To be perfectly honest I don't trust any single company out there anymore
not even GE???? <vbg>
SEC Probes Ex-GE CEO's Compensation
.c The Associated Press
NEW YORK (AP) - The Securities and Exchange Commission has begun an informal investigation into the compensation agreement that General Electric Co. has with former chairman and chief executive Jack Welch, the company said Monday.
GE said it was cooperating with the request, which it received Friday. That was a day after GE's board, at Welch's request, cut his post-retirement benefits to include only an office and administrative support in response to widespread criticism of the extent of the perks, which included use of a Manhattan apartment, household staff and use of corporate planes.
In a column in The Wall Street Journal on Monday, Welch disclosed he had offered to give up many of those benefits, which received wide attention after their disclosure in court papers related to his divorce.
``... In these times when public confidence and trust have been shaken, I've learned the hard way that perception matters more than ever. In this environment, I don't want a great company with the highest integrity dragged into a public fight because of my divorce proceedings. I care too much for GE and its people.''
Welch said he is giving up some of his perks because of the unfavorable perception they may have created for the company he led for more than two decades.
In a column appearing under his name in Monday's edition of The Wall Street Journal, Welch said he had asked the GE board modify his contract ``by eliminating everything except the traditional office and administrative support given for decades to all retired GE chairmen and vice chairmen.''
He said under his new contract, he will pay the costs which he estimated at $2 million to $2.5 million a year for the use of planes and the GE company apartment in Manhattan and other facilities and services provided by GE.
Welch's announcement comes amid a series of disclosures involving alleged misbehavior by top-level executives at companies such as Tyco International, Adelphia Communications and ImClone Systems.
Two weeks ago, terms of Welch's compensation package received wide media attention after lawyers for his wife filed papers in which it raised questions about what he was getting.
That filing put a man who many Wall Street and academics see as one of the most influential business leaders of the 20th century in some uncomfortable company.
In Monday's column, Welch said he reached an agreement in 1996 under which he opted to take a package of benefits extending into his retirement instead of taking a ``special one-time payment of tens of millions of dollars'' to remain as CEO until turning 65 in December 2000.
But he wrote the divorce papers filed by his wife ``grossly misrepresented many aspects of my employment contract with General Electric.''
``... In today's reality, my 1996 employment contract could be misportrayed as an excessive retirement package, rather than what it is - part of a fair employment and post-employment contract made six years ago. For GE and its board to be dragged into these stories because of a divorce dispute is just plain wrong.''
During his two decades as GE's leader, the company expanded from a $13 billion maker of appliances and light bulbs into a $480 billion industrial conglomerate. It has 313,000 employees in more than 100 countries.
Welch said he will continue to consult and teach for the company.
GE said the terms of Welch's compensation were contained in 1997 filing with the SEC and that the company ``believes it has complied with all disclosure requirements regarding Mr. Welch's benefits.''
In morning trading Monday, GE shares gained 45 cents to $27.50 on the New York Stock Exchange.
09/16/02 09:56 EDT |
