UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                                 SCHEDULE 14A

                                (RULE 14a-101)

                    INFORMATION REQUIRED IN PROXY STATEMENT

                           SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
                             (AMENDMENT NO. _____)

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[ ]  Confidential, for Use of the Commission Only (as permitted by
     Rule 14a-6(e)(2))

[X]  Definitive Proxy Statement

[ ]  Definitive Additional Materials

[ ]  Soliciting Materials Pursuant to Rule 14a-12


                             EMERSON ELECTRIC CO.
--------------------------------------------------------------------------------
               (Name of Registrant as Specified in Its Charter)


--------------------------------------------------------------------------------
   (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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                           NOTICE OF ANNUAL MEETING
                               OF STOCKHOLDERS

                                [Emerson logo]
                                                           St. Louis, Missouri
                                                             December 14, 2007
TO THE STOCKHOLDERS OF
  EMERSON ELECTRIC CO.:

The Annual Meeting of the Stockholders of Emerson Electric Co. will be held at
the office of the Company, 8000 West Florissant Avenue, St. Louis, Missouri
63136 on Tuesday, February 5, 2008, commencing at 10:00 a.m., at which meeting
only holders of the common stock of record at the close of business on
November 27, 2007 will be entitled to vote, for the following purposes:

        1. To elect four Directors;

        2. To ratify the appointment of KPMG LLP as our independent registered
           public accounting firm; and

        3. To transact such other and further business, if any, as lawfully
           may be brought before the meeting.

                                   EMERSON ELECTRIC CO.


                                   By /s/ David N. Farr
                                      Chairman of the Board,
                                      Chief Executive Officer and
                                      President

/s/ Frank L. Steeves

Secretary

EVEN THOUGH YOU MAY PLAN TO ATTEND THE MEETING IN PERSON, PLEASE VOTE BY
TELEPHONE OR THE INTERNET, OR EXECUTE THE ENCLOSED PROXY CARD AND MAIL IT
PROMPTLY. A RETURN ENVELOPE (WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES) IS ENCLOSED FOR YOUR CONVENIENCE. TELEPHONE AND INTERNET VOTING
INFORMATION IS PROVIDED ON YOUR PROXY CARD. SHOULD YOU ATTEND THE MEETING IN
PERSON, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.

                                  IMPORTANT

PLEASE NOTE THAT A TICKET IS REQUIRED FOR ADMISSION TO THE MEETING. IF YOU
PLAN TO ATTEND IN PERSON AND ARE A STOCKHOLDER OF RECORD, PLEASE CHECK THE BOX
ON YOUR PROXY CARD AND BRING THE TEAR-OFF ADMISSION TICKET WITH YOU TO THE
MEETING. IF YOUR SHARES ARE HELD BY SOMEONE ELSE (SUCH AS A BROKER) PLEASE
BRING WITH YOU A LETTER FROM THAT FIRM OR AN ACCOUNT STATEMENT SHOWING YOU
WERE A BENEFICIAL HOLDER ON NOVEMBER 27, 2007.




                             EMERSON ELECTRIC CO.

            8000 WEST FLORISSANT AVENUE, ST. LOUIS, MISSOURI 63136

                               PROXY STATEMENT

        FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD FEBRUARY 5, 2008

This proxy statement is furnished to the stockholders of Emerson Electric Co.
in connection with the solicitation of proxies for use at the Annual Meeting
of Stockholders to be held at 10:00 a.m. on February 5, 2008 at the office of
the Company, 8000 West Florissant Avenue, St. Louis, Missouri 63136 and at all
adjournments thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders. This proxy statement and the enclosed form of
proxy are first being mailed to stockholders on or about December 14, 2007.

If you plan to attend and have a disability which requires accommodation at
the meeting, please call 314-553-2197; requests must be received by January
17, 2008.

STOCKHOLDERS CAN SIMPLIFY THEIR VOTING AND SAVE EMERSON EXPENSE BY VOTING BY
TELEPHONE OR BY INTERNET. Telephone and Internet voting information is
provided on your proxy card. A Control Number, located on the proxy card, is
designed to verify your identity and allow you to vote your shares and confirm
that your voting instructions have been properly recorded.

IF YOU VOTE BY TELEPHONE OR INTERNET, YOU NEED NOT MAIL BACK YOUR PROXY CARD.

If your shares are held in the name of a bank or broker, follow the voting
instructions on the form you receive from that firm. The availability of
telephone or Internet voting will depend on that firm's voting processes.

If you choose not to vote by telephone or Internet, please return your proxy
card, properly signed, and the shares represented will be voted in accordance
with your directions. You can specify your choices by marking the appropriate
boxes on the proxy card. If your proxy card is signed and returned without
specifying choices, the shares will be voted FOR the nominees for Director in
Proposal 1, FOR the ratification of the appointment of KPMG LLP as our
independent registered public accounting firm in Proposal 2, and otherwise in
the discretion of the proxies. The Company knows of no reason why any of the
nominees for Director named herein would be unable to serve. In the event,
however, that any nominee named should, prior to the election, become unable
to serve as a Director, your proxy (unless designated to the contrary) will be
voted for such other person or persons as the Board of Directors of the
Company may recommend.

You may revoke your proxy at any time before it is voted (in the case of proxy
cards) by giving notice to the Secretary of the Company or by executing and
mailing a later-dated proxy. To revoke a proxy given, or change your vote
cast, by telephone or Internet, you must do so by telephone or Internet,
respectively (following the directions on your proxy card), by 11:59 p.m.
Eastern time on February 4, 2008.

The close of business on November 27, 2007 was fixed by the Board of Directors
as the record date for the determination of stockholders entitled to vote at
the Annual Meeting of Stockholders. As of the record date, there were
outstanding and entitled to be voted at such meeting 788,882,508 shares of our
common stock, par value $0.50 per share. The holders of the common stock will
be entitled on each matter to one vote for each share of common stock held of
record on the record date. There is no cumulative voting with respect to the
election of Directors.

A copy of the Company's Annual Report to Stockholders for the fiscal year
ended September 30, 2007 accompanies this proxy statement.

This proxy is solicited by the Board of Directors of the Company. The
solicitation will be by mail and the expense thereof will be paid by the
Company. The Company has retained Morrow & Co., Inc. to assist in the
solicitation of proxies at an estimated cost of $8,000 plus expenses. In
addition, solicitation of proxies may be made by telephone or electronic mail
by Directors, officers or regular employees of the Company.

                                      2





I. ELECTION OF DIRECTORS
------------------------

NOMINEES AND CONTINUING DIRECTORS
---------------------------------
The Board of Directors is divided into three classes, with the terms of office
of each class ending in successive years. Four Directors of the Company are to
be elected for terms ending at the Annual Meeting in 2011, or until their
respective successors have been elected and have qualified. Certain
information with respect to the nominees for election as Directors proposed by
the Company, as well as the other Directors whose terms of office as Directors
will continue after the Annual Meeting, is set forth below.



                                                                                        SHARES OF
                                                                                         EMERSON
                                                                  SERVED AS           COMMON STOCK
              NAME, AGE, PRINCIPAL OCCUPATION                     DIRECTOR            BENEFICIALLY
              OR POSITION, OTHER DIRECTORSHIPS                      SINCE           OWNED(1)(2)(3)(4)
              --------------------------------                    ---------         -----------------
                                                                              
NOMINEES FOR TERMS ENDING IN 2011

D. N. Farr, 52..............................................        2000                1,677,169(5)
  Chairman of the Board, Chief Executive Officer and
     President of Emerson

  He is also a Director of Delphi Corp.

R. B. Horton, 68............................................        1987                   26,153
  Retired Chairman of BP p.l.c. and Railtrack Group PLC and
     Former Chairman of Chubb plc and The Sporting Exchange,
     Ltd.

C. A. Peters, 52............................................        2000                  634,722
  Senior Executive Vice President of Emerson

J. W. Prueher, 65...........................................        2001                   14,335
  Admiral, U.S. Navy (Retired), and Former U.S. Ambassador
     to The People's Republic of China

  He is also a Director of Merrill Lynch & Company, Inc.,
     The New York Life Insurance Company, Dyncorp
     International, Inc. and Fluor Corporation

TO CONTINUE IN OFFICE UNTIL 2010

C. Fernandez G., 41.........................................        2001                   33,309
  Chairman and Chief Executive Officer of Grupo Modelo,
     S.A.B. de C. V., brewery holding company

  He is also a Director of Anheuser-Busch Companies, Inc.
     and Grupo Televisa, S.A.B.

W. J. Galvin, 61............................................        2000                  802,474(5)
  Senior Executive Vice President and Chief Financial
     Officer of Emerson

R. L. Ridgway, 72...........................................        1995                   23,349
  Former Assistant Secretary of State for Europe and Canada

  She is also a Director of The Boeing Company, Manpower,
     Inc., Sara Lee Corporation and 3M Company and is a
     Director of three funds in the American Funds complex
     of mutual funds

R. L. Stephenson, 47........................................        2006                    3,727
  Chairman and Chief Executive Officer of AT&T Inc.,
     telecommunications provider

  He is also a Director of AT&T Inc.

                                      3






                                                                                        SHARES OF
                                                                                         EMERSON
                                                                  SERVED AS           COMMON STOCK
              NAME, AGE, PRINCIPAL OCCUPATION                     DIRECTOR            BENEFICIALLY
              OR POSITION, OTHER DIRECTORSHIPS                      SINCE           OWNED(1)(2)(3)(4)
              --------------------------------                    ---------         -----------------
                                                                              
TO CONTINUE IN OFFICE UNTIL 2009

A. A. Busch III, 70.........................................        1985                   68,329(5)
  Director and Former Chairman of the Board of
     Anheuser-Busch Companies, Inc., brewery, container
     manufacturer and theme park operator

  He is also a Director of AT&T Inc.

A. F. Golden, 61............................................        2000                   20,225
  Partner of Davis Polk & Wardwell, lawyers

V. R. Loucks, Jr., 73.......................................        1979(6)                28,429(7)
  Chairman of the Board of The Aethena Group, LLC, a
     health-care merchant banking firm

  He is also a Director of Affymetrix, Inc., Edwards
     Lifesciences Corporation, Anheuser-Busch Companies,
     Inc. and Pain Therapeutics, Inc.

J. B. Menzer, 56............................................        2002                   13,861
  Vice Chairman and Chief Administrative Officer of Wal-Mart
     Stores, Inc., global retailer

All Directors and Executive Officers as a Group
  (18 persons)..............................................                            4,158,742(8)(9)

-------
(1) Balances reflect the effect of a 2-for-1 stock split effected in the form
    of a 100 percent stock dividend which was paid on December 11, 2006.

(2) Beneficial ownership of Emerson common stock is stated as of September 15,
    2007, except in the cases of Mr. Galvin, for whom ownership is stated as
    of September 19, 2007, and one other executive officer of the Company, for
    whom shares are stated as of September 27, 2007, both of whom exercised
    stock options after September 15 but prior to the end of the Company's
    fiscal year. Under rules of the Securities and Exchange Commission
    ("SEC"), persons who have power to vote or dispose of securities, either
    alone or jointly with others, are deemed to be the beneficial owners of
    such securities. Each person reflected in the table has both sole voting
    power and sole investment power with respect to the shares included in the
    table, except as described in the footnotes below and except for the
    following shares of restricted stock over which the person named has no
    investment power: Mr. Farr-470,000; Mr. Galvin-150,000; Mr. Edward L.
    Monser, Chief Operating Officer (who is an executive officer of the
    Company named in the Summary Compensation Table)-60,000; Mr.
    Peters-100,000; Mr. W. Wayne Withers, Executive Vice President and Special
    Legal Advisor and former Secretary and General Counsel (who is also an
    executive officer of the Company named in the Summary Compensation
    Table)-70,000; Mr. Fernandez-13,229; Mr. Golden-13,617; Mr. Menzer-9,861;
    Adm. Prueher-12,429; Mr. Stephenson-3,727; each other non-management
    Director (including Mr. D. C. Farrell who was a Director as of September
    15, 2007, but is not standing for re-election)-21,129; and all Directors
    and executive officers as a group-1,068,508 shares.

(3) Includes the following shares which such persons have or will have within
    60 days after September 15, 2007 the right to acquire upon the exercise of
    employee stock options: Mr. Farr-870,000; Mr. Galvin-436,244; Mr.
    Monser-165,000; Mr. Peters-320,000; and Mr. Withers-180,536. In computing
    the number of shares beneficially owned by a person, shares of common
    stock subject to options held by that person that are currently
    exercisable or that are exercisable within 60 days after September 15,
    2007 are deemed to be outstanding. Such shares, however, are not deemed
    outstanding for the purposes of counting the percentage ownership of each
    other person.

                                      4





(4) No person reflected in the table owns more than 0.5% of the outstanding
    shares of Emerson common stock. To the Company's knowledge, no person or
    group beneficially owns more than 5% of the Company's common stock.

(5) Includes 95,194 shares held by the spouse and/or children of Mr. Farr.
    Includes 1,860 shares held in the Emerson Directors' and Officers'
    Charitable Trust over which Mr. Farr exercises investment power but has no
    financial interest. Includes 86,730 shares held by or in trust for the
    spouse and/or children of Mr. Galvin, of which Mr. Galvin disclaims
    beneficial ownership as to 9,678 shares. Includes 59,988 shares held by
    the Galvin Family Partnership, of which Mr. Galvin's spouse is the general
    partner. Includes 1,200 shares held by Mr. Busch as co-trustee of a trust,
    as to which Mr. Busch shares voting and investment power and disclaims
    beneficial ownership.

(6) Mr. Loucks previously served as a Director from April 1974 to December
    1975.

(7) Includes 2,400 shares pledged as collateral for a loan.

(8) Includes 2,050,780 shares of common stock which executive officers have,
    or will have within 60 days after September 15, 2007, the right to acquire
    upon exercise of employee stock options. Shares owned as a group represent
    0.53% of the outstanding common stock of the Company. The shares issuable
    upon exercise of options were deemed to be outstanding for purposes of
    calculating the percentage of outstanding shares. Such shares, however,
    are not deemed outstanding for the purposes of counting the ownership of
    other persons.

(9) The total includes shares owned by E. L. Monser and W. W. Withers, the
    only executive officers of the Company named in the Summary Compensation
    Table not otherwise shown individually in this table, and shares owned by
    D. C. Farrell, who was a Director on September 15, 2007 but is not
    standing for re-election pursuant to the requirement in the Company's
    Bylaws that an individual may not stand for election or re-election as a
    Director after the age of 72. Mr. Monser beneficially owned 274,626
    shares. Mr. Withers beneficially owned 294,481 shares. Mr. Farrell
    beneficially owned 48,750 shares. Also includes 194,803 shares
    beneficially owned by three other executive officers of the Company, of
    which 60,000 shares are shares of common stock over which two of the other
    executive officers have no investment power, 79,000 are shares of common
    stock which two of the other executive officers have, or will have within
    60 days after September 15, 2007, the right to acquire upon exercise of
    employee stock options, and 900 shares held by one of the other executive
    officers in the Emerson Directors' and Officers' Charitable Trust over
    which the executive officer exercises investment power but has no
    financial interest.


Each of the nominees and continuing Directors has had the same position or
other executive positions with the same employer during the past five years,
except as follows:

    * Sir Robert Horton retired as Chairman of Railtrack Group PLC in July,
      1999. He was named Deputy Chairman of Chubb plc in September, 2002 and
      Chairman in December, 2002 (both are non-executive positions), and
      served as Chairman of Chubb plc, which was acquired by United
      Technologies Corp., until November, 2003. He was appointed Chairman of
      The Sporting Exchange, Ltd. in March, 2004 and Executive Chairman in
      November, 2005. He resigned from The Sporting Exchange in January, 2006.

    * Mr. Loucks also served as Chief Executive Officer of Segway LLC from
      January, 2003 to November, 2003 and is the retired Chairman and Chief
      Executive Officer of Baxter International, Inc.

    * Admiral Prueher served as Ambassador to the People's Republic of China
      from November, 1999 to May, 2001. Prior to that time he served as a
      Consulting Professor and Senior Advisor to the Stanford-Harvard
      Preventive Defense Program and a Senior Fellow at the Center for Naval
      Analysis. Admiral Prueher completed 35 years of service in the United
      States Navy in May, 1999, and was Commander-in-Chief of the U.S. Pacific
      Command from 1996 until his retirement.

    * Mr. Farr was additionally elected as President of Emerson on November 1,
      2005.

    * Mr. Menzer served as Executive Vice President of Wal-Mart Stores, Inc.
      and President and Chief Executive Officer of Wal-Mart International from
      1999 to 2005, as Vice Chairman of Wal-Mart Stores, Inc. since September,
      2005, and assumed the responsibilities of Chief Administrative Officer
      in March, 2007.

                                      5





    * Prior to becoming Chairman and Chief Executive Officer of AT&T Inc. in
      June, 2007, Mr. Stephenson served as Chief Operating Officer of AT&T
      Inc. from November, 2005 to June, 2007, as Chief Operating Officer of
      SBC Communications Inc. from April, 2004 to November, 2005 and as Senior
      Executive Vice President and Chief Financial Officer of SBC from August,
      2001 to April, 2004. SBC Communications Inc. acquired AT&T in November,
      2005.

CORPORATE GOVERNANCE
--------------------

The Company's Corporate Governance Principles and Practices and the charters
of all Board Committees are available on the Company's Web site at
www.emerson.com, Investor Relations, Corporate Governance. The foregoing
documents are available in print to stockholders upon written request
delivered to Emerson Electric Co., 8000 West Florissant Avenue, St. Louis,
Missouri 63136, Attn: Secretary.

There were eleven meetings of the Board of Directors during fiscal 2007. All
of the Directors attended at least 75% of the meetings of the Board and
committees on which they served. Directors are strongly encouraged to attend
the Annual Meeting of Stockholders unless extenuating circumstances prevent
them from attending, although the Company has no formal, written policy
requiring such attendance. In 2007, all Directors attended the Annual Meeting
of Stockholders.

The Board of Directors has appointed a Discussion Leader who chairs regularly
scheduled meetings of non-management Directors, as provided in the Company's
Corporate Governance Principles and Practices. The Discussion Leader position
rotates annually among the Chairs of each of the independent Board Committees.
Stockholders and other interested persons may contact the Discussion Leader in
writing c/o Emerson Electric Co., 8000 West Florissant Avenue, St. Louis,
Missouri 63136, Attn: Secretary. All such letters will be forwarded promptly
to the Discussion Leader.

Stockholders may communicate with any of our Directors by sending a letter to
the Director, c/o Emerson Electric Co., 8000 West Florissant Avenue, St.
Louis, Missouri 63136, Attn: Secretary. All such letters will be forwarded
promptly to the relevant Director.

