GE chief executive Jeff Immelt isn’t a big fan of the $500,000 pay cap for executives at financial institutions that get additional government help, which the Obama Administration announced yesterday, but he still thinks Barack Obama rocks.
“It’s in the best interest of the citizens of the country for Jamie Dimon to run JP Morgan,” Immelt said. “He’s worth more than $500,000.” This was a bit of a non sequitur, given that Dimon is presumably hoping to get through this financial crisis without any more government help. Also, companies can still pay executives lots more than $500,000 as long as it’s in restricted stock that they’re required to hold onto for a while. But whatever.
Later on—this was at a breakfast chat put on by the Wall Street Journal at the Bryant Park Grill in Manhattan—former CNN business stalwart Myron Kandel asked Immelt what grade he’d give Obama as a manager. “I’d give him a high grade—a B+, A- type grade,” said Immelt, who had earlier fessed up to being a lifelong Republican. “If he can take a punch well and keep his spirit going, this guy’s going to be a great president. And we need him to be a great president.” At that point the crowd, loaded with New York business luminaries, erupted in spontaneous applause—the only point that happened during the event.
A video of the whole thing will purportedly be posted here later today. It was surprisingly entertaining—especially the first half, when the WSJ’s Alan Murray was asking all the questions. Here are a few highlights:
Immelt said that when he gets up in the morning he turns on CNBC and reads the Journal. These days he thinks of it as “the hour of doom,” he said.
Are we in a recession or a depression? “I wish I’d paid more attention in Ec 101,” Immelt said. “It’s one of ’em.” A little later, he added: “Governments around the world are firing as many bullets into this thing as they know how to do. I think the governments are all in, and my own view is the government always wins.”
His response to the current climate of anger toward highly paid executives. “First of all, I take the train now when I go to Washington. I had to have somebody show me how to buy a ticket.” He also revealed that in the Amtrak first class waiting area, “It’s instant coffee, but it’s free. And you get pretzels.”
He thinks people have been too harsh on the former Treasury Secretary and Financial Rescuer in Chief. “We can all sit back and criticize Hank Paulson … but this was emergency room medicine that people were doing.”
When Murray pointed out that American taxpayers are now guaranteeing some of GE Capital’s debt, Immelt said, “They made $400 million to $500 million insuring my debt. This is a moneymaker.”
He was pretty positive about the current composition of the stimulus package, but said that down the road the Obama administration should articulate a mission behind it: “We’ve got to be the best energy country in the world, the best infrastructure country, the best health care.” His choice would be energy. “We just have no confidence as a country. When you look at what’s the easiest thing to solve as a country, I look at things like energy security, renewable energy. … Health care’s hard. Energy doable. … Both of them are good for GE.”
Immelt is a big backer of a cap-and-trade plan to reduce carbon emissions. Murray asked him if he wasn’t “a little bit of an environmentalist.” Immelt: “I’ve never camped. If I ever go 20 yards from a channel clicker, I break out in hives.” And what’s his favorite NBC show? “Despite the fact that they dump on us endlessly, it’s 30 Rock.” He also said The Office reminds him of his beginnings at GE, working in a plastics sales office.
On the financial services business: “Financial services are not going to be the same in our lifetime.” As for GE’s financial business in particular, “It’s gonna be smaller. It’s gonna have less leverage. It’s gonna have less commercial paper.” And the threat of a downgrade from GE’s current triple-A status? “We’re prepared to run it as a double-A, we’re prepared to run it as a triple-A.”
Should GE have reduced its dividend? “The company has $60 billion of cash on the balance sheet … We earned $18 billion in 2008. Other than the oil companies nobody made that kind of money.”