It's hurricane frenzy here at Fool global headquarters in Alexandria, VA, where only the sturdiest of writers and editors have made it into the office. Isabel's winds and rain are moving into the area and we've sandbagged the banks of the Potomac. Most of Washington, D.C. is literally closed until further notice. You'd think being 150 miles inland, people wouldn't get so worked up, but forecasters are telling us to get off the streets so we'll heed their warnings and go home to ride the storm out.

With any luck, and any power, we'll be back at it tomorrow on Fool.com. Until then, stay dry, and stay safe.

In today's Motley Fool Take:

GE Does Good

In very exciting news to us at The Motley Fool and to all investors, General Electric(NYSE: GE) announced that CEO Jeffrey Immelt will receive a new form of compensation tied to performance targets achieved over five years. And when the nation's number one company by market capitalization makes such a move, others may follow.

The board will award Immelt 250,000 performance share units (PSUs) with a present value of $7.5 million -- 8.5% more than Immelt's 2002 salary and bonus. Half of the PSUs convert to stock only if GE achieves 10% average annual growth in net cash from operating activities over the period, and the other half only if total to shareholder return meets or beats the S&P 500. Meanwhile, Immelt receives the equivalent of GE's 2.4% quarterly dividend on the number of PSUs.

Immelt will certainly do fine whether he meets the targets or not. He already earns a $3 million base salary, receives a bonus ($3.9 million in 2002), and collects over $200,000 in dividends on his 550,000 shares. Not to mention 4 million other stock-appreciation rights and stock options.

But the new incentive is hardly chump change, and it's a giant step in the right direction for aligning the top exec with shareholder interests. Sure, pay the CEO whatever salary and bonus the marketplace demands, but make part of the total package incentives to bring good thing to life for all shareholders.

Why not stock options? Besides that they are about stock price only and are invariably repriced anyway if the stock drops, the company said in a prepared statement that the CEO doesn't need retention compensation. Amen! For other employees that do receive options, GE was one of the first to say it would expense them.

We are positively giddy about this for two reasons. First, net cash from operations beats EPS hands down as a measure of company performance. The cash flow statement is a clearer indication of a company's cash generating activities than the income statement, which is the accounting view of earnings for tax purposes

Second, it's a five-year period. This allows Immelt to care for the long-term health of the business and make investments that may not pay off today, tomorrow, next quarter, or even next year. As long as shareholders are better off in five years than the S&P 500, and the business is producing more green stuff, everyone is happy.

The board also made other improvements in compensation for senior execs. The whole package is a great move and puts GE at the forefront of improving corporate governance.

The Motley Fool led the charge for expensing stock options early on. We ran at least nine analyses in 1999 (Bill Mann directs you to all of them), for example, and eventually the world started to catch up. We screamed "cash flow statement" well before you started seeing "cash flow" in the mainstream financial media -- and even now it's usually undefined, though at least there. And while we can't claim to be first clamoring for management pay to encourage long-term thinking about the business, we've been in the right company with Berkshire Hathaway's(NYSE: BRK.A) Warren Buffett and others.

You can bet that something we're writing on Fool.com and in our stock advice newsletters right now is going to be mainstream next. Be first to know. Don't miss us. And may GE be starting a trend.

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Microsoft Board Grows

As one board accepts a much-publicized resignation, another prepares to welcome two new members. Microsoft(Nasdaq: MSFT) announced this morning that its board has nominated two additional independent directors. Shareholders will have a chance to vote on them at November's annual meeting.

Dr. Helmut Panke, chairman of the management board at German automaker BMW, will become Microsoft's first international director. Charles H. Noski, formerly AT&T's(NYSE: T) chief financial officer and vice-president is also slated to join the board.

Having a European board member should be good for Microsoft. Hopefully, Panke will be able to help the company better deal with the European Union Commission, which still has an outstanding beef with Microsoft over antitrust concerns

The move expands Microsoft's board from eight members to 10, and comes as corporate governance is again making headlines. From its shift to stock grants from stock options, to its organizational retooling that ties management compensation more directly to performance, to its recent dividend increase, Microsoft has been making concerted efforts to become a more shareholder-friendly and responsible company.

Today's news that two more outside board members will be added continues this positive trend for the world's largest software firm. It will bring Microsoft's number of outside directors up from six to eight. Chief executive officer Steve Ballmer and founder and chairman Bill Gates are the two inside board members.

Quote of Note

"You are like a hurricane.... I want to love you but I get so blown away." -- Neil Young

Broadband Is Booming

The number of broadband subscribers worldwide zoomed ahead 72% last year, and there's no reason to expect a leveling off anytime soon. This is nothing but good news for the global economy.

According to the United Nations' International Telecommunication Union (ITU), 63 million people paid for high-speed service in 2002. That works out to about one in every 10 Internet subscribers. The Republic of Korea leads the way in broadband adoption, with 21 subscribers for every 100 inhabitants. Hong Kong (China) is next with 16 per 100, and Canada is third with 11 per 100. The U.S., by contrast, is 11th on the list at roughly seven per 100.

As the ITU says in its report, there seems to be evidence linking broadband access to higher consumer spending. "The dot-com boom was driven by the expectation that the Internet would create a large market for electronic commerce, on-demand content, and online applications," says the ITU's Dr. Tim Kelly. "Broadband brings this expectation one step closer to reality by offering faster speeds and a better platform for the development of content services."

The report is good news for Internet companies with global operations. Amazon.com(Nasdaq: AMZN), for example, and eBay(Nasdaq: EBAY) -- which expects its international operations to grow larger than its U.S. unit in the future.

That's not to discount what this means to the U.S. economy, where broadband is expected to reach the 25% penetration mark even more quickly than either PCs or mobile telephones did. There are the obvious winners: music distributors such as Apple's(Nasdaq: AAPL) iTunes or companies like Electronic Arts(Nasdaq: ERTS) that benefit from online gaming. Soaring broadband usage is but one reason EA was tabbed by David Gardner in Motley Fool Stock Advisor.

Of course, it's not just online companies that benefit. Indeed, most every company is now "Internet-related" in some form or another, and able to benefit from quick and efficient networking. As broadband and "always-on" connections proliferate, the medium will begin to live up to earlier expectations. "The reality," says Dr. Kelly, "is finally starting to catch up with the market hype."

Discussion Board of the Day: Survivor

Will you be tuning in to watch the Drakes battle the Morgans, or have you been turned off by staged elements of reality shows past? Any calls on how you think this new cast will fare and who has what it takes to win it all? All this and more -- in the Survivor discussion board. Only on Fool.com.

And Finally...

If you've about had it with the hurricane talk, nothing changes the subject like a few good stocks. Jeff Fischer tracks one down in the leading maker of global positioning devices in Garmin's Got It. You even might want to fasten a GPS on the little ones when you drop them off at daycare. Selena Maranjian likes Bright Horizons -- both the daycare and the stock. Find out why in Bright Horizons for Bright Horizons. Then find out what Bob Bobala really thinks about Wall Street in Grasso Is Mowed.

Contributors:
Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Tom Jacobs, Jeff Hwang, LouAnn Lofton, Alyce Lomax, Bill Mann, Selena Maranjian, Dave Marino-Nachison, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Dayana Yochim