He told cadets at the U.S. Military Academy [PDF] that GE wants people to see a purpose bigger than themselves. Said Immelt: “Leaders must like and respect people. I think we are at the end of a difficult generation of business leadership, and maybe leadership in general.
"Tough-mindedness, a good trait—was replaced by meanness and greed—both terrible traits. Rewards became perverted. The richest people made the most mistakes with the least accountability. In too many situations, leaders divided us instead of bringing us together.
"As a result, the bottom 25 percent of the American population is poorer than they were 25 years ago. That is just wrong.”
Greed in the banking sector is vividly on display in the U.K. as British bankers are enraged with the government's move to slap a 50 percent tax on bonuses. They don’t have a clue about why the public is angry about bailing out some of the guys who drove the world’s financial system to the brink.
David Wessel in the Wall Street Journal wrote today that Alistair Darling, Britain's finance minister, told some of the best-paid players in the City of London: "You have to be able to look at your next door neighbor and justify what you are doing."
Bankers are clueless about economist Nouriel Roubini's statement that people are fed up with "privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street."
Immelt is right when he says change is in the air. Goldman Sachs dropped a bombshell on Wall Street today with news that its top 30 executives won't "get paid" this year. They will forgo their multi-million dollar bonus packages in return for "shares at risk."
Importantly, those shares are at risk if an executive engages in "materially improper risk analysis" or fails to "sufficiently raise concerns about risks."
That's good thinking and a threat to exotic investments that were passed along like hot potatoes.
Other bankers should follow Goldman CEO Lloyd Blankfein’s lead, especially the crew at bailed-out Bank of America. BoA's top brass, according to reports, rushed to pay back Uncle Sam not because its financial picture suddenly brightened, but rather because it wanted to escape any federal cap on bonuses paid to execs.
That is the greed leadership of yesterday, passing the buck with the idea that Uncle Sam will bail you out once again if you screw up.
Corporate America needs more guys like Jeff Immelt.
(Image via Notre Dame)