We wanted to tag this piece for readers. This is a transcript of General Electric Co. Annual Shareholder Meeting, which took place on April 23rd 2014. Besides for the humor, there are some really good issues raised regarding corporate governance. The shareholder below cites Ben Graham specifically while making his case to Jeff Immelt. The whole transcript is worth a read, but below is a small excerpt of the parts we found the most important (and funny). Check it out below:

General Electric Company (NYSE:GE) shareholder Martin Harangozo has produced a t-shirt that says “GE to make me a billionaire with a B,” as he expects the increase on dividend percentage for the year of 2014. Also see: Alstom Shares Soar Despite Denying GE’s Takeover Bid

General Electric GE

Martin Harangozo- GE Shareholder

Good morning. My name is Martin Harangozo. I’m grateful to be a shareholder. I love this company, people, and products. Should this year’s percentage dividend increase continue until I reach the age of my current living relative, I will earn per annum $35 million. At today’s multiple, I will be a General Electric Company (NYSE:GE) stock billionaire. To certify this, I have produced a t-shirt that says, GE to make me a billionaire with a B.

Cumulative voting is recommended by Warren Buffett’s mentor Benjamin Graham in a book Security Analysis he co-authored with David Dodd. Holocaust survivor Evelyn Davis placed this proposal on the General Electric Company (NYSE:GE) proxy many times in previous years. I’m honored to stand on the shoulders of great people in presenting this cumulative voting proposal. Cumulative voting gives shareholders a company with more distinction capability and direction elections. Directors provide oversight to the company on behalf of the shareholders. Oversight matters of interest to me are sustainability and transparency.

I do not believe there is any legal behavior that is an overreaction to the dividend adjustment. I’m equally confident that there is no argument against the relationship that financial strength improves when you decrease debt. I enjoyed the Annual Report where you mentioned Jeff Bezos’ assertion that most businesses soon fail. Here, for example, General Electric Company (NYSE:GE) became free from debt and indebts a quarter of net income, we can thank Bezos for pumping profits into our company, and remind him if Amazon.com, Inc. (NASDAQ:AMZN) fails a better successor is likely to follow.

If we allotted 1% of debt, or $3.3 billion of net income to reduce our debt, we will be debt free in the next 100 years. I believe this is a strategic starting point. I was formerly an employee of the Bethlehem Steel Corporation. My colleagues lost their pensions when the company realized the concerns of Bezos. As a purchasing agent I supported just-in-time factories when suppliers became insolvent. Experience taught me to be cautious when suppliers had debt in excess of half of sales, or 5 times earnings.

Our debt, $330 billion according to Value Line is more than twice sales, twice shareholder equity, and 26 times earnings. It is almost $1,000 for each American. In debts today at a market PE of 18, our debt would produce $18 billion of income, or $5 billion more than the $13 billion we are getting. Regarding transparency, I struggle with how it happens that so many accomplished directors and gifted managers adjusted the dividend. Roger Penske, for example, is a billionaire. Do his checks bounce, or does his mortgage default? Of course, not. The answer that comes to me is a memory of a meeting you held at Monogram Hall Appliance Park. You behaved as though you had a normal work day, and took questions from the audience.

General Electric Company (NYSE:GE) has nothing to hide. I listened to the questions and answers and raised my hand. The event was staged. When you pay people to tell you want to hear, and that’s what you want to answer, you remove the oversight needed to see opportunities, avoid pitfalls, and honor the dividend. For the quarterly earnings updates, like a bank statement, I would prefer sales net income and debt numbers before any written text. $146 billion, $13 billion, $330 billion represent the sales, net earnings, and debt respectively, down 1%, down .5%, and down 1% from a year ago, as an example.

I wish share concentration would stay fixed as net income improves. Net income is down this year as well as last year. I hope this turns around, but did not see this plan in the Annual Report. While sustainability and transparency are oversight matters of interest to me, I know there are other matters of interest to other shareholders. I urge all shareholders to vote for cumulative voting, shareholder proposal number one.

Jeff Immelt – General Electric Company (GE) – Chairman

Okay.