DIRECTOR INDEPENDENCE
---------------------

The Board of Directors has determined that the following of its members are
independent, as that term is defined under the general independence standards
in the listing standards of the New York Stock Exchange: A. A. Busch III,
D. C. Farrell, C. Fernandez G., A. F. Golden, R. B. Horton, V. R. Loucks, Jr.,
J. B. Menzer, J. W. Prueher, R. L. Ridgway and R. L. Stephenson. Mr. Farrell
will not be standing for re-election in accordance with the requirement in the
Company's Bylaws that an individual may not stand for election or re-election
as a Director after the age of 72. G. A. Lodge retired from the Board of
Directors at the 2007 Annual Meeting. During his term on the Board, Mr. Lodge
was determined to be an independent Director. Further, the Board has adopted
its own categorical standards to assist it in making determinations of
Director independence. All Directors identified as independent in this proxy
statement meet these standards; a copy of these standards is attached as
Appendix A and is available on the Company's Web site at www.emerson.com,
Investor Relations, Corporate Governance.

In the course of the Board's determination regarding independence of each
non-management Director, it considered any transactions, relationships and
arrangements as required by the Company's independence standards. In
particular, with respect to each of the three most recently completed fiscal
years, the Board considered for:

    * Each of Messrs. Fernandez, Menzer and Stephenson, the annual amount of
      sales to Emerson by the company which he serves as an executive officer,
      and purchases by that company from Emerson, and determined that the
      amount of such sales and the amount of such purchases in each fiscal
      year were less than two percent of the annual revenues of each of those
      companies.

    * Mr. Busch, the annual amount of sales to Emerson by the company which
      one of his immediate family members serves as an executive officer, and
      purchases by that company from Emerson, and determined that the amount
      of such sales and the amount of such purchases in each fiscal year were
      less than two percent of the annual revenues of such company.

                                      6





    * Mr. Golden, the annual amount paid by Emerson to the law firm of which
      he is a partner and determined that the total amount of such payments in
      each fiscal year were less than 1% of the annual revenues of that law
      firm.

    * Messrs. Busch, Farrell, Fernandez, Golden, Menzer, Prueher and
      Stephenson and Ms. Ridgway, the annual amount of contributions by
      Emerson to charitable organizations with which the Director served as a
      director, officer or trustee, and determined that the amount of such
      contributions was less than the greater of $1,000,000 or 2% of each such
      charitable organization's gross receipts in each fiscal year, or was
      approved by the Finance Committee of the Board of Directors and not made
      "on behalf of" any Director.

REVIEW, APPROVAL OR RATIFICATION OF TRANSACTIONS WITH RELATED PERSONS

We review all transactions and relationships in which the Company and any of
our Directors, nominees for Director or executive officers, or any of their
immediate family members, are participants, so as to determine whether any of
these individuals have a direct or indirect material interest in any such
transaction. We have developed and implemented processes and controls to
obtain information from the Directors and executive officers about related
person transactions, and for then determining, based on the facts and
circumstances, whether a related person has a direct or indirect material
interest in any such transaction. As required by SEC rules, transactions that
are determined to be directly or indirectly material to a related person are
disclosed in the Company's proxy statement.

Pursuant to these processes, all Directors and executive officers annually
complete, sign and submit a Directors' and Officers' Questionnaire and a
Conflict of Interest Questionnaire that are designed to identify related
person transactions and both actual and potential conflicts of interest. We
also make appropriate inquiries as to the nature and extent of business that
the Company conducts with other companies for whom any of our Directors or
executive officers also serve as directors or executive officers. Under the
Company's Code of Business Ethics, if an actual or potential conflict of
interest affects an executive officer, he or she is to immediately disclose
all the relevant facts and circumstances to the Company's Ethics and
Environmental Policy Committee. If the Committee determines that there is a
conflict, it will refer the matter to the Board of Directors, which will
review the matter to make a final determination as to whether a conflict
exists, and, if so, how the conflict should be resolved. If an actual or
potential conflict of interest affects a Director, he or she is to immediately
disclose all the relevant facts and circumstances to the Board of Directors,
which likewise will review the matter to make a final determination as to
whether a conflict exists, and, if so, how it should be resolved.

The Company has a written Code of Business Ethics applicable to all Directors
and executive officers of the Company that prohibits Directors and executive
officers from entering into transactions, or having any relationships, that
would result in a conflict of interest with the interests of the Company.
Waivers of the Code of Business Ethics for Directors and executive officers
may only be granted by the Board of Directors. The Code of Business Ethics can
be found on the Company's Web site at www.emerson.com, Investor Relations,
Corporate Governance.

CERTAIN BUSINESS RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Based on the review described above, there were no transactions from October
1, 2006 through the date of this proxy statement, and there are no currently
proposed transactions, in which the Company was or is to be a participant, in
which the amount involved exceeded $120,000 and in which any of the Company's
Directors or executive officers or any of their immediate family members
either had or will have a direct or indirect material interest.

BOARD OF DIRECTORS AND COMMITTEES
---------------------------------

The members of the Board are elected to various committees. The standing
committees of the Board (and the respective Chairmen) are: Executive Committee
(Farr), Audit Committee (Busch), Compensation Committee (Loucks), Corporate
Governance and Nominating Committee (Farrell) and Finance Committee (Horton).

                                      7





AUDIT COMMITTEE

The Audit Committee met five times in fiscal 2007. The members of the Audit
Committee are A. A. Busch III, Chairman, R. B. Horton, J. B. Menzer and R. L.
Ridgway, all of whom are independent. The functions of the Audit Committee are
described under "Report of the Audit Committee" at page 13 below. The Board
has determined that all of the Audit Committee members are independent, as
that term is defined under the enhanced independence standards for audit
committee members in the Securities Exchange Act of 1934 (the "Exchange Act")
and rules thereunder, as incorporated into the listing standards of the New
York Stock Exchange. The Board has also determined that J. B. Menzer is an
Audit Committee Financial Expert as that term is defined in the rules issued
pursuant to the Sarbanes-Oxley Act of 2002. See the "Report of the Audit
Committee" at page 13 below.

COMPENSATION COMMITTEE

The Compensation Committee met six times in 2007. The Compensation Committee
Charter requires that the Committee be comprised of at least three Directors.
The current Compensation Committee members are V. R. Loucks, Jr., Chairman,
D. C. Farrell, J. W. Prueher and R. L. Stephenson. The Board has determined
that, as required by the Committee Charter, each of the members of the
Compensation Committee meets applicable independence requirements, including
those of the New York Stock Exchange, and qualifies as an "outside director"
under Section 162(m) of the Internal Revenue Code and as a "non-employee
director" under Rule 16b-3 of the Exchange Act.

The Compensation Committee discharges the Board's responsibilities relating to
compensation of the Company's executives and produces the Committee's annual
report on executive compensation to be included in the Company's annual proxy
statement.

    Specifically, the Committee:

    * Approves corporate goals and objectives relevant to Chief Executive
      Officer compensation, evaluates Chief Executive Officer performance, has
      sole authority to set Chief Executive Officer compensation, and reviews
      the compensation of the Chief Executive Officer with the Board in
      executive session annually.

    * Reviews and approves all elements of compensation and oversees the
      evaluation process for all officers of the Company.

    * Makes recommendations to the Board with respect to equity-based
      compensation plans and executive officer incentive compensation plans.

    * Approves stock option grants and administers each of the Company's stock
      option plans as provided in those plans.

    * Approves Company contributions to benefit plans (other than qualified
      defined benefit plans), and the adoption, amendment or termination of
      benefit plans.

    * Approves all additional compensation plans designed to attract and
      retain key employees, and, for such key employees, approves all
      employment agreements and contracts and all plans providing deferred and
      continuing compensation or providing additional benefits upon a
      termination or change of control.

    * Monitors the levels of stock ownership of Company executives.

    * Monitors and keeps current the Senior Management Succession Plan.

    * Determines whether service by an officer, Director or employee of the
      Company as an officer, director or employee of another company is
      eligible for indemnification pursuant to the Company's Bylaws.

    * Approves the Compensation Discussion and Analysis ("CD&A") to determine
      whether to recommend inclusion of the CD&A in the Company's proxy
      statement, annual report on Form 10-K or other appropriate document(s)
      filed with the SEC.

The Compensation Committee operates under a written charter that details the
scope of authority, composition and procedures of the Committee. The Committee
may, when appropriate in its discretion, delegate authority

                                      8





with respect to specific matters to one or more members, provided that all
decisions of any such members are presented to the full Committee at its next
scheduled meeting. For a discussion of delegations of authority the Committee
has made to the Chief Executive Officer, see "Compensation Discussion and
Analysis -- Equity Compensation Grant Practices" at page 24 below. The
Committee reports to the Board of Directors regularly, reviews and reassesses
the adequacy of its Charter at least annually and conducts an annual
evaluation of its performance.

Role of Executive Officers and the Compensation Consultant
----------------------------------------------------------

Executive Officers

The Chief Executive Officer makes recommendations to the Committee regarding
total compensation to be paid to the Company's executive officers other than
himself, including salary, annual bonus, stock awards and benefits, as
appropriate. Management makes recommendations to the Committee regarding
salaries, at or above a level established by the Committee, to be paid to
non-officer employees of the Company, its divisions and subsidiaries,
including the officers of divisions and subsidiaries of the Company who are
not officers of the Company, and salaries of all Division Presidents.

Management develops and presents to the Committee recommendations for the
design of compensation programs, including stock or other incentive-based
programs and other programs designed to attract and retain key employees.

The Committee has unrestricted access to management and may also request the
participation of management in any discussion of a particular subject at any
meeting. Committee meetings are regularly attended by the Chief Executive
Officer, who generally attends all meetings except meetings in executive
session and discussions of Chief Executive Officer compensation, and the Vice
President-Executive Compensation, who is responsible for leading some of the
discussions regarding the Company's compensation programs and is responsible
for recording the minutes of the meetings.

The Compensation Committee also meets in executive session without any members
of management. The Committee may request the participation of management or
outside consultants as it deems necessary or appropriate. The Committee
regularly reports to the Board on compensation matters and annually reviews
the Chief Executive Officer's compensation with the Board.

Compensation Consultant

The Committee has sole discretion, at Company expense, to retain and terminate
independent advisors, including sole authority to approve the fees and
retention terms for such advisors, if it shall determine the services of such
advisors to be necessary or appropriate. Any Committee member may request the
participation of independent advisors in any discussion of a particular
subject at any meeting. The Company engages Frederic W. Cook & Co., Inc. to
assist the Company in its executive compensation program design and
competitive pay analysis. The Committee reviews this information in
determining compensation for its named executive officers. In fiscal 2006, the
Committee engaged Towers Perrin and Ernst & Young as outside consultants to
review the philosophies and principles upon which the program is based, and
the process used by the Committee to set pay. In fiscal 2007, the Committee
engaged Towers Perrin and Ernst & Young to review the Committee's charter and
Towers Perrin to review the reasonableness of the compensation paid to our
Chief Executive Officer. For a description of survey data provided by certain
compensation consultants, see "Compensation Discussion and Analysis" beginning
at page 15 below.

CORPORATE GOVERNANCE AND NOMINATING COMMITTEE

The Corporate Governance and Nominating Committee met five times in fiscal
2007. The members of the Committee are D. C. Farrell, Chairman, C. Fernandez
G., A. F. Golden, V. R. Loucks, Jr., R. L. Ridgway and R. L. Stephenson, all
of whom are independent. The Corporate Governance and Nominating Committee
reviews the Company's corporate governance principles and independence
standards; oversees the annual self-evaluation by the Board and its
committees; discharges the Board's responsibilities related to compensation of
Directors; identifies and evaluates individuals for Board and committee
membership and Chairs; makes recommendations to the Board concerning the
selection of Director nominees; makes recommendations as to the size and
composition

                                      9





of the Board and its committees; and approves and/or reviews the Company's
conflict of interest policies, codes of ethics, political activities and
compliance with laws and regulations, and oversees management's implementation
thereof. For a description of the process used by the Committee in evaluating
and recommending Director nominees, see "Nomination Process" below.

Nomination Process
------------------

The Corporate Governance and Nominating Committee regularly reviews the
appropriate size and composition of the Board and anticipates future vacancies
and needs of the Board. In the event the Committee recommends an increase in
the size of the Board or a vacancy occurs, the Committee may consider nominees
submitted by several sources, including current Board members, management of
the Company, director search firms, stockholders or other persons.

In evaluating possible Director nominees, the Committee considers the
knowledge, experience, integrity and judgment of possible candidates, their
potential contribution to the diversity of backgrounds, experience and skills
of the Board, and their ability to devote sufficient time and effort to their
duties as Directors. The Company's Statement of Corporate Governance
Principles and Practices sets forth the minimum qualifications for Director
nominees which include, among other criteria determined by the Board, senior
management experience in business, government and/or other relevant
organizations. Important experience includes the field of manufacturing,
international exposure and Board membership with major organizations. Pursuant
to the Company's Bylaws, no Director may stand for election or re-election as
a Director after attaining the age of 72.

The Committee evaluates Director nominees at regular or special Committee
meetings pursuant to the criteria described above and reviews qualified
Director nominees with the Board. The Committee evaluates candidates that meet
the Director criteria, and the Committee selects nominees that best suit the
Board's current needs and recommends one or more of such individuals for
election to the Board. From time to time, the Company retains an independent
search firm to assist the Committee in identifying potential candidates for
Board membership and in evaluating their qualifications and availability.

The Committee will consider candidates recommended by stockholders, provided
the names of such persons, accompanied by relevant biographical information,
are properly submitted in writing to the Secretary of the Company in
accordance with the manner described for stockholder nominations in "IV.
Stockholders' Proposals" at page 39 below. The Secretary will send properly
submitted stockholder recommendations to the Committee. Individuals
recommended by stockholders in accordance with these procedures will receive
the same consideration received by individuals identified to the Committee
through other means. The Committee also may, in its discretion, consider
candidates otherwise recommended by stockholders without accompanying
biographical information, if submitted in writing to the Secretary.

In addition, the Company's Bylaws permit stockholders to nominate Directors at
an annual meeting of stockholders or at a special meeting at which Directors
are to be elected in accordance with the notice of meeting. The procedures for
making such nominations are discussed in "IV. Stockholders' Proposals" at
page 39 below.

Processes and Procedures for Determination of Director Compensation
-------------------------------------------------------------------

As specified in its Charter, the Corporate Governance and Nominating Committee
reviews compensation of the Company's Directors, as well as the Company's
compensation practices for Directors, and makes recommendations to the Board
regarding these matters. The Board makes the final determinations as to
Director compensation and compensation practices. The Committee typically
conducts its review and makes its recommendations in February of each year.

To assist the Committee in performing these duties, Company management
periodically engages Towers Perrin, an outside consultant, to prepare a study
of outside director compensation trends and best practices in the competitive
market, and to make recommendations as to whether and to what extent
compensation of the Company's outside Directors should be increased.
Management, including the Chief Executive Officer, presents these
recommendations to the Committee for its consideration.

                                      10





DIRECTOR COMPENSATION
---------------------

Directors who are employees of the Company do not receive any compensation for
service as Directors. Each non-management Director is currently paid an annual
retainer of $150,000, a portion of which is paid in restricted stock, and fees
of $1,500 plus expenses for attendance at each Board meeting. The percentage
of the annual retainer paid in restricted stock each year is determined by or
upon the recommendation of the Corporate Governance and Nominating Committee.
For fiscal 2007, $100,000 of the annual retainer was paid in restricted stock
on the date of the Company's Annual Meeting of Stockholders to those
non-management Directors who were elected or re-elected at, or who continued
in office after, such Annual Meeting, and the remaining $50,000 of the annual
retainer was paid in cash on a monthly basis.

The restricted stock award does not vest and cannot be sold until the
Director's retirement or earlier death, disability or a change of control of
the Company. Non-management Directors receive dividends with respect to such
restricted stock. If a Director's tenure on the Board ends for any other
reason, the restrictions will lapse unless it is determined that the
participant has acted in a manner detrimental to the Company or has failed to
fulfill his or her responsibilities in a satisfactory manner. If the
restrictions on the shares do not lapse, such shares will be forfeited to, and
acquired at no cost by, the Company. As a result of these restrictions, the
amount of restricted stock held by a Director reflects the length of time that
a Director has served on the Board.

Each committee Chairman is currently paid an annual retainer of $12,000,
except for the Chairman of the Audit Committee who is paid an annual retainer
of $15,000, and each committee member is paid $1,500 plus expenses for
attendance at each committee meeting.

Directors may elect to defer all or a part of their cash compensation under
the Company's Deferred Compensation Plan for Non-Employee Directors. Under the
plan, which has existed since 1982, such deferred amounts are credited with
interest quarterly at the prime rate charged by Bank of America, N.A. Under
the rules of the SEC, interest on deferred compensation is considered
above-market only if the rate of interest exceeds 120% of the applicable
federal long-term rate, which rate is the rate published monthly by the
Internal Revenue Service applying to debt instruments with a term of more than
9 years. During fiscal 2007, the Bank of America prime rate ranged from 7.75%
to 8.25%, while 120% of the applicable federal long-term rate ranged from
5.56% to 6.21%. The amount of the earnings on deferred compensation for each
of these Directors that is considered above-market is set forth in footnote
(4) to the Director Compensation table. In the alternative, Directors may
elect to have deferred fees converted into units equivalent to shares of
Emerson common stock and their accounts credited with additional units
representing dividend equivalents. All deferred fees are payable only in cash.
A. A. Busch, D. C. Farrell, A. F. Golden and R. L. Stephenson currently
participate in this deferral program.

For Directors who assumed office on or after June 4, 2002, the Company has
eliminated its Continuing Compensation Plan for Non-Management Directors.
Non-management Directors in office on that date who are not fully vested
continue to vest in the plan. A non-management Director who assumed office
prior to June 4, 2002, and who served as a Director for at least five years
will, after the later of termination of service as a Director or age 72,
receive for life a percentage of the annual $30,000 cash retainer for
non-management Directors in effect on June 4, 2002. This percentage is 50% for
five years' service and increases by 10% for each additional year of service
to 100% for ten years' or more service. In the event that service as a covered
Director terminates because of death, the benefit will be paid to the
surviving spouse for five years. Amounts relating to the aggregate change in
the actuarial present value of the accumulated benefit for fiscal year 2007
pursuant to the Company's Continuing Compensation Plan for Non-Management
Directors are set forth in footnote (4) to the Director Compensation table and
the eligible Directors are identified in that footnote.

As part of the Company's overall charitable contributions practice, the
Company may, in the sole and absolute discretion of the Board and its
Committees, make a charitable contribution in the names of Emerson and a
Director upon his or her retirement from the Board (as determined by the Board
and its Committees), taking into account such Director's tenure on the Board,
his or her accomplishments and service on the Board, and other relevant
factors.

                                      11





The table below sets forth amounts for non-management Director compensation
for fiscal 2007.

