Jack Welch, the former General Electric Co. chief, is under an informal investigation by the Securities and Exchange Commission due to his lavish retirement plan.
Welch, who retired in September of 2001, had a contract that included all expenses of his Manhattan apartment, including food, wine, cook and wait staff, laundry, and furnishings, as well as travel expenses, entertainment, private car and driver, and computer equipment to be paid by GE. Although Welch denies many of these perks, he asked the GE board to eliminate everything from his contract, except for the traditional office and administrative support given to all retired GE chairmen and vice chairmen. The board of directors agreed to Welch’s request to modify his contract the day before notice of the Securities and Exchange Committee inquiry.
Welch plans to reimburse GE for the value of any services and facilities he has used since his retirement, which is estimated to be between $2 million and $2.5 million. Welch will also pay taxes for any personal use of the accommodations.
GE said the terms of Welch’s compensation were in a proxy statement, filed with the Securities and Exchange Committee in March of 1997. This document does not list specific perks but said the compensation was justified to ensure that “Mr. Welch’s skill and experience would be available to the company in the future.”