Following up on this morning's "General Electric Beats Low Expectations; Speculators Confused (GE)".
Jeff Immelt's tenure at GE's helm has been profitable for him and just awful for the shareholders.
Despite foregoing his $5.8Mil. bonus for the second year in a row Mr. Immelt still took home total compensation of $9.9Mil. in 2009.
I've been bullish on the stock for the past month but would not consider any long term commitment to GE until he leaves. Some of our prior posts on JI:
...Since succeeding Jack Welch in 2001, Immelt has been paid a total of $28.2 million in salary and another $28.6 million in cash bonuses, for total payments of $56.8 million. That's over nine years, and in addition to all his stock- and option-grant entitlements.
It doesn't end there. Along with all his cash payments, Immelt also has accumulated a remarkable pension fund worth $32 million. That would be enough to provide, say, a 60-year-old retiree with a lifetime income of $192,000 a month...
April 2008That last piece was posted the day we went bullish, never let your feelings get in the way of a profit opportunity.
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From Bloomberg via BusinessWeek:
CEO Jeff Immelt says his company trains the best business leaders in the world. Yet they haven't saved him from a hellish decade that cut GE's value in half
A couple of Fridays each month, Jeffrey R. Immelt hosts a sleepover. The chairman and CEO of General Electric (GE) invites one of the 185 officers of his company—and only one—to his home in New Canaan, Conn., for a leisurely meal. After a few drinks, some laughs, a plate of pasta, and a wide-ranging discussion of what's going on in the world, the two executives part. Immelt, 54, stays home while his guest heads to lodging at GE headquarters in nearby Fairfield. When they reconvene the next morning, things get personal. "We spend Saturday morning just talking about their careers," says Immelt. "Who they are, how they fit, how I see their strengths and weaknesses—stuff like that." One recent guest, Steve Bolze, president and CEO of GE Power & Water, calls it "a really nice discussion, a chance to get to know each other better."
What does it say about Immelt that after almost a decade in the top job he's looking for ways to bond with his team? "The personal connection is something I may have taken for granted before that I don't want to ever take for granted again," he says. "Sometimes there's a tendency to say, 'Well, this is an officer of the company. They've been here 20 years. They can figure it out. Do they really need me to draw them a diagram?' But you need to make the time."
The sleepovers are part of a major rethink by Immelt, a personal reevaluation of how GE equips its people to lead. The reappraisal was triggered by the global financial crisis, which shook the $157 billion-a-year conglomerate, almost destroyed its financial services unit, and sent its share price from $29 in the days before Lehman Brothers crashed to below $6. (It has since recovered to around $19, leaving GE's market cap, at roughly $200 billion, about half what it once was.) That led Immelt to become what he describes as "self-reflective on steroids" and to ask a hard question: "Was there one of my top 150 people who was thinking, 'You know, Jeff, commercial real estate shouldn't be so goddamn big,' but didn't have a way to say [it]?"
Immelt intends to spend this year exploring new ideas, which he describes as "wallowing in it," to decide how GE should shape and measure its leaders. He has solicited management suggestions from a broad range of organizations—from Google (GOOG) to China's Communist Party—and sent 30 of his top people to more than 100 companies worldwide. He's holding monthly dinners with 10 executives and an external "thought leader" to debate leadership. He launched a pilot program to bring in personal coaches for high-potential talent, a practice that GE once reserved mainly for those in need of remedial work. To increase exposure to the world beyond GE, Immelt is even reconsidering the age-old rule that employees can't sit on corporate boards. "I think about it all the time," he says. "You have to be willing to change when it makes sense.">>>MUCH MORE
I can think of at least one change that might be in order.