,893
|
|
—
|
|
Lorenzo Simonelli
|
—
|
|
—
|
|
NAME AND ADDRESS
|
TITLE OF CLASS
|
SHARES
|
PERCENT OF CLASS
|
|
|
PERCENT OF TOTAL SHARES OUTSTANDING
|
|
General Electric Company
(1)
33-41 Farnsworth Street
Boston, MA 02210
|
Class B Common Stock
|
521,543,095
|
100
|
%
|
|
50.4
|
%
|
Capital World Investors
(2)
333 South Hope Street
Los Angeles, CA 90071
|
Class A Common Stock
|
60,204,836
|
11.7
|
%
|
|
5.8
|
%
|
Dodge & Cox
(3)
555 California Street, 40th Floor
San Francisco, CA 94104
|
Class A Common Stock
|
54,838,110
|
10.7
|
%
|
|
5.3
|
%
|
The Vanguard Group
(4)
100 Vanguard Blvd.
Malvern, PA 19355
|
Class A Common Stock
|
47,347,612
|
9.2
|
%
|
|
4.6
|
%
|
FMR LLC
(5)
245 Summer Street
Boston, MA 02210
|
Class A Common Stock
|
36,476,703
|
7.1
|
%
|
|
3.5
|
%
|
BlackRock Inc.
(6)
55 East 52nd Street
New York, NY 10055
|
Class A Common Stock
|
35,009,945
|
6.8
|
%
|
|
3.4
|
%
|
(1)
|
The number of shares is based on a Form 4 filed with the SEC on November 19, 2018. According to the filing, General Electric Company directly owns 23,369,778 shares and 498,173,317 shares are owned by General Electric Company's wholly-owned subsidiaries. According to the Schedule 13D filed with the SEC on November 19, 2018 and assuming the exchange of all Class B Common Stock into Class A Common Stock (for a total of 1,034,938,693 shares of Class A Common Stock on a fully exchanged basis), (i) General Electric Company has sole voting power over 23,369,778 shares and sole dispositive power over all such shares, and shared voting power over 498,173,317 shares and shared dispositive power over all such shares, (ii) GE Investments, Inc. has shared voting power over 5,403,956 shares and shared dispositive power over all such shares, (iii) GE Oil & Gas US Holdings IV, Inc. has shared voting power over 48,896,204 shares and shared dispositive power over all such shares, (iv) GE Holdings (US), Inc. has shared voting power over 5,403,946 shares and shared dispositive power over all such shares and (v) GE Oil & Gas US Holdings I, Inc. has shared voting power over 443,873,157 shares and shared dispositive power over all such shares.
|
(2)
|
The number of shares is based on the Schedule 13G filed on February 14, 2019. According to the filing, (i) Capital World Investors has sole power to vote 60,154,116 shares and does not share power to vote any of the shares and (ii) sole power to dispose of 60,204,836 shares and does not share power to dispose of any of the shares. Capital World Investors divisions of CRMC and Capital International Limited collectively provide investment management services under the name Capital World Investors. Capital World Investors is deemed to be the beneficial owner of 60,204,836 shares or 11.7% of the Company's Class A Common Stock.
|
(3)
|
The number of shares is based on the Schedule 13G filed on January 10, 2019. According to the filing, (i) Dodge & Cox has sole power to vote 52,444,747 shares and does not share power to vote any of the shares and (ii) sole power to dispose of 54,838,110 shares and does not share power to dispose of any of the shares. Dodge & Cox Stock Fund, an investment company registered under the Investment Company Act of 1940, has an interest of 36,084,952 shares, or 7%, of the Company's Class A Common Stock.
|
(4)
|
The number of shares is based on the Schedule 13G filed with the SEC on February 11, 2019. According to the filing, (i) the Vanguard Group has sole power to vote 606,602 shares and shared power to vote 96,594 shares and sole power to dispose of 46,655,512 shares and shared power to dispose of 692,100 shares, (ii) Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 434,599 shares or 0.08% of the Class A Common Stock of the Company, and (iii) Vanguard Investments Australia Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 422,935 shares or 0.08% of the Class A Common Stock of the Company.
|
(5)
|
The number of shares is based on the Schedule 13G dated February 13, 2019 and filed with the SEC by FMR LLC. According to the filing, (i) FMR LLC has sole power to vote 4,220,841 shares and does not share power to vote any of the shares and (ii) sole power to dispose of 36,476,703 shares and does not share power to dispose of any of the shares.
|
(6)
|
The number of shares is based on the Schedule 13G/A filed on March 25, 2019. According to the filing, (i) BlackRock, Inc. has sole power to vote 30,683,071 shares and does not share power to vote any of the shares and (ii) sole power to dispose of 35,009,945 shares and does not share power to dispose of any of the shares.
|
Shares Beneficially Owned
|
|||||||||
NAME
|
SHARES OWNED AS OF MARCH 15, 2019
|
|
|
SHARES SUBJECT TO OPTIONS AND RSU'S WHICH ARE OR WILL BECOME EXERCISABLE OR VESTED PRIOR TO MAY 14, 2019
|
|
TOTAL BENEFICIAL OWNERSHIP AS OF MARCH 15, 2019
|
|
% OF CLASS
(1)
|
|
W. Geoffrey Beattie
|
12,217
|
|
|
—
|
|
12,217
|
|
—
|
|
Gregory D. Brenneman
|
101,842
|
|
|
—
|
|
101,842
|
|
—
|
|
Clarence P. Cazalot, Jr.
|
43,894
|
|
|
13,142
|
|
57,036
|
|
—
|
|
Martin S. Craighead
|
510,058
|
|
|
588,173
|
|
1,098,231
|
|
—
|
|
Lynn L. Elsenhans
|
28,816
|
|
|
18,010
|
|
46,826
|
|
—
|
|
Jamie S. Miller
|
—
|
|
|
—
|
|
—
|
|
—
|
|
James J. Mulva
|
5,380
|
|
|
|
5,380
|
|
—
|
|
|
John G. Rice
|
5,000
|
|
|
—
|
|
5,000
|
|
—
|
|
Lorenzo Simonelli
|
61,647
|
|
|
191,502
|
|
253,149
|
|
—
|
|
Brian Worrell
|
26,735
|
|
|
49,404
|
|
76,139
|
|
—
|
|
Roderick Christie
|
12,316
|
|
|
28,231
|
|
40,547
|
|
|
|
Maria Claudia Borras
|
18,405
|
|
|
38,279
|
|
56,684
|
|
|
|
Derek Mathieson
|
102,627
|
|
|
120,037
|
|
222,664
|
|
—
|
|
All directors and executive officers as a group (17 persons)
(2)
|
989,665
|
|
|
1,173,115
|
|
2,162,780
|
|
—
|
|
(1)
|
No percent of class is shown for holdings of less than 1%.
|
(2)
|
The totals in this row include the NEOs, current directors and all Section 16 officers.
|
|
This Compensation Discussion and Analysis ("CD&A") outlines BHGE's executive compensation program for 2018 for our named executive officers (each a "NEO") who are listed below and appear in the Summary Compensation Table.
