GE chief's lavish retirement package

WHEN Federal Reserve chairman Alan Greenspan said earlier this year that 'infectious greed' had taken root in corporate America during the market boom of the 1990s, nobody suspected its most admired company and legendary former chief executive would find themselves in the dock of public opinion, albeit for less serious reasons, alongside Enron, WorldCom and Tyco.

But that is where General Electric and Jack Welch are today as a result of messy divorce proceedings between the 66-year-old and his estranged second wife, Jane, 51. The marriage dissolved after Welch's affair with the younger Suzy Wetlaufer, former editor of the Harvard Business Review.

Most people thought he retired a year ago. But, judging from divorce papers filed by his wife, the retirement perks he receives would leave many a full-time boss green with envy. They also raise questions about what is going on in less high-profile firms. His benefits include lifetime use of a palatial Manhattan apartment complete with wine, flowers, cook, housekeeper, toiletries, access to GE's Boeing 737 jets and helicopters, a car and driver and tickets for the New York Metropolitan Opera and top sporting events such as Wimbledon, which is broadcast by NBC, a GE subsidiary.

Welch has homes in Connecticut, Massachusetts, New York and Florida and uses GE-provided transport to travel between them. GE argues he has to use corporate transportation at all times for security reasons.

Corporate governance experts in America are aghast at how little GE told shareholders about the cost of his lifestyle when he was working for it. Last year, his published salary and bonus was $16.2m (£10.4m), not to mention the lack of disclosure over his lavishly financed retirement.

Most governance experts say Welch's benefits are extreme and believe all Fortune 500 companies should be more forthcoming with details of executive perks, a grey area not subject to strict government rules.

'Investors aren't concerned about an executive getting a country club membership or access to a company car,' said University of Delaware Professor Charles Elson, a leading governance expert. 'But covering basic living costs at company expense, as in Welch's case, apparently for the rest of his life? The totality of it is phenomenal and should have been disclosed in detail.'

The firm says that, in a publicly filed 1996 employment agreement, which kept Welch at GE until 2000, it agreed to give him lifetime access to 'planes, cars, offices, apartments and financial planning'. But the deal went almost unnoticed until the divorce case.

The extent of the corporate welfare programme that underpinned Welch's position at a company so widely praised for its dynamism and managerial excellence does nothing to improve the image of US business already tarnished in the eyes of investors and the general public by a string of accounting scams.

Executive perks have also become a major talking point in America, where some of the latest scandals have unearthed lavish lifestyle subsidies awarded to top executives that shareholders knew nothing about. 'It says something about GE's board of directors that, as part of the negotiating process, they would give him all those things,' said Elson.