GE's Immelt Works Without A Contract

ByJohn S. McClenahen In a highly conversational letter to stakeholders that's part of General Electric Co.'s 2002 annual report, Chairman and CEO Jeffrey R. Immelt reveals that he works without a contract. "Just to make sure I never lose my way, I work without a contract, serving meeting to meeting at the will of the board," he says. So much for the notion that all corporate CEOs are protected by generous employment contracts. Turns out that the CEO working without a contract has been the practice at Fairfield, Conn.-based GE for many years. John F. Welch Jr., Immelt's legendary predecessor, also worked without a contract when he was CEO. However, neither Immelt nor GE's board is a proponent of splitting the job of chairman and CEO and having the positions filled by two separate people, a corporate-governance reform proposal offered in the wake of alleged misdeeds at Enron Corp. and other companies. "GE is a very large, multibusiness company, and the board and I believe that you are best served by having one person fill both roles," Immelt tells stakeholders.