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. Last Updated: 07/27/2016

Defensive Ex-GE Chief Hands Back His Perks

NEW YORK -- General Electric Co. said Monday U.S. federal regulators are investigating Jack Welch's lavish retirement and employment benefits, shortly after the former chief executive announced he had given up company-funded use of corporate jets and a sprawling New York apartment.

Welch, hailed for taking a stodgy conglomerate by the horns and reshaping it into an aggressive global powerhouse, didn't apologize for taking home a retirement package that has drawn a barrage of criticism since details emerged in divorce filings.

However, the decision will likely make it more difficult for corporate boards to sign off on fancy retirement perks that many executives had come to expect during the boom of the 1990s.

In an article penned for The Wall Street Journal, he defended his benefits, saying they were given in lieu of cash compensation offered by the company during his reign as CEO.

Though the benefits were not improper, perception mattered, Welch wrote. At his request, GE's board agreed Thursday to change the contract so only basic office and administrative support would be funded by the company, Welch said.

"And in these times when public confidence and trust have been shaken, I've learned the hard way that perception matters more than ever," Welch wrote. "In this environment, I don't want a great company with the highest integrity dragged into a public fight because of my divorce proceedings."

A day later, the U.S. Securities and Exchange Commission requested information on Welch's pay and benefits, seeking to uncover whether GE properly disclosed the details of the arrangement decided on in 1996, the company said.

Details of Welch's compensation and perks -- both from his years as CEO and his retirement -- were revealed recently in divorce papers filed by his wife, Jane Beasley Welch, in a Connecticut court.

The perks were slammed almost immediately, coming at a time investors are still furious over a string of corporate scandals that left shareholders stripped of their retirement savings while executives walked away with unseemly severance packages.

"Papers filed by my wife in our divorce proceeding became public and grossly misrepresented many aspects of my employment contract with General Electric," Welch wrote. "I'm not going to get into a public fight refuting every allegation in that filing."

Welch, who retired from GE a year ago after 21 years as chairman, said he expects to pay GE between $2 million and $2.5 million a year for such services as use of company aircraft and the company apartment overlooking Central Park in Manhattan.

He also said he would provide no-cost consulting services to GE on an as-needed basis. He concluded, "In the end, this decision may not satisfy everyone, but it sure feels right in my gut."

Recent legislation and reform proposals have sought to curb excessive executive compensation, which exploded during the late 1980s and the long economic boom of the last decade.