One more point on President Obama's decision to name General Electric CEO Jeffrey Immelt as chairman of the President's Council on Jobs and Competitiveness: As CEO of GE, Mr. Immelt's performance, at least as measured by the stock price, has been a disappointment. When he took over on September 7, 2001, GE was at about $29 a share (this number is from Yahoo Finance, which says it is adjusted for dividends and splits). Yesterday it closed at $18.43. Today it's up to about $19.44, but even so, about a third of the company's value, or about $100 billion of shareholder property, has been destroyed on Mr. Immelt's watch, by the stock market's measure. The stock has underperformed the S&P 500 index over the period.
Wall Street Journal columnist Brett Arends wrote back in March 2010, when GE stock was trading at around what it is today, "By any measure of shareholder value, GE has been a disaster under Jeffrey Immelt. Investors haven't made a nickel since he took the helm as chairman nine years ago. In fact, they've lost tens of billions of dollars....In real post-inflation terms, stockholders have lost about half their money....So it may come as a shock to discover that during that same period, the 54-year old chairman and chief executive has racked up around $90 million in salary, cash and pension benefits."
I don't know how much of the company's lagging performance is attributable to Mr. Immelt and how much to matters beyond his control, but even so, if this is the kind of "competitiveness" Mr. Obama is hoping Mr. Immelt will bring to the American economy overall, we're all in big trouble. It partly explains why the White House handled the announcement as it did, putting it out after midnight when a lot of reporters were asleep.