DIRECTOR COMPENSATION



--------------------------------------------------------------------------------------------------------------------------
                                                                           CHANGE IN
                                                                         PENSION VALUE
                                            FEES                              AND
                                           EARNED                        NONQUALIFIED
                                           OR PAID         STOCK           DEFERRED           ALL OTHER
                                           IN CASH        AWARDS         COMPENSATION        COMPENSATION
              NAME(1)                        ($)         ($)(2)(3)        EARNINGS(4)           ($)(5)          TOTAL ($)
--------------------------------------------------------------------------------------------------------------------------
                                                                                                 
 A. A. Busch III                           96,750         99,957            80,419              10,000           287,126
--------------------------------------------------------------------------------------------------------------------------
 D. C. Farrell(6)                          96,667         99,957            40,674              10,000           247,298
--------------------------------------------------------------------------------------------------------------------------
 C. Fernandez G.                           70,500         99,957             7,000                  --           177,457
--------------------------------------------------------------------------------------------------------------------------
 A. F. Golden                              78,750         99,957            33,701              10,000           222,408
--------------------------------------------------------------------------------------------------------------------------
 R. B. Horton                              93,417         99,957            16,000               1,500           210,874
--------------------------------------------------------------------------------------------------------------------------
 G. A. Lodge(7)                            37,084             --            14,000             334,000           385,084
--------------------------------------------------------------------------------------------------------------------------
 V. R. Loucks, Jr.                         97,667         99,957            20,000                  --           217,624
--------------------------------------------------------------------------------------------------------------------------
 J. B. Menzer                              78,750         99,957                --                  --           178,707
--------------------------------------------------------------------------------------------------------------------------
 J. W. Prueher                             80,250         99,957            23,000              10,000           213,207
--------------------------------------------------------------------------------------------------------------------------
 R. L. Ridgway                             80,000         99,957            20,000              10,000           209,957
--------------------------------------------------------------------------------------------------------------------------
 R. L. Stephenson                          76,250         99,957             1,375                  --           177,582
--------------------------------------------------------------------------------------------------------------------------

-------
(1) Messrs. D. N. Farr, W. J. Galvin and C. A. Peters are named executive
    officers who are also Directors and their compensation is set forth in the
    Summary Compensation Table and related tables. They did not receive any
    additional compensation for their service as Directors.

(2) In fiscal 2007 the Directors were awarded 2,223 shares of restricted stock
    ($100,000 divided by the grant date fair market value of Emerson stock,
    rounded down to the nearest whole share) with a total restricted stock
    value of $99,957. Constitutes the aggregate grant date fair value of
    restricted stock awards for fiscal 2007 calculated in accordance with
    Statement of Financial Accounting Standards 123R ("FAS 123R") which is
    also the dollar amount recognized for financial statement reporting
    purposes for fiscal 2007. See Note 14 to the Company's fiscal year 2007
    financial statements in the Company's Annual Report on Form 10-K for a
    discussion of the valuation under FAS 123R.

(3) The total number of shares of restricted stock held by each of the
    non-management Directors at September 30, 2007 (the end of fiscal 2007),
    as adjusted to reflect a 2-for-1 stock split effected in the form of a 100
    percent stock dividend which was paid on December 11, 2006, is as follows:
    A. A. Busch-21,129; D. C. Farrell-21,129; C. Fernandez G.-13,229; A. F.
    Golden-13,617; R. B. Horton-21,129; V. R. Loucks, Jr.-21,129; J. B.
    Menzer-9,861; J. W. Prueher-12,429; R. L. Ridgway-21,129; and R. L.
    Stephenson-3,727.

(4) Includes above-market earnings for fiscal 2007, based on duration of
    participation in the deferred compensation plan, on cash fees that a
    Director elected to defer as follows: A. A. Busch-$62,419; D. C.
    Farrell-$40,674; A. F. Golden-$13,701; and R. L. Stephenson-$1,375. Also
    includes the following amounts attributable to the aggregate change in the
    actuarial present value of the accumulated pension benefit for fiscal year
    2007 pursuant to the Company's Continuing Compensation Plan for
    Non-Management Directors who assumed office prior to June 4, 2002, as
    follows: A. A. Busch-$18,000; C. Fernandez G.-$7,000; A. F.
    Golden-$20,000; R. B. Horton-$16,000; G. A. Lodge-$14,000; V. R. Loucks,
    Jr.-$20,000; J. W. Prueher-$23,000; and R. L. Ridgway-$20,000. Pursuant to
    applicable regulations, does not include the following negative amount
    relating to the change in actuarial present value: D. C. Farrell-$5,000.
    The Company has eliminated its Continuing Compensation Plan for
    Non-Management Directors who assumed office on or after June 4, 2002.
    Non-management Directors in office on that date who are not fully vested
    continue to vest in the plan. The actuarial present value changes reflect
    in part the continued vesting of these Directors. Please see the narrative
    above for more information.

                                      12





(5) The Company's charitable matching gifts program matches charitable gifts
    of up to $10,000 for all employees and Directors of the Company. Includes
    the amount of Company matching contributions as follows: A. A.
    Busch-$10,000; D. C. Farrell-$10,000; A. F. Golden-$10,000; R. B.
    Horton-$1,500; J. W. Prueher-$10,000; and R. L. Ridgway-$10,000.

(6) D. C. Farrell is not standing for re-election pursuant to the requirement
    in the Company's Bylaws that an individual may not stand for election or
    re-election as a Director after the age of 72. Mr. Farrell's service on
    the Board of Directors will end as of February 5, 2008.

(7) G. A. Lodge retired from Emerson's Board of Directors on February 6, 2007
    after 32 years of service to the Company. After his retirement, as a
    participant in the Company's Continuing Compensation Plan for Non-
    Management Directors, Mr. Lodge began receiving his earned payments under
    the plan, as described above. These payments were included in the
    calculation of change in pension value for Mr. Lodge during the fiscal
    year. In recognition of Mr. Lodge's long and distinguished service on the
    Board and his numerous contributions to the Company's success, the Board
    of Directors, in its discretion, determined to make a charitable
    contribution in the amount of $1 million in the names of Emerson and Mr.
    Lodge, payable in three annual installments. The amount included for Mr.
    Lodge above under "All Other Compensation" is the amount of the first
    installment with respect to this charitable contribution, which was made
    in February, 2007.


CODE OF ETHICS
--------------

The Company has adopted a Code of Ethics that applies to the Company's chief
executive officer, chief financial officer, chief accounting officer, and
controller; has posted such Code of Ethics on its Web site; and intends to
satisfy the disclosure requirement under Item 5.05 of Form 8-K by posting such
information on its Web site at www.emerson.com, Investor Relations, Corporate
Governance. The Company has adopted a Code of Business Ethics for Directors,
officers and employees, which is available at the same location on the
Company's Web site. Printed copies of the foregoing documents are available to
stockholders upon written request delivered to Emerson Electric Co., 8000 West
Florissant Avenue, St. Louis, Missouri 63136, Attn: Secretary.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
-----------------------------------------------------------

The functions and members of the Compensation Committee are set forth above
under "Board of Directors and Committees - Compensation Committee." All
Committee members are independent and none of the Committee members has served
as an officer or employee of the Company or a subsidiary of the Company.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
-------------------------------------------------------

The Company's Directors and executive officers are required, pursuant to
Section 16(a) of the Exchange Act, to file statements of beneficial ownership
and changes in beneficial ownership of common stock of the Company with the
SEC and the New York Stock Exchange, and to furnish copies of such statements
to the Company. Based solely on a review of the copies of such statements
furnished to the Company and written representations that no other such
statements were required, the Company believes that during fiscal year 2007
its Directors and executive officers complied with all such requirements,
except that Mr. Monser, our Chief Operating Officer, reported late one sale of
a total of 12,000 shares of Emerson common stock, and Mr. Fernandez, a
Director, reported late three dispositions of Emerson stock (a total of 1,052
shares) by entities in which his spouse is a shareholder and with respect to
which Mr. Fernandez had disclaimed beneficial ownership.

REPORT OF THE AUDIT COMMITTEE
-----------------------------

The Audit Committee assists the Board in providing oversight of the systems
and procedures relating to the integrity of the Company's financial
statements, the Company's financial reporting process, its systems of internal
accounting and financial controls, the internal audit process, the annual
independent audit process of the Company's annual financial statements, the
Company's compliance with legal and regulatory requirements and the
qualification and independence of the Company's independent registered public
accounting firm. Management has the responsibility for the implementation of
these activities. In fulfilling its oversight responsibilities, the Committee
reviewed and discussed with management the audited financial statements in the
Company's Annual Report

                                      13





on Form 10-K for the fiscal year ended September 30, 2007, including a
discussion of the quality and the acceptability of the Company's financial
reporting and controls.

The Company's independent registered public accounting firm is responsible for
expressing an opinion on the conformity of those audited financial statements
with U.S. generally accepted accounting principles and on the effectiveness of
the Company's internal control over financial reporting. The Committee
reviewed with the independent registered public accounting firm the firm's
judgments as to the quality and the acceptability of the Company's financial
reporting and such other matters as are required to be discussed with the
Committee under auditing standards of the Public Company Accounting Oversight
Board (United States), including the matters required to be discussed by
Statement on Auditing Standards No. 61, as may be modified or supplemented. In
addition, the Committee has discussed with the independent registered public
accounting firm the firm's independence from management and the Company,
including the impact of non-audit-related services provided to the Company and
the matters in the independent registered public accounting firm's written
disclosures required by Standard No. 1 of the Independence Standards Board, as
may be modified or supplemented.

The Committee also discussed with the Company's internal auditors and the
independent registered public accounting firm in advance the overall scope and
plans for their respective audits. The Committee meets regularly with the
internal auditor and the independent registered public accounting firm, with
and without management present, to discuss the results of their examinations,
their evaluations of the Company's internal controls, and the overall quality
of the Company's financial reporting.

In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 2007 for filing with the Securities and Exchange Commission. The
Committee also reappointed KPMG LLP as the Company's independent registered
public accounting firm for fiscal 2008.

                                                Audit Committee

                                                    A. A. Busch III, Chairman
                                                    R. B. Horton
                                                    J. B. Menzer
                                                    R. L. Ridgway

FEES PAID TO KPMG LLP
---------------------

The following are the fees of KPMG LLP, the Company's independent registered
public accounting firm, for services rendered in 2006 and 2007 ($ in
millions):



                                                              2006       2007
                                                              -----      -----
                                                                   
Audit Fees..............................................      $19.7      $22.7
Audit-Related Fees......................................        3.9        2.8
Tax Fees................................................        3.1        3.4
All Other Fees..........................................          0          0
                                                              -----      -----
    Total KPMG LLP Fees.................................      $26.7      $28.9
                                                              =====      =====


Audit Fees primarily represent the cost for the audit of the Company's annual
financial statements, reviews of SEC Forms 10-Q and 10-K and statutory audit
requirements at certain non-U.S. locations.

Audit-Related Fees are primarily related to statutory filings, audits of
employee benefit plans and acquisition and divestiture due diligence.

Tax Fees are primarily related to tax compliance services, which represented
$3.3 million and $3.0 million in 2007 and 2006, respectively. The remaining
tax fees related to tax consulting services and represented $0.1 million in
each of 2007 and 2006.

                                      14





The Audit Committee approved in advance all services provided by KPMG LLP. The
Audit Committee's pre-approval policies and procedures are included within the
Audit Committee Charter, which was filed as an exhibit to the Company's proxy
statement for the 2006 Annual Meeting and can be found on the Company's Web
site at www.emerson.com, Investor Relations, Corporate Governance.

EXECUTIVE COMPENSATION
----------------------

COMPENSATION DISCUSSION AND ANALYSIS
------------------------------------

OVERVIEW

Emerson is a global technology leader with diversified businesses that report
in five segments: Process Management, Industrial Automation, Network Power,
Climate Technologies, and Appliance and Tools. We design and supply advanced
products and deliver engineered solutions to industrial, commercial and
consumer markets worldwide. Managing these diverse global businesses requires
a team of committed, talented and experienced executives. Our executive
compensation philosophy is straightforward and consistent -- we pay for
performance. Our executives are accountable for the performance of the
businesses they manage and are compensated based on that performance. The
Emerson executive compensation program, which is substantially unchanged since
1977, attracts, retains, motivates and rewards our executives for achieving
outstanding operational and financial performance. This performance, in turn,
builds value for our stockholders.

This Compensation Discussion and Analysis describes Emerson executive
compensation policies and programs and how they apply to our named executive
officers (the senior executives included in the Summary Compensation Table at
page 25 below). This section also describes the actions and decisions of the
Compensation Committee of the Board of Directors (the "Committee"), which
oversees the executive compensation program and determines the compensation of
the named executive officers.

COMPENSATION OBJECTIVES AND ELEMENTS

Emerson's executive compensation program is designed to support the interests
of stockholders by rewarding executives for achievement of the Company's
specific business objectives, such as growth in earnings per share and
improvement in trade working capital and cash flow. The fundamental principles
underlying the program are:

    * Rewarding for superior performance rather than creating a sense of
      entitlement.

    * Maximizing stockholder value by allocating a significant percentage of
      compensation to at-risk pay that is dependent on achievement of the
      Company's performance goals.

    * Aligning executives' interests with stockholder interests by providing
      significant stock-based compensation and expecting executives to hold
      the stock they earn.

    * Attracting and retaining talented executives by providing competitive
      compensation opportunities.

    * Rewarding overall corporate results while recognizing individual
      contributions.

                                      15





Our executive compensation program includes incentive plans that communicate
to participants the Company's critical business values, strategies and
performance objectives, and are clear and simple to understand. This
understanding focuses their efforts on the performance objectives that drive
Emerson's success and encourages them to make career commitments to the
Company. The program offers a balanced approach to compensation and consists
of the primary components illustrated below. Taken together, we refer to these
components as "total compensation." Individual compensation packages and the
mix of base salary, annual cash bonus opportunity and long-term stock
compensation for each named executive officer vary depending upon the
executive's level of responsibilities, potential, performance and tenure with
the Company. The at-risk portion of total compensation generally increases as
an executive's level of responsibilities increases. The chart below is not to
scale for any particular named executive officer.


                            
     ------- ---------------
     |       |             |    /|*Objective: Supports succession planning and retention
     |       | Restricted  |   / |*Participation is highly selective
     |       |    Stock    |  \  |*Generally represents 5-20%* of total compensation for named
     |       |             |   \ | executive officers
     |       |-------------|    \|*No set frequency of awards; vest after term of up to 10 years
     |       |             |
     |       |             |
     |       |             |    /|*Objective: Supports achievement of the Company's longer-
     |       |             |   / | term financial goal of sustained earnings per share growth
 Long-Term   |             |  /  |*Is the primary long-term compensation element, generally
   Stock     | Performance | /   | representing 45%-55%* of total compensation for named
Compensation |   Shares    |  \  | executive officers
     |       |             |   \ |*Generally awarded every three years with a four-year
     |       |             |    \| performance period
     |       |             |
     |       |             |
     |       |             |     /*Objective: Rewards for the Company's stock price appreciation
     |       |             |    /|*Generally represents 5-10%* of total compensation for named
     |       |-------------|   / | executive officers
     |       |    Stock    |  /  |*Exercise price equal to average of high and low market price
     |       |   Options   |  \  | on grant date
     |       |             |   \ |*Awarded generally every three years, with one-third vesting
     |------ |-------------|    \| each of the first three years of a ten year term
     |       |             |
     |       |             |    /|*Objective: Rewards achievement of the Company's annual
     |       |   Annual    |   / | financial targets and individual performance
     |       |    Bonus    |   \ |*Generally represents 10-25%* of total compensation for named
 Annual Cash |             |    \| executive officers
Compensation |-------------|    /|*Objective: Rewards individual performance and may vary
     |       |             |   / | with the Company's performance
     |       | Base Salary |   \ |*Generally represents 5-20%* of total compensation for named
     |       |             |    \| executive officers
     ------- --------------


-------
*These percentage ranges are based on annualized total compensation values and
do not necessarily correspond to, and are not a substitute for, the values
disclosed in the Summary Compensation Table and supplemental tables.
Annualized values for long-term stock compensation are based on the grant date
value of awards annualized over the three-year award cycle for performance
shares and options and over the vesting terms for restricted stock, based on
data provided by our compensation consultants. We use these annualized values
because competitive data is calculated in the same manner.


                                      16





COMPETITIVE MARKET PAY INFORMATION AND PHILOSOPHY

In determining total compensation levels and mix for the named executive
officers other than the Chief Executive Officer ("CEO"), the Committee reviews
market trends in executive compensation and survey results from Frederic W.
Cook & Co., Inc. and Hewitt Associates, Inc. The Company's compensation
philosophy is to target total compensation in the median range of these data
sources, as adjusted based on revenue, which we refer to as the "median
range", with actual pay delivered dependent on Company and individual
performance. Equity awards are valued at grant and annualized over their award
frequency. This approach is consistent with long-standing Company practice.

For our CEO, the Committee reviews survey data from three groups reflecting
(1) large industrial companies, (2) companies with profiles similar to the
Company's, and (3) companies with comparable sales revenues.

    * Large industrial companies: This group consists of the industrial
      --------------------------
      companies in the Frederic W. Cook total compensation database, which we
      believe is the best indicator of CEO pay. These companies reflect
      potential opportunities the CEO has at other companies. The group
      generally consists of the same companies from year to year, but may vary
      based on survey participants.

    * Companies with similar profiles: This group consists of companies
      -------------------------------
      identified independently by our planning department for benchmarking
      Company performance. These companies are not selected for compensation
      purposes. The companies have some or all of the following
      characteristics which the planning department believes to be similar to
      the Company's: industry or markets being served, customers being
      targeted, investor profiles being pursued, and a global strategy. The
      companies in this group may change each year based on their and the
      Company's performance.

    * Companies with comparable revenues: Because there is a correlation
      ----------------------------------
      between level of pay and company size, we review a group that includes
      companies with revenues comparable to the Company's as a secondary
      reference. Companies in this group may vary each year based on their and
      the Company's revenues.

As with the other named executive officers, the Company's compensation
philosophy for the CEO is to target total compensation in the median range of
these data sources.

The Committee considers these competitive pay analyses as a frame of reference
in making its pay decisions. The pay decisions are not formulaic and the
Committee exercises judgment in making them. These analyses are not used to
establish performance goals in the compensation programs.

SETTING TOTAL COMPENSATION

Each year as part of the Company's continuing, disciplined management
development and succession planning process, management meets with division
and corporate executives to evaluate the individual performance and leadership
potential of our key executives. Our CEO uses these performance and leadership
evaluations to develop individual pay recommendations to the Committee for
senior executives, including the named executive officers (other than
himself). The Committee reviews the performance evaluations and pay
recommendations for the named executive officers and the other senior
executives. The Committee separately meets in executive session to review the
CEO's performance and set his compensation.

In setting the CEO's compensation, the Committee first considers the Company's
financial results. The Committee considered the Company's outstanding
financial performance in fiscal 2007, which exceeded the financial performance
objectives established by the Company for the year:

    * Sales reached a record $22.6 billion, an increase of 12.1 percent over
      the prior year.

    * Earnings per share rose 18.8 percent to $2.66, which also was a record.

    * Return on total capital was 20.1 percent, an increase of 170 basis
      points over the prior year.

    * Operating cash flow exceeded $3.0 billion, an improvement of 20.1
      percent from fiscal 2006.

    * The Company increased its dividend to stockholders for the 51st
      consecutive year.

    * The Company returned $1.7 billion to stockholders in the form of
      dividends and share repurchases.

                                      17





    * Total stockholder return, based on stock price appreciation and assuming
      dividend reinvestment, was 29.9% for fiscal 2007, driven by the
      Company's strong financial performance.

