In the last newsletter I talked about the value of GE stock under former Chairman and CEO Jeff Immelt. The Wall St. Journal has uncovered during his 16 years in office he had 2 corporate jets follow him across the world. One was in case there was a mechanical problem on the first jet.
In the previous issue I talked about how the value of the stock dropped from $39.66 (Sept 2, 2001) to $25.61 (July 31, 2017) during his tenure. The 18 Board of Directors seems to be shocked about this total waste of money. In the US the more incompetent the CEO the more he gets paid. The Board and Immelt are now paying the price. The GE stock has dropped 40% this year, erasing nearly $120 billion in market value even as the stock market has surged to record highs. As on November 14th, the stock has dropped in value to $19.02.
Price is one of the core issues for service leaders. When the CEO wastes millions of dollars on ego (Often the fish rots from the head) everyone in the company follows. CEO and Board compensation is out of control. I hope the new CEO John Flannery turns the company around. He has grounded all the company jets and is selling them. They reduced the number of board members to 12 on November 13th.