General Electric chairman defends salary at meeting
CLEVELAND - General Electric Co. Chairman John F. Welch Jr. defended his status as one of the nation's highest-paid executives yesterday at the company's annual meeting.
A shareholders' proposal discussed at the meeting would have forced the GE board to "set a reasonable ratio" between the chief executive's pay and incentives and the pay received by the lowest-paid GE worker.
"It's time for a change. It's time we discuss the effect of concentrated wealth on our company, on our country and on democracy," said Scott Klinger, director of Responsible Wealth, an organization seeking controls on corporate executive compensation.
The company recommended that the proposal be rejected, and it was supported by only 5 percent of the shares voted.
According to GE's records, Welch received a base salary of $2.8 million in 1998 and a bonus of $7.2 million, nearly $1 million in other compensation and stock options on 500,000 shares that could be worth $63 million in 10 years at a 10 percent annual growth rate.
Welch pointed out the company gives wealth opportunities to others, too.
"Our hourly employees five years ago had $300 million in their savings plans," Welch said. Those plans are now worth $2 billion.
"We've got 50 hourly millionaires," Welch said.
In all, nine shareholders' proposals discussed at the meeting and opposed by the GE board were rejected.
Among them was a proposal of Dominican and Maryknoll nuns urging GE become more environmentally active and to support an education effort on cancer dangers in the New York-New Jersey region due to polychlorinated biphenyls in fish in the Hudson River.
The nuns want GM to admit to its role in the problem, but Welch said the company complies with environmental standards and that the dangers caused by PCBs might be overstated.
Also rejected was a proposal of retirees to eliminate retirement benefits of outside directors. The proposal was largely an effort of GE retirees to draw attention to their call for improved pensions.
Helen Quirini, 79, of Schenectady, N.Y., told Welch she worked for GE for 39 years and now struggles with a monthly pension of about $570. She argued that the company's pension fund holds $43 billion and that pension increases would not harm GE.
About 1,000 shareholders attended the annual meeting at the International Exposition Center adjacent to Cleveland Hopkins International Airport. It was the first GE annual meeting held in the Cleveland area in 40 years.