|
|||
|
||||
|
||||
|
||||
|
|
Lorenzo Simonelli
Chairman, President and CEO
|
||
|
||||
|
||||
|
|
Brian Worrell
Chief Financial Officer
|
||
|
||||
|
||||
Grants of Plan-Based Awards
in 2018
|
|
|
Maria Claudia Borras
President & CEO, Oilfield Services
|
|
|
||||
|
||||
|
|
Roderick Christie
President & CEO, Turbomachinery & Process Solutions
|
||
|
||||
|
||||
|
|
Derek Mathieson
Chief Marketing and Technology Officer
|
||
Compensation Committee Interlocks
|
59
|
|
||
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Align executive and stockholder interests
|
|
Provide a significant portion of total compensation that is performance-based and at risk
|
|
Attract and retain talented executives
|
|
|
|
|
|
|
|
|
|
WHAT WE DO
|
|
WHAT WE DON'T DO
|
Pay for performance
|
|
No hedging or pledging of Company stock
|
Align executive compensation with stockholder returns through long-term incentives
|
|
No backdating or repricing of stock option awards
|
Include clawback provisions
|
|
No excessive perquisites
|
Engage an independent compensation consultant
|
|
No dividend equivalents paid on unearned restricted stock units
|
Mandate "double-trigger" provisions for change-in-control scenarios
|
|
No gross-ups in new executive arrangements
|
CEO
|
|
|
|
OTHER NEOs
|
||||
|
|
11%
|
BASE SALARY
|
18%
|
|
|
||
|
|
17%
|
|
Purpose
|
|
|
|
|
|
|
|
Fixed cash income to retain and attract highly marketable executives in a competitive market for executive talent.
|
18%
|
|
|
||
|
|
72%
|
PERFORMANCE-BASED SHORT-TERM INCENTIVE
|
|
|
|
||
|
|
|
|
Purpose
|
|
64%
|
|
|
|
|
|
Annual cash incentive program designed to motivate our executives to achieve annual financial goals and other business objectives and reward them accordingly.
|
|
|
|
||
|
|
|
Metrics
|
|
|
|
||
|
|
|
Revenue, Operating Income, Free Cash Flow, and Strategic Priorities
|
|
|
|
||
|
|
|
LONG-TERM INCENTIVE
|
|
|
|
||
|
|
|
|
Purpose
|
|
|
|
|
|
|
|
Annual equity incentive awards designed to further align the interests of our executives with those of our shareholders by facilitating significant ownership of BHGE stock by the officers.
|
|
|
|
||
|
|
|
Metrics
|
|
|
|
||
|
|
|
50% Performance Share Units—Relative TSR, Relative ROIC—3 Year Cliff Vesting
25% Restricted Stock Units—3 Year Ratable Vesting
25% Stock Options—3 Year Ratable
|
|
|
|
•
|
Formulaic, financial metrics weighted at 70% of the bonus that may payout up to 150% of target; and
|
•
|
Strategic goals weighted at 30% of the bonus that may payout up to 200% of target.
|
BHGE 2018 FINANCIAL GOALS
(70% WEIGHT)
|
THRESHOLD (50%)
|
TARGET (100%)
|
MAXIMUM (150%)
|
|
RESULTS
|
Adjusted Revenue ($B)
|
$21.9B
|
$23.6B
|
$25.3B
|
|
$23.3B
|
Adjusted Operating Income ($B)
|
$1.5B
|
$1.8B
|
$2.0B
|
|
$1.4B
|
Adjusted Free Cash Flow ($B)
|
$0.64B
|
$0.8B
|
$1.0B
|
|
$0.9B
|
* Adjusted revenue, adjusted operating income and adjusted free cash flow are non-GAAP measures. A reconciliation of GAAP to non-GAAP measures is included in this Proxy Statement in Annex A. Note: Revenue result adjusted for foreign exchange and revenue and free cash flow results adjusted for a material down payment.
|
PERFORMANCE COMPONENT
|
2018 PERFORMANCE EXPECTATION
|
ACHIEVEMENTS
|
SAFETY & COMPLIANCE
|
—Improvement in HSE metrics versus 2017
—Compliance first culture
|
—Delivered 20% improvement in perfect day trending; Recordable incidents down 24%
—Overall Improvement in key HSE metrics … drove increase in HSE and compliance culture through leadership site visits, continued employee education and training
2018 Assessment: Met Expectations
|
EXECUTION
|
—Grow faster than the market
—Drive margin rate accretion
—Structural cost reduction
—Drive cash performance
|
—Grew revenue in Oilfield Services faster than the rig count both overall and internationally.
—Margin rate expanded 220 basis points year over year.
—Delivered approximately $800 million in synergy benefits.
—Free cash flow of $1.2B, up $2.5B year-over-year, improved operational cash metrics (DSOs, DPOs, Inventory Turns).
2018 Assessment: Met Expectations
|
TECHNOLOGY & INNOVATION
|
—Launch new business models
—New product launches
|
—Drove significant progress on key new products commercialization to enable continued technology leadership.
—Launched Aptara
TM
Subsea product family; opened Digital Solutions customer centers for technology demonstrations.
2018 Assessment: Met Expectations
|
LEADERSHIP
|
—Active management of GE optionality
—Digital leadership
—Employee engagement
|
—Signed new commercial & technology agreements with GE, executed secondary offering and buyback to reduce GE’s ownership to approximately 50.4%.
—Strong execution on BHGE Digital, as well as on digital contracts to deliver margin expansion within the year.
—Launched key internal career and talent initiatives for development and retention
2018 Assessment: Exceeded Expectations
|
PERFORMANCE COMPONENT
|
2018 PERFORMANCE EXPECTATION
|
ACHIEVEMENTS
|
SHAREHOLDER RETURNS
|
—TSR in line with peer group
—Execution on capital allocation
—Active portfolio management
|
—BHGE share price down 32% in 2018, but outpacing OSX index by 14 points. BHGE Enterprise Value to EBITDA multiple contracted in 2018.
—Executed multiple dispositions to re-focus portfolio.
—Continued focus & improvement needed in ROIC.
2018 Assessment: Did Not Meet Expectations
|
NAME
|
TARGET BONUS
|
ACTUAL BONUS
|
% OF TARGET
|
Lorenzo Simonelli
Chairman, President and CEO
|
$2,100,000
|
$2,000,000
|
95%
|
Brian Worrell
Chief Financial Officer
|
$850,000
|
$800,000
|
94%
|
Maria Claudia Borras
President & CEO - OFS
|
$780,000
|
$725,000
|
93%
|
Roderick Christie
President & CEO - TPS
|
$645,149
|
$430,000
|
67%
|
Derek Mathieson
Chief Marketing and Technology Officer
|
$690,000
|
$510,000
|
74%
|
ANNUAL LTI AWARDS
|
PERFORMANCE SHARES UNITS
1
|
STOCK OPTIONS
1
|
RESTRICTED STOCK UNITS
1
|
TOTAL
1
|
Lorenzo Simonelli
Chairman, President and CEO
|
$4,500,000
|
$2,250,000
|
$2,250,000
|
$9,000,000
|
Brian Worrell
Chief Financial Officer
|
$1,750,000
|
$875,000
|
$875,000
|
$3,500,000
|
Maria Claudia Borras
President & CEO - OFS
|
$1,250,000
|
$625,000
|
$625,000
|
$2,500,000
|
Roderick Christie
President & CEO - TPS
|
$1,000,000
|
$500,000
|
$500,000
|
$2,000,000
|
Derek Mathieson
Chief Marketing and Technology Officer
|
$1,212,500
|
$606,250
|
$606,250
|
$2,425,000
|
•
|
Utilizes metrics for relative TSR and relative ROIC;
|
•
|
Delivers any payout that is actually earned at the end of the three-year performance period;
|
•
|
Compares BHGE performance versus the Company's Performance Peer Group (OSX Index plus TechnipFMC), as defined below;
|
•
|
Balances stock returns with capital investment returns; and
|
•
|
Provides a payout range from 0% - 150% of the granted units based on actual Company performance.
