Opinion

Felix Salmon

Actual candor from Jack Welch

By Felix Salmon
June 23, 2009

Jack Welch likes to cultivate an image as a straight-talking kinda guy who would never say something to an enclave of CEOs that he wouldn’t be happy putting his name to in one of his books or columns.

Except, according to the Economist (a/k/a Matthew Bishop):

This columnist once heard Mr Welch tell a chief executives’ boot-camp that the key was to have the compensation committee chaired by someone older and richer than you, who would not be threatened by the idea of your getting rich too. Under no circumstances, he said (the very thought clearly evoking feelings of disgust), should the committee be chaired by “anyone from the public sector or a professor”.

Maybe that’s the reason he finally retired from GE: there was no one left who was richer than he was.

Update: Bishop went into more detail on this here.

Comments
4 comments so far | RSS Comments RSS

By this logic, Jack Welch should be on every compensation committee in the country.

Posted by Kelli K | Report as abusive
 

I lost respect for Welch when this crisis revealed that GE’s earnings over the years – and thus their self-promoting genius strategic approach – depended on blunt manipulation of the financial arm’s end of quarter bookings. This was suspected but people – including the so often credulous professorial class – wanted to believe a company could be so much better managed and have such better strategy. If we knew it was financial manipulation …. I attended GE presentations where they pridefully discussed their strategic goals and methods and never a word about how they jiggered the facts. This bothers me because it was unnecessary but highly enriching for Welch and some others. The fact is that GE was well run, just not spectacularly so, but his ego needed it to look perfect and perfection is a mirage. So when Welch criticized current management for not meeting quarterly goals, he was standing on a fake mountaintop shouting down with his ego that he was better … when he wasn’t but the times allowed him to play numbers games.

Posted by jonathan | Report as abusive
 

This sounds great; let Warren Buffett chair every compensation committee in the country.

 

When he left there were few older too.

Posted by zach | Report as abusive
 

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •