Sometimes I wonder what it would be like to work in a job that required my utmost attention to detail, the ability to solve virtually any problem, the foresight to think outside the realm of current affairs, and the desire to work harder than any one else. Wait! I do that already. Albeit at a much, much less grand scale as Jeff Immelt.
I read the story about Jeff’s pay package, and it is actually hard to believe. I figure if he worked 24/7/52, he made about $4235.34798…./hr.
Granted, he is not getting all of it up front, and some of it is in the form of travel expenses( He spends more in travel expenses than a neighborhood of middle class families makes in a year.)
However, I would think that if payments to the CEO were like that, the stock should be seeing massive gains in performance of the stock price and the dividend.
Can you imagine what the numbers for his pay package would be if GE really made some forward progress in revenue and earnings?
I have no problem with the CEO being paid whatever amount. What I have a problem with is the pay being so high regardless of where the stock price heads. Immelt has probably received almost 1/2 billion dollars in pay and perks since his tenure began. Even if it is not in that range, the amount seems ridiculous when considering the stock has floundered for the length of his tenure, and it almost went belly up a few years back.
Hey, I wish Immelt’s pay goes to $50,000,000 — As long as I see some of the spoils come my way. I would not mind seeing a double from here in the next 2 years. If that would happen, I would be extremely happy. So happy, in fact, that I would not even be able to describe how I would feel. It would be like winning the lottery for me. However, even at a double, some shareholders still would not be at break even, and that is a damn shame.
Well, I guess I have some pie in the sky dreams, but I have been waiting for the price to not only come back, but to appreciate also. Am I, or are we, asking for too much? I think not. I see a company on the cusp of expansion. The world is a big place, and the population is growing by leaps and bounds. Those people will all require infrastructure (who wants to live in a third world country?) and GE is a leader, if not the leader, in those infrastructure builds.
Times are tough right now for the oil patch, and GE will pay the price for that. They still are being labeled a bank, but that should change soon. The Alstom deal is in limbo, but it could play out to GE’s benefit, and the appliances will be gone, but not forgotten.
Immelt’s pay package is an incredible amount of money. I guess it would seem less so if the stock had seen some major or even minor appreciation over the last year. As a matter of fact, I am not even one of the guys who has been pushing for his resignation. I just want to see the stock perform to the upside just as easily as it underperformed to the downside. In the past few years(14), GE has not had a thing to do with the upside to the Dow. As a matter of fact, since the Dow is a price weighted index and GE’s stock is so low, changes in the stock price do not have a very meaningful movement in the Dow at all compared to a stock like IBM or Visa. A double in GE will only move the Dow about 150 points, whereas a double for Visa would push the Dow almost 1500 points. That is because Visa is almost 10 times higher in price per share. Amazing how a stock with a market cap almost half as much as GE could move the market 10 times as much if they both doubled in price. That is absolutely ridiculous, but true. So, a double is not too much for me to ask for, because the Dow would really hardly notice it, and if that happened, I would be willing to clap with joy as Jeff Immelt cashed his new higher paycheck.
I read today that GE is thinking hard about GE Capital and how it is holding back the stock. Seems like a lot of these pieces are being let go for a song in order to apeze Wall Street. I wonder if there will be a point of diminishing returns, or will all of this divestiture really lead to improvement in the share price of GE? I am sure that we will see the effects sooner or later.
Either way, as of now, I do feel that Jeff Immelt is overpaid. Although, he may not feel like he is collecting too much for his efforts. In his eyes, he may feel that he is getting a raw deal.
He might even feel that he should try his luck with another company—- Just kidding! That dude is probably glad he has that gig, and he seems to be keeping his mouth shut as he attempts to stay out of the limelight.
Hopefully, all of these changes that he is pushing lead to improvements in performance of the company and the stock. Hopefully, he sees that this is a public company and not his own personal piggy bank.
Hopefully, he and his buddies do not see themselves as kings on a throne who desire respect and expect the shareholders to kneel in their presence-Napoleon anyone? We all know how that turned out.
Anyhow, I hope that Jeff Immelt sees his compensation as payment for a job well done or soon to be well done- Not as an entitlement. I hope that he has his chance to earn every bit of that money by finishing the turn around of the company he has worked for since he was a young man. I think he wants the best for the company, and I think he has enough insight to pull it off.
He was dealt a 7-2 off suit right out the gate, but he has played it out. I hope, for the sake of all of the shareholders and the company, that at the end of this long running bet, he is not bluffing.
We shall see…………
Any thoughts would be greatly appreciated.
Robert the DividendDreamer