|
|
|
|
|
|
|
|
|
|
|
|
2018
Performance
Shares Units
|
|
Relative TSR
50% of Units
|
|
Relative ROIC
50% of Units
|
|
Percentile Rank
(Core Metric)
|
Payout
Multiple
(1)
|
|
|
ð
|
— Average Closing Price between Dec 2018 and Dec 2021, including dividends
— If TSR is negative payout capped at 100%
|
+
|
— 3 Year Absolute Change
— 3 Year Cumulative Average
|
ð
|
75th Percentile or Greater
|
150%
|
|
|
|
Payout Range
0% - 150%
|
50th Percentile
|
100%
|
|
|||||
|
25th Percentile
|
50%
|
|
||||||
|
Below 25th Percentile
|
0%
|
|
||||||
|
|
|
|
|
|
|
|
|
|
•
|
Solidifying and integrating the senior leadership team required to deliver on the strategic plan commitments
|
•
|
Addressing the uncertainty associated with the reduced ownership of our majority stockholder
|
•
|
The necessity to deliver the near-term synergies our investors are expecting
|
•
|
The need to fulfill the longer-term execution on the fullstream market strategy, and realize the potential of combining the two legacy organizations
|
1.
|
Performance - 60% of the award value is delivered in the form of Outperformance Performance Share Units ("OPSUs"), the value of which is based on both the Company’s absolute TSR and relative TSR over a three-year performance period. If performance goals are achieved, the earned units will vest and payout 50% at the end of three years and 50% after five years. If the Company's TSR per year is 10%, the OPSUs will be earned at the target amount. No OPSUs are earned unless the Company's TSR per year is at least 5% at the end of the three-year performance period.
|
2.
|
Retention - 40% of the award value was delivered in the form of RSUs with 50% vesting after three years and 50% vesting after five years, based on continued service.
|
SPECIAL STOCK GRANT
|
PERFORMANCE-BASED SHARES UNITS
|
RESTRICTED STOCK UNITS
|
TOTAL
|
Lorenzo Simonelli
Chairman, President and CEO
|
$1,800,000
|
$1,200,000
|
$3,000,000
|
Brian Worrell
Chief Financial Officer
|
$750,000
|
$750,000
|
$1,500,000
|
Maria Claudia Borras
President & CEO - OFS
|
$750,000
|
$750,000
|
$1,500,000
|
Roderick Christie
President & CEO - TPS
|
$500,000
|
$500,000
|
$1,000,000
|
PRIMARY SELECTION CRITERIA
|
|||||
Similar Business Characteristics:
Global scale, engineering, industrial, and technology applications, multiple divisions, logistical complexity, business services, asset/people intensity, mature stage business
|
|
||||
Labor Market Competitors:
BHGE’s market for executive talent extends throughout multiple industries
|
|||||
Scale
: Primary – Revenue, Secondary – Market Cap. Generally within a 1/3x to 3x range but larger comparators may be appropriate if the prior criteria are met
|
|||||
ROLE
|
GUIDELINES
|
Chairman, President and Chief Executive Officer
|
6X Base Salary
|
Chief Financial Officer
|
3X Base Salary
|
Other executive officers reporting to the CEO
|
2X Base Salary
|
NAME AND PRINCIPAL POSITION
|
YEAR
|
SALARY
($)
|
STOCK AWARDS
(2)
($)
|
OPTION AWARDS
(3)
($)
|
NON-EQUITY INCENTIVE PLAN COMPENSATION
(4)
($)
|
CHANGE IN PENSION VALUE AND NONQUALIFIED DEFERRED COMPENSATION EARNINGS
(5)
($)
|
ALL OTHER COMPENSATION
(6)
($)
|
TOTAL
($)
|
|
||||||||||||
Lorenzo Simonelli
Chairman, President & CEO
(1)
|
2018
|
1,400,000
|
|
|
9,631,365
|
|
|
2,249,996
|
|
|
2,000,000
|
|
|
369,247
|
|
|
309,153
|
|
|
15,959,761
|
|
2017
|
700,000
|
|
|
6,480,880
|
|
|
4,499,991
|
|
|
607,124
|
|
|
204,895
|
|
|
156,076
|
|
|
12,648,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Brian Worrell
Chief Financial Officer
(1)
|
2018
|
850,000
|
|
|
4,120,548
|
|
|
874,992
|
|
|
800,000
|
|
|
201,492
|
|
|
437,210
|
|
|
7,284,242
|
|
2017
|
425,000
|
|
|
3,659,679
|
|
|
874,992
|
|
|
284,345
|
|
|
126,479
|
|
|
421,310
|
|
|
5,791,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Maria Claudia Borras
President & CEO--OFS
|
2018
|
780,000
|
|
|
3,375,296
|
|
|
624,998
|
|
|
725,000
|
|
|
110,915
|
|
|
68,293
|
|
|
5,684,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Roderick Christie
President & CEO--TPS
(7)
|
2018
|
645,880
|
|
|
2,498,603
|
|
|
499,989
|
|
|
430,000
|
|
|
4,299
|
|
|
266,983
|
|
|
4,345,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derek Mathieson
Chief Marketing & Technology Officer
|
2018
|
690,000
|
|
|
1,807,106
|
|
|
606,250
|
|
|
510,000
|
|
|
—
|
|
|
800,891
|
|
|
4,414,247
|
|
2017
|
666,769
|
|
|
4,443,393
|
|
|
606,241
|
|
|
470,400
|
|
|
16,051
|
|
|
307,571
|
|
|
6,510,425
|
|
|
2016
|
636,308
|
|
|
2,386,968
|
|
|
—
|
|
|
752,013
|
|
|
9,785
|
|
|
156,275
|
|
|
3,941,349
|
|
(1)
|
The compensation for 2017 paid to Messrs. Simonelli and Worrell from July 3, 2017 through December 31, 2017 is for service related to BHGE.
Note, their annual salaries were unchanged from 2017 to 2018 as the 2017 annualized salary for
each was $1,400,000 and $850,000 respectively. Their annual incentive targets did not change from 2017 to 2018 and the amount reflected for 2017 in the "Non-equity Incentive Plan Compensation" was the same 6 month period only.
|
(2)
|
The amount reflected in the "Stock Awards" column is the aggregate grant date fair value of stock awards in the form of PSUs, OPSUs, and RSUs granted in the years shown. This value includes one-time special performance and retention awards for Messrs. Simonelli, Worrell, Christie, and Ms. Borras. For RSUs, and PSUs based on relative ROIC, generally the aggregate grant date fair value is the amount that the Company expects to expense for accounting purposes over the award's vesting schedule and does not correspond to the actual value that the NEOs will realize from the award. For PSUs and OPSUs based on TSR, the aggregate grant date fair value of the awards made to the NEOs is estimated in accordance with FASB ASC Topic 718. The estimated fair value of each TSR based grant is established on the date of grant using a Monte Carlo simulation model in a manner that is consistent with generally accepted valuation principles. The value ultimately realized by the executive upon the actual vesting award may or may not be equal to the FASB ASC Topic 718 determined value. For a discussion of valuation assumptions, see “Note 13 - Stock-Based Compensation” of the Notes to Consolidated and Combined Financial Statements included in our Annual Report under Item 8 of the Form 10-K for the year ended December 31, 2018. The value of the 2018 PSUs and OPSUs at the grant date, assuming achievement of the maximum performance level of 150% for PSUs and 300% for OPSUs would be: Mr. Simonelli -- $11,805,886; Mr. Worrell -- $3,722,526; Mr. Christie -- $2,236,185; Ms. Borras -- $2,986,030; and Mr. Mathieson -- $1,785,961.