Second, the Committee evaluates his performance and leadership, compares his
pay to the median range of market compensation, and reviews his pay in
relation to the pay of the other named executive officers. The Committee
determined that Mr. Farr played a vital role in achieving this financial
performance in fiscal 2007. His leadership was central to numerous
accomplishments underpinning this performance, including:

    * Strengthening Emerson's global business platforms and market-leading
      technologies.

    * Expanding Emerson's global footprint in high-growth regions.

    * Strengthening customer relationships worldwide.

    * Improving operating and capital efficiencies and cost positions in the
      face of significant competitive pressures.

    * Completing acquisitions that added to Emerson's technology base and to
      its products and customer services and solutions.

    * Driving improvements in Emerson's product development process to
      increase the pace and profitability of new and innovative technologies.

    * Continuing to develop and retain Emerson's management team.

The Committee uses the survey results under "Competitive Market Pay
Information and Philosophy" above as a frame of reference when setting the
CEO's total compensation. The Committee reviews the relative internal
compensation relationships among the named executive officers, based on each
executive's level of responsibilities, and how they compare to pay
relationships in the survey data. While the Committee monitors these pay
relationships, it does not target any specific pay ratios. The Committee notes
that Mr. Farr's responsibilities as CEO are greater than those of the other
named executive officers. The Committee also receives a summary for the CEO
showing all elements of his compensation, including base salary, annual cash
bonus, long-term stock compensation, retirement and other benefits and
perquisites. The summary shows compensation that may be paid upon voluntary or
involuntary termination of employment, retirement, death or disability, or
upon a change of control. Mr. Farr does not have an employment agreement with
the Company.

The Committee reviewed alternatives for delivering the appropriate level of
total compensation for Mr. Farr based on the Company's and his performance, as
described above. These alternatives reflected the fact that fiscal 2007 was an
award year for performance shares and fiscal 2008 is an award year for stock
options. The Committee's consultant, Towers Perrin, reviewed these
compensation alternatives and determined that they were reasonable, but made
no specific compensation recommendations.

The Committee follows a similar process to determine compensation for the
remaining named executive officers. The Committee uses data from Frederic W.
Cook & Co., Inc. and Hewitt Associates, Inc. in exercising its judgment
regarding these compensation decisions. For the other named executive
officers, the Committee first considered the overall outstanding performance
of the Company for fiscal 2007 as it did for Mr. Farr. The Committee then
reviewed the CEO's evaluation of the individual performance of each named
executive officer, which was outstanding for fiscal 2007. The Committee took
into account the responsibilities of Messrs. Galvin, Monser and Peters in
addition to the traditional roles denoted by their job titles. In addition to
his duties as Chief Financial Officer, Mr. Galvin participates in operational
reviews with the Chief Operating Officer and oversees the Company's
governmental affairs function. The Committee also considered his long tenure
with the Company. In addition to his duties as Chief Operating Officer, Mr.
Monser has corporate oversight responsibilities for the Company's Asian and
Latin American operations, took on additional responsibilities in Europe in
fiscal 2007, and oversees corporate procurement functions. In addition to
being responsible for the Company's marketing and information systems
functions, Mr. Peters also participates with the CEO in strategic reviews of
all of the Company's businesses and provides independent assessments of
potential acquisition targets. The Committee considered the CEO's compensation
recommendations for these named executive officers and their total
compensation relative to the median range of market compensation. The
Committee also took into account its own evaluations of the named executive
officers based on frequent interactions with and presentations to the members

                                      18





of the Board of Directors. None of the named executive officers has an
employment agreement with the Company. Please see "Description of W. W.
Withers Retirement Agreements" at page 36 below for a description of the terms
of our letter agreement and related consulting contract with Mr. Withers
regarding his retirement.

For the named executive officers, the Committee made its annual pay decisions
for each of the compensation components as outlined below.

ANNUAL CASH COMPENSATION

The Committee targets total annual cash compensation in the median range of
market total cash compensation, while placing more emphasis on the at-risk
annual cash bonus than on base salary.

Base salary: For the named executive officers, the Committee awards base
-----------
salary increases (if any) after reviewing the Company's performance,
individual performance, and competitive market conditions. The Committee
determined that the base salary increases for fiscal 2007 and fiscal 2008
indicated in the table below were in recognition of Company performance,
increased responsibilities for Mr. Monser, and the individual
responsibilities, performance and potential of each named executive officer.
Survey data indicated that the average merit increase for individuals in these
positions was 4-6% in fiscal 2007 and fiscal 2008. Mr. Withers did not receive
a base salary increase for fiscal 2008 due to his pending retirement.



-------------------------------------------------------------------------------------------------------------------------
                                                                          2006-2007                            2007-2008
                                                                         PERCENTAGE                           PERCENTAGE
             NAME                       FY2006           FY2007           INCREASE            FY2008           INCREASE
-------------------------------------------------------------------------------------------------------------------------
                                                                                              
 D. N. Farr                           $1,100,000       $1,150,000            4.5%           $1,200,000            4.3%
-------------------------------------------------------------------------------------------------------------------------
 W. J. Galvin                           $645,000         $680,000            5.4%             $710,000            4.4%
-------------------------------------------------------------------------------------------------------------------------
 E. L. Monser                           $525,000         $575,000            9.5%             $600,000            4.3%
-------------------------------------------------------------------------------------------------------------------------
 C. A. Peters                           $485,000         $515,000            6.2%             $540,000            4.9%
-------------------------------------------------------------------------------------------------------------------------
 W. W. Withers                          $500,000         $520,000            4.0%             $520,000             --
-------------------------------------------------------------------------------------------------------------------------


Annual bonus: The determination of individual bonus amounts for the named
------------
executive officers is discretionary, but is based on consolidated Company
performance. For fiscal 2007, the Committee considered sales growth, earnings
per share growth, return on total capital, operating cash flow, operating
margin improvement and fiscal year total shareholder return. For all of these
measures the Company met or exceeded the original forecasted financial plan
for the Company for fiscal 2007. The Committee compared fiscal 2007
performance to the prior year to determine whether to increase or decrease the
bonus amounts from the prior year amounts. The Committee reviewed each named
executive officer's individual performance, leadership potential and
responsibilities, and exercised its discretion to determine each individual
annual bonus award. The Committee believes that the bonus amounts awarded for
fiscal 2007 in the table below are consistent with the Company's outstanding
performance for fiscal 2007, as described above.



---------------------------------------------------------------------------------
                                      FOR              FOR            PERCENTAGE
            NAME                     FY2006           FY2007           INCREASE
---------------------------------------------------------------------------------
                                                            
 D. N. Farr                        $2,200,000       $2,700,000           22.7%
---------------------------------------------------------------------------------
 W. J. Galvin                        $875,000       $1,025,000           17.1%
---------------------------------------------------------------------------------
 E. L. Monser                        $600,000         $725,000           20.8%
---------------------------------------------------------------------------------
 C. A. Peters                        $615,000         $725,000           17.9%
---------------------------------------------------------------------------------
 W. W. Withers                       $600,000         $660,000           10.0%
---------------------------------------------------------------------------------


LONG-TERM STOCK COMPENSATION

The Committee may make long-term stock compensation awards to the Company's
executives, including the named executive officers. Executives participate in
these programs based on their: (1) ability to make a significant contribution
to the Company's financial results, (2) level of responsibility, (3)
performance and (4) leadership potential. No executive participates
automatically based on title, position or salary level. We require
participants to accept confidentiality, non-competition and non-solicitation
obligations. In general, we target long-term stock

                                      19





compensation in the median range of market long-term compensation, with more
emphasis on at-risk equity compensation.

Our long-term compensation consists of three programs: performance shares,
stock options and restricted stock. We allocate the largest portion to
performance shares, which are the primary incentive for delivery of superior
longer-term financial performance, with a small portion allocated to stock
options and the remainder is through the selective use of restricted stock. We
make awards of stock options and performance shares periodically, generally
every three years, instead of annually, and restricted stock awards have no
set award cycle. For purposes of its analysis, the Committee considers values
of these awards based on the grant date value annualized over the three-year
award cycle for performance shares and options and over the vesting terms for
restricted stock, because competitive data considered by the Committee is
calculated in the same manner. These estimates do not necessarily correspond
to, and are not a substitute for, the values described for the awards in the
Summary Compensation Table or in the tables that follow it.

Performance Shares Program. Our performance shares program is the primary
--------------------------
element of long-term stock compensation for our named executive officers. For
thirty years, the program has reinforced the Company's long-term financial
objectives, enhancing stockholder value. We limit participation in the
programs to individuals who can most directly influence our long-term success.
The long-term stock compensation opportunities for our senior executives are
heavily weighted towards performance shares, which generally represent
approximately 45-55% of total compensation and 70-80% of long-term stock
compensation.

Unlike many companies, Emerson awards performance shares only once every three
years. Awards of performance shares are made in share units. Participants can
earn from 0-100% of the awarded units depending upon the Company's financial
results at the end of the performance period measured against the
pre-established target. Participants cannot earn greater than 100%, regardless
of the extent to which actual Company performance exceeds the target. For
performance in excess of the targets, participants benefit only to the extent
that performance results in increases in the price of the Emerson stock
received upon payout of the performance shares. During fiscal 2007, the
performance periods for both the 2004 performance shares program and the 2007
performance shares program were in effect, as illustrated below:

                                   [FY-graph]



                                   FISCAL YEAR OCTOBER 1 TO SEPTEMBER 30
                       ------------------------------------------------------------
                       2004    2005    2006    2007    2008    2009    2010    2011
                       ----    ----    ----    ----    ----    ----    ----    ----
                                                       
PERFORMANCE SHARES:
-------------------

FY 2004 Program                                    60%     40%

FY 2007 Program                                                            60%     40%



As shown above, fiscal 2007 was an "overlap" year, both the final year of the
2004 program performance period, which ended on September 30, 2007, and the
first year of the 2007 program performance period, which began on October 1,
2006 and ends on September 30, 2010. Due to this overlap, the Summary
Compensation Table includes amounts for both the 2004 and 2007 performance
shares programs.

To earn a 100% payout under each of the fiscal 2004 and fiscal 2007
performance shares programs, the performance target requires the Company's
compounded average growth rate in earnings per share to exceed by three
percentage points the compounded average growth rate in the U.S. Gross
National Product over the four-year performance period. We target earnings per
share growth exceeding the growth in the economy because we believe this focus
on above market growth over the long-term performance period drives
participants in the program to produce superior financial returns for our
stockholders. For the 2004 and 2007 performance shares programs, the Committee
has specified that 60% of any earned performance share units will be paid at
the end of the four-year performance period, and the remaining 40% will be
paid one year later, subject to continued service. Cash dividend equivalents
are paid on 40% of the award during the performance period and on the 40%
of the earned award during the holdback period. The cash dividend equivalents
for these longer-term awards align the participants with stockholders
receiving dividend returns.

                                      20





At the completion of fiscal 2007, the four-year performance period for the
2004 performance shares program ended. The compounded average growth rate in
U.S. Gross National Product over the four year performance period for the 2004
performance shares program, plus three percentage points, was 8.8%. The
Committee determined that the Company's actual compounded average earnings per
share growth rate over the performance period was 22.0%, resulting in a 100%
payout, with the units earned set forth in the table below.



---------------------------------------------------------------------
                                                        40% ONE-YEAR
                                       60% PAYOUT         HOLDBACK
              NAME                      (UNITS)           (UNITS)
---------------------------------------------------------------------
                                                  
 D. N. Farr                             240,000           160,000
---------------------------------------------------------------------
 W. J. Galvin                            90,000            60,000
---------------------------------------------------------------------
 E. L. Monser                            60,000            40,000
---------------------------------------------------------------------
 C. A. Peters                            48,000            32,000
---------------------------------------------------------------------
 W. W. Withers                           42,000            28,000
---------------------------------------------------------------------


The payout of the 60% portion is shown in the Option Exercises and Stock
Vested table on page 30 and the remaining 40% hold-back is shown in the
Outstanding Equity Awards at Fiscal Year-End table on page 28.

Under the 2007 performance shares program, the Committee awarded the named
executive officers performance share units in early fiscal 2007 as follows:
D. N. Farr-460,000 units; W. J. Galvin-200,000; E. L. Monser-160,000; and
C. A. Peters-120,000. These performance share units are subject to the
achievement of the performance target over the four-year performance period.
No performance share units were awarded to Mr. Withers due to his anticipated
retirement before the end of the performance period. These awards reflected
the Committee's judgment that the named executive officers' leadership
performance and their potential to enhance long-term stockholder value would
continue to be significant factors in the Company's future success. The
Committee determined that these awards were consistent with targeting 45-55%
of total compensation and 70-80% of long-term stock compensation in the form
of performance shares.

Stock Options Program. Our stock option awards provide long-term focus and are
---------------------
the primary form of long-term stock compensation for a broader group of key
employees. Stock options represent a smaller portion of long-term stock
compensation for the named executive officers. We made no grants of stock
options to our named executive officers during fiscal 2007. In early fiscal
2008, as part of the normal three-year award cycle and in recognition of their
individual performance, the Committee awarded Mr. Farr, Mr. Galvin, Mr. Monser
and Mr. Peters 200,000, 130,000, 100,000 and 100,000 stock options,
respectively. The Committee determined that these amounts are consistent with
targeting 5-10% of total compensation in the form of stock options.

Restricted Stock Program. Our restricted stock program is designed to retain
------------------------
key executives and future leaders of the Company. The objective is to lock in
top executives and their potential replacements identified through the
succession planning process. The Committee views this program as an important
management succession planning and retention tool. Restricted stock, along
with stock options, supplement performance shares to achieve the target of
long-term compensation in the median range of market compensation, and in some
cases may provide compensation above the median range. Restricted stock
provides participants with dividends and voting rights beginning on the award
date. We made the following grants of restricted stock to our named executive
officers during fiscal 2007 and 2008:

    * At the beginning of fiscal 2008 Mr. Galvin was awarded 30,000 shares of
      restricted stock in recognition of his continued outstanding performance
      with the Company.

    * In fiscal 2007 the Committee awarded Mr. Monser 20,000 shares of
      restricted stock in recognition of his increased responsibilities in
      fiscal 2007 related to international operations. To help secure his
      continued employment with the Company, at the beginning of fiscal 2008
      Mr. Monser was awarded 10,000 shares of restricted stock.

    * Mr. Withers did not receive a performance share award due to his
      anticipated retirement. However, the Committee awarded 50,000 shares of
      restricted stock to Mr. Withers, reflecting the Company's desire to
      retain his services during the transition to his successor.

                                      21





TOTAL COMPENSATION

In the Committee's judgment, Mr. Farr's total compensation reflects the
Company's outstanding performance under his leadership as well as his
individual performance, and his total compensation is in the median range of
competitive market pay. The combination of the performance share awards, stock
option awards and annual cash bonus represents at-risk compensation of
approximately 74% of Mr. Farr's total compensation. For the other named
executive officers, the combination of the performance shares, stock option
awards and annual cash bonus awarded by the Committee represents at-risk
compensation for the named executive officers of approximately 54-79% of their
total compensation. These at-risk incentives, and the way we allocate them,
reward the named executive officers for the achievement of outstanding Company
performance, which builds shareholder value.

The table below illustrates how total compensation for our named executive
officers for fiscal 2007 was allocated between performance- and
non-performance-based components, how performance-based compensation is
allocated between annual and long-term components, and how total compensation
is allocated between cash and equity components. These percentages are based
on annualized total compensation values and do not necessarily correspond to,
and are not a substitute for, the values disclosed in the Summary Compensation
Table and supplemental tables.



----------------------------------------------------------------------------------------------------------------------------
                                            FISCAL 2007 TOTAL COMPENSATION MIX*
----------------------------------------------------------------------------------------------------------------------------
                                                                            PERCENTAGE OF
                                     PERCENTAGE OF TOTAL                  PERFORMANCE-BASED             PERCENT OF TOTAL
                                    COMPENSATION THAT IS:                  TOTAL THAT IS:             COMPENSATION THAT IS:
----------------------------------------------------------------------------------------------------------------------------
                             PERFORMANCE-       NOT PERFORMANCE-                        LONG-
         NAME                   BASED                BASED              ANNUAL          TERM          CASH          EQUITY
----------------------------------------------------------------------------------------------------------------------------
                                                                                                 
 D. N. Farr                      74%                  26%                 30%            70%           31%            69%
----------------------------------------------------------------------------------------------------------------------------
 W. J. Galvin                    75%                  25%                 26%            74%           32%            68%
----------------------------------------------------------------------------------------------------------------------------
 E. L. Monser                    79%                  21%                 24%            76%           34%            66%
----------------------------------------------------------------------------------------------------------------------------
 C. A. Peters                    74%                  26%                 29%            71%           37%            63%
----------------------------------------------------------------------------------------------------------------------------
 W. W. Withers                   54%                  46%                 42%            58%           40%            60%
----------------------------------------------------------------------------------------------------------------------------

-------
* Only amounts for base salary, annual bonus and long-term compensation
  (performance shares, stock options and restricted stock) were included in
  calculating the percentages in this table. Other forms of compensation that
  are shown in the Summary Compensation Table were not included. Annualized
  values for long-term stock compensation are based on the grant date value of
  awards annualized over the three-year award cycle for performance shares and
  options and over the vesting terms for restricted stock, based on data
  provided by our compensation consultants. The competitive data we use is
  calculated in the same manner. For purposes of this table, (i) annual bonus,
  performance shares and stock options are performance-based compensation,
  (ii) performance shares and stock options are long-term, performance-based
  compensation, and (iii) base salary and annual bonus are the only forms of
  cash compensation.


EXECUTIVE STOCK OWNERSHIP

The Compensation Committee monitors the stock ownership of the Company's
executive officers. While the Company has no formal stock ownership policies,
we expect executives to retain a substantial portion of stock earned under
long-term compensation plans. Based on beneficial ownership of Emerson stock,
as shown on page 3, the named executive officers' holdings of Emerson stock
are valued at multiples of between approximately 25 and 75 times their
respective base salaries. Our stock trading policy requires elected Company
officers to obtain written permission from two other senior executives before
engaging in transactions in Emerson stock.

SECURITY AND PERQUISITES

We provide security services to help ensure the safety of all employees while
they are on Company business. Due to increased security risks that are
inherent in senior executive positions, we provide the named executive
officers with residential security monitoring and personal security as needed.
The Company's security policy and the Committee require that the CEO use the
Company aircraft for all business and personal travel. On a very limited
basis, other named executive officers have access to Company aircraft for
personal use subject to reimbursement at first class rates. The Company also
provides leased cars, club memberships and financial planning for executives.
These are long-standing perquisites which we believe are similar to those
generally provided to executives at

                                      22





other similarly-sized companies. Executives also have access to tickets for
theater or sporting events. The Committee reviews these perquisites annually.
Total perquisite costs and related information appear in the Summary
Compensation Table at page 25 below.

