General Electric boss attacks corporate US
The boss of US conglomerate General Electric accused an entire generation of business leaders of submitting to 'meanness and greed' in the run-up to last year's financial crash.
In an outspoken attack on corporate America, Jeffrey Immelt said executives had been seduced by a 'perverted' pay culture where eightand even nine-figure bonuses were commonplace.
The staggering rewards blinded bosses to the ever greater risks they were taking, and drove an even bigger wedge between America's rich and poor, according to Immelt.
His comments are an astonishing assault on US remuneration policies, which are far more generous than in the UK.
The five highest-earning US executives took home some £1.1bn between them last year, including a £425m payout for private equity baron Stephen Schwarzman.
Technology tycoon Larry Ellison, who is worth an estimated £13bn, was the second highest earner with a pay and bonus package of £300m.
Immelt said: 'Tough-mindedness, a good trait, was replaced by meanness and greed, both terrible traits.'
'Rewards became perverted,' he told recruits at the West Point Military Academy.'The richest people made the most mistakes with the least accountability.'
The huge payouts for the elite exacerbated the damaging social divisions that exist in the world's richest nation, he said. 'The bottom 25% of the American population is poorer than they were 25 years ago. That is just wrong,' said Immelt.
'Ethically, leaders do share a common responsibility to narrow the gap between the weak and the strong.'
Businesses like General Electric were also wrong to have 'tilted toward the quicker profits of financial services' instead of nurturing America's manufacturing, research and technology industries, said the chief executive.
The financial crisis wreaked turmoil on the group's finance wing, GE Capital , which Immelt has been forced to slim down.
Soaring bad debt losses at the GE Capital saw the group's profits plunge 45% during the third quarter.
Most watched Money videos
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- Mini Cooper SE: The British icon gets an all-electric makeover
- How to invest for income and growth: SAINTS' James Dow
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- Mini celebrates the release of brand new all-electric car Mini Aceman
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Land Rover unveil newest all-electric Range Rover SUV
- Blue Whale fund manager on the best of the Magnificent 7
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- CITY WHISPERS: Bill Ackman's cerulean eyes charm...
- Britain's nascent battery industry receives shot in the...
- Helium and hydrogen company set to join stock market in...
- Cost-of-living crunch wipes shine off Thomas Sabo jewellery
- Where is Labour's 'white heat' revolution to revive...
- FTSE 100 hits an all-time high - but remember the stock...
- British businesses awash with 'accidental' bosses who...
- Shipping broker Clarksons on list of shame after...
- North Sea projects worth £21bn put at risk by Labour: Tax...
- Virgin Money's biggest independent investor...
- JOHCM UK EQUITY INCOME FUND: Rate cuts... and a spending...
- TONY HETHERINGTON: Boss behind firms fined £340k for more...
- Hollywood silly money? I'd only have stuffed it under the...
- MIDAS SHARE TIPS UPDATE: Wind is turning in Octopus...
- MIDAS SHARE TIPS: Why it soon won't be hip to give the...
- Cash in on the Northern property boom as our experts...
- As world lurches from crisis to crisis, experts share...
- 86-year-old Peter's woes with a faulty smart meter that...