|
(3)
|
The amount reflected in the "Option Awards" column is the aggregate grant date fair value of the awards made to the NEOs, computed in accordance with FASB ASC Topic 718. The fair value of each grant is established on the date of grant using the Black-Scholes option-pricing model. The value ultimately realized by the executive upon the actual vesting of the exercise of the stock options may or may not be equal to the FASB ASC Topic 718 determined value. For a discussion of valuation assumptions, see “Note 13 - Stock-Based Compensation” of the Notes to Consolidated and Financial Financial Statements included in our Annual Report under Item 8 of the Form 10-K for the year ended December 31, 2018.
|
(4)
|
The amount reflected in the "Non-Equity Incentive Plan Compensation" column is the payment earned under our annual bonus program and the amounts for 2017 reflect annual incentive paid to Messrs. Simonelli and Worrell from July 3, 2017 through December 31, 2017.
|
(5)
|
This amount reflects the change in the present values of the NEOs’ accumulated benefits under applicable pension plans and above-market earnings on nonqualified deferred compensation. The amount for each of Messrs. Simonelli, and Worrell and Ms. Borras reflects the portion of the change in the present value of accumulated benefits in 2018 under the GE Pension Plan and the GE Supplementary Pension Plan that is allocable to service with BHGE since July 2017 (i.e., it does not reflect the change in such value that is allocable to service with GE prior to July 2017). The amount for Mr. Christie reflects the change in present value of accumulated benefits under the GE U.K. Pension Plan. Only Mr. Mathieson had BHGE related compensation deferrals and participated in the BHGE SRP, and the values represent changes under those plans since January 2018. The breakdown is shown in the following table.
|
NAME
|
CHANGE IN PENSION VALUE
$
|
|
|
ABOVE MARKET EARNINGS
$
|
|
Simonelli
|
369,247
|
|
|
0
|
|
Worrell
|
201,492
|
|
|
0
|
|
Borras
|
110,915
|
|
|
0
|
|
Christie
|
4,299
|
|
|
0
|
|
Mathieson
|
—
|
|
|
—
|
|
(6)
|
We provide NEOs with other benefits that we believe are reasonable, competitive, and consistent with our overall executive compensation program. The costs of these benefits for 2018, minus any reimbursements by the NEOs, are shown in the table below.
|
NAME
|
LIFE INSURANCE PREMIUMS
|
|
COMPANY CONTRIBUTIONS TO RETIREMENT & SAVINGS PLANS
|
|
FINANCIAL & TAX PLANNING
|
|
RELOCATION BENEFITS
|
|
RELOCATION TAX BENEFITS
|
|
DIVIDEND EQUIVALENTS
|
|
STAY & WIN PAYMENT
|
|
OTHER
|
|
TOTAL
|
Simonelli
|
41,626
|
|
11,000
|
|
13,193
|
|
—
|
|
200,347
|
|
42,987
|
|
—
|
|
—
|
|
309,153
|
Worrell
|
23,915
|
|
9,625
|
|
21,303
|
|
272,659
|
|
86,217
|
|
23,491
|
|
—
|
|
—
|
|
437,210
|
Borras
|
19,857
|
|
11,000
|
|
—
|
|
—
|
|
—
|
|
15,639
|
|
—
|
|
21,797
|
|
68,293
|
Christie
|
—
|
|
64,457
|
|
—
|
|
189,103
|
|
—
|
|
13,423
|
|
—
|
|
—
|
|
266,983
|
Mathieson
|
5,894
|
|
77,030
|
|
—
|
|
—
|
|
—
|
|
16,484
|
|
700,000
|
|
1,483
|
|
800,891
|
(7)
|
Mr. Christie’s compensation is paid in British Pounds. His salary was converted to dollars by using the foreign exchange rate on December 31, 2018 which was 1 British Pound to 1.27 US Dollars.
|
|
|
|
ESTIMATED PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS
(1)
|
ESTIMATED FUTURE PAYOUTS UNDER PERFORMANCE-BASED RSUs (#)
(2)
|
RSUs
(3)
(#)
|
STOCK OPTIONS
(4)
(#)
|
STOCK OPTION EXERCISE PRICE
($/Sh)
|
GRANT DATE FAIR VALUE OF AWARDS
($)
|
||||||
NAME
|
GRANT DATE
|
AWARD TYPE
|
THRES-HOLD
($)
|
TARGET
($)
|
MAXIMUM
($)
|
THRES-HOLD
(#)
|
TARGET
(#)
|
MAXIMUM
(#)
|
||||||
Lorenzo Simonelli
|
N/A
|
STI
|
$735,000
|
$2,100,000
|
$3,465,000
|
|
|
|
|
|
|
|
||
1/22/2018
|
PSU
|
|
|
|
—
|
126,582
|
189,873
|
|
|
|
$
|
4,458,218
|
|
|
1/22/2018
|
Stock Option
|
|
|
|
|
|
|
|
199,822
|
$35.55
|
$
|
2,249,996
|
|
|
1/22/2018
|
RSU
|
|
|
|
|
|
|
63,291
|
|
|
$
|
2,248,729
|
|
|
6/1/2018
|
OPSU
|
|
|
|
—
|
51,532
|
154,596
|
|
|
|
$
|
1,725,807
|
|
|
6/1/2018
|
RSU
|
|
|
|
|
|
|
34,354
|
|
|
$
|
1,198,611
|
|
|
Brian Worrell
|
N/A
|
STI
|
$297,500
|
$850,000
|
$1,402,500
|
|
|
|
|
|
|
|
||
1/22/2018
|
PSU
|
|
|
|
—
|
49,226
|
73,839
|
|
|
|
$
|
1,733,740
|
|
|
1/22/2018
|
Stock Option
|
|
|
|
|
|
|
|
77,708
|
$35.55
|
$
|
874,992
|
|
|
1/22/2018
|
RSU
|
|
|
|
|
|
|
24,613
|
|
|
$
|
874,500
|
|
|
4/24/2018
|
PSU
|
|
|
|
—
|
21,657
|
32,486
|
|
|
|
$
|
763,193
|
|
|
4/24/2018
|
RSU
|
|
|
|
|
|
|
21,657
|
|
|
$
|
749,116
|
|
|
Maria Claudia Borras
|
N/A
|
STI
|
$273,000
|
$780,000
|
$1,287,000
|
|
|
|
|
|
|
|
||
1/22/2018
|
PSU
|
|
|
|
—
|
35,161
|
52,742
|
|
|
|
$
|
1,238,371
|
|
|
1/22/2018
|
Stock Option
|
|
|
|
|
|
|
|
55,506
|
$35.55
|
$
|
624,998
|
|
|
1/22/2018
|
RSU
|
|
|
|
|
|
|
17,580
|
|
|
$
|
624,617
|
|
|
4/24/2018
|
PSU
|
|
|
|
—
|
21,657
|
32,486
|
|
|
|
$
|
763,193
|
|
|
4/24/2018
|
RSU
|
|
|
|
|
|
|
21,657
|
|
|
$
|
749,116
|
|
|
Roderick Christie
|
N/A
|
STI
|
$226,058
|
$645,880
|
$1,065,702
|
|
|
|
|
|
|
|
||
1/22/2018
|
PSU
|
|
|
|
—
|
28,129
|
42,194
|
|
|
|
$
|
990,704
|
|
|
1/22/2018
|
Stock Option
|
|
|
|
|
|
|
|
44,404
|
$35.55
|
$
|
499,989
|
|
|
1/22/2018
|
RSU
|
|
|
|
|
|
|
14,064
|
|
|
$
|
499,694
|
|
|
4/24/2018
|
PSU
|
|
|
|
—
|
14,438
|
21,657
|
|
|
|
$
|
508,795
|
|
|
4/24/2018
|
RSU
|
|
|
|
|
|
|
14,438
|
|
|
$
|
499,410
|
|
|
Derek Mathieson
|
N/A
|
STI
|
$241,500
|
$690,000
|
$1,138,500
|
|
|
|
|
|
|
|
||
1/22/2018
|
PSU
|
|
|
|
—
|
34,106
|
51,159
|
|
|
|
$
|
1,201,213
|
|
|
1/22/2018
|
Stock Option
|
|
|
|
|
|
|
|
53,841
|
$35.55
|
$
|
606,250
|
|
|
1/22/2018
|
RSU
|
|
|
|
|
|
|
17,053
|
|
|
$
|
605,893
|
|
(1)
|
Amounts represent potential payouts for the fiscal year 2018 performance year under BHGE short-term incentive (STI) plans. If threshold levels of performance are not met, then the payout can be zero.