SEVERANCE, EXECUTIVE TERMINATION AND RETIREMENT

Emerson does not provide employment agreements, severance agreements, or
golden parachute agreements for the named executive officers. The terms of all
executive terminations and retirements are determined individually based on
specific facts and circumstances at the time of such events, and not on
formulaic rules. In general, we follow these principles:

    * We do not pay lump sum, non-forfeitable cash severance payments.

    * Departing executives sign extended non-competition, non-solicitation and
      confidentiality agreements, or reaffirm existing agreements on these
      matters.

    * As permitted under stockholder-approved plans, departing plan
      participants, including named executive officers, may have additional
      time to exercise previously granted stock options, with accelerated
      vesting for retirees. However, the additional time cannot exceed the
      time permitted in the original grants.

    * The Committee may also allow continuation (without accelerated vesting)
      of previously granted long-term performance shares or restricted stock
      awards, which would be paid if and when the Company achieves specified
      performance targets or service vesting requirements are met.

    * Executives forfeit these awards if they breach their non-competition,
      non-solicitation or confidentiality agreements.

In 2006, the Committee adopted an Executive Officer Severance Policy,
reflecting these principles. In addition to the foregoing principles, the
Executive Officer Severance Policy provides that the Company shall not
implement individual severance or change of control agreements providing
certain benefits (as described in the Policy) to any of the named executive
officers in excess of 2.99 times the sum of the officer's then current base
salary and most recently earned cash bonus without stockholder ratification.
The Executive Officer Severance Policy can be found on the Company's Web site
at www.emerson.com, Investor Relations, Corporate Governance.

W. W. Withers, our former Executive Vice President, Secretary and General
Counsel, retired from the Company effective November 30, 2007. To facilitate
the transition of his duties to his successor and provide his continued
expertise to the Company, on April 4, 2007, we entered into a letter agreement
and related consulting contract with Mr. Withers in respect of his retirement.
Consistent with the policy above, Mr. Withers received no lump-sum cash
severance payment, was allowed up to five years (but no longer than the
original option term) to exercise his stock options as provided under the plan
and continued to vest in performance shares and outstanding restricted stock.
All of these benefits are forfeitable if he breaches his non-competition and
non-solicitation agreements, which were extended from two to four years
pursuant to the severance policy. Please see "Description of W. W. Withers
Retirement Agreements" at page 36 below for a description of these agreements.

CHANGE OF CONTROL

Emerson has no employment agreements, severance agreements or golden parachute
agreements with the named executive officers. If a change of control occurs,
we protect all employees who participate in long-term stock plans, the Saving
Investment Restoration Plan and the Pension Restoration Plan as described
under "Potential Payments Upon Termination or Change of Control" at page 33
below. To provide this protection, we accelerate vesting of stock awards and
pay accrued benefits under the Savings Investment Restoration Plan and the
Emerson Pension Restoration Plan. We do not credit additional years of service
under any plans, or continue medical or other benefits. We do not make
additional cash payments related to stock compensation plans, although stock
awards vest upon a change of control. We do not increase payouts to cover
payment of taxes and do not provide tax gross-ups.

OTHER BENEFITS

The named executive officers are eligible for medical, life and disability
insurance, and other Company-provided benefits that are generally available to
all other employees, including the Company's charitable matching gifts
program. Retirement plans for U.S. employees may be qualified defined-benefit
pension plans, 401(k) plans

                                      23





and/or profit-sharing plans as determined by each business unit's competitive
market. The Company continues to maintain a defined-benefit pension plan for a
majority of U.S. employees. These other benefits are available to the named
executive officers, as follows:

    * A qualified 401(k) savings plan and a non-qualified savings plan which
      allows participating executives to defer up to 20 percent of their cash
      compensation and continue to receive the Company match after they reach
      the Internal Revenue Service qualified plan limits.

    * A qualified defined-benefit pension plan and a non-qualified
      defined-benefit pension plan (the "Pension Restoration Plan") which
      provides benefits based on the qualified plan without regard to IRS
      limits and does not provide additional credited years of service.
      Participation in the Pension Restoration Plan is by award and based on
      the executive's individual contributions and long-term service to the
      Company. In recognition of their outstanding contributions over their
      long careers with the Company, Mr. Monser and Mr. Peters were awarded
      participation in the Pension Restoration Plan in fiscal 2007. The other
      named executive officers were previously awarded this benefit.

    * A group term life insurance policy under the same terms as other
      employees and a term life insurance policy which was converted from the
      former split dollar program.

    * A voluntary annual physical paid for by the Company.

REGULATORY CONSIDERATIONS

Section 162(m) of the Internal Revenue Code of 1986, as amended, imposes a $1
million limit on the amount that a public company may deduct for compensation
paid to the Company's CEO or any of the Company's other named executive
officers, other than the Chief Financial Officer, who are employed as of the
end of the fiscal year. This limitation does not apply to compensation that
meets the requirements under Section 162(m) for "qualifying performance-based"
compensation (i.e., compensation paid only if the individual's performance
meets pre-established objective goals based on performance criteria approved
by stockholders). The Company's incentive compensation plans are designed to
qualify under Internal Revenue Code Section 162(m) to ensure tax
deductibility. However, restricted stock awards do not qualify under Section
162(m) and the Committee retains the flexibility to design compensation
programs that are in the best interests of Emerson and its stockholders.

Internal Revenue Code Section 409A, which was enacted in 2004, requires that
nonqualified deferred compensation arrangements must meet specific
requirements. Failure to meet these requirements results in immediate taxation
of certain deferred amounts, as well as an additional tax equal to 20% of such
deferred amounts and an interest penalty. The term "nonqualified deferred
compensation plan" is defined broadly in the regulations issued under Section
409A to potentially include equity-based compensation such as equity-based
bonuses and stock options. We have adopted amendments to our compensation
plans to comply with the requirements of Section 409A.

In accordance with Statement of Financial Accounting Standards 123R, for
financial statement purposes, we expense all equity-based awards over the
period earned based upon their estimated fair value at grant date, or
subsequently, depending on the terms of the award. FAS 123R has not resulted
in any significant changes in our compensation program design.

EQUITY COMPENSATION GRANT PRACTICES

The Committee approves all grants of equity compensation, including
performance shares, stock options and restricted stock, to executive officers
of the Company, as defined in Section 16 of the Exchange Act. All elements of
executive officer compensation are reviewed by the Committee annually at its
October meeting. Generally, the Company's awards of performance shares, stock
options and restricted stock are made at that meeting, but may be made at
other meetings of the Committee. The Committee meeting date, or the next
business day if the meeting falls on a non-business day, is the grant date for
stock option, performance share and restricted stock awards. The Company may
also make awards of stock options in connection with acquisitions or
promotions, or for retention purposes. Under the Company's stock option plans,
the Committee may delegate to the Company's CEO the authority to grant stock
options to any employees of the Company other than "executive officers" of the
Company as that term is defined in Section 16 of the Exchange Act. The
Committee has exercised this authority and delegated to the CEO the ability to
make stock option grants in connection with retention and

                                      24





acquisitions, which he uses on an infrequent basis. This delegation of
authority does not extend to executive officers or other officers who are
subject to the Company's trading blackout policy.

COMPENSATION COMMITTEE REPORT
-----------------------------

The Compensation Committee of the Board of Directors acts on behalf of the
Board to establish and oversee the Company's executive compensation program in
a manner that serves the interests of the Company and its stockholders. For a
discussion of the Compensation Committee's policies and procedures, see
"Compensation Committee" at page 8 above.

Management of the Company has prepared the Compensation Discussion and
Analysis describing the Company's compensation program for senior executives,
including the named executive officers. See "Compensation Discussion and
Analysis" beginning on page 15 above. The Compensation Committee has reviewed
and discussed the Compensation Discussion and Analysis for fiscal year 2007
(included in this proxy statement) with the Company's management. Based on
this review and discussion, the Compensation Committee recommended to the
Board of Directors of the Company that the Compensation Discussion and
Analysis be included in the Company's proxy statement for the fiscal year
ended September 30, 2007, for filing with the Securities and Exchange
Commission.

                                              Compensation Committee

                                                  V. R. Loucks, Jr., Chairman
                                                  D. C. Farrell
                                                  J. W. Prueher
                                                  R. L. Stephenson

SUMMARY COMPENSATION TABLE
--------------------------

The following information relates to compensation received or earned by our
Chief Executive Officer, our Chief Financial Officer and each of our other
three most highly compensated executive officers for the last fiscal year (the
"named executive officers"). All share and option numbers and exercise prices
in the following tables reflect the effect of a 2-for-1 stock split effected
in the form of a 100% stock dividend which was paid on December 11, 2006.



-----------------------------------------------------------------------------------------------------------------------------------
                                                                                               CHANGE IN
                                                                                             PENSION VALUE
                                                                                                  AND
                                                                                             NONQUALIFIED       ALL
                                                                                               DEFERRED        OTHER
                                                                      STOCK       OPTION     COMPENSATION     COMPEN-
                               FISCAL                    BONUS        AWARDS      AWARDS       EARNINGS       SATION
NAME AND PRINCIPAL POSITION     YEAR     SALARY ($)     ($)(1)        ($)(2)      ($)(3)        ($)(4)        ($)(5)   TOTAL ($)
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                               
 D. N. Farr                     2007     1,150,000     2,700,000    16,077,732    527,500      1,343,000      383,302   22,181,534
 Chairman of the Board,
 Chief Executive Officer
 and President(6)
-----------------------------------------------------------------------------------------------------------------------------------
 W. J. Galvin                   2007       680,000     1,025,000     6,251,132    358,700      1,081,000      114,840    9,510,672
 Senior Executive Vice
 President and Chief
 Financial Officer(6)
-----------------------------------------------------------------------------------------------------------------------------------
 E. L. Monser                   2007       575,000       725,000     4,252,004    211,000        406,000      141,285    6,310,289
 Chief Operating Officer
-----------------------------------------------------------------------------------------------------------------------------------
 C. A. Peters                   2007       515,000       725,000     3,483,368    211,000      1,390,000       79,761    6,404,129
 Senior Executive Vice
 President(6)
-----------------------------------------------------------------------------------------------------------------------------------
 W. W. Withers                  2007       520,000       660,000     3,704,349    211,000        332,000      107,546    5,534,895
 Executive Vice President,
 Special Legal Advisor and
 former Secretary and
 General Counsel(7)
-----------------------------------------------------------------------------------------------------------------------------------

--------
(1) Represent bonus amounts paid after the end of fiscal 2007 with respect to
    fiscal 2007 performance.

                                      25




(2) The amounts relate to awards of performance shares and restricted stock
    and reflect the amounts expensed in the Company's financial statements for
    these awards under FAS 123R and do not correspond to the actual value that
    will be realized by the named executive officers. See Note 14 to the
    Company's fiscal year 2007 financial statements in the Company's Annual
    Report on Form 10-K for a discussion of the valuation of these amounts
    under FAS 123R. Pursuant to SEC rules, the amounts shown exclude the
    impact of estimated forfeitures related to service-based vesting
    conditions. Fiscal 2007 was an "overlap" year which, as described in the
    Compensation Discussion and Analysis beginning on page 15, was the final
    year of the 2004 performance shares program performance period, which
    ended on September 30, 2007, and the first year of the 2007 performance
    shares program performance period, which began on October 1, 2006 and ends
    on September 30, 2010. Due to this overlap, the amounts for performance
    share awards include awards made in both fiscal 2004 and fiscal 2007.
    Amounts for performance share awards generally reflect the difference
    between the financial reporting value at the beginning and the end of the
    fiscal year, which varies depending upon stock price and the probability
    that targets will be reached. Amounts for restricted stock generally
    include the aggregate grant date dollar value amortized over the
    applicable vesting period. See the Grants of Plan-Based Awards table at
    page 27 below for information on performance shares and restricted stock
    granted in fiscal 2007.

(3) There were no stock option awards granted in fiscal 2007 to the named
    executive officers. The amounts reflect the financial statement expense
    under FAS 123R related to awards made in prior years and do not correspond
    to the actual amount that will be realized upon exercise by the named
    executive officers. See Note 14 to the Company's fiscal year 2007
    financial statements in the Company's Annual Report on Form 10-K for a
    discussion of the valuation of these amounts under FAS 123R. Pursuant to
    SEC rules, the amounts shown exclude the impact of estimated forfeitures
    related to service-based vesting conditions. Amounts for stock options
    generally include the aggregate grant date dollar value amortized over the
    applicable vesting period.

(4) Includes the fiscal 2007 aggregate change in the actuarial present value
    of the named executive officers' accumulated benefits under the Company's
    defined benefit pension plans. See the Pension Benefits table at page 31
    below for additional information, including the present value assumptions
    used in this calculation.

(5) Includes the following amounts:

      ----------------------------------------------------------------------------------------------------------------------------
                                                       SAVINGS           LIFE           CHARITABLE           TAX
              NAME                PERQUISITES(a)       PLAN(b)       INSURANCE(c)        MATCH(d)          GROSS-UP       TOTAL
      ----------------------------------------------------------------------------------------------------------------------------
                                                                                                     
       D. N. Farr                    $239,286          $83,698          $9,564            $10,000         $40,754(e)      $383,202
      ----------------------------------------------------------------------------------------------------------------------------
       W. J. Galvin                   $46,449          $41,474         $16,917            $10,000                 --      $114,840
      ----------------------------------------------------------------------------------------------------------------------------
       E. L. Monser                   $92,218          $29,323         $14,744             $5,000                 --      $141,285
      ----------------------------------------------------------------------------------------------------------------------------
       C. A. Peters                   $32,132          $28,219          $9,410            $10,000                 --       $79,761
      ----------------------------------------------------------------------------------------------------------------------------
       W. W. Withers                  $44,926          $27,979         $34,036               $605                 --      $107,546
      ----------------------------------------------------------------------------------------------------------------------------

      ---------
      (a)   The perquisites provided are: tax and financial planning, leased
            Company car, club dues (except for Mr. Peters), annual physical,
            tickets for theater or sporting events and costs related to
            personal security provided to each of the named executive officers
            under the Company's security program. The Company's security
            program and the Board of Directors require that the Chairman and
            Chief Executive Officer use Company aircraft for all business and
            personal air travel. The Company also provides limited personal
            use of Company aircraft outside of the security program
            requirements to the named executive officers, who reimburse the
            Company at first class rates. Amounts for personal use of Company
            aircraft represent the incremental cost to the Company, calculated
            based on the variable operating costs per hour of operation, which
            include fuel costs, maintenance, and associated travel costs for
            the crew, less any reimbursements. For Mr. Farr the amount of
            personal use of Company aircraft was $172,150, which is included
            in the perquisites amount above. The amounts for personal use by
            other named executive officers in fiscal 2007 were E. L.
            Monser-$50,981 and C. A. Peters-$3,019.

      (b)   Contributions by the Company for the named executive officers to
            the Company's savings plans.

      (c)   Premiums paid by the Company on behalf of the named executive
            officers for term life insurance.

                                      26





      (d)   Matching contribution under the Company's charitable matching
            gifts program which matches charitable gifts of up to $10,000 for
            all employees and Directors of the Company.

      (e)   Tax gross-up for amounts included in Mr. Farr's compensation
            relating to personal use of Company aircraft required by the Board
            of Directors and pursuant to the Company's security program.

(6) Messrs. Farr, Galvin and Peters do not receive any separate compensation
    for service as Directors.

(7) Mr. Withers retired from the Company on November 30, 2007. On April 4,
    2007, we entered into a letter agreement and related consulting contract
    with Mr. Withers in respect of his retirement. Please see "Description of
    W. W. Withers Retirement Agreements" at page 36 below for a description of
    the agreements. Amounts for Mr. Withers' stock awards include the impact
    of his retirement on the amounts expensed under FAS 123R.


GRANTS OF PLAN-BASED AWARDS
---------------------------

The following table provides information about equity awards granted to the
named executive officers in fiscal 2007.



--------------------------------------------------------------------------------------------------------------------------------
                                           ESTIMATED FUTURE PAYOUTS UNDER EQUITY
                                                   INCENTIVE PLAN AWARDS
                                          ---------------------------------------
                                                                                         ALL OTHER
                                                                                       STOCK AWARDS:
                                                                                         NUMBER OF
                                                                                         SHARES OF           GRANT DATE FAIR
                             GRANT         THRESHOLD       TARGET        MAXIMUM         STOCK OR           VALUE OF STOCK AND
        NAME                 DATE           (#)(1)         (#)(1)        (#)(1)        UNITS (#)(2)        OPTION AWARDS ($)(3)
--------------------------------------------------------------------------------------------------------------------------------
                                                                                         
 D. N. Farr                10/2/2006          N/A          460,000       460,000                                18,186,100
--------------------------------------------------------------------------------------------------------------------------------
 W. J. Galvin              10/2/2006          N/A          200,000       200,000                                 7,907,000
--------------------------------------------------------------------------------------------------------------------------------
 E. L. Monser              10/2/2006          N/A          150,000       150,000                                 5,930,250
                           11/7/2006          N/A           10,000        10,000                                   411,640
                           11/7/2006                                                      20,000                   870,200
--------------------------------------------------------------------------------------------------------------------------------
 C. A. Peters              10/2/2006          N/A          120,000       120,000                                 4,744,200
--------------------------------------------------------------------------------------------------------------------------------
 W. W. Withers (4)         10/2/2006                                                      50,000                 2,096,375
--------------------------------------------------------------------------------------------------------------------------------

-------
(1) Includes performance share awards granted in fiscal 2007 under the 2007
    performance shares program. Payout for a performance period is made as
    soon as practicable after the achievement of the performance target,
    provided that the Committee may establish additional vesting conditions
    for retention purposes. Earned performance shares are paid to participants
    in stock, with a portion paid in cash to cover tax obligations of
    participants. See "Performance Shares Program" at page 20 above for
    additional information regarding the program and additional detail on
    performance shares.

(2) Includes restricted stock granted in fiscal 2007 which vests over 8 years
    from the date of grant for Mr. Monser and 3 years for Mr. Withers. Please
    see "Description of W. W. Withers Retirement Agreements" at page 36 below
    for a description of Mr. Withers' letter agreement and the terms and
    conditions of vesting applicable to him after retirement.

(3) Includes the grant date fair value of awards of performance shares or
    restricted stock computed in accordance with FAS 123R applying the same
    valuation model and assumptions applied for financial reporting purposes.
    These amounts do not correspond to the actual value that will be realized
    by the named executive officers. For stock options and restricted stock,
    the aggregate amount that the Company would expense in its yearly
    financial statements over the vesting period is generally equal to the
    full grant date fair value reported above. Yearly amounts expensed in the
    Company's financial statements over the performance period for performance
    share awards reflect the difference between the financial reporting value
    of the award at the beginning and the end of the performance program term
    during the fiscal year, which varies depending upon stock price and the
    probability that targets will be reached, and therefore will generally not
    be equal to the grant date fair value reported above. See Note 14 to the
    Company's fiscal year 2007 financial statements in the Company's Annual
    Report on Form 10-K for a discussion of the valuation of these amounts
    under FAS 123R.

                                      27





(4) Mr. Withers retired from the Company on November 30, 2007. On April 4,
    2007, we entered into a letter agreement and related consulting contract
    with Mr. Withers in respect of his retirement. Please see "Description of
    W. W. Withers Retirement Agreements" at page 36 below for a description of
    those agreements.


OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
--------------------------------------------

The following table provides information on the holdings of stock options,
performance shares and restricted stock by our named executive officers at the
end of fiscal 2007. This table includes unexercised and unvested stock
options, unvested restricted stock and performance shares with performance
conditions or service requirements that have not been satisfied.



-----------------------------------------------------------------------------------------------------------------------
                                    OPTION AWARDS                                          STOCK AWARDS
            -----------------------------------------------------------------------------------------------------------
                       NUMBER OF      NUMBER OF
                      SECURITIES     SECURITIES
                      UNDERLYING     UNDERLYING                                          NUMBER OF       MARKET VALUE
                      UNEXERCISED    UNEXERCISED                                         SHARES OR       OF SHARES OR
                      OPTIONS (#)    OPTIONS (#)     OPTION       OPTION               UNITS OF STOCK   UNITS OF STOCK
            DATE OF   EXERCISABLE   UNEXERCISABLE   EXERCISE    EXPIRATION   DATE OF   THAT HAVE NOT    THAT HAVE NOT
  NAME       AWARD        (1)            (1)        PRICE ($)      DATE       AWARD      VESTED (#)     VESTED ($)(5)
-----------------------------------------------------------------------------------------------------------------------
                                                                                
 D. N.      10/4/99      70,000                      32.0313    10/4/2009     4/6/04     160,000(3)        8,515,200
 Farr        3/6/00     100,000                      21.2813     3/6/2010        (4)     470,000(4)       25,013,400
            10/2/00     200,000                      33.4063    10/2/2010    10/2/06
            1/16/02     250,000                      26.4150    1/16/2012
            10/5/04     166,666       83,334(2)      31.6275    10/5/2014
-----------------------------------------------------------------------------------------------------------------------
 W. J.      10/4/99      29,574                      32.0313    10/4/2009     4/6/04      60,000(3)        3,193,200
 Galvin      3/6/00      66,670                      21.2813     3/6/2010        (4)     150,000(4)        7,983,000
            1/16/02     170,000                      26.4150    1/16/2012    10/2/06
            10/5/04     113,333       56,667(2)      31.6275    10/5/2014
-----------------------------------------------------------------------------------------------------------------------
 E. L.       4/1/99      15,000                      26.1719     4/1/2009     4/6/04      40,000(3)        2,128,800
 Monser      3/6/00      10,000                      21.2813     3/6/2010        (4)      60,000(4)        3,193,200
            1/16/02      40,000                      26.4150    1/16/2012    10/2/06
            10/5/04      66,666       33,334(2)      31.6275    10/5/2014    11/7/06
-----------------------------------------------------------------------------------------------------------------------
 C. A.       4/1/99      30,000                      26.1719     4/1/2009     4/6/04      32,000(3)        1,703,040
 Peters      3/6/00      30,000                      21.2813     3/6/2010        (4)     100,000(4)        5,322,000
            10/2/00      60,000                      33.4063    10/2/2010    10/2/06
            1/16/02     100,000                      26.4150    1/16/2012
            10/5/04      66,666       33,334(2)      31.6275    10/5/2014
-----------------------------------------------------------------------------------------------------------------------
 W. W.      10/4/99      30,640                      32.0313    10/4/2009     4/6/04      28,000(3)        1,490,160
 Withers    1/16/02      56,216                      26.4150    1/16/2012        (4)      70,000(4)        3,725,400
 (7)        10/5/04      60,346       33,334(2)      31.6275    10/5/2014
-----------------------------------------------------------------------------------------------------------------------


            --------------------------------------------
                            STOCK AWARDS
            --------------------------------------------
                          EQUITY
                      INCENTIVE PLAN        EQUITY
                         AWARDS:        INCENTIVE PLAN
                        NUMBER OF       AWARDS: MARKET
                         UNEARNED      OR PAYOUT VALUE
                      SHARES, UNITS      OF UNEARNED
                         OR OTHER      SHARES, UNITS OR
                       RIGHTS THAT       OTHER RIGHTS
            DATE OF      HAVE NOT       THAT HAVE NOT
  NAME       AWARD      VESTED (#)       VESTED($)(5)
--------------------------------------------------------
                              
 D. N.       4/6/04
 Farr           (4)
            10/2/06     460,000(6)        24,481,200


--------------------------------------------------------
 W. J.       4/6/04
 Galvin         (4)
            10/2/06     200,000(6)        10,644,000

--------------------------------------------------------
 E. L.       4/6/04
 Monser         (4)
            10/2/06     150,000(6)         7,983,000
            11/7/06      10,000(6)           532,200
--------------------------------------------------------
 C. A.       4/6/04
 Peters         (4)
            10/2/06     120,000(6)         6,386,400


--------------------------------------------------------
 W. W.       4/6/04
 Withers        (4)
 (7)
--------------------------------------------------------

--------
(1) Consists of stock options granted under the Company's stock option plans.

(2) These options became exercisable on October 5, 2007.

(3) Consists of performance share awards granted in fiscal 2004 under the 2004
    performance shares program (under our 1997 Incentive Shares Plan) which
    were subject to the achievement of financial targets for the performance
    period ending September 30, 2007. Those financial targets have been
    satisfied. Amounts shown represent the 40% portions of the earned awards
    which will remain subject to forfeiture as participants must remain
    employed by the Company for an additional year. The 60% portions of those
    awards earned at the end of the performance period were paid out in stock,
    with a portion paid in cash to cover tax obligations of participants, and
    are set forth in the Option Exercises and Stock Vested table.

                                      28





(4) Consists of restricted stock for each of the named executive officers
    which vests as follows:


----------------------------------------------------------------------------------------------
                              NUMBER         VESTING TERM
         NAME                OF SHARES        (IN YEARS)        GRANT DATE       VESTING DATE
----------------------------------------------------------------------------------------------
                                                                     
 D. N. Farr                     40,000            10            10/7/1997         10/7/2007
                               100,000             5            10/5/2004         10/5/2009
                               120,000            10            10/2/2000         10/2/2010
                               110,000             6            10/5/2005         10/5/2011
                               100,000            10            10/1/2002         10/1/2012
----------------------------------------------------------------------------------------------
 W. J. Galvin                   40,000             5            10/1/2002         10/1/2007
                                40,000            10            10/7/1997         10/7/2007
                                20,000            10            10/2/2000         10/2/2010
                                50,000             6            10/4/2005         10/4/2011
----------------------------------------------------------------------------------------------
 E. L. Monser                   20,000            10            10/2/2000         10/2/2010
                                20,000            10            11/4/2002         11/4/2012
                                20,000             8            11/7/2006         11/7/2014
----------------------------------------------------------------------------------------------
 C. A. Peters                   60,000            10            10/2/2000         10/2/2010
                                40,000            10            10/4/2005         10/4/2015
----------------------------------------------------------------------------------------------
 W. W. Withers                  20,000             5            11/4/2002         11/4/2007
                                50,000             3            10/2/2006         10/2/2009
----------------------------------------------------------------------------------------------


(5) Based on the closing market price of the Company's common stock of $53.22
    on September 30, 2007.

(6) Consists of performance share awards granted in fiscal 2007 under the 2007
    performance shares program (under our 2006 Incentive Shares Plan), subject
    to the achievement of financial targets for the performance period ending
    September 30, 2010. The target and maximum number of shares that can be
    earned under these awards are shown in this column. Participants cannot
    earn greater than 100% of the maximum, regardless of the extent to which
    actual Company performance exceeds the target. Payout for a performance
    period is made as soon as practicable after the achievement of the
    performance target, provided that the Committee may establish additional
    vesting conditions for retention purposes. Earned performance shares are
    paid to participants in stock, with a portion paid in cash to cover tax
    obligations of participants. See "Performance Shares Program" at page 20
    above for additional information regarding the program and additional
    detail on performance shares, including how the shares are earned.

(7) Mr. Withers retired from the Company on November 30, 2007. On April 4,
    2007, we entered into a letter agreement and related consulting contract
    with respect to his retirement. In accordance with those agreements and as
    permitted under the 1997 and 2006 Incentive Shares Plans, Mr. Withers will
    be eligible to receive payout of the awards described in footnote (4), and
    the restricted stock described in footnote (3) will vest as normally
    scheduled. Mr. Withers will also be permitted to exercise his outstanding
    stock options for a period of five years following his retirement, in
    accordance with the terms of the option plans. See "Description of W. W.
    Withers Retirement Agreements" at page 36 below for a description of those
    agreements with respect to Mr. Withers.


                                      29





OPTION EXERCISES AND STOCK VESTED
---------------------------------

The following table provides information for fiscal 2007 for our named
executive officers on (1) stock option exercises during fiscal 2007, including
the number of shares acquired on exercise and the value realized and (2) the
earning of performance shares that are not subject to additional service
requirements, the vesting of restricted stock, and the values realized.



------------------------------------------------------------------------------------------------------------------------
                                                    OPTION AWARDS                              STOCK AWARDS
------------------------------------------------------------------------------------------------------------------------
                                         NUMBER OF SHARES      VALUE REALIZED      NUMBER OF SHARES      VALUE REALIZED
                                           ACQUIRED ON          ON EXERCISE          ACQUIRED ON           ON VESTING
               NAME                        EXERCISE (#)            ($)(1)            VESTING (#)             ($)(4)
------------------------------------------------------------------------------------------------------------------------
                                                                                             
 D. N. Farr                                   10,000               212,075             240,000(2)          12,439,200
                                                                                        40,000(3)           1,677,100
------------------------------------------------------------------------------------------------------------------------
 W. J. Galvin                                 73,756             1,756,247              90,000(2)           4,664,700
------------------------------------------------------------------------------------------------------------------------
 E. L. Monser                                     --                    --              60,000(2)           3,109,800
------------------------------------------------------------------------------------------------------------------------
 C. A. Peters                                     --                    --              48,000(2)           2,487,840
------------------------------------------------------------------------------------------------------------------------
 W. W. Withers                                16,344               254,387              42,000(2)           2,176,860
------------------------------------------------------------------------------------------------------------------------

---------
(1) Values for stock options represent the difference between the exercise
    price of the options and the market price of the Company's common stock at
    exercise, based on the average of the high and low market prices on the
    day of exercise.

(2) Numbers reflect the earning of performance shares granted under the 2004
    performance shares program. The performance shares were subject to the
    achievement of financial targets for the four-year period ended September
    30, 2007. The performance shares shown are the 60% portions of the awards
    earned and paid out in stock, with a portion paid in cash to cover tax
    obligations of participants, after the end of fiscal 2007. Amounts shown
    exclude the 40% portions of the 2004 performance share awards which remain
    subject to forfeiture, as participants must remain employed by or in
    service to the Company for an additional year, and which are set forth in
    the Outstanding Equity Awards at Fiscal Year End table.

(3) Represents the vesting of 40,000 shares of restricted stock with a five
    year vesting term with respect to Mr. Farr.

(4) Values realized for performance shares earned reflect the market value
    based on the average of the high and low market prices ($51.83) on
    November 5, 2007, the date the Compensation Committee determined that the
    performance targets for the performance period ended September 30, 2007
    were met. Value realized for restricted stock described in footnote (3)
    above reflects the market value based on the average of the high and low
    market prices on the date of vesting.


PENSION BENEFITS
----------------

The table below presents information on the pension benefits for the named
executive officers under each of the following pension plans:

EMERSON RETIREMENT PLAN

The Emerson Electric Co. Retirement Plan is a tax-qualified retirement program
that covered approximately 65,000 participants as of September 30, 2007. As
applicable to the named executive officers, the plan provides benefits based
primarily on a formula that considers the highest consecutive five-year
average of the executive's annual cash earnings (final average earnings).
Earnings for this plan include base salary plus bonus payments, but may not
exceed an IRS-prescribed limit applicable to tax-qualified plans ($225,000 for
2007).

The formula provides an annual benefit accrual for each year of service of
1.0% of final average earnings up to "covered compensation" and 1.5% of final
average earnings in excess of "covered compensation," limited to 35 years of
service. Once the employee has attained 35 years of service, the annual
accrual is 1.0% of final average earnings. "Covered compensation" is based on
the average of Social Security taxable wage bases, and varies per individual
based on Social Security retirement age. A small portion of the accrued
benefits payable from the Emerson Retirement Plan for Messrs. Farr, Galvin,
and Peters includes benefits determined under different but lesser pension
formulas for periods of prior service at various Company divisions or
subsidiaries.

                                      30





The accumulated benefit that an employee earns over his or her career with the
Company is payable upon retirement on the basis of an annuity on a monthly
basis for life with a guaranteed minimum term of five years. The normal
retirement age is defined for this plan as 65. Employees are eligible to
retire early under the plan once they have attained age 55 and 10 years of
service. As of September 30, 2007, Mr. Withers has met the eligibility
requirements for normal retirement, and Mr. Galvin and Mr. Monser have met the
eligibility requirements for early retirement under the Plan. In the event the
employee retires before normal retirement age, the accrued benefit is reduced
for the number of years prior to age 65 that the benefit commences (4% for
each of the first 5 years that retirement precedes age 65, and 5% for each
year thereafter). Employees vest in their accrued benefit after 5 years of
service. The Plan provides for spousal joint and survivor annuity options. No
employee contributions are required.

Benefits under the Emerson Retirement Plan are subject to the limitations
imposed under section 415 of the Internal Revenue Code (which in 2007 is
$180,000 per year for a single life annuity payable at an IRS-prescribed
retirement age). This ceiling may be actuarially adjusted in accordance with
IRS rules for items such as other forms of distribution and different annuity
starting dates.

EMERSON PENSION RESTORATION PLAN

The Emerson Electric Co. Pension Restoration Plan is a non-qualified plan that
is an unfunded obligation of the Company. Benefits are payable from the
Company's general operating funds. Participation in, and benefits payable
from, the plan are by award, subject to the approval of the Compensation
Committee. D. N. Farr, W. J. Galvin, W. W. Withers, E. L. Monser and C. A.
Peters have been selected to participate in the Plan. At age 65 or later
termination of employment, the Plan will provide a benefit based on the same
final average earnings formula as described above for the Emerson Retirement
Plan, for all years of service at Emerson, and without regard to the
IRS-prescribed limitations on benefits and compensation as described in the
Emerson Retirement Plan. The benefit payable from the Pension Restoration Plan
is reduced by the benefit received from the Emerson Retirement Plan. Benefits
payable from the Pension Restoration Plan are generally payable in the same
annuity form as the benefits paid from the Emerson Retirement Plan. In the
event a named executive officer leaves the Company before normal retirement
age, the benefit payable to the executive is determined in the discretion of
the Committee. No pension benefits were paid to any of the named executives
during the 2007 fiscal year.

The amounts reported in the table below equal the present value of the
accumulated benefit at September 30, 2007, for the named executive officers
under each plan based upon the assumptions described in footnote (2).

PENSION BENEFITS



--------------------------------------------------------------------------------------------------------------------------
                                                                        NUMBER OF       PRESENT VALUE    PAYMENTS DURING
                                                                      YEARS CREDITED    OF ACCUMULATED   LAST FISCAL YEAR
        NAME                            PLAN NAME                     SERVICE (#)(1)    BENEFIT ($)(2)         ($)
--------------------------------------------------------------------------------------------------------------------------
                                                                                             
 D. N. Farr           Emerson Electric Co. Retirement Plan                  27              375,000            --
                      Emerson Electric Co. Pension Restoration Plan         27            4,373,000            --
--------------------------------------------------------------------------------------------------------------------------
 W. J. Galvin         Emerson Electric Co. Retirement Plan                  35              859,000            --
                      Emerson Electric Co. Pension Restoration Plan         35            4,214,000            --
--------------------------------------------------------------------------------------------------------------------------
 E. L. Monser         Emerson Electric Co. Retirement Plan                   6              118,000            --
                      Emerson Electric Co. Pension Restoration Plan          6              376,000            --
--------------------------------------------------------------------------------------------------------------------------
 C. A. Peters         Emerson Electric Co. Retirement Plan                  31              368,000            --
                      Emerson Electric Co. Pension Restoration Plan         31            1,332,000            --
--------------------------------------------------------------------------------------------------------------------------
 W. W. Withers        Emerson Electric Co. Retirement Plan                  18              544,000            --
                      Emerson Electric Co. Pension Restoration Plan         18            1,893,000            --
--------------------------------------------------------------------------------------------------------------------------

---------
(1) The number of years of service credited under the plans is computed as of
    the same pension plan measurement date used for financial statement
    reporting purposes with respect to the Company's financial statements for
    the last completed fiscal year. Mr. Monser has 30 years of service with
    the Company, but only 6 years of credited service under our Retirement
    Plan as he previously participated in a divisional profit sharing plan.

                                      31





(2) The accumulated benefit is based on service and earnings (as described
    above) considered by the plans for the period through September 30, 2007.
    The present value has been calculated assuming that the named executives
    will remain in service until age 65 (with the exception of Mr. Withers,
    who is currently age 67), the age at which retirement may occur without
    any reduction in benefits, and that the benefit is payable under the
    stated form of annuity. Except for the assumption that the executives
    remain in service and retire at age 65, the present value is based on the
    assumptions as described in Note 10 to the Company's fiscal year 2007
    financial statements in the Company's Annual Report on Form 10-K.


NONQUALIFIED DEFERRED COMPENSATION
----------------------------------

The Emerson Electric Co. Savings Investment Restoration Plan ("Savings
Investment Restoration Plan") is a nonqualified, unfunded defined contribution
plan. The plan provides participants with benefits that would have been
provided under the Emerson Electric Co. Employee Savings Investment Plan, the
Company's qualified 401(k) plan (the "ESIP"), but could not be provided due to
Internal Revenue Code ("IRC") qualified plan compensation limits.

Participants in the Savings Investment Restoration Plan are individuals who
have been designated by the Compensation Committee. Under the Savings
Investment Restoration Plan, participants may elect to defer up to 20 percent
of compensation and the Company will make matching contributions on up to the
first 5 percent of those deferrals at the rate of 50 percent, not to exceed
2.5 percent of compensation and less any matching amounts contributed to the
ESIP. Compensation includes cash pay (base salary plus annual cash bonus)
received by a participant and excludes any reimbursements, payments under the
incentive shares plans, stock option gains, any other stock based awards and
any severance payments. Amounts deferred under the plan (which are 100%
vested) will be credited with returns based on the same investment
alternatives selected by the participant under the ESIP, which include an
Emerson common stock fund and 21 other mutual fund investment alternatives.
The Company matching contributions vest 20% each year for the first 5 years of
service, after which the participant is 100% vested. The matching
contributions are credited to a book-entry account reflecting units equivalent
to Emerson stock. There are no "above-market earnings" as all earnings are
market-based consistent with the investment funds elected. All deferred
amounts and the Company matching contributions are accounted for on the
Company's financial statements and are unfunded obligations of the Company
which are paid in cash when benefit payments commence.

