GE's Welch cut back down to size

September 19, 2002|By Ellen Goodman

BOSTON - You could say that Jack Welch was once larger than life. After all, as a young adult, he once looked back with disbelief at the pictures taken of his school sports teams: He never realized that he'd been so short.

Later, after divorcing his first wife, the woman who had raised the four kids while he'd been a confessed "ultimate workaholic," Mr. Welch had another out-of-body experience. "Being single and having money," he wrote, "was like standing 6 feet 4 with a full head of hair."

GE brought good things to (his) life. For two decades, the head of General Electric had a high ride and a low golf handicap. Mr. Welch was a celebrity CEO on more magazine covers than Madonna. He was huge. "Being a CEO is the nuts!" he once wrote.

But now Jack is tumbling down.

His affair with Suzy Wetlaufer, the former editor of the Harvard Business Review who famously did more than interview her subject, ended Jack's second marriage. This is the wife he once described in his book, Jack: Straight from the Gut, as "tough, witty, and 17 years younger than I am."

Jane Welch was, in his words, "the perfect partner." A mergers and acquisitions lawyer when they met, she became a corporate wife because, in Jack's words, "I really wanted a full-time partner. ... Jane would have to give up her career."

But once they split - two years after the prenuptial agreement ran out - Jane apparently took up her old career. In papers filed in divorce court, the retired wife listed the details of the perks that GE shareholders were paying the retired CEO.

It wasn't just the big stuff like the $15 million apartment in Manhattan, the use of the corporate jet, the limousine and the Mercedes. They were also paying for the cheesy little stuff, from the sports tickets and satellite dishes to the laundry and toiletries.

The man whose fortune is estimated at $900 million, the man who was paid $16 million in his last year as CEO, was getting about $2.5 million a year in perks. For life.

Of course, Jack is now going around issuing some of those wonderful nonapologies, the mea-not-culpas that are the staple of public life. On Wall Street Week he whined that the retirement perks he negotiated in 1996 were worth less than the millions in bonus he was offered: "I sacrificed millions of dollars."

In The Wall Street Journal, he renounced his perks with the drama of the Prince of Wales renouncing his rightful throne. He said, "My contract could be misportrayed as an excessive retirement package." Could be.

Well, I will leave the culpas in the hands of the SEC. But I agree that, as Mr. Welch wrote, "The world has changed during the past year." Today, The Economist puts Jack Welch on its cover as a fall guy, not a superstar. Today, he's listed, fairly or not, in the crashing pantheon of Kenneth Lay and Bernard Ebbers.

But don't forget another change. When Jane Welch went to court this time, the attention wasn't on her greed, but on his. For once, it wasn't the soon-to-be ex-wife of a gazillionaire looking for big bucks from her husband who was run through the media mill. It was the corporate gazillionaire himself.

Jane was "the perfect partner" when they were married. But worth $35,000 a month when they split. The $900 million man reportedly offered her $20 million in severance. Hold the toiletries.

Jack was the guru of tough-love management. He once said - straight from the gut, no doubt - "Too much of American business inflicts false kindness on its employees." But it turns out that Jack didn't know from tough love.

Now a downsized Jack Welch has volunteered to teach a management course for GE. Let's just pray they don't let him teach marriage counseling.

Ellen Goodman is a columnist for The Boston Globe. Her column appears Mondays and Thursdays in The Sun. Her e-mail address is ellengoodman@globe.com.

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