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Ceo Pay and Ethics

In: Business and Management

Submitted By milena
Words 796
Pages 4
The CEO of General Electric (GE) Jack Welch had said he only had three jobs: selecting the right people, allocating capital resources, and spreading ideas quickly. When talking to hundreds of GE managers Welch used to ask them not only about their ideas but who they have shared their ideas with, and who else has adopted them. He was the head of GE from 1981 till 2001. In 1980, the year before Welch became CEO, GE recorded revenues of roughly $26.8 billion. In 2000, the year before he left, the revenues increased to nearly $130 billion. When he left GE, the company had gone from a market value of $14 billion to one of more than $410 billion at the end of 2004, making it the most valuable and largest company in the world (Storrs, 2006).

At the time of his retirement, Welch received a salary of $4 million a year, followed by his controversial retirement plan of $8 million a year, which included GE's $80,000 per month luxury apartment in Trump Tower (New York City), free food and wine, access to a $300,000 per month B737 corporate jet, VIP tickets to the Metropolitan Opera, the Knicks, Wimbledon, the US Open (tennis) and the Red Sox, an office and a secretary in the GE building and a limousine with driver.

The impact of leadership on the bottom line is dramatic. A study by Andersen Consulting Institute for Strategic Change asserts that the stock price of companies perceived as being well led grew 900 percent over a 10-year period, compared to just 74 percent growth in companies perceived to lack good leadership. And Fortune, in its 1998 round up of America's most admired companies, identifies leadership as the common denominator of exemplary organizations: in Warren Buffet's phrase, 'People are voting for the artist and not the painting.'(Bennis, 2004)

In terms of character and traits, integrity is the foundation of leadership. Without integrity, leadership…...

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