G E N E R A L
A M E R I C A N
I N V E S T O R S
2 0 1 6
A N N U A L
R E P O R T
GENERAL AMERICAN INVESTORS COMPANY, INC.
Established in 1927, the Company is a closed-end investment company listed on the
New York Stock Exchange. Its objective is long-term capital appreciation through
investment in companies with above average growth potential.
FINANCIAL SUMMARY (unaudited)
Net assets applicable to Common Stock -
December 31
Net investment income
Net realized gain
Net decrease in unrealized appreciation
Distributions to Preferred Stockholders
Per Common Share-December 31
Net asset value
Market price
Discount from net asset value
Common Shares outstanding-Dec. 31
Market price range* (high-low)
Market volume-shares
*Unadjusted for dividend payments.
2016
2015
$1,022,534,692
8,172,289
91,570,557
(15,321,337)
(11,311,972)
$1,068,028,205
13,728,242
34,130,660
(76,268,833)
(11,311,972)
$37.56
$31.18
-17.0%
$37.74
$31.94
-15.4%
27,221,115
$33.25-$26.88
15,584,306
28,296,697
$35.98-$30.46
16,381,264
DIVIDEND SUMMARY (per share) (unaudited)
Record Date
Payment Date
Ordinary
Income
Long-Term
Capital Gain
Total
Common Stock
Nov. 14, 2016
Jan. 30, 2017
Total from 2016 earnings
Dec. 30, 2016
Feb. 10, 2017
Nov. 16, 2015
Feb. 1, 2016
Total from 2015 earnings
Dec. 30, 2015
Feb. 12, 2016
$0.282605
—
$0.282605
$0.340000
0.051500
$0.391500
$2.797395
0.200000
$2.997395
$0.810000
0.048500
$0.858500
$3.080000
0.200000
$3.280000
$1.150000
0.100000
$1.250000
Preferred Stock
Mar. 7, 2016
Jun. 7 2016
Sept. 7, 2016
Dec. 7, 2016
Total for 2016
Mar. 9, 2015
Jun. 8 2015
Sept. 7, 2015
Dec. 7, 2015
Total for 2015
Mar. 24, 2016
Jun. 24, 2016
Sept. 26, 2016
Dec. 27, 2016
Mar. 24, 2015
Jun. 24, 2015
Sept. 24, 2015
Dec. 24, 2015
$.034185
.034185
.034185
.034185
$.136740
$.109946
.109946
.109946
.109946
$.439784
$.337690
.337690
.337690
.337690
$1.350760
$.261929
.261929
.261929
.261929
$1.047716
$.371875
.371875
.371875
.371875
$1.487500
$.371875
.371875
.371875
.371875
$1.487500
T O T H E S T O C K H O L D E R S
G e n e r a l A m e r i c a n I n v e s t o r s
General American Investors Company, Inc.
100 Park Avenue, New York, NY 10017
(212) 916-8400 (800) 436-8401
E-mail: InvestorRelations@gainv.com
www.generalamericaninvestors.com
1
T O T H E S T O C K H O L D E R S
G e n e r a l A m e r i c a n I n v e s t o r s
General American Investors’ net asset value
(NAV) per Common Share (assuming re-
investment of all dividends) increased 9.7%
for the year ended December 31, 2016. The
U.S. stock market was up 12.0% for the year,
as measured by our benchmark, the Standard
& Poor’s 500 Stock Index (including income).
The return to our Common Stockholders in-
creased by 7.6% and the discount at which our
shares traded to their NAV continued to fluctu-
ate and on December 31, 2016, it was 17.0%.
The table that follows provides a compre-
hensive presentation of our performance and
compares our returns on an annualized basis
with the S&P 500.
Years
Stockholder Return
(Market Value)
NAV Return
S&P 500
3
5
10
20
30
40
50
3.7%
4.7%
8.9%
12.4
4.3
10.1
11.4
13.6
11.8
12.2
5.0
9.8
11.7
13.3
12.0
14.7
6.9
7.7
10.1
11.1
10.1
The sectors that contributed to our perfor-
mance during the year relative to our
benchmark included materials, technology,
energy, financials, and consumer discretion-
ary. Detractors from our relative performance
included telecommunications, healthcare, and
consumer staples. Our lack of holdings in
utilities and real estate also detracted from total
return performance.
Momentum in the U.S. economy improved
during the second half of 2016. The inventory
reduction that had restrained the economy for
nearly 2 years appears to have run its course,
oil prices have stabilized and rebounded mod-
estly, employment data appear to be advancing
further, with more conversions of part time to
full time workers and wages have improved.
U.S. consumer spending continues to grow
at nearly 4% with surveys suggesting contin-
ued high consumer and business confidence.
China remains a wildcard regarding its long
term economic stability, but recent data con-
firm a rebound in growth, albeit funded in
large part with debt. U.S. housing markets
continue their advance thanks to rising house-
hold formations. The election results surprised
many and were an elixir for domestic equity
markets as prospects for pro-business policies
of lower taxes, infrastructure spending and
reduced regulation encouraged investors to
imagine a significantly enhanced political
and economic environment for U.S. equities.
Though sentiment has changed, there remain
obstacles for the economy and the markets
overall.
The Federal Reserve is a potential constraint
on markets with a determined path for in-
terest rates that appears to be higher, which
may limit the price to earnings multiple inves-
tors are willing to pay. The U.S. Dollar since
the election has rallied significantly with as-
sociated potential negative consequences for
earnings on foreign sales for U.S. businesses.
And though policies of economic stimulation
are anticipated, the specifics have not yet been
detailed.
Election ambiguity in the U.S. may have
ended, but it begins anew in the European
Union as Germany, France, the Netherlands
and, potentially Italy, are all slated for elec-
tions with rising candidates from politically
populist and nationalist parties. The combina-
tion of these elections and the effects of the
Brexit could exacerbate currency, bond, and
stock market volatility and other economic
ills which may reverberate to our markets and
economy. In addition, much of the improve-
ment in sentiment in the U.S. is based on
the potential changes anticipated from the
Republican controlled Congress and White
House. Were significant deviations from ex-
pectations of regulation and tax relief to occur,
it is possible that the markets would react
swiftly and negatively.
On the whole, improvements in economic
growth over the prior six months have proved
to be more substantive than many expected.
The earnings recession experienced by compa-
nies in the U.S. for the past two years appears
to have ended with the third quarter’s earnings
reports. As yet unreported, fourth quarter S&P
500 earnings are anticipated by Wall Street
analysts to have increased more than 3%, year
over year. For 2017, those same analysts are
projecting mid to high single digit growth.
Likewise, with political uncertainty in the
European Union increasing this year, it would
seem unlikely that its central bank would
reduce the ongoing Quantitative Easing sub-
stantively. Thus, liquidity in markets should
remain high, economic growth may acceler-
ate and earnings increases appear to have the
upper hand over multiple contraction to yield
better equity performance especially for securi-
ties of companies with strong balance sheets,
high cash flow yields and disciplined capital al-
location. Despite the shorter term caveats and
the potential for elevated volatility, we remain
optimistic on the long term performance of
equities.
Information about the Company, including
our investment objectives, operating policies
and procedures, investment results, record of
dividend payments, financial reports and press
releases, etc., is available on our website, which
can be accessed at www.generalamericanin-
vestors.com.
By Order of the Board of Directors,
Jeffrey W. Priest
President and Chief Executive Officer
January 19, 2017
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T H E C O M P A N Y
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Corporate
Overview
General American Investors,
established in 1927, is one of
the nation’s oldest closed-end
investment companies. It is an
independent organization that
is internally managed. For reg-
ulatory purposes, the Company is classified as
a diversified, closed-end management invest-
ment company; it is registered under and sub-
ject to the Investment Company Act of 1940
and Sub-Chapter M of the Internal Revenue
Code.
Investment
Policy
The primary objective of the
Company is long-term capital
appreciation. Lesser emphasis
is placed on current income.
In seeking to achieve its pri-
mary objective, the Company
invests principally in common stocks believed
by its management to have better than average
growth potential.
The Company’s investment approach focuses
on the selection of individual stocks, each of
which is expected to meet a clearly defined
portfolio objective. A continuous investment
research program, which stresses fundamental
security analysis, is carried on by the officers
and staff of the Company under the oversight
of the Board of Directors. The Directors have
a broad range of experience in business and
financial affairs.
Portfolio
Manager
Mr. Jeffrey W. Priest, has been
President of the Company
since February 1, 2012 and
has been responsible for the
management of the Company
since January 1, 2013 when
he was appointed Chief Executive Officer
and Portfolio Manager. Mr. Priest joined the
Company in 2010 as a senior investment
analyst and has spent his entire 30-year busi-
ness career on Wall Street. Mr. Priest succeeds
Mr. Spencer Davidson who served as Chief
Executive Officer and Portfolio Manager from
1995 through 2012. ommon Stock
“GAM”
Common
Stock
As a closed-end investment
company, the Company does
not offer its shares continu-
ously. The Common Stock is
listed on The New York Stock
Exchange (symbol, GAM) and
can be bought or sold in the same manner as
all listed stocks. Net asset value is computed
and published on the Company’s website daily
(on an unaudited basis) and is also furnished
upon request. It is also available on most
electronic quotation services using the symbol
“XGAMX.” Net asset value per share (NAV),
market price, and the discount or premium
from NAV as of the close of each week, is pub-
lished in Barron’s and The Wall Street Journal,
Monday edition.