|
(2)
|
Amounts represent grants of PSUs made in January and April 2018. These awards cliff vest after three years if the performance criteria are met. Additionally for Mr. Simonelli, amounts include OPSUs granted in June 2018. This award vests 50% after three years and 50% after five years if performance criteria are met. For potential payout information, see the discussion on "Performance Share Units" in the Compensation Discussion & Analysis Section.
|
(3)
|
Amounts shown represent the number of RSUs granted in 2018. Awards generally vest pro rata over a three-year period beginning on the first anniversary of the grant date. Dividends are accrued throughout the year on RSUs and paid out once the units vest. The dividend rate is determined by the Board of Directors on a quarterly basis. The Company determines the fair value of RSUs based on the market price of our Common Stock on the date of grant, discounted by the present value of future dividends.
|
(4)
|
Amounts represent options granted in 2018 under the BHGE 2017 Long-Term Incentive Plan (the "LTIP"). Awards vest pro rata over a three-year period beginning on the first anniversary of the grant date.
|
|
|
OPTION AWARDS
|
|
STOCK AWARDS
|
|||||||
NAME
|
OPTION / PSU / OPSU / RSU GRANT DATE
|
NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE
(#)
|
NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS UNEXERCISABLE
(#)
|
OPTION EXERCISE PRICE
(1)
($)
|
OPTION EXPIRATION DATE
(2)
|
|
NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED
(#)
|
MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED
($)
(10)
|
EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED
(5)
(#)
|
EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED
|
|
Lorenzo Simonelli
|
8/1/2017
|
124,895
|
249,792
|
35.70
|
|
8/1/2027
|
|
|
|
|
|
8/1/2017
|
|
|
|
|
|
121,094
(3)
|
2,603,521
|
|
|
||
1/22/2018
|
|
199,822
|
35.55
|
|
1/22/2028
|
|
|
|
|
|
|
1/22/2018
|
|
|
|
|
|
63,291
(3)
|
1,360,757
|
|
|
||
1/22/2018
|
|
|
|
|
|
|
|
126,582
(4)
|
2,721,513
|
||
6/1/2018
|
|
|
|
|
|
34,354
|
738,611
(5)
|
|
|
||
6/1/2018
|
|
|
|
|
|
|
|
51,532
(6)
|
1,107,938
|
||
Brian Worrell
|
7/31/2017
|
23,502
|
47,005
|
36.89
|
|
7/31/2027
|
|
|
|
|
|
7/31/2017
|
|
|
|
|
|
66,173
(3)
|
1,422,720
|
|
|
||
1/22/2018
|
|
77,708
|
35.55
|
|
1/22/2028
|
|
|
|
|
|
|
1/22/2018
|
|
|
|
|
|
24,613
(3)
|
529,180
|
|
|
||
1/22/2018
|
|
|
|
|
|
|
|
49,226
(4)
|
1,058,359
|
||
4/24/2018
|
|
|
|
|
|
21,657
(7)
|
465,626
|
|
|
||
4/24/2018
|
|
|
|
|
|
|
|
21,657
(8)
|
465,626
|
||
Maria Claudia Borras
|
7/19/2011
|
2,990
|
0
|
59.50
|
|
12/31/2019
|
|
|
|
|
|
7/31/2017
|
16,787
|
33,575
|
36.89
|
|
7/31/2027
|
|
|
|
|
|
|
7/31/2017
|
|
|
|
|
|
44,054
(3)
|
947,161
|
|
|
||
1/22/2018
|
|
55,506
|
35.55
|
|
1/22/2028
|
|
|
|
|
|
|
1/22/2018
|
|
|
|
|
|
17,580
(3)
|
377,970
|
|
|
||
1/22/2018
|
|
|
|
|
|
|
|
35,161
(4)
|
755,962
|
||
4/24/2018
|
|
|
|
|
|
21,657
(7)
|
465,626
|
|
|
||
4/24/2018
|
|
|
|
|
|
|
|
21,657
(8)
|
465,626
|
||
Roderick Christie
|
7/31/2017
|
13,430
|
26,860
|
36.89
|
|
7/31/2027
|
|
|
|
|
|
7/31/2017
|
|
|
|
|
|
37,814
(3)
|
813,001
|
|
|
||
1/22/2018
|
|
44,404
|
35.55
|
|
1/22/2028
|
|
|
|
|
|
|
1/22/2018
|
|
|
|
|
|
14,064
(3)
|
302,376
|
|
|
||
1/22/2018
|
|
|
|
|
|
|
|
28,129
(4)
|
604,774
|
||
4/24/2018
|
|
|
|
|
|
14,438
(7)
|
310,417
|
|
|
||
4/24/2018
|
|
|
|
|
|
|
|
14,438
(8)
|
310,417
|
|
|
OPTION AWARDS
|
|
STOCK AWARDS
|
|||||||
NAME
|
OPTION / PSU / OPSU / RSU GRANT DATE
|
NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE
(#)
|
NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS UNEXERCISABLE
(#)
|
OPTION EXERCISE PRICE
(1)
($)
|
OPTION EXPIRATION DATE
(2)
|
|
NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED
(#)
|
MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED
($)
(10)
|
EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED
(5)
(#)
|
EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED
|
|
Derek Mathieson
|
1/26/2011
|
12,200
|
0
|
44.82
|
|
1/26/2021
|
|
|
|
|
|
7/19/2011
|
9,900
|
0
|
59.50
|
|
7/19/2021
|
|
|
|
|
|
|
7/16/2012
|
8,465
|
0
|
21.80
|
|
7/16/2022
|
|
|
|
|
|
|
1/24/2013
|
8,020
|
0
|
27.71
|
|
1/24/2023
|
|
|
|
|
|
|
7/24/2013
|
15,192
|
0
|
30.25
|
|
7/24/2023
|
|
|
|
|
|
|
1/22/2014
|
14,753
|
0
|
39.23
|
|
1/22/2024
|
|
|
|
|
|
|
7/14/2014
|
17,277
|
0
|
55.20
|
|
7/14/2024
|
|
|
|
|
|
|
1/25/2017
|
|
|
|
|
|
34,909
(8)
|
750,544
|
|
|
||
7/31/2017
|
16,283
|
32,568
|
36.89
|
|
7/31/2027
|
|
|
|
|
|
|
7/31/2017
|
|
|
|
|
|
32,868
(3)
|
706,662
|
|
|
||
1/22/2018
|
|
53,841
|
35.55
|
|
1/22/2028
|
|
|
|
|
|
|
1/22/2018
|
|
|
|
|
|
17,053
(3)
|
366,640
|
|
|
||
1/22/2018
|
|
|
|
|
|
|
|
34,106
(9)
|
733,279
|
(1)
|
The original exercise price was equal to the closing market price of a share of our Class A Common Stock on the last trading day prior to the grant date for stock options granted prior to 2018. Upon the closing of the Transactions and in accordance with the terms of the Transactions, the exercise price of stock options granted prior to 2017 was reduced by $17.50 to reflect the special dividend paid to all BHI stockholders in connection with the Transactions.
