Russell Stokes
GENERAL ELECTRICAbout Russell Stokes
Russell Stokes is SVP and CEO of GE Aerospace’s Commercial Engines & Services (CES) since July 2022, with 28 years at GE and prior roles as President & CEO of GE Aviation Services (2020–2022) and CEO across other GE businesses (2013–2020). He holds a degree from Cleveland State University and is 53 years old . Under his leadership, CES delivered strong 2024 results: orders +38%, revenue +13%, operating profit +25%, and a $154B backlog (90% services). Company-wide in 2024, adjusted revenue grew ~10%, operating profit +30%, free cash flow +28%, and TSR was 65% versus 17% for S&P 500 Industrials .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| GE Aerospace – Commercial Engines & Services (CES) | SVP, CEO | Since Jul 2022 | Led demand ramp; orders +38%, revenue +13%, operating profit +25%; CES backlog $154B, 90% services |
| GE Aviation Services | President & CEO | 2020–2022 | Managed services recovery and operational execution |
| Former GE businesses (multiple) | President & CEO | 2013–2020 | Led business turnarounds and portfolio execution |
Fixed Compensation
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | $1,400,000 | $1,400,000 | $1,400,000 |
| All Other Compensation | $113,422 | $115,832 | $138,645 |
Performance Compensation
Annual Bonus (AEIP)
| Component | 2024 Details |
|---|---|
| Base salary | $1,400,000 |
| Target bonus % | 100% of base (Target $1,400,000) |
| Metrics & weight | Revenue/Adjusted Revenue growth 20%; Operating Profit 40%; Free Cash Flow 40%; Safety modifier +/-10 pts |
| Performance discretion | Committee reduced total company from 174% to 165% and CES from 160% to 143% due to missed delivery expectations |
| Actual bonus paid | $2,226,000 (≈159% of target) |
| Target/actual disclosure | Company does not publicly disclose specific AEIP targets by metric |
Long-Term Incentives (grants recognized in 2024)
| Award Type | Grant/Recognition | Quantity/Value | Key Terms |
|---|---|---|---|
| RSUs | 5/1/2024 | 6,443 units; $1,074,628 market value at 12/31/2024 | Vests 50% at 2 years and 50% at 3 years; one-year post-settlement holding for certain awards |
| Options | 5/1/2024 | 24,793 options @ $159.70; expires 5/1/2034; $175,782 intrinsic value at 12/31/2024 | Vesting 50% at 2 years and 50% at 3 years; one-year holding of net shares post-exercise; no dividend equivalents |
| PSUs (2024 annual) | 5/1/2024 | 28,030 units; $4,675,124 market value at 12/31/2024 | 2024/2025/2026 one-year goals (50/30/20 weight) in Adjusted EPS & FCF; +/-20% 3-yr TSR modifier; payout cap 175% |
| PSUs (2023 award 2024 portion) | Recognized in 2024 | $2,286,944 accounting value (target) | Three one-year periods with Adjusted EPS & FCF; +/-20% 3-yr TSR modifier |
| Options (2024 fair value) | Recognized in 2024 | $1,499,977 grant-date fair value | Black-Scholes methodology; $60.50 per option unit FV |
| RSUs (2024 fair value) | Recognized in 2024 | $2,423,402 grant-date fair value | $149.32 per RSU unit FV |
| Spin-off adjustments | 2024 | Stock awards $222,594; options $847,415 incremental fair value from GE Vernova spin-off | Equitable adjustments preserve pre-spin intrinsic value; same vesting terms |
Multi-year compensation mix
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Stock Awards | $2,549,063 | $1,745,057 | $5,971,540 |
| Stock Options | $1,140,001 | $1,499,995 | $2,347,391 |
| Non-Equity Incentive (AEIP) | $1,652,000 | $2,086,000 | $2,226,000 |
| SEC Total Compensation | $6,857,703 | $8,260,941 | $12,087,364 |
Equity Ownership & Alignment
| Ownership Item (as of 12/31/2024) | Amount |
|---|---|
| Beneficial ownership – shares | 582,812 |
| Options exercisable within 60 days | 418,270 |
| RSUs vesting within 60 days | 13,775 |
| Hedging/Pledging status | Hedging and pledging prohibited; none pledged |
| Ownership guideline | 3x base salary for SVPs; all NEOs in compliance |
| Holding requirements | Net shares from RSUs/PSUs/exercises held until guideline met; certain awards require 1-year hold |
Vesting-driven supply: In 2024, Stokes exercised 62,446 options (value $2,364,984) and had 118,488 shares vest from stock awards (value $19,563,319). Net shares are subject to holding requirements, moderating near-term selling pressure .