While shares of the Company usually sell at
a discount to NAV, as do the shares of most
other domestic equity closed-end investment
companies, they occasionally sell at a pre-
mium over NAV.
Since March 1995, the Board of Directors has
authorized the repurchase of Common Stock
in the open market when the shares trade at
a discount to NAV of at least 8%. To date,
24,325,088 shares have been repurchased.
“GAM Pr B”
Preferred
Stock
On September 24, 2003, the
Company issued and sold in
a n u n d e r w r i t t e n o f f e r i n g
8,000,000 shares of its 5.95%
Cumulative Preferred Stock,
Series B with a liquidation
preference of $25 per share ($200,000,000 in
the aggregate). The Preferred Shares are rated
“A1” by Moody’s Investors Service, Inc. and
are listed and traded on The New York Stock
Exchange (symbol, GAM Pr B). The Preferred
Shares are available to leverage the investment
performance of the Common Stockholders;
higher market volatility for the Common
Stockholders may result.
The Board of Directors authorized the repur-
chase of up to 1 million Preferred Shares in the
open market at prices below $25 per share. To
date, 395,313 shares have been repurchased.
3
T H E C O M P A N Y
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Dividend
and
Distribution
Policy
The Company’s dividend and
distribution policy is to dis-
tribute to stockholders before
year-end substantially all or-
dinary income estimated for
the full year and capital gains
realized during the ten-month period ended
October 31 of that year. If any additional capi-
tal gains are realized and available or ordinary
income is earned during the last two months
of the year, a “spill-over” distribution of these
amounts may be paid. Dividends and distri-
butions on shares of Preferred Stock are paid
quarterly. Distributions from capital gains and
dividends from ordinary income are allocated
proportionately among holders of shares of
Common Stock and Preferred Stock.
Dividends from income have been paid con-
tinuously on the Common Stock since 1939
and capital gain distributions in varying
amounts have been paid for each of the years
1943-2016 (except for the year 1974). (A table
listing dividends and distributions paid during
the 20-year period 1997-2016 is shown at the
bottom of page 4.) To the extent that shares
can be issued, dividends and distributions are
paid to Common Stockholders in additional
shares of Common Stock unless the stockhold-
er specifically requests payment in cash.
Proxy Voting
Policies,
Procedures
and Record
The policies and procedures
used by the Company to de-
termine how to vote proxies
relating to portfolio securities
and the Company’s proxy
voting record for the 12-
month period ended June
30, 2016 are available: (1) without charge,
upon request, by calling the Company at its
toll-free number (1-800-436-8401), (2) on the
Company’s website at www.generalamerican-
investors.com and (3) on the Securities and
Exchange Commission’s website at www.sec.
gov.
Direct
Registration
The Company makes avail-
able direct registration for its
Common Shareholders. Direct
registration, an element of the
Investors Choice Plan admin-
istered by our transfer agent, is
a system that allows for book-entry ownership
and electronic transfer of our Common Shares.
Accordingly, when Common Shareholders,
who hold their shares directly, receive new
shares resulting from a purchase, transfer or
dividend payment, they will receive a state-
ment showing the credit of the new shares
as well as their Plan account and certificated
share balances. A brochure which describes
the features and benefits of the Investors
Choice Plan, including the ability of share-
holders to deposit certificates with our transfer
agent, can be obtained by calling American
Stock Transfer & Trust Company at 1-800-413-
5499, calling the Company at 1-800-436-8401
or visiting our website: www.generalameri-
caninvestors.com - click on Distributions &
Reports, then Report Downloads.
Privacy
Policy and
Practices
The Company collects non-
public personal information
about its direct stockhold-
ers with respect to their
transactions in shares of the
Company’s securities (those
stockholders whose shares are
registered directly in their names). This infor-
mation includes the stockholder’s address, tax
identification or Social Security number and
dividend elections. We do not have knowledge
of, nor do we collect personal information
about, stockholders who hold the Company’s
securities in “street name” registration.
We do not disclose any nonpublic personal
information about our current or former stock-
holders to anyone, except as permitted by
law. We restrict access to nonpublic personal
information about our stockholders to those
few employees who need to know that infor-
mation to perform their responsibilities. We
maintain safeguards to comply with federal
standards to secure our stockholders’ informa-
tion.
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I N V E S T M E N T R E S U L T S ( U N A U D I T E D )
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T he investment return for a Common Stockholder of General American Investors (GAM)
over the 20 years ended December 31, 2016 is shown in the table below and in the
accompa ny ing chart. The return based on GAM’s net asset value (NAV) per Common
Share in comparison to the change in the Standard & Poor’s 500 Stock Index (S&P 500) is also
displayed. Each illustration assumes an investment of $10,000 at the beginning of 1997.
Stockholder Return is the return a Common Stock holder of GAM would have achieved assum-
ing reinvestment of all dividends and distributions at the actual reinvestment price and of all
cash dividends and distributions at the market price on the ex-dividend date.
Net Asset Value (NAV) Return is the return on shares of the Company’s Common Stock based
on the NAV per share, including the reinvestment of all dividends and distributions at the rein-
vestment prices indicated above.
Standard & Poor’s 500 Return is the total rate of return on this widely-recognized, unmanaged
index which is a measure of general stock market performance, including dividend income.
Past performance may not be indicative of future results.
The following tables and graph do not reflect the deduction of taxes that a stockholder would
pay on Company distributions or the sale of Company shares.
GENERAL AMERICAN INVESTORS
STOCKHOLDER RETURN
CUMULATIVE
INVESTMENT
ANNUAL
RETURN
NET ASSET VALUE RETURN
ANNUAL
RETURN
CUMULATIVE
INVESTMENT
STANDARD & POOR’S 500
RETURN
CUMULATIVE
INVESTMENT
ANNUAL
RETURN
$14,258
42.58%
$13,205
32.05%
$13,333
33.33%
18,722
26,065
31,043
32,388
23,575
29,943
32,574
38,242
44,660
48,554
25,151
34,422
40,012
37,895
45,387
60,918
66,596
63,040
67,824
31.31
39.22
19.10
4.33
-27.21
27.01
8.79
17.40
16.78
8.72
-48.20
36.86
16.24
-5.29
19.77
34.22
9.32
-5.34
7.59
17,845
24,341
28,635
28,291
21,778
27,746
30,623
35,584
39,939
43,138
24,580
32,466
37,436
36,362
42,656
56,873
60,547
59,603
65,372
35.14
36.40
17.64
-1.20
-23.02
27.40
10.37
16.20
12.24
8.01
-43.02
32.08
15.31
-2.87
17.31
33.33
6.46
-1.56
9.68
17,140
20,732
18,847
16,607
12,930
16,623
18,416
19,306
22,329
23,537
14,812
18,730
21,550
22,009
25,528
33,802
38,430
38,972
43,640
28.55
20.96
-9.09
-11.89
-22.14
28.56
10.79
4.83
15.66
5.41
-37.07
26.45
15.06
2.13
15.99
32.41
13.69
1.41
11.98
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
D I V I D E N D S A N D D I S T R I B U T I O N S P E R C O M M O N S H A R E ( 1 9 9 7 - 2 0 1 6 ) ( U N A U D I T E D )
EARNINGS SOURCE
SHORT-TERM LONG-TERM
YEAR INCOME CAPITAL GAINS CAPITAL GAINS
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
$2.950
4.400
4.050
6.160
1.370
.330
.590
.957
1.398
2.666
—
—
$.620
1.550
.640
—
—
—
.041
—
$.210
.470
.420
.480
.370
.030
.020
.217
.547
.334
EARNINGS SOURCE
SHORT-TERM LONG-TERM RETURN OF
YEAR INCOME CAPITAL GAINS CAPITAL GAINS CAPITAL
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
$.706
.186
.103
.081
.147
.215
.184
.321
.392
.283
$.009
—
.051
.033
.011
.015
—
.254
—
—
$5.250
.254
.186
.316
.342
1.770
1.916
2.925
.858
2.997
—
—
$.010
—
—
—
—
—
—
—
5
I N V E S T M E N T R E S U L T S ( U N A U D I T E D )
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20-YEAR INVESTMENT RESULTS
ASSUMING AN INITIAL INVESTMENT OF $10,000
COMPARATIVE ANNUALIZED INVESTMENT RESULTS
YEARS ENDED
DECEMBER 31, 2016
STOCKHOLDER
RETURN
GAM NET
ASSET VALUE
S&P 500
STOCK INDEX
1 year
5 years
10 years
15 years
20 years
7.6%
9.7%
12.4
4.3
5.1
10.1
12.2
5.0
5.7
9.8
12.0%
14.7
6.9
6.7
7.7
CUMULATIVE VALUE OF INVESTMENT
$100,000
$75,000
$50,000
$25,000
7
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9
9
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1
0
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4
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6
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8
0
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2
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2
3
1
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4
1
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2
5
1
0
2
6
1
0
2
P O R T F O L I O D I V E R S I F I C A T I O N ( U N A U D I T E D )
GAM Stockholder Return
GAM Net Asset Value
S&P 500 Stock Index
$0
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INDUSTRY CATEGORY
Financials
Banks
Diversified Financials
Insurance
Information Technology
Semiconductors & Semiconductor Equipment
Software & Services
Technology Hardware & Equipment
Consumer Staples
Food, Beverage & Tobacco
Food & Staples Retailing
Consumer Discretionary
Automobiles & Components
Consumer Services
Media
Retailing
Industrials
Capital Goods
Commercial & Professional Services
DECEMBER 31, 2016
COST(000)
VALUE(000)
% COMMON
NET ASSETS
$1,676
18,221
43,648
63,545
10,591
52,159
42,907
105,657
70,878
23,645
94,523
16,175
6,057
19,154
40,128
81,514
48,563
11,168
59,731
$18,772
55,520
165,150
239,442
32,658
77,438
76,573
186,669
117,431
42,591
160,022
15,333
5,282
20,028
105,248
145,891
61,957
44,944
106,901
1.8%
5.4
16.2
23.4
3.2
7.5
7.5
18.2
11.5
4.1
15.6
1.5
0.5
2.0
10.3
14.3
6.1
4.4
10.5
10.1
Health Care
Pharmaceuticals, Biotechnology & Life Sciences
55,507
102,783
Energy
Miscellaneous*
Materials
Telecommunication Services
Short-Term Securities
Total Investments
Other Assets and Liabilities - Net
Preferred Stock
Net Assets Applicable to Common Stock
44,618
34,234
10,039
14,740
564,108
141,106
$705,214
77,802
35,693
11,952
10,670
1,077,825
141,106
1,218,931
(6,279)
(190,117)
$1,022,535
7.6
3.5
1.2
1.0
105.4
13.8
119.2
(0.6)
(18.6)
100.0%
* Securities which have been held for less than one year, not previously disclosed and not restricted.
