Welsh gives up retirement perks after outcry

JACK WELCH, former chief executive of General Electric Co, yesterday said he had given up free use of corporate jets, a sprawling New York apartment and other retirement benefits after facing criticism since they were revealed in his divorce.

Welch’s decision, which could halt lavish executive retirement packages funded by shareholders, came as the US markets’ top regulator said it is investigating the high powered executive’s employment and retirement contracts.

Welch, who retired from GE a year ago after 21 years as chairman, said he expects to pay GE between $2 million and $2.5 million a year for services such as use of company aircraft and the apartment. He also said he would provide no-cost consulting services to GE on an as-needed basis.

In an article he wrote for The Wall Street Journal, Welch said he asked the GE board to modify his post-employment contract “by eliminating everything except the traditional office and administrative support given for decades to all retired GE chairmen and vice chairmen”.

Welch said the board, headed by Jeff Immelt, his successor as chairman and chief executive, agreed to his proposal last week. The next day, the US Securities and Exchange Commission requested information on Welch’s pay and benefits, GE said.

Details of Welch’s compensation and perks, both from his years as CEO and his retirement, were revealed recently in divorce papers filed by his wife, Jane Beasley Welch, in a Connecticut court.

The perks were slammed, coming at a time when investors are still furious over a string of corporate scandals that left shareholders stripped of their retirement savings while top executives walked away with unseemly severance packages.

Recent legislation and reform proposals have sought to curb excessive executive compensation, which exploded during the late 1980s and the long economic boom of the last decade.

“Papers filed by my wife in our divorce proceeding became public and grossly misrepresented many aspects of my employment contract with General Electric,” Welch wrote. “I’m not going to get into a public fight refuting every allegation in that filing.” Tech boom darling in profit at last