Upcoming expirations that can drive exercise decisions: 2015 options expiring 9/11/2025; 2016 expiring 9/9/2026; 2017 expiring 9/6/2027 .
Employment Terms
- Pension: Eligible and fully vested in GE Aerospace Pension Plan; accruals ended Jan 1, 2021. Formula provided annual accrual of 1.45% up to covered compensation and 1.9% above, with normal retirement at 65; pre-2005 hires may retire at 60 without reduction .
- Clawbacks: Board may seek reimbursement of incentive compensation for fraudulent/illegal misconduct or material inaccuracies in financials/performance metrics; additional remedies include termination .
- No hedging/pledging: Executives prohibited from hedging or pledging company stock .
- Severance/CIC (equity treatment): Under potential termination scenarios at 12/31/2024, Stokes’ equity intrinsic values: Death/Disability—Options $8,749,142; RSUs/PSUs $17,895,713; Involuntary termination (without cause/good reason)—Options $0; RSUs/PSUs $0. Equity remains subject to performance certification for PSUs; no single-trigger CIC vesting .
Compensation Structure Analysis
- Increased equity intensity: 2024 stock awards rose to $5.97M from $1.75M in 2023, with options also higher, increasing at-risk, long-term alignment .
- AEIP rigor and discretion: Formulaic metrics (Rev/OP/FCF) and safety modifier; committee applied negative discretion to reflect customer delivery misses (reducing CES from 160% to 143%), yet Stokes’ payout remained strong at $2.226M .
- PSU design evolution: 2024 PSUs measured annually within a 3-year framework; 2025 PSUs move to cumulative 3-year Adjusted EPS & FCF with +/-20% TSR modifier, enhancing long-range focus .
- Spin-off award adjustments: GE Vernova spin-off equitable adjustments preserved pre-spin value; incremental fair values recognized in 2024 .
Compensation Peer Group & Say‑on‑Pay
- 2024 peer group: 3M, American Airlines, Boeing, Caterpillar, Delta Airlines, Emerson, FedEx, General Dynamics, Honeywell, L3Harris, Lockheed Martin, Northrop Grumman, Parker-Hannifin, RTX, Textron, TransDigm, United Airlines .
- Say-on-pay support: 94% shareholder approval in 2024; active engagement and program enhancements (e.g., PSU redesign) aligned with investor feedback .
Performance & Track Record
- CES performance under Stokes: Orders +38%; revenue +13%; operating profit +25%; backlog $154B (90% services) .
- Company-wide 2024 outcomes: Adjusted revenue +10%, operating profit +30%, FCF +28%, TSR 65% (vs. 17% S&P 500 Industrials) .
Investment Implications
- Alignment: High equity ownership, strict no-hedge/pledge, and holding requirements support strong pay-for-performance alignment .
- Retention risk: Significant in-the-money options with expirations in 2025–2027 and robust unvested PSUs/RSUs tied to multiyear goals suggest continued retention incentives; however, AEIP downward discretion signals accountability to customer outcomes .
- Execution focus: CES growth metrics and backlog strength under Stokes support sustained services revenue and profitability, while PSU design shifts further link long-term payouts to EPS/FCF and relative TSR .