(see notes to unaudited financial statements)
M A J O R S T O C K C H A N G E S ( a ) : T H R E E M O N T H S E N D E D D E C E M B E R 3 1 , 2 0 1 6 ( U N A U D I T E D )
(cid:131)
(cid:138)
(cid:137)
(cid:135)
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(cid:133)
(cid:145)
(cid:133)
(cid:135)
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(cid:143)
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(cid:136)
(cid:144)
(cid:139)
6
INCREASES:
NEW POSITIONS
Alphabet Inc.
Amazon.com, Inc.
eBay Inc.
IMAX Corporation
Regal Entertainment Group
ADDITIONS
CVS Health Corporation
Danone
Diageo plc ADR
Gilead Sciences, Inc.
Intra-Cellular Therapies, Inc.
Liberty Interactive Corporation, Series A
Universal Display Corporation
DECREASES:
ELIMINATIONS
REDUCTIONS
Hertz Global Holdings, Inc.
Keysight Technologies, Inc.
Synchronoss Technologies, Inc.
American Express Company
Arch Capital Group Ltd.
Ariad Pharmaceuticals, Inc.
ASML Holding N.V.
Cameco Corporation
Celgene Corporation
Cempra, Inc.
Chipotle Mexican Grill, Inc.
Ensco plc - Class A
Halliburton Company
Helix Energy Solutions Group, Inc.
Huntsman Corporation
Intel Corporation
JPMorgan Chase & Co.
M&T Bank Corporation
Macy's, Inc.
Merck & Co., Inc.
MetLife, Inc.
Nelnet, Inc.
Paratek Pharmaceuticals, Inc.
QUALCOMM Incorporated
Repros Therapeutics Inc.
Vodafone Group plc ADR
Willis Towers Watson plc
NET SHARES TRANSACTED
SHARES HELD
23,000
20,000
285,000
105,300
53,900
55,000
18,826
27,464
45,000
55,000
29,534
45,100
104,012
127,900
378,034
20,000
115,000
43,300
15,000
672,000
25,000
350,000
7,000
210,000
15,000
8,841
400,000
65,000
70,000
20,000
133,700
132,000
20,000
100,000
277,076
50,000
121,355
255,500
95,300
23,000
20,000
580,000 (b)
349,496 (b)
439,500 (b)
197,280
220,000
209,864
483,600
284,942
339,199
283,309
-----
-----
-----
225,000
495,000
714,100
185,850
800,819
165,000
164,409
14,000
440,000
520,000
1,721,159
626,422
325,500
215,000
120,000
241,326
265,191
380,000
400,000
263,176
341,200
589,768
428,352
147,998
(a) Common shares unless otherwise noted; excludes transactions in Common Stocks - Miscellaneous - Other.
(b) Shares purchased in prior period and previously carried under Common Stocks - Miscellaneous - Other.
(see notes to financial statement)
7
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T E N L A R G E S T I N V E S T M E N T H O L D I N G S ( U N A U D I T E D )
(cid:146)
(cid:153)
(cid:152)
(cid:148)
(cid:150)
(cid:150)
(cid:148)
(cid:148)
(cid:160)
(cid:147)
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THE TJX COMPANIES, INC.
Through its T.J. Maxx and Marshalls divisions, TJX is the leading
off-price retailer. The continued growth of these divisions in the
U.S. and Europe, along with expansion of related U.S. and foreign
off-price formats, provide ongoing growth opportunities.
REPUBLIC SERVICES, INC.
Republic Services is a leading provider of non-hazardous, solid
waste collection and disposal services in the U.S. The efficient
operation of its routes and facilities combined with appropriate
pricing enables Republic Services to generate significant free cash flow.
ARCH CAPITAL GROUP LTD.
Arch Capital, a Bermuda-based insurer/reinsurer, generates
premiums of approximately $5 billion and has a high quality,
well-reserved A+ rated balance sheet. This company has a strong
management team that exercises prudent underwriting discipline,
efficient expense control, and steady capital management resulting
in above-average earnings and book value growth.
MICROSOFT CORPORATION
Microsoft is a leading global provider of software, services and
hardware devices. The company produces the Windows operating
system, Office productivity suite, Azure public cloud service, and
Xbox gaming console.
SHARES
VALUE
% COMMON
NET ASSETS
919,768
$69,102,170
6.8%
787,800
44,943,990
4.4
495,000
42,713,550
4.2
680,686
42,297,828
4.1
GILEAD SCIENCES, INC.
Gilead Sciences is a U.S. based biotechnology company that discovers,
develops and commercializes therapeutics. Originally founded to focus
predominantly on antiviral drugs to treat patients with HIV, Hepatitis B,
CMV, influenza and, most recently, Hepatitis C, the company has expanded
its reach into cardiopulmonary medicine, oncology and other related areas.
NESTLÉ S.A.
Nestlé is a well-managed, global food company with a
favorably-positioned product portfolio and an excellent
AA rated balance sheet. High market share, solid volume growth,
strong pricing power, expense control and steady capital management
yield durable, above-average, long-term total return potential.
483,600
450,000
34,630,596
3.4
32,297,603
3.2
UNILEVER N.V.
Unilever N.V. is a well-managed, primarily emerging market-based,
global consumer goods manufacturer focusing on personal care,
home care, food and refreshment products and operates with a solid
A+ rated balance sheet. Advantaged geographies coupled with above
average volume growth, pricing power and management execution
generates above average long-term shareholder returns.
704,378
28,984,436
2.8
GENERAL ELECTRIC COMPANY
General Electric is a global industrial and technology company.
The company's diverse mix of infrastructure, transportation, energy
and healthcare businesses, many with leading market positions, forms
the foundation of management’s focus upon shareholder value via
earnings growth, optimization of profitability, and returning capital
through dividends and share repurchases.
900,000
HALLIBURTON COMPANY
Halliburton offers a broad suite of services and products to customers
worldwide for the exploration, development and production of oil and
gas. The company has the scale, product depth and technology to
provide value-added customer service and produce an attractive long-
term return on invested capital and strong shareholder appreciation.
520,000
EVEREST RE GROUP, LTD.
Everest Re is one of the largest independent U.S. property and
casualty reinsurers, generates annual premiums of approximately $5
billion, has a high quality investment portfolio, and a well-reserved A+
balance sheet. This Bermuda domiciled company has a strong
management team that exercises prudent underwriting discipline and
efficient expense control, resulting in above-average earnings and book
value growth.
125,000
28,440,000
2.8
28,126,800
2.7
27,050,000
2.6
$378,586,973
37.0%
8
S T A T E M E N T O F I N V E S T M E N T S D E C E M B E R 3 1 , 2 0 1 6
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CONSUMER
DISCRETIONARY
(14.3%)
SHARES
COMMON STOCKS
AUTOMOBILES AND COMPONENTS (1.5%)
1,264,063 Ford Motor Company
CONSUMER SERVICES (0.5%)
VALUE (NOTE 1a)
(COST $16,174,723)
$15,333,084
14,000 Chipotle Mexican Grill, Inc. (a)
(COST $6,056,957)
5,282,480
MEDIA (2.0%)
349,496
439,500 Regal Entertainment Group
IMAX Corporation (a)
RETAILING (10.3%)
20,000 Amazon.com, Inc. (a)
339,199 Liberty Interactive Corporation, Series A (a)
241,326 Macy's, Inc.