Unidentified Audience Member

And the right to speak on the proposal. Is the microphone on? Without question, I believe I’m the only one in this room that has used cumulative voting to be elected a director, and had cumulative voting used against me. I’m the President of the Cincinnati Union Stockyard Company since 1965. I used cumulative voting to get on the board of the Stockyard Company, and essentially I became the President. 1966 Annual Meeting, the minority shareholders elected a director through cumulative voting to be on the board. I’ve lived with that minority director for over 10 years until we closed up the Stockyards. I’m the only one in this room who has had the experience both way. Thank you.

Jeff Immelt – General Electric Company (GE)  – Chairman

Thank you very much. I understand that Timothy Roberts will be presenting proposals 2, 3, 5, and 6. So number 2 is, hold options shares for life.

Number 3 is multiple board candidates. Number 5 is to cease options and bonuses, and number 6 is entertain a study to sell General Electric Company (NYSE:GE). So is Mr. Roberts here today? Thank you.

Good morning.

You’ll come next Miss [Crocher]. Good morning.

Timothy Roberts – – Shareholder

Good morning, Mr. Immelt. My name is Tim Roberts. The objective of this presentation is to give shareholders a company aligned to stock needs experienced by management. Wall Street Journal writer, Jason Zweig, in the book, The Intelligent Investor, revised edition page 511 — no CEO deserves to make himself rich if he has produced poor results for you. The proposal highlights from October 17, 2000 in 13 years, Mr. Immelt has gained through options and stock trades 2,250% growth, all while the shareholder during the same time experienced a decline of 60%.

The market is at near record highs, yet our stocks, our dividends, and our earnings are trailing like a caboose. When the company underperforms the market, bonuses are paid. This is accomplished by taking the company nearly bankrupt according to Forbes in claiming a slight recovery as an outperformance to the market.

Trading patterns show that both Mr. Welch and Mr. Immelt made enormous amounts of money on options and trading General Electric Company (NYSE:GE) stock. Collectively, they earned hundreds of million doing that. Welch and Immelt become rich utilizing the shareholders as useful idiots. Their inside trading, even if legal, is outperforming the buy-and-hold shareholders handsomely. There currently is no mechanism that will prevent this from becoming a common occurrence. Shareholders do not have the same inside control, and we lose money.

Welch fed the Financial Times effectively that much of General Electric Company (NYSE:GE) valuation was unsustainably driven by debt. Welch did not, however, return to the GE shareholders the hundreds of millions he collected in creating that GE bubble. Welch and Immelt kept their money as shareholders lost their shirts.

Immelt and Welch created wealth similar to that of Bernard Madoff in that the temporary claimed earnings growth were not sustainable. Yet, unlike Madoff, the money Welch and Immelt earned, fleecing the shareholders, remained in their pockets.

Given the size of the valuation declines, and dividend declines, and Welch’s acknowledgment that debt-driven profits are not sustainable, salary increases should only occur when profits increase, with debt simultaneously decreasing. Increasing the profits by increasing debt continues the insanity, as Welch discussed in Financial Times.

General Electric’s response to this proposal focuses on shares Mr. Immelt primarily acquired after he became CEO. This fails to highlight that Immelt sold millions of dollars of GE stock when the price was at the top, only to buy after Immelt became CEO and the stock failed.

I noticed for decades that the GE proxy print the addresses of the shareholder proponents. This was missing this year. I wonder why. As my home address was on last year’s proxy, I received correspondence from several shareholders. All were positive. One wrote that he lost both his shirt and his underwear. So shareholders I urge you to make proxy recommendations, and ask me if you need any help in doing so. My email is [email protected]

The proposal: the Board of Directors are requested to consider voting, that unvested stock options are held for the life of the executive. If you look at the data on this proposal, Mr. Immelt, you see that $100 managed by your trades becomes $2,350. Yet we see $100 invested in GE falls to $60. So this raises questions, collectively, for you, Mr. Immelt. Would you rather have $60 or $2,350? Would General Electric Company (NYSE:GE) catch up to the market, beginning your tenure, and why did you leave the addresses off of the shareholder proposals, and next year will you put those addresses back on with each proposal? And finally, can you charge your performance to the market, since your tenure, in the front of the Annual Report.

