E New Year's Eve Notes

I am a long-time shareholder of GE, and I think it has been overpaying rainmakers for decades. So I am incensed that H. Lawrence Culp jr, the current CEO, will be getting a $46.5 million bonus (and up to $230 mn) despite GE not reaching the target price for paying it set in 2018. The directors last summer decided to pay him that amount if GE hits $16.68 this year rather than $31. Moreover GE employees have been let go in the aviation part of the company, its best performer befor Culp and Covid-19 hit.

I'm convinced that the GE habit of overpaying for its CEOs is not good for the company, its shareholders like me, and the USA. Do other people still remember the gold shower curtains and sports seats guaranteed to Jack Welch who retired as CEO of GE in 2001? He began a process of firing 10% of GE employees each year. He also ditched GE's consumer electronics businesses. And he began an affaire with the lady editor of the Harvard Business Review which resulted in the former Mrs Welch spilling the beans on his excessive peerquisites.

I'm afraid that my reaction, despite being a supporter of free enterprise, is to consider Thomas Piketty, the French economist, to have proven his case that capital in the 21st century flows to the richest 1% because the tax system is jigged in their favor and against the needs of the vast majority of the citizenry. He compares the inequality today to France before the Revolution and other countries during the 19th century, because the 20th century move to taxing the rich more than their poorer fellow-citizens has been reversed. GE rose to $10.73 today, up 0.15% despite the outrage shown even by the Financial Times.

More on the news for today:

*Microsoft was a victim of the SolarWinds cyber attack from Russia, according to Dow Jones. I own the stock. Putin's gangsters were able to view internal codes used to build software at MSFT, a new revelation. That means big tech is vulnerable across the board.

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