919,768 The TJX Companies, Inc.
CONSUMER STAPLES
(15.6%)
FOOD, BEVERAGE AND TOBACCO (11.5%)
220,000 Danone
209,864 Diageo plc ADR
450,000 Nestlé S.A.
195,000 PepsiCo, Inc.
704,378 Unilever N.V.
FOOD AND STAPLES RETAILING (4.1%)
168,781 Costco Wholesale Corporation
197,280 CVS Health Corporation
ENERGY
(7.3%)
113,000 Anadarko Petroleum Corporation
160,900 Apache Corporation
800,819 Cameco Corporation
440,000 Ensco plc - Class A
3,830,440 Gulf Coast Ultra Deep Royalty Trust (a)
520,000 Halliburton Company
1,721,159 Helix Energy Solutions Group, Inc. (a)
(COST $19,154,133)
(COST $40,128,215)
(COST $81,514,028)
(COST $70,877,764)
(COST $23,645,176)
(COST $94,522,940)
(COST $43,436,744)
10,974,174
9,053,700
20,027,874
14,997,400
12,506,267
8,641,884
69,102,170
105,247,721
145,891,159
13,932,688
21,813,264
32,297,603
20,402,850
28,984,436
117,430,841
27,023,526
15,567,365
42,590,891
160,021,732
7,879,490
10,212,323
8,384,575
4,276,800
555,414
28,126,800
15,180,622
74,616,024
FINANCIALS
(23.4%)
BANKS (1.8%)
120,000 M&T Bank Corporation
(COST $1,676,067)
18,771,600
DIVERSIFIED FINANCIALS (5.4%)
225,000 American Express Company
215,000
400,000 Nelnet, Inc.
JPMorgan Chase & Co.
INSURANCE (16.2%)
158,877 Aon plc
495,000 Arch Capital Group Ltd. (a)
187,500 Axis Capital Holdings Limited
110 Berkshire Hathaway Inc. Class A (a) (b)
125,000 Everest Re Group, Ltd.
380,000 MetLife, Inc.
147,998 Willis Towers Watson plc
(COST $18,221,288)
(COST $43,647,656)
(COST $63,545,011)
16,668,000
18,552,350
20,300,000
55,520,350
17,719,552
42,713,550
12,238,125
26,853,310
27,050,000
20,478,200
18,097,195
165,149,932
239,441,882
9
HEALTH CARE
(10.1%)
S T A T E M E N T O F I N V E S T M E N T S D E C E M B E R 3 1 , 2 0 1 6 - c o n t i n u e d
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(cid:218)
(cid:217)
(cid:213)
(cid:215)
(cid:215)
(cid:213)
(cid:213)
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(cid:212)
(cid:212)
(cid:212)
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(cid:214)
(cid:223)
(cid:214)
(cid:223)
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(cid:216)
(cid:219)
(cid:224)
SHARES
COMMON STOCKS (Continued)
VALUE (NOTE 1a)
Ariad Pharmaceuticals, Inc. (a)
Celgene Corporation (a)
Cempra, Inc. (a)
Gilead Sciences, Inc.
Intra-Cellular Therapies, Inc. (a)
PHARMACEUTICALS, BIOTECHNOLOGY AND LIFE SCIENCES
714,100
165,000
164,409
483,600
284,942
265,191 Merck & Co., Inc.
263,176
460,808
589,768
Paratek Pharmaceuticals, Inc. (a)
Pfizer Inc.
Repros Therapeutics Inc. (a)
INDUSTRIALS
(10.5%)
CAPITAL GOODS (6.1%)
189,131
900,000
190,000
Eaton Corporation PLC
General Electric Company
United Technologies Corporation
COMMERCIAL AND PROFESSIONAL SERVICES (4.4%)
Republic Services, Inc.
787,800
$8,883,404
19,098,750
460,345
34,630,596
4,299,775
15,611,794
4,052,910
14,967,044
778,494
102,783,112
12,688,799
28,440,000
20,827,800
61,956,599
(COST $55,506,985)
(COST $48,563,291)
(COST $11,167,520)
(COST $59,730,811)
44,943,990
106,900,589
INFORMATION
TECHNOLOGY
(18.2%)
SEMICONDUCTORS AND SEMICONDUCTOR EQUIPMENT (3.2%)
185,850
325,500
ASML Holding N.V.
Intel Corporation
SOFTWARE AND SERVICES (7.5%)
23,000
580,000
680,686
Alphabet Inc. (a)
eBay Inc. (a)
Microsoft Corporation
TECHNOLOGY HARDWARE AND EQUIPMENT (7.5%)
124,000
790,000
341,200
283,309
Apple Inc.
Cisco Systems, Inc.
QUALCOMM Incorporated
Universal Display Corporation (a)
(COST $10,590,861)
(COST $51,991,043)
(COST $42,903,836)
(COST $105,485,740)
20,852,370
11,805,885
32,658,255
17,751,860
17,220,200
42,297,828
77,269,888
14,361,680
23,873,800
22,246,240
15,950,297
76,432,017
186,360,160
MATERIALS (1.2%)
626,422
Huntsman Corporation
(COST $10,039,342)
11,952,132
MISCELLANEOUS (3.5%)
Other (c)
(COST $34,234,145)
35,693,482
TELECOMMUNICATION
SERVICES (1.0%)
428,352
Vodafone Group plc ADR
(COST $14,468,110)
10,464,639
TOTAL COMMON STOCKS (105.1%)
(COST $562,483,856)
1,074,124,911
TECHNOLOGY
HARDWARE AND
EQUIPMENT (0.0%)
WARRANTS
WARRANT (a)
281,409 Applied DNA Sciences, Inc.
(COST $2,814)
140,705
CONTRACTS
CALL OPTIONS
ENERGY (0.3%)
(100 SHARES EACH) COMPANY/EXPIRATION DATE/EXERCISE PRICE
15,000 Cameco Corporation/March 17, 2017/$10
10,000 Ensco plc/January 20, 2017/$8
TELECOMMUNICATION
SERVICES (0.0%)
2,500 Vodafone Group plc ADR/July 21, 2017/$26 (COST $271,979)
(COST $1,347,996)
TOTAL CALL OPTIONS (0.3%)
(COST $1,076,017)
1,425,000
1,700,000
3,125,000
205,000
3,330,000
1 0
S T A T E M E N T O F I N V E S T M E N T S D E C E M B E R 3 1 , 2 0 1 6 - c o n t i n u e d
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CONTRACTS
PUT OPTIONS
(100 SHARES EACH)
COMPANY/EXPIRATION DATE/EXERCISE PRICE
ENERGY
(0.0%)
500
68
Halliburton Company/February 17, 2017/$50
Helix Energy Solutions Group, Inc./March 17, 2017/$11
(COST $105,142)
VALUE (NOTE 1a)
$45,000
15,640
60,640
INFORMATION TECHNOLOGY
SOFTWARE AND SERVICES
1,500
(0.0%)
Microsoft Corporation/January 20, 2017/$62.50
TOTAL PUT OPTIONS (0.0%)
(COST $168,061)
(COST $273,203)
168,000
228,640
SHARES
141,106,388
SHORT-TERM SECURITIES AND OTHER ASSETS
State Street Insitutional Treasury Plus Money Market Fund
(13.8%) (COST $141,106,388)
TOTAL INVESTMENTS (d) (119.2%)
Liabilities in excess of receivables and other assets (-0.6%)
(COST $705,214,257)
PREFERRED STOCK (-18.6%)
NET ASSETS APPLICABLE TO COMMON STOCK (100%)
141,106,388
1,218,930,644
(6,278,777)
1,212,651,867
(190,117,175)
$1,022,534,692
ADR - American Depository Receipt
(a) Non-income producing security.
(b) Security is held as collateral for options written.
(c) Securities which have been held for less than one year, not previously disclosed, and not restricted.
(d) At December 31, 2016, the cost of investments for Federal income tax purposes was $705,404,791; aggregate gross
unrealized appreciation was $531,423,240; aggregate gross unrealized depreciation was $17,897,387; and net unrealized
appreciation was $513,525,853.
(see notes to financial statements)
S T A T E M E N T O F O P T I O N S W R I T T E N
CONTRACTS
CALL OPTIONS (100 SHARES EACH) COMPANY/EXPIRATION DATE/EXERCISE PRICE
ENERGY
500 Halliburton Company/February 17, 2017/$55
INFORMATION TECHNOLOGY
SOFTWARE AND SERVICES
68 Helix Energy Solutions Group, Inc./March 17, 2017/$12
1,500 Microsoft Corporation/February 17, 2017/$67.50
(PREMIUMS RECEIVED $223,189)
PUT OPTIONS
ENERGY
5,300 Cameco Corporation/March 17, 2017/$7
2,000 Ensco plc - Class A/January 20, 2017/$6
TELECOMMUNICATIONS
SERVICES
2,500 Vodafone Group plc ADR/July 21, 2017/$22
TOTAL OPTIONS WRITTEN
(PREMIUMS RECEIVED $462,617*)
(PREMIUMS RECEIVED $685,806)
VALUE (NOTE 1a)
$97,500
1,700
58,500
157,700
53,000
10,000
262,500
325,500
$483,200
*The maximum cash outlay if all put options are exercised is $10,410,000.
(see notes to financial statements)
S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S
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1 1
ASSETS
INVESTMENTS, AT VALUE (NOTE 1a)
Common stocks (cost $562,483,856)
Warrant (cost $2,814)
Purchased options (cost $1,621,199)
Money market fund (cost $141,106,388)
Total investments (cost $705,214,257)
RECEIVABLES AND OTHER ASSETS
Receivable for securities sold
Dividends, interest and other receivables
Qualified pension plan asset, net excess funded (note 7)
Prepaid expenses, fixed assets and other assets
TOTAL ASSETS
LIABILITIES
Payable for securities purchased
Outstanding options written, at value (premiums received $685,806)
Accrued preferred stock dividend not yet declared
Accrued compensation payable to officers and employees
Accrued supplemental pension plan liability (note 7)
Accrued supplemental thrift plan liability (note 7)
Accrued expenses and other liabilities
TOTAL LIABILITIES
5.95% CUMULATIVE PREFERRED STOCK, SERIES B -
7,604,687 at a liquidation value of $25 per share (note 5)
NET ASSETS APPLICABLE TO COMMON STOCK - 27,221,115 (note 5)
NET ASSET VALUE PER COMMON SHARE
NET ASSETS APPLICABLE TO COMMON STOCK
Common Stock, 27,221,115 shares at par value (note 5)
Additional paid-in capital (note 5)
Over distributed net investment income (note 5)
Undistributed realized gain on securities sold
Unallocated distributions on Preferred Stock
Unrealized appreciation on investments, options written and other
Accumulated other comprehensive loss (note 7)
NET ASSETS APPLICABLE TO COMMON STOCK
(see notes to financial statements)
DECEMBER 31, 2016
$1,074,124,911
140,705
3,558,640
141,106,388
1,218,930,644
4,110,006
2,040,139
2,338,732
597,684
1,228,017,205
2,582,135
483,200
219,955
3,068,000
5,508,944
3,127,159
375,945
15,365,338
190,117,175
$1,022,534,692
$37.56
$27,221,115
477,804,582
(1,947,100)
10,380,508
(219,955)
513,918,993
(4,623,451)
$1,022,534,692
1 2
S T A T E M E N T O F O P E R A T I O N S
(cid:0)
(cid:7)
(cid:6)
(cid:2)
(cid:4)
(cid:4)
(cid:2)
(cid:2)
(cid:14)
(cid:1)
(cid:1)
(cid:1)
(cid:9)
(cid:11)
(cid:1)
(cid:3)
(cid:3)
(cid:12)
(cid:3)
(cid:12)
(cid:10)
(cid:5)
(cid:8)
(cid:13)
INCOME
Dividends (net of foreign withholding taxes of $637,083)
Interest
TOTAL INCOME
EXPENSES
Investment research
Administration and operations
Office space and general
Auditing and legal fees
Directors’ fees and expenses
Transfer agent, custodian and registrar fees and expenses
State and local taxes
Stockholders’ meeting and reports
TOTAL EXPENSES
NET INVESTMENT INCOME
YEAR ENDED
DECEMBER 31, 2016
$21,229,092
244,635
21,473,727
6,861,845
3,673,761
1,730,505
281,094
256,237
214,696
168,784
114,516
13,301,438
8,172,289
REALIZED GAIN AND CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS (NOTES 1, 3 AND 4)
Net realized gain on investments:
Securities transactions
Written options transactions (notes 1b and 4)
Net decrease in unrealized appreciation
NET INVESTMENT INCOME, REALIZED GAINS AND DEPRECIATION ON INVESTMENTS
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
(see notes to financial statements)
S T A T E M E N T O F C H A N G E S I N N E T A S S E T S
90,861,223
709,334
91,570,557
(15,321,337)
76,249,220
(11,311,972)
$73,109,537
OPERATIONS
Net investment income
Net realized gain on investments
Net decrease in unrealized appreciation
Distributions to Preferred Stockholders:
From net investment income
From net capital gains
Decrease in net assets from Preferred distributions
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
OTHER COMPREHENSIVE INCOME
YEAR ENDED DECEMBER 31,
2016
2015
$8,172,289
91,570,557
(15,321,337)
(84,421,509)
$13,728,242
34,130,660
(76,268,833)
(28,409,931)
(1,039,878)
(10,272,094)
(11,311,972)
(3,344,407)
(7,967,565)
(11,311,972)
73,109,537
(39,721,903)
Funded status of defined benefit plans (note 7)
624,419
538,384
DISTRIBUTIONS TO COMMON STOCKHOLDERS
From net investment income
From net capital gains
(8,988,445)
(75,933,325)
(9,622,112)
(22,923,266)
DECREASE IN NET ASSETS FROM COMMON DISTRIBUTIONS
(84,921,770)
(32,545,378)
CAPITAL SHARE TRANSACTIONS (NOTE 5)
Value of Common Shares issued in payment of dividends
and distributions
Cost of Common Shares purchased
DECREASE IN NET ASSETS - CAPITAL TRANSACTIONS
NET DECREASE IN NET ASSETS
NET ASSETS APPLICABLE TO COMMON STOCK
BEGINNING OF YEAR
END OF YEAR (including over distributed net investment
income of ($1,947,100) and ($92,807), respectively)
income of ($1,947,100) and ($92,807), respectively)
(see notes to financial statements)
33,686,020
(67,991,719)
(34,305,699)
(45,493,513)
13,532,276
(101,674,879)
(88,142,603)
(159,871,500)
1,068,028,205
1,068,028,205
1,227,899,705
$1,022,534,692
$1,022,534,692
$1,068,028,205
$1,068,028,205
F I N A N C I A L H I G H L I G H T S
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PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year
Net investment income
Net gain (loss) on securities - realized
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(cid:16)
(cid:27)
(cid:22)
(cid:27)
(cid:28)
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-
Distributions on Preferred Stock:
Dividends from net investment income
Distributions from net capital gains
Total from investment operations
Distributions on Common Stock:
Dividends from net investment income
Distributions from net capital gains
2016
2015
2014
2013
2012
$37.74
.30
$39.77
.48
$41.07
.32
$32.68
.17
$29.78
.24
3.10
.02
3.42
(.04)
(.38)
(.42)
3.00
(.99)
.02
(.49)
(.12)
(.27)
(.39)
(.88)
2.39
(.13)
2.58
(.04)
(.34)
(.38)
2.20
(.33)
(2.85)
(3.18)
(.34)
(.81)
(1.15)
(.32)
(3.18)
(3.50)
10.51
.20
10.88
(.04)
(.35)
(.39)
10.49
(.18)
(1.92)
(2.10)
5.05
—
5.29
(.04)
(.35)
(.39)
4.90
(.21)
(1.79)
(2.00)
Net asset value, end of year
Per share market value, end of year
$37.56
$31.18
$37.74
$31.94
$39.77
$35.00
$41.07
$35.20
$32.68
$27.82
TOTAL INVESTMENT RETURN - Stockholder
Return, based on market price per share
RATIOS AND SUPPLEMENTAL DATA
Net assets applicable to Common Stock,
7.59%
(5.34%)
9.32%
34.24%
19.77%
end of year (000’s omitted)
$1,022,535 $1,068,028 $1,227,900 $1,229,470 $955,418
Ratio of expenses to average net assets
applicable to Common Stock
1.27%
1.17%
1.10%
1.27%
1.67%
Ratio of net income to average net assets
applicable to Common Stock
Portfolio turnover rate
0.78%
20.29%
1.17%
14.41%
0.78%
14.98%
0.47%
17.12%
0.74%
9.56%
PREFERRED STOCK
Liquidation value, end of year
(000’s omitted)
Asset coverage
Liquidation preference per share
Market value per share
(see notes to financial statements)
$190,117
638%
$190,117
662%
$190,117 $190,117 $190,117
603%
746%
747%
$25.00
$25.77
$25.00
$26.75
$25.00
$26.01
$25.00
$25.30
$25.00
$25.54
1 4
N O T E S T O F I N A N C I A L S T A T E M E N T S
@
G
F
B
D
D
B
B
N
A
A
A
I
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A
C
C
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C
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1. SIGNIFICANT ACCOUNTING POLICIES
General American Investors Company, Inc. (the “Company”), established in 1927, is registered under the
Investment Company Act of 1940 as a closed-end, diversified management investment company. It is internally
managed by its officers under the direction of the Board of Directors.
The accompanying financial statements have been prepared in accordance with United States generally
accepted accounting principles (“U.S. GAAP”) pursuant to the requirements for reporting; Accounting Standards
Codification 946, Financial Services - Investment Companies (“ASC 946"), and Regulation S-X.