|
(2)
|
Each option grant has a ten-year term and vests ratably over three years beginning on the first anniversary of the grant date.
|
(3)
|
Reflects the number of three-year RSUs that will vest ratably over three years beginning on the first anniversary of the grant date.
|
(4)
|
Reflects the target number of three-year TSR and ROIC PSUs that are scheduled to vest in January 2021, subject to the achievement of performance and service conditions.
|
(5)
|
Reflects the number of five-year RSUs that that are scheduled to vest 50% in June 2021 and 50% in June 2023, subject to continued service.
|
(6)
|
Reflects the target number of three-year OPSUs that are scheduled to vest 50% in June 2021 and 50% in June 2023, subject to the achievement of performance and service conditions.
|
(7)
|
Reflects the number of three-year RSUs that will cliff vest after three years on the third anniversary of the grant date.
|
(8)
|
Reflects the target number of three-year TSR PSUs that are scheduled to vest in April 2021, subject to the achievement of performance and service conditions.
|
(9)
|
Includes performance-based RSUs granted to Mr. Mathieson in January 2017 that converted to time-based RSUs upon the closing of the Transactions based on the change-in-control provision in the award agreements. This award cliff vests on the three-year anniversary of the grant date.
|
(10)
|
This column does not include the value of the special dividend of $17.50 paid to all BHI stockholders and upon the vesting of legacy BHI RSU awards.
|
NAME
|
OPTION AWARDS
|
|
STOCK AWARDS
|
||||||
NUMBER OF SHARES ACQUIRED ON EXERCISE
(1)
(#)
|
VALUE REALIZED ON EXERCISE
($)
|
|
NUMBER OF SHARES ACQUIRED ON VESTING
(#)
|
VALUE REALIZED ON VESTING
(2)
($)
|
|||||
Lorenzo Simonelli
|
—
|
|
—
|
|
|
60,545
|
|
2,074,877
|
|
Brian Worrell
|
—
|
|
—
|
|
|
33,086
|
|
1,144,114
|
|
Maria Claudia Borras
|
19,571
|
|
178,996
|
|
|
22,027
|
|
761,694
|
|
Roderick Christie
|
—
|
|
—
|
|
|
18,905
|
|
653,735
|
|
Derek Mathieson
|
—
|
|
—
|
|
|
23,414
|
|
804,071
|
|
(1)
|
The value realized upon the exercise of the option award is determined by multiplying the number of shares acquired on exercise by the difference between the market price of the stock at exercise and the exercise price of the option.
|
(2)
|
The value realized upon the vesting of the stock awards is determined by multiplying the number of shares of stock by the closing price of the stock on the vesting date.
|
NAME
|
PLAN NAME
|
NUMBER OF YEARS CREDITED SERVICE
(#)
|
PRESENT VALUE OF ACCUMULATED BENEFIT
(1)
($)
|
PAYMENTS DURING LAST FISCAL YEAR
($)
|
||
Lorenzo Simonelli
(2)
|
GE Supplementary Pension Plan
|
1.5
|
517,940
|
|
—
|
|
Lorenzo Simonelli
(2)
|
GE Pension Plan
|
1.5
|
54,394
|
|
—
|
|
Brian Worrell
(2)
|
GE Supplementary Pension Plan
|
1.5
|
260,727
|
|
—
|
|
Brian Worrell
(2)
|
GE Pension Plan
|
1.5
|
63,634
|
|
—
|
|
Maria Claudia Borras
(2)
|
GE Supplementary Pension Plan
|
1.5
|
197,371
|
|
—
|
|
Roderick Christie
(2)
|
GE U.K. Pension Plan
|
1.5
|
4,299
|
|
—
|
|
Derek Mathieson
|
BHI Pension Plan
|
10
|
70,603
|
|
—
|
|
(1)
|
For a discussion of valuation assumptions, see “Note 11 - Employee Benefit Plans” of the Notes to Consolidated and Combined Financial Statements included in our Annual Report under Item 8 of the Form 10-K for the year ended December 31, 2018.
|
(2)
|
The amount for each of Messrs. Simonelli, Worrell, and Ms. Borras reflects the portion of the present value of his or her accumulated benefit under the GE Pension Plan and the GE Supplementary Pension Plan that is allocable to service with BHGE since July 2017 (i.e., it does not reflect the change in such value that is allocable to service with GE prior to July 2017). The amount for Mr. Christie reflects the portion of the present value of his accumulated benefit under the GE U.K. Pension Plan that is allocable to service with BHGE since July 2017 (i.e., it does not reflect the change in such value that is allocable to service with GE prior to July 2017).
|
NAME
|
PROGRAM
|
EXECUTIVE CONTRIBUTIONS IN LAST FY
(1)
($)
|
REGISTRANT CONTRIBUTIONS IN LAST FY
(2)
($)
|
AGGREGATE EARNINGS IN LAST FY
($)
|
AGGREGATE WITHDRAWALS / DISTRIBUTIONS
($)
|
AGGREGATE BALANCE AT LAST FY END
($)
|
|||||||||||
Lorenzo Simonelli
(3)
|
NA
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Brian Worrell
(3)
|
NA
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Maria Claudia Borras
(3)
|
NA
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Roderick Christie
(3)
|
NA
|
|
|
|
|
|
|
|
|
|
|
||||||
Derek Mathieson
|
BHGE SRP
|
34,500
|
|
|
52,279
|
|
|
11,013
|
|
|
—
|
|
|
836,132
|
|
|
(1)
|
Amounts shown in the “Executive Contributions in Last FY” column are also included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns of the Summary Compensation Table.
|
(2)
|
Amounts shown in the “Registrant Contributions in Last FY” column are also included in the “All Other Compensation” column of the Summary Compensation Table.
|
(3)
|
Messrs. Simonelli, Worrell, and Christie and Ms. Borras do not have any BHGE-related compensation deferrals and did not participate in the SRP in 2018.
|
•
|
the acquisition of at least 50% of the total voting power represented by the Company’s then-outstanding voting securities, other than any acquisition directly from the Company or by the Company, General Electric Company or any of their affiliates;
|
•
|
a merger or consolidation of the Company with any other entity, unless the voting securities of the Company continue to represent at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity or its parent; or
|
•
|
a sale or disposition by the Company of all or substantially all of its assets, other than a sale or disposition to an entity at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company.
|
•
|
Messrs. Simonelli and Worrell are eligible for benefits under the BHGE Executive Severance Plan plus (a) an additional six months of base salary and (b) 1.5 times the greater of the last annual bonus and the average of the last three year bonuses (applying the bonuses earned prior to employment by BHGE if needed).
|
•
|
For a period of three years following the closing of the Transactions, in exchange for waiving termination benefits under the BHI CIC Plan, Mr. Mathieson is eligible for certain severance benefits on a termination of employment as a “Safety Net” under his “Stay and Win” awards described in the 2018 CD&A including a lump sum payment equal to 18 months of his base salary, accelerated payment of unpaid amounts under the cash retention plan, the acceleration of the vesting of any outstanding and unvested RSUs from the BHI January 2017 Annual Grant and July 2017 “Founder’s Grant”, a pro-rata bonus, outplacement benefits, a gross-up of any excise tax imposed on “excess” change in control payments under Section 4999 of the Internal Revenue Code, and interest on any payment that is subject to a six-month delay under Section 409A of the Internal Revenue Code.
