Posted on 04/23/2003 12:38:03 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
CHARLOTTE, N.C., April 23 (Reuters) - General Electric Co. shareholders on Wednesday narrowly defeated a resolution at the company's annual meeting that was designed to curb executive "golden parachutes" amid lingering resentment over former Chairman Jack Welch's retirement package.
The vote was one of the closest in GE history. No shareholder resolutions have passed in recent memory, GE spokesman Gary Sheffer said.
All 13 shareholder resolutions - ranging on topics from global warming to pay disparity - were defeated at GE's annual meeting in Charlotte, North Carolina.
Nevertheless, investor discontent was evident among the estimated 500 people who attended the three-hour meeting.
"What we did for Jack Welch was absolutely disgusting," one shareholder told current GE Chairman Jeff Immelt.
The resolution, urging shareholder approval of future severance agreements when they exceed 2.99 times the sum of the executive's base salary and bonus, was defeated by 52 percent to 48 percent.
The resolution was opposed by the company's board of directors. A similar resolution in 2002 garnered a 39 percent vote in favor.
A close vote was expected after Welch's retirement package was revealed last year in a bitter divorce battle. Last year's corporate scandals also fueled voter discontent.
Revelations about Welch's retirement package sparked a public outcry, embarrassed GE and sparked an inquiry by the U.S. Securities and Exchange Commission.
LUXURY APARTMENT IN MANHATTAN
Court documents filed by his wife said Welch received flowers, wine and laundry services at a GE-owned luxury apartment in Manhattan, along with meals and satellite TV at his stable of residences.
After the package was roundly denounced as excessive, Welch agreed to modify his contract. He said the court filings were misleading, but he will pay GE up to $2.5 million a year for services.
In recent weeks, shareholders at several other corporations, such as Tyco International Ltd., have approved measures that would curb executive severance packages.
In a related measure, shareholder activist Tim Dewane asked shareholders to support a resolution that called on GE to publish a report on the difference between CEO pay and the wages of average workers. The measure was soundly defeated, capturing only 10 percent of the votes cast.
Union officials say Immelt, whose direct compensation was about $15.4 million last year, made more than 300 times the average production worker at GE.
"There is a corporate crisis of confidence that is as much spiritual as it financial," Dewane said.
But not every shareholder believes Immelt is overpaid.
Douglas Moore, a retired Methodist minister, complained that, "People are nickel and diming the chairman," especially considering Immelt runs a company with some $130 billion in annual revenue.
"Fifteen million dollars," Moore exclaimed. "That ain't no money."
Moore's take on CEO pay drew a round of laughs, including from Immelt, during an otherwise sober meeting.
"I love ya," Immelt said. "But I'm not sure you're helping me here, reverend."
GE - We Bring Deflation to Life
Alan Tonelson
Monday, April 14, 2003
“The most successful China strategy is to capitalize on its market growth while exporting its deflationary power.”
– Jeffrey R. Immelt, Chairman and CEO, General Electric(Source: “Letter to Stakeholders,” by Jeffrey R. Immelt, Only GE: General Electric Annual Report 2002 (Fairfield, Conn.: General Electric Co.), 2003, p. 13)
Errr --- a little less than $300,000 per week ain't no money? Now I know that people have lost touch with reality.
Richard W.
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