The preparation of financial statements in accordance with U.S. GAAP requires management to make esti-
mates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial state-
ments and the reported amounts of income, expenses and gains and losses during the reported period. Changes
in the economic environment, financial markets, and any other parameters used in determining these estimates
could cause actual results to differ, and these differences could be material.
a. SECURITY VALUATION Equity securities traded on a national securities exchange are valued at the last reported
sales price on the last business day of the period. Equity securities reported on the NASDAQ national market
are valued at the official closing price on that day. Listed and NASDAQ equity securities for which no sales are
reported on that day and other securities traded in the over-the-counter market are valued at the last bid price
(asked price for options written) on the valuation date. Equity securities traded primarily in foreign markets are
valued at the closing price of such securities on their respective exchanges or markets. Corporate debt securities,
domestic and foreign, are generally traded in the over-the-counter market rather than on a securities exchange.
The Company utilizes the latest bid prices provided by independent dealers and information with respect to
transactions in such securities to determine current market value. If, after the close of foreign markets, condi-
tions change significantly, the price of certain foreign securities may be adjusted to reflect fair value as of the
time of the valuation of the portfolio. Investments in money market funds are valued at their net asset value.
Special holdings (restricted securities) and other securities for which quotations are not readily available are val-
ued at fair value determined in good faith pursuant to specific procedures appropriate to each security as estab-
lished by and under the general supervision of the Board of Directors. The determination of fair value involves
subjective judgments. As a result, using fair value to price a security may result in a price materially different
from the price used by other investors or the price that may be realized upon the actual sale of the security.
b. OPTIONS The Company may purchase and write (sell) put and call options. The Company typically purchases
put options or writes call options to hedge the value of portfolio investments while it typically purchases call
options and writes put options to obtain equity market exposure under specified circumstances. The risk associ-
ated with purchasing an option is that the Company pays a premium whether or not the option is exercised.
Additionally, the Company bears the risk of loss of the premium and a change in market value should the coun-
terparty not perform under the contract. Put and call options purchased are accounted for in the same manner
as portfolio securities. Premiums received from writing options are reported as a liability on the Statement of
Assets and Liabilities. Those that expire unexercised are treated by the Company on the expiration date as real-
ized gains on written option transactions in the Statement of Operations. The difference between the premium
received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transac-
tion, as a realized loss on written option transactions in the Statement of Operations. If a written call option is
exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether
the Company has realized a gain or loss on investments in the Statement of Operations. If a written put option
is exercised, the premium reduces the cost basis for the securities purchased by the Company and is parentheti-
cally disclosed under cost of investments on the Statement of Assets and Liabilities. The Company as writer of an
option bears the market risk of an unfavorable change in the price of the security underlying the written option.
See Note 4 for written option activity.
c. SECURITIES TRANSACTIONS AND INVESTMENT INCOME Securities transactions are recorded as of the trade date.
Dividend income and distributions to stockholders are recorded as of the ex-dividend dates. Interest income,
adjusted for amortization of discount and premium on investments, is earned from settlement date and is recog-
nized on the accrual basis. Cost of short-term investments represents amortized cost.
d. FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS Portfolio securities and other assets and liabilities denomi-
nated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies versus
U.S. dollars on the date of valuation. Purchases and sales of securities, income and expense items denominated
in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Events
may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent
value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established
and approved by the Company’s Board of Directors. The Company does not separately report the effect of
changes in foreign exchange rates from changes in market prices on securities held. Such changes are included
in net realized and unrealized gain or loss from investments on the Statement of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses real-
ized between the trade and settlement dates on securities transactions and the difference between the recorded
amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts ac-
tually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange
rates on foreign denominated assets and liabilities other than investments in securities held at the end of the
reporting period.
1 5
N O T E S T O F I N A N C I A L S T A T E M E N T S - c o n t i n u e d
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S
Q
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Q
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P
X
Z
P
P
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R
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1. SIGNIFICANT ACCOUNTING POLICIES - (Continued from previous page.)
Foreign security and currency transactions may involve certain considerations and risks not typically associ-
ated with those of U.S. companies as a result of, among other factors, the possibility of political or economic
instability or the level of governmental supervision and regulation of foreign securities markets.
e. DIVIDENDS AND DISTRIBUTIONS The Company expects to pay dividends of net investment income and distribu-
tions of net realized capital and currency gains, if any, annually to common shareholders and quarterly to preferred
shareholders. Dividends and distributions to common and preferred shareholders, which are determined in accor-
dance with Federal income tax regulations are recorded on the ex-dividend date. Permanent book/tax differences
relating to income and gains are reclassified to paid-in capital as they arise.
f. FEDERAL INCOME TAXES The Company’s policy is to fulfill the requirements of the Internal Revenue Code appli-
cable to regulated investment companies and to distribute substantially all taxable income to its stockholders.
Accordingly, no provision for Federal income taxes is required. In accordance with U.S. GAAP requirements regard-
ing accounting for uncertainties in income taxes, management has analyzed the Company’s tax positions taken or
expected to be taken on Federal and state income tax returns for all open tax years (the current and the prior three
tax years) and has concluded that no provision for income tax is required in the Company’s financial statements.
g. CONTINGENT LIABILITIES Amounts related to contingent liabilities are accrued if it is probable that a liability has
been incurred and an amount is reasonably estimable. Management evaluates whether there are incremental
legal or other costs directly associated with the ultimate resolution of a matter that are reasonably estimable and,
if so, they are included in the accrual.
h. INDEMNIFICATIONS In the ordinary course of business, the Company enters into contracts that contain a variety
of indemnifications. The Company’s maximum exposure under these arrangements is unknown. However, the
Company has not had prior claims or losses pursuant to these indemnification provisions and expects the risk of
loss thereunder to be remote.
2. FAIR VALUE MEASUREMENTS
Various data inputs are used in determining the value of the Company’s investments. These inputs are summa-
rized in a hierarchy consisting of the three broad levels listed below:
Level 1 - quoted prices in active markets for identical securities (including money market funds which are valued
using amortized cost and which transact at net asset value, typically $1 per share),
Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk,
etc.), and
Level 3 - significant unobservable inputs (including the Company’s own assumptions in determining the fair
value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated
with investing in those securities. The following is a summary of the inputs used to value the Company’s net
assets as of December 31, 2016:
Assets
Common stocks
Warrants
Purchased options
Money market fund
Total
Liabilities
Options written
Level 1
$1,074,124,911
140,705
3,558,640
141,106,388
$1,218,930,644
Level 2
—
—
—
—
—
Level 3
—
—
—
—
—
Total
$1,074,124,911
140,705
3,558,640
141,106,388
$1,218,930,644
($483,200)
—
—
($483,200)
Transfers of Level 3 Securities, if any, are reported as of the actual date of reclassification. No such transfers occurred during
the year ended December 31, 2016.
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (other than short-term securities and options) during 2016 amounted to
$220,131,850 and $380,582,892, on long transactions, respectively.
4. WRITTEN OPTIONS
The level of activity in written options varies from year to year based upon market conditions. Transactions in
written covered call options and collateralized put options during the year ended December 31, 2016 were as fol-
lows:
COLLATERALIZED PUTS
COVERED CALLS
CONTRACTS
2,250
Options outstanding, December 31, 2015
Options written
8,068
Options terminated in closing purchase transaction (4,500)
(500)
Options expired
(3,250)
Options assigned
2,068
Options outstanding, December 31, 2016
PREMIUMS
$1,473,462
1,789,719
(1,672,355)
(129,998)
(1,237,639)
$223,189
CONTRACTS
2,500
27,500
(19,200)
0
(1,000)
9,800
PREMIUMS
$404,556
1,038,184
(823,435)
0
(156,688)
$462,617
5. CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS
The authorized capital stock of the Company consists of 50,000,000 shares of Common Stock, $1.00 par value,
and 10,000,000 shares of Preferred Stock, $1.00 par value. With respect to the Common Stock, 27,221,115 shares
were issued and outstanding; 8,000,000 Preferred Shares were originally issued and 7,604,687 were outstanding
on December 31, 2016.
1 6
N O T E S T O F I N A N C I A L S T A T E M E N T S - c o n t i n u e d
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e
d
‘
b
b
‘
‘
l
_
_
_
g
i
_
a
a
j
a
j
h
c
f
k
5. CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS - (Continued from previous page.)
On September 24, 2003, the Company issued and sold 8,000,000 shares of its 5.95% Cumulative Preferred Stock,
Series B in an underwritten offering. The Preferred Shares were noncallable for the 5 year period ended September
24, 2008 and have a liquidation preference of $25.00 per share plus accumulated and unpaid dividends to the date of
redemption.
On December 10, 2008, the Board of Directors authorized the repurchase of up to 1 million Preferred Shares in the
open market at prices below $25.00 per share. This authorization has been renewed annually thereafter. To date,
395,313 shares have been repurchased.
The Company allocates distributions from net capital gains and other types of income proportionately among hold-
ers of shares of Common Stock and Preferred Stock. To the extent that dividends on the shares of Preferred Stock are
not paid from net capital gains, they will be paid from investment company taxable income, or will represent a return
of capital.