|
•
|
all outstanding RSUs that have been held for at least one year would have become vested on a pro-rata basis and become non-forfeitable;
|
•
|
all outstanding stock options that have been held for at least one year would have become vested on a pro-rata basis and exercisable; and
|
•
|
all outstanding PSUs and OPSUs that have been held for at least one year would have satisfied the service condition and would remain eligible to vest subject to the attainment of performance conditions.
|
•
|
all outstanding RSUs that have been held for at least one year would have become fully vested and non-forfeitable;
|
•
|
all outstanding stock options that have been held for at least one year would have become fully vested and exercisable;
|
•
|
all outstanding PSUs and OPSUs that have been held for at least one year would have satisfied the service condition and would remain eligible to vest subject to the performance condition;
|
•
|
an amount equal to the executive officer's earned annual incentive bonus, prorated based on the number of months of the executive officer's participation in the annual incentive bonus during the calendar year; and
|
•
|
for Mr. Mathieson, any other termination benefits described in “
Payments Upon Involuntary Termination of Employment Not In Connection With a Change in Control”
above.
|
•
|
all outstanding RSUs granted by us would have become fully vested and non-forfeitable;
|
•
|
all outstanding stock options granted by us would have become fully vested and exercisable;
|
•
|
all outstanding PSUs and OPSUs would have satisfied the service condition and would remain subject to the performance condition;
|
•
|
an amount equal to the executive officer's annual target bonus; and,
|
•
|
all outstanding RSUs that have been held for at least one year would have become fully vested and non-forfeitable;
|
•
|
all outstanding stock options that have been held for at least one year would have become fully vested and exercisable; and
|
•
|
all outstanding PSUs and OPSUs that have been held for at least one year would have satisfied the service condition and would remain subject to the performance condition.
|
|
LORENZO SIMONELLI
($)
|
BRIAN WORRELL
($)
|
MARIA CLAUDIA BORRAS ($)
|
|
RODERICK CHRISTIE
($)
|
DEREK MATHIESON
($)
|
|
|||||||||||
Payments upon a Change in Control Without Termination of Employment
|
|
|
|
|
|
|
|
|||||||||||
Accelerated Vesting of RSUs / PSUs / OPSUs
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
750,544
|
|
|
|
||
Dividend Equivalents
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
660,129
|
|
|
|
||
TOTAL
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,410,673
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||||||||
Payments in the Event of a Change in Control and Termination of Employment With Good Reason or by the Company Without Cause
|
|
|
|
|
|
|
|
|||||||||||
Accelerated Vesting of Stock Option Awards
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||
Accelerated Vesting of RSUs / PSUs / OPSUs
(4)
|
8,532,340
|
|
|
3,941,509
|
|
|
3,012,344
|
|
|
2,340,985
|
|
|
2,557,124
|
|
|
|
||
Dividend Equivalents
(2)
|
233,077
|
|
|
117,943
|
|
|
84,148
|
|
|
68,510
|
|
|
719,854
|
|
|
|
||
Severance Payment
|
3,367,562
|
|
|
2,045,973
|
|
|
780,000
|
|
|
645,880
|
|
|
1,035,000
|
|
|
|
||
Annual Incentive Bonus
|
2,100,000
|
|
|
850,000
|
|
|
780,000
|
|
|
645,880
|
|
|
690,000
|
|
|
|
||
Cash Payment (Stay and Win balance)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,400,000
|
|
|
|
||
Continuation of Health and Life Insurance Benefits
|
46,425
|
|
|
29,973
|
|
|
30,751
|
|
|
—
|
|
|
—
|
|
|
|
||
Outplacement Services
|
35,000
|
|
|
35,000
|
|
|
35,000
|
|
|
35,000
|
|
|
30,000
|
|
|
|
||
Interest Paid for Section 409A Six-Month Delay
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
75,342
|
|
|
|
||
TOTAL
|
14,314,404
|
|
|
7,020,398
|
|
|
4,722,243
|
|
|
3,736,255
|
|
|
6,507,320
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||||||||
Payments upon Disability
|
|
|
|
|
|
|
|
|||||||||||
Accelerated Vesting of Stock Option Awards
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||
Accelerated Vesting of RSUs / PSUs / OPSUs
(6)
|
2,603,521
|
|
|
1,422,720
|
|
|
947,161
|
|
|
813,001
|
|
|
1,457,206
|
|
|
|
||
Dividend Equivalents
(2)
|
129,571
|
|
|
70,805
|
|
|
47,138
|
|
|
40,461
|
|
|
695,298
|
|
|
|
||
Annual Incentive Bonus
|
2,100,000
|
|
|
850,000
|
|
|
780,000
|
|
|
645,880
|
|
|
690,000
|
|
|
|
||
Cash Payment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,435,000
|
|
|
|
||
Interest Paid for Section 409A Six-Month Delay
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,342
|
|
|
|
||
TOTAL
|
4,833,092
|
|
|
2,343,525
|
|
|
1,774,299
|
|
|
1,499,342
|
|
|
5,352,846
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||||||||
Payments upon Death
|
|
|
|
|
|
|
|
|||||||||||
Accelerated Vesting of Stock Option Awards
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||
Accelerated Vesting of RSUs / PSUs / OPSUs
(8)
|
8,532,340
|
|
|
3,941,509
|
|
|
3,012,344
|
|
|
2,340,985
|
|
|
2,557,124
|
|
|
|
||
Dividend Equivalents
(2)
|
233,077
|
|
|
117,943
|
|
|
84,148
|
|
|
68,510
|
|
|
719,854
|
|
|
|
||
Annual Incentive Bonus
|
2,100,000
|
|
|
850,000
|
|
|
780,000
|
|
|
645,880
|
|
|
690,000
|
|
|
|
||
Cash Payment
(7)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,435,000
|
|
|
|
||
TOTAL
|
10,865,417
|
|
|
4,909,452
|
|
|
3,876,492
|
|
|
3,055,375
|
|
|
6,401,978
|
|
|
|
||
|
|
|
|
|
|
|
||||||||||||
Payments upon Retirement
(9)
|
|
|
|
|
|
|
|
|||||||||||
Accelerated Vesting of Stock Option Awards
(5)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Accelerated Vesting of RSUs / PSUs / OPSUs
(6)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Annual Incentive Bonus
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
LORENZO SIMONELLI
($)
|
BRIAN WORRELL
($)
|
MARIA CLAUDIA BORRAS ($)
|
|
RODERICK CHRISTIE
($)
|
DEREK MATHIESON
($)
|
|
|||||||||||
TOTAL
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Payments upon Involuntary Termination of Employment Not in Connection with a Change of Control
|
|
|
|
|
|
|
|
|||||||||||
Accelerated Vesting of Stock Option Awards
(10)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||
Accelerated Vesting of RSUs / PSUs / OPSUs
(11)
|
542,400
|
|
|
296,400
|
|
|
197,325
|
|
|
169,375
|
|
|
897,765
|
|
|
|
||
Dividend Equivalents
(2)
|
18,164
|
|
|
9,926
|
|
|
6,608
|
|
|
5,672
|
|
|
667,456
|
|
|
|
||
Severance Payment
|
3,367,562
|
|
|
2,045,973
|
|
|
780,000
|
|
|
645,880
|
|
|
1,035,000
|
|
|
|
||
Annual Incentive Bonus
|
2,100,000
|
|
|
850,000
|
|
|
780,000
|
|
|
645,880
|
|
|
690,000
|
|
|
|
||
Cash Payment (Stay and Win Balance)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,400,000
|
|
|
|
||
Continuation of Health and Life Insurance Benefits
|
46,425
|
|
|
29,973
|
|
|
30,751
|
|
|
—
|
|
|
—
|
|
|
|
||
Outplacement Services
|
35,000
|
|
|
35,000
|
|
|
35,000
|
|
|
35,000
|
|
|
30,000
|
|
|
|
||
Interest Paid for Section 409A Six-Month Delay
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
75,342
|
|
|
|
||
TOTAL
|
6,109,551
|
|
|
3,267,272
|
|
|
1,829,684
|
|
|
1,501,807
|
|
|
4,795,563
|
|
|
|
(1)
|
While awards granted under the BHGE Plan would generally not vest upon a change in control without termination the attainment of performance conditional for PSUs would have been measured at target at the time of the Change in Control and the performance conditions for OPSUs would have been measured based on actual performance as of the date of the Change in Control, as described above. In both cases, the awards would still be subject to their respective service conditions. RSUs granted to Mr. Mathieson in January 2017 would vest in full upon a Change in Control per the award agreements under the BHI plan.
