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DELIVERING THE MESSAGE
CHAPTER 8
including the New York apartment and corporate jet service. This bill, accord-
ing to Welch may be $2.5 million annually, but as he says,
[Perception] matters. And in these times when public confidence and trust
have been shaken, I’ve learned the hard way that perception matters more
than ever. . . . I don’t want a great company with the highest integrity
dragged into a public fight. . . . I care too much for GE and its people. 13 123
CORPORATE STATESMAN
In the wake of the corporate governance scandals, Jack Welch emerged as a
statesman on corporate and shareholder interests, confessing that he was as
shocked as anyone by the financial foul play perpetrated by companies like
Enron and Global Crossing. He traces the rise in CEOs’ pay to the alignment
of management compensation with shareholder value. When companies’
stock soared, as happened in the nineties, senior management compensation
grew at the same rate. “If you focus on pay for performance, and if you focus
on results, and you focus on delivery to shareholders, you will get a system
14
that works.” He admits that his total compensation for building GE’s equity
was generous, but he argues that it was determined fairly and honestly and for
the benefit of shareholders and employees alike. He draws a distinction
between the fraud perpetrated by a few and the honest earnings of the vast
majority of senior leaders. Welch remains a true believer in the long-term
future of his company, refusing to sell when the stock spiked, a move that
“more than halved” his net worth: “I’ve gone up with it and I’ve gone down
15
with it.” In his speeches, Welch reflects the same spirit of optimism about
corporate America that he injected into GE “We need to have an atmosphere
where CEOs are out taking risks, are out doing things positively, are out cre-
16
ating an atmosphere that we can win again.” To Welch, born into a union
family and educated at a state school, it’s all part of the American free enter-
prise system, of which he is a loyal and proud proponent.

FINAL THOUGHTS
Welch has a capacity for self-criticism. He says that his biggest mistake was
not going fast enough. “I went too slow in everything I did. Yes, I was called
every name in the book when I started, but if I had done in two years what took
five, we would have been ahead of the curve even more.” 17
In a reflective interview with the Harvard Business Review after he had
left office, Welch was even more philosophical. “My success rate was 50-50
at best. . . . That improved later because I turned out to be pretty good at it.” As
for strengths, Welch considers himself only “marginally” creative, but “very
intuitive. I don’t get fooled very often.” 18