Generally, distribution of vested account balances occurs no later than one
year following termination of employment in a lump sum. Upon retirement, or in
other certain instances, participants may elect to receive their account
balances in up to ten annual installments. Unvested matching contributions
shall be fully vested in the event of (i) retirement with the approval of the
Compensation Committee on or after the age of 55, (ii) death or disability,
(iii) termination of the plan, or (iv) a change of control of the Company. All
or a portion of any participant's vested account balance may be distributed
earlier in the event of an unforeseeable emergency, if approved by the
Compensation Committee. For amounts deferred or vested as of December 31,
2004, a participant may receive a distribution of after tax deferrals upon 30
days notice.

NON-QUALIFIED DEFERRED COMPENSATION



-------------------------------------------------------------------------------------------------------------------------------
                                     EXECUTIVE                                 AGGREGATE          AGGREGATE         AGGREGATE
                                   CONTRIBUTIONS          REGISTRANT          EARNINGS IN       WITHDRAWALS/        BALANCE AT
                                    IN LAST FY         CONTRIBUTIONS IN         LAST FY         DISTRIBUTIONS        LAST FYE
            NAME                      ($)(1)            LAST FY ($)(1)          ($)(1)               ($)              ($)(2)
-------------------------------------------------------------------------------------------------------------------------------
                                                                                                     
 D. N. Farr                           323,792               78,198              423,331              --             3,021,323
-------------------------------------------------------------------------------------------------------------------------------
 W. J. Galvin                         144,354               33,339              253,058              --             2,599,647
-------------------------------------------------------------------------------------------------------------------------------
 E. L. Monser                          78,333               23,823               64,274              --               512,810
-------------------------------------------------------------------------------------------------------------------------------
 C. A. Peters                          45,438               22,719              182,813              --             1,119,630
-------------------------------------------------------------------------------------------------------------------------------
 W. W. Withers                        107,608               24,188              223,859              --             1,785,287
-------------------------------------------------------------------------------------------------------------------------------

-------
(1) Includes amounts contributed by each named executive officer and by the
    Company, respectively, to the Savings Investment Restoration Plan.
    Executive and Company contributions in the last fiscal year have been
    included in the Salary and All Other Compensation columns, respectively,
    of the Summary Compensation Table. Aggregate earnings under the plan are
    not above-market and are not included in the Summary Compensation Table.

                                      32





(2) Includes amounts reported as compensation for the named executive officers
    in the Summary Compensation Table for previous years. For fiscal 2007, the
    amounts described in footnote (1) are included in the Summary Compensation
    Table as described.


POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
--------------------------------------------------------

As described in the Compensation Discussion and Analysis beginning on
page 15, the named executive officers do not have any written or oral
employment agreements with the Company and have no other agreements that
contain severance or "golden parachute" provisions. As described below, the
terms and conditions of Mr. Withers' retirement are set forth in a letter
agreement and related consulting contract.

The information below generally describes payments or benefits under the
Company's compensation plans and arrangements that would be available to all
participants in the plans, including the named executive officers, in the
event of the participant's termination of employment or of a Change of Control
of the Company. Benefits or payments under other plans and arrangements that
are generally available to the Company's employees on similar terms are not
described.

CONDITIONS AND OBLIGATIONS APPLICABLE TO RECEIPT OF TERMINATION/CHANGE OF
CONTROL PAYMENTS

In the event of any termination or Change of Control, all executives
participating in stock options, performance shares, restricted stock or the
Pension Restoration Plan have the following obligations to the Company:

Stock Options. Named executive officers awarded stock options are obligated to
-------------
maintain the confidentiality of Company information, to assign to the Company
intellectual property rights, and not to compete with, or solicit the
employees of, the Company. If these obligations are breached, any unexercised
portion of the option will be void and, for options exercised within twelve
months prior to the breach, the named executive officer owes the Company the
difference between (i) the fair market value of the shares acquired and (ii)
the exercise price.

Performance Shares and Restricted Stock. Named executive officers awarded
---------------------------------------
performance shares or restricted stock are obligated not to compete with, or
solicit the employees of, the Company during and for two years after
termination of employment.

Pension Restoration Plan. If any participating named executive officer is
------------------------
discharged for cause, enters into competition with the Company, interferes
with the Company's relations with a customer, or engages in any activity that
would result in a decrease of or loss in sales by the Company, the named
executive officer's rights to benefits under this Plan will be forfeited,
unless the Compensation Committee determines that the activity is not
detrimental to the Company's interests.

Additionally, upon retirement and involuntary termination, named executive
officers generally execute letter agreements reaffirming their applicable
confidentiality, non-competition and non-solicitation obligations and may
enter into extended non-competition agreements with the Company.

PAYMENTS MADE UPON RETIREMENT

Upon retirement, the Company's compensation plans and arrangements provide as
follows:

    * The Compensation Committee has the discretion to determine whether any
      annual cash bonus award, or any part of it, would be paid, subject to
      satisfaction of pre-established performance conditions;

    * All unvested stock options would vest immediately, and all unexercised
      options could be exercised for a period of up to five years after
      retirement, but no longer than the original option term;

    * Upon retirement after age 65, the named executive officer would receive
      a prorated payout of performance shares, as reasonably determined by the
      Compensation Committee, subject to satisfaction of pre-established
      performance conditions, and paid after the end of the applicable
      performance period. Before age 65, the Compensation Committee has the
      discretion to determine whether the named executive officer would
      receive a prorated, other or no payout of performance shares, which
      payout would be made after the performance period, subject to the
      satisfaction of performance conditions;

    * The Compensation Committee has the discretion to determine whether to
      allow the named executive officer to continue to vest in restricted
      stock following retirement, or to reduce the vesting period (to not less
      than three years);

                                      33





    * If not previously vested, the named executive officer would be vested in
      Company contributions to his or her Savings Investment Restoration Plan
      account if retirement occurs with the approval of the Committee on or
      after age 55; and

    * Under the Company's Pension Restoration Plan, a named executive
      officer's pension commences at age 65 (or upon retirement, if later) and
      is paid in the form of an annuity on a monthly basis (no lump sum
      distributions).

PAYMENTS MADE UPON DEATH OR DISABILITY

Upon death or total disability, the Company's compensation plans and
arrangements provide as follows:

    * The Compensation Committee has the discretion to determine whether any
      annual cash bonus award, or any part of it, would be paid, subject to
      satisfaction of pre-established performance conditions;

    * All unvested stock options would vest immediately upon death, and all
      unexercised options could be exercised for a period of up to one year
      after death, but no longer than the original option term. Upon
      termination due to disability, the named executive officer would have up
      to one year, but no longer than the original option term, to exercise
      any previously vested options (no accelerated vesting);

    * The Compensation Committee has the discretion to determine whether the
      named executive officer would receive full, partial or no payout of
      performance shares, subject to satisfaction of pre-established
      performance conditions;

    * Awards of restricted stock will be prorated for the period of service
      during the restriction period and distributed free of restriction at the
      end of the vesting period and the Compensation Committee has the
      discretion to determine whether to reduce the vesting period to not less
      than three years;

    * If not previously vested, the named executive officer would be vested in
      Company contributions to his or her Savings Investment Restoration Plan
      account;

    * Upon the death of a named executive officer participating in the Pension
      Restoration Plan, the surviving spouse would receive, in the form of an
      annuity payment on a monthly basis, benefits equal to 50% of the benefit
      that would have been payable to the named executive officer at the named
      executive officer's earliest retirement age. Upon termination due to
      disability, benefits would start when the named executive officer
      reaches age 65 (or upon termination, if later) and be paid in the form
      of an annuity on a monthly basis; and

    * Upon a named executive officer's death, the beneficiaries would receive
      proceeds from term life insurance provided by the Company.

PAYMENTS MADE UPON OTHER TERMINATION

If the named executive officer's employment terminates for a reason other than
as described above (i.e., voluntary termination, termination for cause or
involuntary termination), he or she would only receive:

    * Payment of the vested portion of the named executive officer's Savings
      Investment Restoration Plan account, which payment would be made within
      60 days after termination, in a single lump sum, unless the named
      executive officer previously had chosen to be paid in equal annual
      installments for up to ten years.

Under the Company's compensation plans and arrangements, the Committee may
also, in its discretion, determine whether any of the additional payments or
benefits described below would be paid to the named executive officer.
However, this exercise of discretion is unlikely to result in the payment of
any additional benefits in the case of voluntary quit or termination for
cause.

    * The Compensation Committee has the discretion to determine whether any
      annual cash bonus award, or any part of it, would be paid, subject to
      satisfaction of pre-established performance conditions;

    * If termination occurs with Company consent, the Compensation Committee
      may permit the named executive officer to have up to three months, but
      no longer than the original option term, to exercise any previously
      vested stock options;

    * The Compensation Committee has the discretion to determine whether the
      named executive officer would receive full, partial or no payout of
      performance shares, subject to satisfaction of pre-established
      performance conditions;

                                      34





    * The Compensation Committee has the discretion to determine whether to
      allow the named executive officer to continue to vest in restricted
      stock following termination, or to reduce the vesting period (to not
      less than three years); and

    * Subject to the discretion of the Compensation Committee, a named
      executive officer participating in the Pension Restoration Plan would
      receive his or her vested benefits starting at age 65 (or upon
      termination, if later), paid in the form of an annuity on a monthly
      basis.

The estimated amounts of the foregoing benefits, based on certain assumptions
regarding the exercise of the Committee's authority, are identified in the
tables below.

PAYMENTS MADE UPON CHANGE OF CONTROL

Upon a Change of Control, the Company's compensation plans and arrangements
provide as follows:

    * Annual cash bonus awards are not paid in the event of a Change of
      Control. Previously earned annual cash bonus awards that have been
      deferred would be paid as previously elected by the named executive
      officer, in a single lump sum or in deferral installments, either upon
      the Change of Control or the termination of employment after the Change
      of Control;

    * All unvested stock options would vest immediately, and all unexercised
      options could be exercised for their remaining terms;

    * Performance conditions of outstanding performance share awards would be
      deemed to be satisfied, with payout to be made immediately;

    * All restricted stock awards would vest immediately;

    * If not previously vested, the named executive officer would be vested in
      Company contributions to his or her Savings Investment Restoration Plan
      account; and

    * A named executive officer participating in the Pension Restoration Plan
      would become fully vested and plan benefits would be paid immediately in
      a lump sum.

"CHANGE OF CONTROL" DEFINITION AND PAYMENT APPROACH

"Change of Control" generally means: (i) the acquisition of beneficial
ownership of 20% or more of the Company's common stock, (ii) individuals who
currently make up the Company's Board of Directors (or who subsequently become
Directors after being approved for election by at least a majority of current
Directors) ceasing for any reason to make up at least a majority of the Board,
or (iii) approval by the Company's stockholders of (a) a reorganization,
merger or consolidation which results in the ownership of more than 50% of the
Company's common stock by persons or entities that were not previously
stockholders; (b) a liquidation or dissolution of the Company; or (c) the sale
of substantially all of the Company's assets, provided that, only with respect
to the 2006 Incentive Shares Plan, the Change of Control must also meet the
requirements of Internal Revenue Code Section 409A and any transaction
referenced in (iii) must have actually occurred, rather than merely have been
approved; and, provided further that, with respect to the Company's Pension
Restoration Plan, Savings Investment Restoration Plan and Deferred
Compensation Plan for Non-Employee Directors, a Change of Control refers to a
change in the ownership or effective control of the Company or a change in the
ownership of a substantial portion of the assets of the Company, as such terms
are defined under Section 409A of the Internal Revenue Code and the
regulations promulgated thereunder.

As described above, immediately upon a Change of Control, named executive
officers may exercise all their outstanding stock options, all their
outstanding performance shares will be paid out, and their restricted stock
vests. This is the so-called "single" trigger treatment for outstanding equity
awards, which does not require an additional, or "double", trigger for
receiving the benefit, such as termination or significant change in the named
executive officers' duties as a result of a Change of Control. The Company
believes that "single" trigger treatment is appropriate for equity awards for
the following reasons:

    * It provides employees with the same opportunities as stockholders of the
      Company, who are free to sell their equity at the time of the Change of
      Control and to realize the value created at the time of the transaction.

                                      35





    * It ensures that continuing employees are treated the same as terminated
      employees.

    * It is an effective retention device during Change of Control
      discussions, especially for more senior executives for whom equity
      represents a significant portion of their total pay.

    * It is particularly appropriate for performance-based equity, given the
      potential difficulty of replicating or meeting the performance goals
      after the Change of Control.

DESCRIPTION OF W. W. WITHERS RETIREMENT AGREEMENTS

On April 4, 2007, the Company and W. Wayne Withers entered into a letter
agreement and related consulting contract in connection with Mr. Withers'
previously announced voluntary retirement effective November 30, 2007.

Under the letter agreement, Mr. Withers agrees, among other things: (i) not to
compete with, or solicit to hire the employees of, the Company during the
two-year term of the consulting contract and for an additional period of two
years thereafter; (ii) not to use or disclose any confidential information of
the Company; and (iii) to reaffirm his obligations under all existing
non-competition agreements with the Company.

Under the letter agreement, Mr. Withers continued to receive his current
annual base salary through November 30, 2007 and was eligible to receive a
cash bonus for the fiscal year ended September 30, 2007. As provided in the
1997 Incentive Shares Plan, he was eligible to receive the scheduled payout of
the performance shares granted to him under the Company's 2004 performance
shares program, subject to the terms of the program and the Company achieving
the financial objectives under the program, 60% of which was paid after the
end of fiscal 2007 and the remaining 40% of which is to be paid one year after
the end of the performance period, subject to continued service to the
Company. As permitted under the 1997 Incentive Shares Plan, an unvested
restricted stock award of 50,000 shares with a three year term, which was
previously granted to Mr. Withers, will be permitted to vest as scheduled in
October, 2009.

As a result of his retirement from the Company, commencing on December 1, 2007
Mr. Withers is eligible to receive his monthly pension benefits earned as of
that date under, and pursuant to the terms of, the Pension Restoration Plan.
In addition, Mr. Withers will be permitted to exercise his outstanding stock
options in accordance with the provisions of the stock option plans described
above relating to retiring participants.

If Mr. Withers violates any of his obligations to the Company under the letter
agreement, the consulting contract or otherwise, he will forfeit any
outstanding portions of the performance share award payable under the 2004
performance shares program, the restricted stock and the benefits under the
supplemental retirement plan described above, and the Company will have the
right to recover from him any gain he has realized on the exercise of the
stock options described above.

During the two-year consulting contract term, Mr. Withers agrees to be
available to provide consulting and legal advisory services on a full-time
basis for the first six months following his retirement and on a part-time
basis for the remaining 18 months. Mr. Withers will receive consulting fees of
$43,333 per month for the first six months of the consulting contract term,
payable monthly, and $21,666 per month for the remaining 18 months of the
term, payable monthly. The Company will also reimburse Mr. Withers for
necessary and ordinary business expenses incurred in connection with the
consulting services and, during the term of the consulting contract, the
Company will continue to pay for a leased automobile, financial planning, a
club membership and a dinner club membership, the value of which the Company
estimates will be less than $50,000 per year.

QUANTIFICATION OF PAYMENTS AND BENEFITS

The following tables quantify the potential payments and benefits upon
termination or a Change of Control of the Company for each of the named
executive officers, assuming the named executive officer's employment
terminated on September 30, 2007, given the named executive officer's
compensation and service level as of that date and, if applicable, based on
the Company's closing stock price of $53.22 on that date. Other assumptions
made with respect to specific payments or benefits are set forth in applicable
footnotes to the tables. Due to the number of factors that affect the nature
and amount of any payments or benefits provided upon a termination or Change
of Control, including, but not limited to, the date of any such event, the
Company's stock price and the named executive officer's age, any actual
amounts paid or distributed may be different. See "Description of W. W.
Withers Retirement Agreements" above for a description of the Mr. Withers'
retirement arrangements. None of the payments set forth below will be
grossed-up for taxes.

                                      36






                                                             D. N. FARR
------------------------------------------------------------------------------------------------------------------------------------

EXECUTIVE BENEFITS AND                                                           VOLUNTARY OR FOR  INVOL. TERM. NOT   CHANGE OF
PAYMENTS UPON TERMINATION    RETIREMENT ($)      DEATH ($)       DISABILITY ($)   CAUSE TERM. ($)   FOR CAUSE ($)    CONTROL ($)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   
Annual Cash Incentive        2,700,000(1)(2)   2,700,000(1)(2)   2,700,000(1)(2)        --(1)(3)    2,700,000(1)(2)          --(4)
------------------------------------------------------------------------------------------------------------------------------------
Stock Options                1,799,389(5)      1,799,389(5)             --              --                 --         1,799,389(5)
------------------------------------------------------------------------------------------------------------------------------------
Performance Shares           8,515,200(6)(7)   8,515,200(6)(7)   8,515,200(6)(7)        --(3)(6)    8,515,200(6)(7)  32,996,400(8)
------------------------------------------------------------------------------------------------------------------------------------
Restricted Stock                    --(9)     14,404,880(10)    14,404,880(10)          --(9)              --(9)     25,013,400(11)
------------------------------------------------------------------------------------------------------------------------------------
Pension Restoration Plan           N/A               N/A               N/A             N/A                N/A           496,000(12)
------------------------------------------------------------------------------------------------------------------------------------
Life Insurance Benefits             --           200,000(13)            --              --                 --                --
------------------------------------------------------------------------------------------------------------------------------------


                                                        W. J. GALVIN
------------------------------------------------------------------------------------------------------------------------------------
EXECUTIVE BENEFITS AND                                                           VOLUNTARY OR FOR  INVOL. TERM. NOT   CHANGE OF
PAYMENTS UPON TERMINATION    RETIREMENT ($)      DEATH ($)       DISABILITY ($)   CAUSE TERM. ($)   FOR CAUSE ($)    CONTROL ($)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   
Annual Cash Incentive        1,025,000(1)(2)   1,025,000(1)(2)   1,025,000(1)(2)        --(1)(3)    1,025,000(1)(2)          --(4)
------------------------------------------------------------------------------------------------------------------------------------
Stock Options                1,223,582(5)      1,223,582(5)             --              --                 --         1,223,582(5)
------------------------------------------------------------------------------------------------------------------------------------
Performance Shares           3,193,200(6)(7)   3,193,200(6)(7)   3,193,200(6)(7)        --(3)(6)    3,193,200(6)(7)  13,837,200(8)
------------------------------------------------------------------------------------------------------------------------------------
Restricted Stock                    --(9)      5,889,680(10)     5,889,680(10)          --(9)              --(9)      7,983,000(11)
------------------------------------------------------------------------------------------------------------------------------------
Pension Restoration Plan           N/A               N/A               N/A             N/A                N/A           123,000(12)
------------------------------------------------------------------------------------------------------------------------------------
Life Insurance Benefits             --           200,000(13)            --              --                 --                --
------------------------------------------------------------------------------------------------------------------------------------


                                                        E. L. MONSER
------------------------------------------------------------------------------------------------------------------------------------
EXECUTIVE BENEFITS AND                                                           VOLUNTARY OR FOR  INVOL. TERM. NOT   CHANGE OF
PAYMENTS UPON TERMINATION    RETIREMENT ($)      DEATH ($)       DISABILITY ($)   CAUSE TERM. ($)   FOR CAUSE ($)    CONTROL ($)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   
Annual Cash Incentive          725,000(1)(2)     725,000(1)(2)     725,000(1)(2)        --(1)(3)      725,000(1)(2)          --(4)
------------------------------------------------------------------------------------------------------------------------------------
Stock Options                  719,764(5)        719,764(5)             --              --                 --           719,764(5)
------------------------------------------------------------------------------------------------------------------------------------
Performance Shares           2,128,800(6)(7)   2,128,800(6)(7)   2,128,800(6)(7)        --(3)(6)    2,128,800(6)(7)  10,644,000(8)
------------------------------------------------------------------------------------------------------------------------------------
Restricted Stock                    --(9)      1,410,330(10)     1,410,330(10)          --(9)              --(9)      3,193,200(11)
------------------------------------------------------------------------------------------------------------------------------------
Pension Restoration Plan           N/A               N/A               N/A             N/A                N/A            36,000(12)
------------------------------------------------------------------------------------------------------------------------------------
Life Insurance Benefits             --           200,000(13)            --              --                 --                --
------------------------------------------------------------------------------------------------------------------------------------


                                                        C. A. PETERS
------------------------------------------------------------------------------------------------------------------------------------
EXECUTIVE BENEFITS AND                                                           VOLUNTARY OR FOR  INVOL. TERM. NOT    CHANGE OF
PAYMENTS UPON TERMINATION    RETIREMENT ($)      DEATH ($)       DISABILITY ($)   CAUSE TERM. ($)   FOR CAUSE ($)     CONTROL ($)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    
Annual Cash Incentive          725,000(1)(2)     725,000(1)(2)     725,000(1)(2)        --(1)(3)      725,000(1)(2)          --(4)
------------------------------------------------------------------------------------------------------------------------------------
Stock Options                  719,764(5)        719,764(5)             --              --                 --           719,764(5)
------------------------------------------------------------------------------------------------------------------------------------
Performance Shares           1,703,040(6)(7)   1,703,040(6)(7)   1,703,040(6)(7)        --(3)(6)    1,703,040(6)(7)   8,089,440(8)
------------------------------------------------------------------------------------------------------------------------------------
Restricted Stock                    --(9)      2,661,000(10)     2,661,000(10)          --(9)              --(9)      5,322,000(11)
------------------------------------------------------------------------------------------------------------------------------------
Pension Restoration Plan           N/A               N/A               N/A             N/A                N/A           151,000(12)
------------------------------------------------------------------------------------------------------------------------------------
Life Insurance Benefits             --           200,000(13)            --              --                 --                --
------------------------------------------------------------------------------------------------------------------------------------

--------
 (1) The Committee has discretion as to whether to pay or not pay a bonus,
     subject to satisfaction of performance conditions.