|
(2)
|
Values include the quarterly dividend equivalents that would be due upon the vesting of the RSUs and the Transaction-related payment in respect of the special dividend of $17.50 paid to all BHI stockholders and paid upon the vest of legacy BHI RSU awards.
|
(3)
|
All outstanding stock options would have become fully vested and exercisable.
|
(4)
|
All service-based restrictions on RSUs, PSUs, and OPSUs would have immediately lapsed. Attainment of the performance conditions would be fixed at target for PSUs and based on actual performance as of the date of the Change in Control for OPSUs. For the purpose of this calculation, OPSUs were measured at target.
|
(5)
|
All outstanding stock options that have been held for at least one year would have become fully vested and exercisable.
|
(6)
|
Assuming the outstanding awards have been held for at least one year, RSUs would have fully vested and become non-forfeitable and PSUs and OPSUs would have satisfied their respective service conditions and would continue to vest subject to their respective performance conditions.
|
(7)
|
In the event that Mr. Mathieson becomes disabled or passes away, the cash retention balance and severance value under his Stay and Win award would be paid to him or his estate.
|
(8)
|
All outstanding RSUs would have become fully vested and non-forfeitable. All outstanding PSUs and OPSUs would have satisfied their respective service conditions and would continue to vest subject to their respective performance conditions.
|
(9)
|
None of our NEOs met the retirement criteria.
|
(10)
|
Outstanding stock options that have been held for at least one year would have become vested on a pro-rata basis and exercisable.
|
(11)
|
Assuming the outstanding awards have been held for at least one year, RSUs would have vested on a pro-rata basis and become non-forfeitable and PSUs and OPSUs would have satisfied their respective service conditions and would continue to vest subject to their respective performance conditions.
|
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, enables our stockholders to approve, on an advisory basis, the compensation of our NEOs as disclosed in this Proxy Statement in accordance with the SEC’s rules. The proposal, commonly known as a “Say on Pay” proposal, gives our stockholders the opportunity to express their views on the Company’s executive compensation. Because this is an advisory vote, this proposal is not binding upon the Company.
|
|
|
However, the Compensation Committee, which is responsible for designing and administering the Company’s executive compensation program, values the opinions expressed by stockholders in their vote on this proposal.
|
||
We believe that our compensation policies and decisions are focused on pay for performance principles, as well as being strongly aligned with the long-term interests of our stockholders and being competitive in the marketplace. As discussed previously in the Compensation Discussion and Analysis section, the Company’s principal compensation policies, which enable the Company to attract and retain strong and experienced executive officers, include:
|
||
ü
providing a significant percentage of total compensation that is variable because it is at-risk, and
based on predetermined performance criteria;
ü
requiring significant stock holdings to align the interests of executive officers with those of stockholders;
ü
designing competitive total compensation and rewards programs to enhance our ability to attract and retain
knowledgeable and experienced executive officers; and
ü
setting compensation and incentive levels that reflect competitive market practices.
|
||
|
|
|
We are asking our stockholders to indicate their support for our NEO compensation program as described in this Proxy Statement. This is an advisory vote to approve NEO compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask our stockholders to vote FOR the following resolution at the Annual Meeting:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the NEOs, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion & Analysis, compensation tables and narrative disclosures.”
The Board has adopted a policy to provide for annual say on pay votes.
|
||
|
|
THE BOARD OF DIRECTORS RECOMMEND THAT YOU VOTE "
FOR
" THE COMPENSATION PROGRAMS OF THE NEOS ON AN ADVISORY BASIS
|
|
||
W. Geoffrey Beattie
|
Lynn L. Elsenhans,
Chair
|
James J. Mulva
|
|
|
|
KPMG LLP
|
2018
|
|
2017
|
|
||
|
|
|
||||
(in millions)
|
|
|||||
Audit fees
|
$
|
28.2
|
|
$
|
31.8
|
|
Audit-related fees
|
0.2
|
|
0.3
|
|
||
Tax fees
|
0.1
|
|
0.3
|
|
||
All Other
|
—
|
|
—
|
|
||
Total
|
$
|
28.5
|
|
$
|
32.4
|
|
KPMG S.p.A.
|
2018
|
|
2017
|
|
||
|
|
|
||||
(in millions)
|
|
|||||
Audit fees
|
$
|
0.3
|
|
$
|
8.8
|
|
Audit-related fees
|
—
|
|
—
|
|
||
Tax fees
|
—
|
|
—
|
|
||
All Other
|
—
|
|
—
|
|
||
Total
|
$
|
0.3
|
|
$
|
8.8
|
|
DELOITTE FEES
|
2018
|
|
2017
|
|
||
|
|
|
||||
(in millions)
|
|
|||||
Audit fees
|
$
|
—
|
|
$
|
7.2
|
|
Audit-related fees
|
—
|
|
|
|||
All Other Audit-Related Fees
|
—
|
|
0.1
|
|
||
Tax fees
|
—
|
|
0.1
|
|
||
All Other
|
2.6
|
|
0.1
|
|
||
Total
|
$
|
2.6
|
|
$
|
7.5
|
|
|
|
THE BOARD OF DIRECTORS RECOMMEND THAT YOU VOTE "
FOR
" THE RATIFICATION OF THE SELECTION OF KPMG LLP AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2019.
|
(in millions)
|
Year ended December 31, 2018
|
|
Orders
|
$
|
23,904
|
Revenue
|
$
|
22,877
|
Operating income
|
$
|
701
|
Adjusted Operating income (non-GAAP)
|
$
|
1,391
|
Cash flows generated from operating activities
|
$
|
1,762
|
Free cash flow (non-GAAP)
|
$
|
1,225
|
(in millions)
|
Year ended December 31, 2018
|
|||
Operating income (GAAP)
|
$
|
701
|
|
|
Inventory impairment and related charges
|
$
|
105
|
|
|
Restructuring, impairment and other
|
$
|
433
|
|
|
Merger and related costs
|
$
|
153
|
|
|
Total operating income adjustments
|
$
|
690
|
|
|
Adjusted operating income (non-GAAP)
|
$
|
1,391
|
|
(in millions)
|
Year ended December 31, 2018
|
|||
Cash flow from operating activities (GAAP)
|
$
|
1,762
|
|
|
Add: cash used in capital expenditures, net of proceeds from disposal of assets
|
$
|
(537
|
)
|
|
Free cash flow (non-GAAP)
|
$
|
1,225
|
|
|
Less: significant down payment from a customer
|
$
|
(300
|
)
|
|
Adjusted Free cash flow (non-GAAP)
|
$
|
925
|
|