In the corporate world, postponed retirements are rarely a good omen. Like an aging athlete unwilling to hit the showers, or a graying rock band mounting one more “reunion tour,” a CEO who pushes back his exit is often judged harshly. He’s either unwilling to let go of the trappings of power, convinced no one can replace him–or both. In recent years highly regarded corporate chiefs, such as Chrysler’s Lee Iacocca and AT&T’s Robert Allen, saw their reputations suffer after hanging around too long. Welch’s iconic status–GE’s stock has increased fiftyfold in his 20-year reign–and the circumstances surrounding his extension may have tempered the criticism. Still, the new timetable has raised eyebrows. A Wall Street Journal editorial called the escapade “One Last Whale Hunt for Captain Jack,” and portrayed Welch “handcuffing himself to the credenza” in a scene worthy of “I Love Lucy.”
Welch escalated the fallout by protesting too much. “This is not a story of the old fool who can’t leave his seat, of the chairman who’s hanging on, who loves his job so much he can’t go home,” Welch told a press conference, one day after threatening to “take on right in the chops” any reporter who dared suggest that. Welch says he’s staying only an extra nine months at the insistence of Honeywell’s board. The deal was too good to pass up, he says, simply so he could hit the golf course on schedule next spring. (His wife, however, was reportedly “very emotional” when he broke the news to her.) Welch says he’s staying mainly to help his replacement blend Honeywell into GE’s already-mammoth empire. Most management experts agree that’s sound strategy. “He doesn’t need to prolong his monarchy–he’s already gotten all the kudos,” says Warren Bennis of the University of Southern California.
If anyone might be uncomfortable with the arrangement, it’s GE’s finalists-in-waiting: Jeffrey Immelt, James McNerney and Robert Nardelli. Welch says he’ll still announce in the next eight weeks, as planned, which of the three will succeed him. But now whoever wins will spend his first year eclipsed by the uber-boss. Prior to the Honeywell deal, speculation focused on Immelt, a 44-year-old Harvard M.B.A. who runs GE’s medical business. But the Honeywell acquisition increases GE’s presence in the aerospace business, which may give a slight edge to McNerney, 51, who runs GE’s aircraft-engine business. “With these three guys, Jack could put on a blindfold, throw a dart and still wind up in great shape,” says Gerard Roche, a top recruiter at Heidrick & Struggles. And with a host of big-name companies currently looking for new CEOs, even the runners-up in the Race to Run GE should enjoy spoils elsewhere. They’ll have an added perk: they won’t have to fill Welch’s unfillable shoes.
