Midwest

Executive Compensation: Don't Whine, You'll Still Be Rich

I couldn't agree more. The sense of entitlement these incompetent CEOs have assumed are staggering.

From gross ups to lifelong insurance and private jet service, the investing public has been paying dearly for poor management. The last decade or two of top tier management is now being revealed as chicanery of the highest order.

This is best exemplified by Jack Welch's claim of running GE so beautifully that he should receive hundreds of millions in compensation all the while he hid the damage being done by Swiss Re's underfunding-

www.smartmoney.com/inv.../

"During the last five years of the Welch era, ended in 2001, GE's reported earnings jumped from 72 cents a share to $1.37, a rise of 65 cents a share, or 90.2% — spectacular for a behemoth like GE. But without a massive under-reserving at its reinsurance unit, the company would have shown a cumulative earnings gain of just four cents, or 5.6%."

Of course, Jack has been uncharacteristically silent about the debacle he left behind and the reality of GE's earnings during his much ballyhooed last few years. In short, Welch did not deliver and his business acumen is nearly worthless. He sits upon a crumbling throne, a poster boy for all those thieving CEOs that followed in his wake.

Add into that mix the fact that Welch cheated on his wife with a much younger woman and the resulting divorce settlement is what began the revelations of his outrageous pay and the extraordinary level of perks he was receiving. Essentially, Jack was doing the same thing to his paramour (now his wife) as he was to the shareholders.

Corporate boards of public companies are responsible for stewarding the company effectively and in the best interest of the shareholders, not those inhabiting the ivory towers. It is time that boards are held liable for their decisions and face the music in a court of law. Maybe, just maybe, they then might change their tune and begin demanding realistic pay for their "hired hands" and a verifiable level of results. Enough is enough.