To prevent performance swings that enrich executives, but impoverish shareholders, please vote yes for holding options for life, shareholder proposal number 2. Thank you.

Thank you. Mr. Jensen requested me to present his proposal. General Electric Company (NYSE:GE), a $100 billion plus net asset company, 12 digits grown into a historical market average will gain an additional 7 digits in 200 years, making 19 digits. A one-time 1% donation, 17 digits would give each person today much more than $1 million. Two centuries of intelligent monetary growth can forever change the world financially, permanently eliminating millenniums who persist in poverty and illiteracy. No more biblical poor Lazarus, as Lazarus becomes a millionaire. The $1,000 shareholder becomes a decade billionaire, the pensioners whole. We can give the public this much.

Today, we use more steel and build larger ships than ever. Yet one-time largest shipbuilder, Bethlehem Steel, led by charming CEOs, guided by rigorously selected cozy directors with impressive credentials, went bankrupt as Warren Buffett did not bail them out. Bethlehem Steel did not see its underperformance to the market as an opportunity to harness the market until it could once again lead the market. It simply went bust. Millenniums of commerce and centuries of equity growth teach us that debt-free indexing should enable General Electric Company (NYSE:GE) to progressively grow exceeding 3 digits each century. All of history shows that any plan short of this likely will not achieve such growth. Something always goes wrong.

Somebody will borrow too much. Financial saviors as Warren Buffett are rare.

A U.S. housing crisis occurs when 99.2% of average Americans make good on their 30-year mortgages. Our Board, likely almost all millionaires, did not protect the dividend, 6 months after promising to do so. Dividend cuts and share depreciation hurt the poor and an elderly widow much more than a wealthy director. If the oak does not grow to the sky, those can be earned in the saplings. The dividend debacle should be met with the words — never again. Debt-free companies paying half of earnings in dividends will not default on dividends. We can lend to many nations, but borrow from none.

This year, for example, we earned $13 billion in net income. We paid $8 billion in dividends, leaving $5 billion of retained earnings. But then we repurchase $10 billion, repurchase shares for $10 billion. If you only have $5 billion, how do you buy shares worth $10 billion? Clearly, we’re using debt to buy stock, a risky scenario given that debt is real, and stock prices can be a freak show. The leverage troubles did not steer us away from using debt again to attempt to inflate the stock price.

Alice Schroeder writes regarding Warren Buffett’s company, Berkshire Hathaway, the board members may as well be Barbie Dolls. Even Warren Buffett has criticized his ineffectiveness as a board member. The leadership transition process resembles those of dictatorships more so than typical elections, as there is no election choice. Presidential elections, on the other hand, teach spirited competition. This creates the world’s greatest economies. Single candidate director elections should be improved.

My dear fellow shareholders, I bring a plan with a date to add 7 digits to the company’s performance while reducing risk. If you like such a plan, you should vote for those directors that present a plan meeting such investment objectives in our report. This is recommended by Warren Buffett’s mentor, late Benjamin Grossbaum in Securities Analysis. This requires a choice in director elections. Please vote for shareholder candidate elections, proposal number 3. Thank you.

Mr. Gilson requested me to present his proposal. The objective of this presentation is to give shareholders a company more incentivized towards price stability. For perspective, if for example, one attributed a $5 million wrongful death award to the near 3,000 victims of 911, this total would be about $15 billion. The General Electric Company (NYSE:GE) valuation decline as the price went from $60 to $6 was over $500 billion, more than 30 times as much. I would like to establish what happened, and how to fix this. Books have been written that Jack Welch grew evaluation by $450 billion, yet valuation fell by $500 billion from the company’s peak, due to gross lack of sustainability.

So one must ask — what good is a skyscraper that falls in less than 10 years. Ex-CEO, Jack Welch, and shareholder Jack Welch, mentioned getting a gun and shooting the CEO. I believe there’s a smarter way, though. It is

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