 (2) Assumes Committee would exercise its discretion and award a bonus,
     subject to achievement of performance conditions. For illustrative
     purposes only, this table shows the bonus paid for fiscal 2007.

                                      37





 (3) Assumes Committee would not pay a bonus or make a performance shares
     payout.

 (4) There would be no additional acceleration or special treatment for
     incentive opportunities for the fiscal year in which the Change of
     Control occurs.

 (5) Represents market value of $53.22 per share minus exercise price for all
     unvested options. The number of unvested options for each named executive
     officer is set forth in the Outstanding Equity Awards at Fiscal Year End
     table.

 (6) The Committee has discretion to provide a prorated, other or no payout,
     subject to the achievement of performance conditions.

 (7) For illustrative purposes only, assumes Committee exercises its
     discretion to allow payout of the 40% portion of the awards granted in
     2004, which are subject to forfeiture for one additional year and for
     which financial targets have been satisfied, but assumes Committee does
     not allow any payout for the performance share awards granted in 2007.
     See Outstanding Equity Awards at Fiscal Year-End table at page 28 above.

 (8) The amount shown includes the 40% portion of the 2004 awards not yet paid
     and the entire amount of 2007 awards.

 (9) The Committee has discretion to provide for continued vesting of unvested
     restricted stock or to reduce the vesting period to not less than three
     years. Assumes Committee would exercise its discretion to not allow any
     further vesting.

(10) Represents a prorated amount of the value of all unvested shares of
     restricted stock, based on number of years elapsed and rounding up to
     whole years. See Outstanding Equity Awards at Fiscal Year-End table at
     page 28 above.

(11) The amount shown includes the value of all unvested shares of restricted
     stock. See Outstanding Equity Awards at Fiscal Year-End table.

(12) Amounts shown include any difference between the discounted present value
     of benefits in such event compared to amounts shown in the Pension
     Benefits table. Upon a Change of Control, the amounts shown also include
     the discounted present value of any unvested amounts under the Pension
     Restoration Plan.

(13) Represents face amount of policies paid for by the Company which are not
     generally available to all employees.


II. RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-----------------------------------------------------------------

In accordance with its Charter, the Audit Committee has selected KPMG LLP,
independent registered public accounting firm, to audit the Company's
consolidated financial statements for fiscal 2008. KPMG LLP served as the
Company's independent registered public accounting firm for fiscal 2007. The
Audit Committee is asking the stockholders to ratify the appointment of KPMG
LLP as the Company's independent registered public accounting firm for the
fiscal year ending September 30, 2008.

The Audit Committee is not required to take any action as a result of the
outcome of the vote on this proposal. In the event stockholders fail to ratify
the appointment, the Audit Committee may reconsider this appointment. Even if
the appointment is ratified, the Audit Committee, in its discretion, may
direct the appointment of a different independent accounting firm at any time
during the year if the Audit Committee determines that such a change would be
in the Company's and the stockholders' best interests.

The Audit Committee has approved in advance all services provided by KPMG LLP.
A member of KPMG LLP will be present at the meeting with the opportunity to
make a statement and respond to appropriate questions from stockholders.

BOARD AND AUDIT COMMITTEE RECOMMENDATION. THE BOARD OF DIRECTORS AND THE AUDIT
----------------------------------------
COMMITTEE UNANIMOUSLY RECOMMEND A VOTE FOR THE RATIFICATION OF THE APPOINTMENT
                                       ---
OF KPMG LLP AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

                                      38





III. VOTING
-----------

Shares may be represented by proxy at the meeting by completing and returning
the proxy card or voting by telephone or by Internet. If a quorum is present,
the affirmative vote of a majority of the shares entitled to vote which are
present in person or represented by proxy at the 2008 Annual Meeting is
required to elect Directors, to ratify the appointment of KPMG LLP as the
Company's independent registered public accounting firm for fiscal 2008, and
to act on any other matters properly brought before the meeting. Shares
represented by proxies which are marked or voted "withhold authority" with
respect to the election of any one or more nominees for election as Directors,
proxies which are marked or voted "abstain" on the proposal to ratify the
appointment of KPMG LLP as the Company's independent registered public
accounting firm for fiscal 2008, and proxies which are marked or voted to deny
discretionary authority on other matters will be counted for the purpose of
determining the number of shares represented by proxy at the meeting. Such
proxies will thus have the same effect as if the shares represented thereby
were voted against such nominee or nominees, against the proposal to ratify
the appointment of KPMG LLP as the Company's independent registered public
accounting firm for fiscal 2008 and against such other matters, respectively.
If a broker indicates on the proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter, those shares
will not be considered as present and entitled to vote with respect to that
matter.

The Company knows of no other matters to come before the meeting. If any other
matters properly come before the meeting, the proxies solicited hereby will be
voted on such matters in the discretion of the persons voting such proxies,
except proxies which are marked to deny discretionary authority.

IV. STOCKHOLDERS' PROPOSALS
---------------------------

Proposals of stockholders intended to be presented at the 2009 Annual Meeting
scheduled to be held on February 3, 2009, must be received by the Company by
August 16, 2008 for inclusion in the Company's proxy statement and proxy
relating to that meeting. Upon receipt of any such proposal, the Company will
determine whether or not to include such proposal in the proxy statement and
proxy in accordance with regulations governing the solicitation of proxies.

In order for a stockholder to nominate a candidate for Director, under the
Company's Bylaws timely notice of the nomination must be received by the
Company in advance of the meeting. Ordinarily, such notice must be received
not less than 90 nor more than 120 days before the meeting, i.e., between
October 6 and November 5, 2008 for the 2009 Annual Meeting (but if the Company
gives less than 100 days' (1) notice of the meeting or (2) prior public
disclosure of the date of the meeting, then such notice must be received
within 10 days after notice of the meeting is mailed or other public
disclosure of the meeting is made). The stockholder filing the notice of
nomination must describe various matters regarding the nominee, including, but
not limited to, such information as name, address, occupation and shares held.

In order for a stockholder to bring other business before a stockholder
meeting, timely notice must be received by the Company within the time limits
described in the preceding paragraph. Such notice must include a description
of the proposed business, the reasons therefor, and other specified matters.
These requirements are separate from the requirements a stockholder must meet
to have a proposal included in the Company's proxy statement. The foregoing
time limits also apply in determining whether notice is timely for purposes of
rules adopted by the Securities and Exchange Commission relating to the
exercise of discretionary voting authority.

In each case the notice must be given to the Secretary of the Company, whose
address is 8000 West Florissant Avenue, St. Louis, Missouri 63136. Any
stockholder desiring a copy of the Company's Bylaws will be furnished one
without charge upon written request to the Secretary. A copy of the Bylaws is
available on the Company's Web site at www.emerson.com, Investor Relations,
Corporate Governance, Bylaws.

                                      39





V. MISCELLANEOUS
----------------

HOUSEHOLDING OF PROXIES

The Securities and Exchange Commission has adopted rules that permit companies
and intermediaries such as brokers to satisfy delivery requirements for annual
reports and proxy statements with respect to two or more stockholders sharing
the same address by delivering a single annual report and/or proxy statement
addressed to those stockholders. This process, which is commonly referred to
as "householding," potentially provides extra convenience for stockholders and
cost savings for companies. The Company and some brokers household annual
reports and proxy materials, delivering a single annual report and/or proxy
statement to multiple stockholders sharing an address unless contrary
instructions have been received from the affected stockholders.

Once you have received notice from your broker or the Company that your broker
or the Company will be householding materials to your address, householding
will continue until you are notified otherwise or until you revoke your
consent. You may request to receive at any time a separate copy of our annual
report or proxy statement, by sending a written request to Emerson Electric
Co., 8000 West Florissant Avenue, St. Louis, Missouri 63136, Attn: Investor
Relations, or by telephoning 314-553-2197 or by visiting our Web site.

If, at any time, you no longer wish to participate in householding and would
prefer to receive a separate annual report and/or proxy statement in the
future, please notify your broker if your shares are held in a brokerage
account or the Company if you hold registered shares. You can notify the
Company by sending a written request to Emerson Electric Co., 8000 West
Florissant Avenue, St. Louis, Missouri 63136, Attn: Investor Relations, or by
telephoning 314-553-2197.

If, at any time, you and another stockholder sharing the same address wish to
participate in householding and prefer to receive a single copy of the
Company's annual report and/or proxy statement, please notify your broker if
your shares are held in a brokerage account or the Company if you hold
registered shares. You can notify the Company by sending a written request to
Emerson Electric Co., 8000 West Florissant Avenue, St. Louis, Missouri 63136,
Attn: Investor Relations, or by telephoning 314-553-2197.

ADDITIONAL FILINGS

The Company's Forms 10-K, 10-Q, 8-K and all amendments to those reports are
available without charge through the Company's Web site on the Internet as
soon as reasonably practicable after they are electronically filed with, or
furnished to, the Securities and Exchange Commission. They may be accessed as
follows: www.emerson.com, Investor Relations, SEC filings.

                                      40




                                                                    APPENDIX A

EMERSON DIRECTOR INDEPENDENCE STANDARDS

In order to be considered independent under the rules of the New York Stock
Exchange, the Board must determine that a director does not have any direct or
indirect material relationship with Emerson Electric Co. ("Emerson"). The
Board has established the following guidelines to assist it in determining
director independence under the NYSE rules. Any Director who meets the
following standards will be deemed independent by the Board:

1. The Director was not employed by Emerson, and no immediate family member of
the Director was employed by Emerson as an executive officer, within the
preceding three years;

2. The Director is not a partner or employee of Emerson's independent auditor,
and no immediate family member of the Director is a partner of, or employed in
the audit, assurance or tax compliance practices of Emerson's independent
auditor, and neither the Director nor any immediate family member has been
within the preceding three years a partner of or employed by Emerson's
independent auditor and personally worked on Emerson's audit;

3. The Director was not employed by, and no immediate family member of the
Director was employed as an executive officer by, any company at the same time
any Emerson executive officer served as a member of such company's
compensation committee within the preceding three years;

4. Neither the Director, nor any member of the Director's immediate family
received in any twelve-month period during any of Emerson's last three fiscal
years direct compensation in excess of $100,000 from Emerson other than
regular director compensation, pension and other deferred payments that are
not in any way contingent on continued service to Emerson, and compensation
received by an immediate family member for service as a non-executive officer
of Emerson;

5. If the Director is an executive officer or an employee of, or if any
immediate family member is an executive officer of, another organization that
does business with Emerson, the annual sales to, or purchases from, Emerson by
such company in each of the last three fiscal years were less than the greater
of two percent of the annual revenues of such company or $1,000,000;

6. If the Director is an executive officer of another organization which is
indebted to Emerson, or to which Emerson is indebted, the total amount of
either company's indebtedness to the other is less than two percent of the
total consolidated assets of the company the Director serves as an executive
officer;

7. If the Director is, or is a director, executive officer or greater than 10%
owner of an entity that is, a paid advisor, paid consultant or paid provider
of professional services to Emerson, any member of Emerson's senior management
or any immediate family member of a member of Emerson's senior management, the
amount of such payments is less than the greater of 2% of such firm's annual
revenues or $1,000,000 during Emerson's current fiscal year;

8. If the Director is a partner, principal or counsel in a law firm that
provides professional services to Emerson, the amount of payments for such
services is less than the greater of 2% of such law firm's annual revenues or
$1,000,000 during Emerson's current fiscal year;

9. If the Director serves as an officer, director or trustee of a charitable
organization to which Emerson makes contributions: (i) Emerson's discretionary
contributions to such organization are less than the greater of two percent of
such organization's total annual charitable receipts or $1 million; (ii)
Emerson's contributions are normal matching charitable gifts and similar
programs available to all employees and independent directors; or (iii) the
charitable donation goes through the normal corporate charitable donation
approval processes, and is not made "on behalf of" a Director;

                                     A-1





10. The Director's ownership of Emerson stock, direct or indirect, is less
than 1% of the total outstanding Emerson stock;

11. If the Director is affiliated with, or provides services to, an entity in
which Emerson has an ownership interest, such ownership interest is less than
20%; and

12. Any other relationship between the Director and Emerson not covered by the
standards set forth above is an arrangement that is usually and customarily
offered to customers of Emerson.

If any relationship exists between Emerson and any Director that is not
addressed by the standards set forth above, the Directors meeting these
standards shall determine whether such relationship impairs the independence
of such Director.

                                     A-2





                                [Emerson logo]





                                [Emerson logo]

PROXY

         THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned, revoking all prior proxies, does hereby appoint D. N. FARR,
F. L. STEEVES, and T. G. WESTMAN, or any of them, with full powers of
substitution, the true and lawful attorneys in fact, agents and proxies of the
undersigned to represent the undersigned at the Annual Meeting of the
Stockholders of EMERSON ELECTRIC CO., to be held on February 5, 2008,
commencing at 10:00 A.M., St. Louis Time, at the Headquarters of the Company,
8000 West Florissant Avenue, St. Louis, Missouri, and at any and all
adjournments of said meeting, and to vote all the shares of Common Stock of
the Company standing on the books of the Company in the name of the
undersigned as specified and in their discretion on such other business as may
properly come before the meeting. The matters stated on the reverse side were
proposed by the Company, except as indicated.

      (CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)

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   ADDRESS CHANGE/COMMENTS (MARK THE CORRESPONDING BOX ON THE REVERSE SIDE)
------------------------------------------------------------------------------




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                           ^ FOLD AND DETACH HERE ^

                                [Emerson logo]


                               ADMISSION TICKET


                        ANNUAL MEETING OF STOCKHOLDERS

                          TUESDAY, FEBRUARY 5, 2008
                                  10:00 A.M.
                      EMERSON ELECTRIC CO. HEADQUARTERS
                         8000 WEST FLORISSANT AVENUE
                             ST. LOUIS, MO 63136

                       ================================
                             PLEASE PRESENT THIS
                           NON-TRANSFERABLE TICKET
                           AT THE REGISTRATION DESK
                                 UPON ARRIVAL
                       ================================





THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION     Please      /  /
IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES IN          Mark Here
PROPOSAL 1 AND FOR PROPOSAL 2.                                 for Address
                                                               Change or
                                                               Comments
                                                               SEE REVERSE SIDE

MANAGEMENT RECOMMENDS A VOTE FOR THE FOLLOWING:
                             ---
1. ELECTION OF DIRECTORS

     FOR all nominees   WITHHOLD AUTHORITY
       listed below      to vote for the
    (except as marked        nominees
     to the contrary)      listed below
           /  /                /  /

01 D. N. Farr      03 C. A. Peters
02 R. B. Horton    04 J. W. Prueher

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR                  I PLAN  /  /
ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE         TO ATTEND THE
NOMINEE'S NAME IN THE LIST ABOVE.)                       ANNUAL MEETING

MANAGEMENT RECOMMENDS A VOTE FOR THE FOLLOWING:
                             ---                         FOR   AGAINST  ABSTAIN
2. Ratification of KPMG LLP as Independent Registered   /  /    /  /     /  /
   Public Accounting Firm






The undersigned hereby acknowledges receipt of Notice of Annual Meeting and
accompanying Proxy Statement.

SIGNATURE                         SIGNATURE                         DATE
         -------------------------         -------------------------    -------
NOTE: PLEASE SIGN AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN
SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE
FULL TITLE AS SUCH.

                           ^ FOLD AND DETACH HERE ^

     WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING,
               BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.

   INTERNET AND TELEPHONE VOTING IS AVAILABLE THROUGH 11:59 PM EASTERN TIME
                     THE DAY PRIOR TO ANNUAL MEETING DAY.

YOUR INTERNET OR TELEPHONE VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
    IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.

                    --------------------------------------
                                   INTERNET
                        http://www.proxyvoting.com/emr

                     Use the internet to vote your proxy.
                     Have your proxy card in hand when
                     you access the web site.
                    --------------------------------------

                                      OR

                    --------------------------------------
                                  TELEPHONE
                                1-866-540-5760

                     Use any touch-tone telephone to
                     vote your proxy. Have your proxy
                     card in hand when you call.
                    --------------------------------------


             If you vote your proxy by Internet or by telephone,
                you do NOT need to mail back your proxy card.
           To vote by mail, mark, sign and date your proxy card and
               return it in the enclosed postage-paid envelope.


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Choose MLink(SM) for fast, easy and secure 24/7 online access to your future
proxy materials, investment plan statements, tax documents and more. Simply
log on to Investor ServiceDirect(R) at www.bnymellon.com/shareowner/isd where
step-by-step instructions will prompt you through enrollment.
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