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SEC says General Electric
violated law over Welch perks HARTFORD, Conn. -- General Electric Co. violated the law by failing to fully disclose to investors the many perks lavished on its retired chief executive Jack Welch, the Securities and Exchange Commission said Thursday. The millions of dollars in benefits included unlimited
personal use of GE's planes, exclusive use of an $11 million apartment
in New York City, a chauffeured limousine, a leased Mercedes, office
space, financial services, bodyguard security and security systems
for his homes. "Shareholders have a clear interest in knowing how public companies compensate their top executives," said Paul R. Berger, associate director of the SEC's enforcement division. "Shareholders have a right to see how that's being used." Welch, who retired in 2001, said his benefits were disclosed, but not to the extent SEC felt was necessary. "I'm pleased that this is settled with no financial ramifications to GE," Welch said. "For me it's the end of a chapter." But Barbara Roper, director of investor protection for the Consumer Federation of America, called the settlement weak. Excessive executive pay and abuses have been a persistent problem in the corporate world, she said. "It seems as though the SEC with this weak sanction missed an opportunity to send a message to corporations that they need to operate in a more shareholder friendly fashion," Roper said. GE, based in Fairfield, did not admit or deny the findings of the settlement. Details of Welch's perks emerged during his divorce case and amid a wave of corporate scandals. Welch paid back many of the perks and now pays for use of aircraft and other services _ "everything except an office and an assistant," GE spokesman Gary Sheffer said. The benefits were part of an employment and retirement agreement Welch reached with GE in 1996. GE shares fell 31 cents to close at $33.42 Thursday on the New York Stock Exchange.
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