Under the Investment Company Act of 1940, the Company is required to maintain an asset coverage of at least
200% of the Preferred Stock. In addition, pursuant to Moody’s Investor Service, Inc. Rating Agency Guidelines, the
Company is required to maintain a certain discounted asset coverage for its portfolio that equals or exceeds a Basic
Maintenance Amount. If the Company fails to meet these requirements in the future and does not cure such failure,
the Company may be required to redeem, in whole or in part, shares of Preferred Stock at a redemption price of $25.00
per share plus accumulated and unpaid dividends. In addition, failure to meet the foregoing asset coverage require-
ments could restrict the Company’s ability to pay dividends on shares of Common Stock and could lead to sales of
portfolio securities at inopportune times.
The holders of Preferred Stock have voting rights equivalent to those of the holders of Common Stock (one vote per
share) and, generally, vote together with the holders of Common Stock as a single class.
Holders of Preferred Stock will elect two members to the Company’s Board of Directors and the holders of Preferred
and Common Stock, voting as a single class, will elect the remaining directors. If the Company fails to pay dividends
on the Preferred Stock in an amount equal to two full years’ dividends, the holders of Preferred Stock will have the
right to elect a majority of the directors. In addition, the Investment Company Act of 1940 requires that approval of
the holders of a majority of any outstanding Preferred Shares, voting separately as a class, would be required to (a)
adopt any plan of reorganization that would adversely affect the Preferred Stock and (b) take any action requiring a
vote of security holders, including, among other things, changes in the Company’s subclassification as a closed-end
investment company or changes in its fundamental investment policies.
The Company presents its Preferred Stock, for which its redemption is outside of the Company’s control, outside of
the net assets applicable to Common Stock in the Statement of Assets and Liabilities.
Transactions in Common Stock during 2016 and 2015 were as follows:
SHARES
AMOUNT
2016
2015
2016
2015
Par Value of Shares issued in payment of
dividends and distributions (includes
1,073,658 and 439,217 shares issued
from treasury, respectively)
Increase in paid-in capital
Total increase
Par Value of Shares purchased (at an average
discount from net asset value of
17.7% and 15.5%, respectively)
Decrease in paid-in capital
Total decrease
Net decrease
1,073,658
439,217
$1,073,658
32,612,362
33,686,020
$439,217
13,093,059
13,532,276
(2,149,240) (3,014,364)
(1,075,582) (2,575,147)
(2,149,240)
(65,842,479)
(67,991,719)
($34,305,699)
(3,014,364)
(98,660,515)
(101,674,879)
($88,142,603)
At December 31, 2016, the Company held in its treasury 4,759,757 shares of Common Stock with an aggregate cost
of $155,663,978.
The tax basis distributions during the year ended December 31, 2016 are as follows: ordinary distributions of
$10,028,323 and net capital gains distributions of $86,205,419. As of December 31, 2016, distributable earnings on a
tax basis included $10,571,042 from undistributed net capital gains and $513,728,459 from net unrealized appreciation
on investments if realized in future years. Reclassifications arising from permanent “book/tax” difference reflect non-
tax deductible expenses during the year ended December 31, 2016. As a result, additional paid-in capital was decreased
by $1,741 and over-distributed net investment income was decreased by $1,741. Net assets were not affected by this
reclassification.
6. OFFICERS’ COMPENSATION
The aggregate compensation accrued and paid by the Company during the year ended December 31, 2016 to its offi-
cers (identified on page 20) amounted to $6,684,000 of which $2,944,000 was payable as of year end.
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7. BENEFIT PLANS
The Company has funded (qualified) and unfunded (supplemental) defined contribution thrift plans that are avail-
able to its employees. The aggregate cost of such plans for 2016 was $560,078. The qualified thrift plan acquired 76,611
shares and distributed 35,643 shares of the Company’s Common Stock during the year ended December 31, 2016. It held
617,905 shares of the Company’s Common Stock at December 31, 2016.
The Company also has both funded (qualified) and unfunded (supplemental) noncontributory defined benefit pen-
sion plans that cover its employees. The pension plans provide a defined benefit based on years of service and final aver-
age salary with an offset for a portion of Social Security covered compensation. The investment policy of the pension
plan is to invest not less than 80% of its assets, under ordinary conditions, in equity securities and the balance in fixed
income securities. The investment strategy is to invest in a portfolio of diversified registered investment funds (open-end
and exchange traded) and an unregistered partnership. Open-end funds and the unregistered partnership are valued at
net asset value based upon the fair market value of the underlying investment portfolios. Exchange traded funds are val-
ued based upon their closing market price.
The Company recognizes the overfunded or underfunded status of a defined benefit postretirement plan as an asset
or liability in the Statement of Assets and Liabilities and recognizes changes in funded status in the year in which the
changes occur through other comprehensive income.
OBLIGATIONS AND FUNDED STATUS OF DEFINED BENEFIT PLANS:
DECEMBER 31, 2016 (MEASUREMENT DATE)
CHANGE IN BENEFIT OBLIGATION:
Benefit obligation at beginning of year
Service cost
Interest cost
Benefits paid
Actuarial (gain)/loss
Projected benefit obligation at end of year
CHANGE IN PLAN ASSETS:
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Benefits paid
Fair value of plan assets at end of year
FUNDED STATUS AT END OF YEAR
QUALIFIED SUPPLEMENTAL
PLAN
PLAN
TOTAL
$16,345,940
402,507
701,608
(847,857)
214,912
16,817,110
$5,605,494
155,095
236,627
(320,320)
(167,952)
5,508,944
$21,951,434
557,602
938,235
(1,168,177)
46,960
22,326,054
18,341,451
1,726,829
—
(847,857)
19,220,423
$2,403,313
—
—
320,320
(320,320)
—
($5,508,944)
18,341,451
1,726,829
320,320
(1,168,177)
19,220,423
($3,105,631)
Accumulated benefit obligation at end of year
$15,962,685
$5,208,726
$21,171,411
WEIGHTED-AVERAGE ASSUMPTIONS USED TO DETERMINE OBLIGATION AT YEAR END:
Discount rate
Salary scale assumption
Mortality
CHANGE IN FUNDED STATUS:
Noncurrent benefit asset - qualified plan
LIABILITIES:
Current benefit liability - supplemental plan
Noncurrent benefit liability - supplemental plan
4.00%
4.00%
4.50% for NHCE* and 2.75% for HCE*
RP-2014 Mortality Table scaled back through 2006/
MP-2016 Projection Scale
without collar adjustment
BEFORE ADJUSTMENTS
AFTER
$1,995,511
$407,802
$2,403,313
($311,579)
(5,293,915)
$4,034
92,516
($307,545)
(5,201,399)
AMOUNTS RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE INCOME CONSIST OF:
Net actuarial (gain)/loss
Prior service cost
ACCUMULATED OTHER COMPREHENSIVE INCOME
$5,228,243
19,627
$5,247,870
($606,615)
(17,804)
($624,419)
$4,621,628
1,823
$4,623,451
WEIGHTED-AVERAGE ASSUMPTIONS TO DETERMINE NET PERIODIC BENEFIT COST DURING YEAR:
Discount rate
Expected return on plan assets**
4.25%
7.50%
4.25%
4.25%
N/A
4.25%
Salary scale assumption
Mortality
RP-2014 Mortality Table scaled back through 2006/
MP-2015 Projection Scale
without collar adjustment
*NHCE - Non-Highly Compensated Employee; HCE - Hightly Compensated Employee.
**Determined based upon a discount to the long-term average historical performance of the plan.
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7. BENEFIT PLANS - (Continued from previous page.)
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service cost
Interest cost
Expected return on plan assets
Amortization of:
Prior service cost
Recognized net actuarial loss
Net periodic benefit cost
QUALIFIED SUPPLEMENTAL
PLAN
PLAN
TOTAL
$402,507
701,608
(1,359,683)
17,161
274,828
$36,421
$155,095
236,627
—
643
76,182
$468,547
$557,602
938,235
(1,359,683)
17,804
351,010
$504,968
PLAN ASSETS
The Company’s qualified pension plan asset allocation by asset class at December 31, 2016, is as follows:
ASSET CATEGORY
Equity securities
Limited partnership interest
Money market fund
Total
LEVEL 2
—
$2,847,927
—
$2,847,927
LEVEL 3
—
—
—
—
LEVEL 1
$14,883,401
—
1,489,095
$16,372,496
TOTAL
$14,883,401
2,847,927
1,489,095
$19,220,423
EXPECTED CASH FLOWS
Expected Company contributions for 2016
Expected benefit payments:
2017
2018
2019
2020
2021
2022-2026
QUALIFIED PLAN
—
$881,639
906,441
923,816
935,619
942,530
5,070,408
SUPPLEMENTAL PLAN
$307,545
$307,545
302,594
296,755
285,221
273,537
1,520,358
TOTAL
$307,545
$1,189,184
1,209,035
1,220,571
1,220,840
1,216,067
6,590,766
The estimated amount that will be amortized from accumulated other comprehensive income into net periodic benefit cost in
2017 is $201,184 which is comprised of $200,227 of actuarial loss and $957 of service cost.
8. OPERATING LEASE COMMITMENT
In September 2007, the Company entered into an operating lease agreement for office space which expires in February
2018 and provided for aggregate rental payments of approximately $10,755,000, net of construction credits. The lease
agreement contains clauses whereby the Company receives free rent for a specified number of months and credit towards
construction of office improvements, and incurs escalations annually relating to operating costs and real property taxes
and to annual rent charges beginning in February 2013. The Company has the option to renew the lease after February
2018 for five years at market rates. Rental expense approximated $1,166,000 for the year ended December 31, 2016.
Minimum rental commitments under the operating lease are approximately $1,183,000 per annum in 2017, and $99,000
in 2018.
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TO THE BOARD OF DIRECTORS
AND STOCKHOLDERS OF
GENERAL AMERICAN INVESTORS COMPANY, INC.
We have audited the accompanying statement of assets and liabilities, including the state-
ments of investments and options written, of General American Investors Company, Inc. (the
“Company”) as of December 31, 2016, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the five years in the period then ended. These finan-
cial state ments and financial highlights are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial state ments and financial high-
lights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and per-
form the audit to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. We were not engaged to perform an
audit of the Company’s internal control over financial reporting. Our audits included con-
sideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectivness of the Company’s internal control over financial reporting. Accordingly, we
express no such opinion. An audit includes examining, on a test basis, evi dence supporting
the amounts and disclosures in the financial statements. Our procedures included confirma-
tion of securities owned as of December 31, 2016, by correspon dence with the custodian and
brokers. An audit also includes assessing the accounting principles used and significant esti-
mates made by management, as well as evaluating the overall financial statement presenta-
tion. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present
fairly, in all material respects, the financial position of General American Investors Company,
Inc. at December 31, 2016, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the financial highlights
for each of the five years in the period then ended, in conformity with U.S. generally accepted
accounting principles.
New York, New York
February 13, 2017
2 0
O F F I C E R S
G e n e r a l A m e r i c a n I n v e s t o r s
NAME (AGE)
EMPLOYEE SINCE
Jeffrey W. Priest (54)
2010
PRINCIPAL OCCUPATION
DURING PAST 5 YEARS
President of the Company
since 2012 and Chief Executive
Officer since 2013
NAME (AGE)
EMPLOYEE SINCE
Sally A. Lynch, Ph.D. (57)
1997
Andrew V. Vindigni (57) Senior Vice-President of the
1988
Company since 2006,
Vice-President 1995-2006
securities analyst (financial
services and consumer
non-durables industries)
Eugene S. Stark (58)
2005
Craig A. Grassi (48)
1991
Vice-President, Administration
of the Company and
Principal Financial Officer
since 2005, Chief Compliance
Officer since 2006
Vice-President of the Company
since 2013, Assistant Vice-
President 2005-2012
securities analyst and
information technology
Anang K. Majmudar (42)
2012
Diane G. Radosti (64)
1980
Linda J. Genid (58)
1983
PRINCIPAL OCCUPATION
DURING PAST 5 YEARS
Vice-President of the
Company since 2006,
securities analyst
(biotechnology industry)
Vice-President of the
Company since 2015,
securities analyst
(general industries)
Treasurer of the Company
since 1990,
Principal Accounting
Officer since 2003
Corporate Secretary of the
Company effective 2016,
Assistant Corporate
Secretary 2014-2015,
network administrator
All Officers serve for a term of one year and are elected by the Board of Directors at the time of its annual meeting in April.
The address for each officer is the Company’s office. All information is as of December 31, 2016.
S E R V I C E O R G A N I Z A T I O N S
COUNSEL
Sullivan & Cromwell LLP
INDEPENDENT AUDITORS
Ernst & Young LLP
CUSTODIAN
State Street Bank and
Trust Company
TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
1-800-413-5499
www.amstock.com
Previous purchases of the Company’s Common and Preferred Stock are set forth in Note 5, on pages 15 and 16.
Prospective purchases of Common and Preferred Stock may be made at such times, at such prices, in such amounts
and in such manner as the Board of Directors may deem advisable.
The policies and procedures used by the Company to determine how to vote proxies relating to portfolio securities
and the Company’s proxy voting record for the twelve-month period ended June 30, 2016 are available: (1) without
charge, upon request, by calling us at our toll-free telephone number (1-800-436-8401), (2) on the Company’s website
at www.generalamericaninvestors.com and (3) on the Securities and Exchange Commission’s website at www.sec.gov.
In addition to distributing financial statements as of the end of each quarter, General American Investors files a
Quarterly Schedule of Portfolio Holdings (Form N-Q) with the Securities and Exchange Commission (“SEC”) as of
the end of the first and third calendar quarters. The Company’s Forms N-Q are available at www.generalamerican-
investors.com and on the SEC’s website: www.sec.gov. Copies of Forms N-Q may also be obtained and reviewed
at the SEC’s Public Reference Room in Washington, DC. or through the Company by calling us at 1-800-436-8401.
Information on the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330.
On April 15, 2016, the Company submitted a CEO annual certification to the New York Stock Exchange (“NYSE”) on
which the Company’s principal executive officer certified that he was not aware, as of that date, of any violation by
the Company of the NYSE’s Corporate Governance listing standards. In addition, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and related SEC rules, the Company’s principal executive and principal financial officer
made quarterly certifications, included in filings with the SEC on Forms N-CSR and N-Q relating to, among other
things, the Company’s disclosure controls and procedures and internal control over financial reporting, as applicable.
D I R E C T O R S
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NAME (AGE)
DIRECTOR SINCE
PRINCIPAL OCCUPATION
DURING PAST 5 YEARS
INDEPENDENT DIRECTORS
Arthur G. Altschul, Jr. (52)
1995
Founder and Managing Member
Diaz & Altschul Capital
Management, LLC
(private investment company)
Chairman
Overbrook Management Corporation
(investment advisory firm)
Co-Founder and Chairman
Kolltan Pharmaceuticals, Inc.
(pharmaceuticals) (until Nov 2016)
CURRENT DIRECTORSHIPS AND AFFILIATIONS
Child Mind Institute, Director
Delta Opportunity Fund, Ltd., Director
Neurosciences Research Foundation, Trustee
Overbrook Foundation, Director
Rodney B. Berens (71)
2007
Founder, Chairman and Senior Investment Svarog Capital Advisors, Member of Investment Committee
Strategist
Berens Capital Management, LLC
(investment advisory firm)
The Morgan Library and Museum, Life Trustee, Chairman of
Investment Sub-Committee and Member of Finance, Compensation
and Nomination Committees
The Woods Hole Oceanographic Institute, Trustee and Member of
Investment Committee
Lewis B. Cullman (98)
Philanthropist
1961
Spencer Davidson (74)
1995
John D. Gordan, III (71)
1986
Chairman of the Board
President and Chief Executive
Officer (1995-2012) of Company
Attorney
Beazley USA Services, Inc.
(insurance)
Senior Counsel (2010-2011)
Partner (1994-2010) (Retired)
Morgan, Lewis & Bockius LLP
(law firm)
Betsy F. Gotbaum (78)
2010
Consultant
Sidney R. Knafel (86)
1994
Daniel M. Neidich (67)
2007
Henry R. Schirmer (52)
2015
Lead Independent Director of Company
Managing Partner
SRK Management Company
(private investment company)
Chief Executive Officer
Dune Real Estate Partners LP
(real estate investment firm)
Chief Financial Officer/Executive
Vice-President
Unilever Europe (April 2016)
Chief Financial Officer/Senior
Vice-President Finance
Unilever North America (2012-2016)
Chief Financial Officer/Senior
Vice-President Finance
Unilever Germany/Austria/
Switzerland (2008-2012)
(consumer products)
Chess-in-the-Schools, Chairman Emeritus
Metropolitan Museum of Art, Honorary Trustee
Museum of Modern Art, Vice Chairman, International Council and
Honorary Trustee
The New York Botanical Garden, Senior Vice Chairman, Board of
Trustees
The New York Public Library, Trustee
Neurosciences Research Foundation, Trustee
Chess-in-the-Schools, Board of Advisors
Community Service Society, Trustee
Coro Leadership, Director
Fisher Center for Alzheimer’s Research Foundation, Trustee
Learning Leaders, Trustee
Visiting Nurse Service of New York, Director
Child Mind Institute, Director
Prep for Prep, Director
Real Estate Roundtable, Member (formerly Chairman)
Urban Land Institute, Trustee
Results for Development Institute, Director
Raymond S. Troubh (90)
Financial Consultant
Diamond Offshore Drilling, Inc., Director
1989
INTERESTED DIRECTOR
Jeffrey W. Priest (54)
2013
President (2012) and
Chief Executive Officer
(2013) of Company
The Company is a stand-alone fund. All Directors serve for a term of one year and are elected by Stockholders at the time of the annual
meeting. The address for each Director is the Company’s office. All information is as of December 31, 2016.
General American Investors Company, Inc.
100 Park Avenue, New York, NY 10017
(212) 916-8400 (800) 436-8401
E-mail: InvestorRelations@gainv.com
www.generalamericaninvestors.com