GE CEO Jeff Immelt to Step Down After 16 Years

John Flannery will take over as companywide CEO in August

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Updated June 12, 2017 7:29 a.m. ET

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General Electric Co. said longtime leader Jeff Immelt will step aside as chief executive on Aug. 1, ending a 16-year run atop the conglomerate that he reshaped after the financial crisis but has struggled recently to boost profit.

GE said Monday that Mr. Immelt will be replaced by the head of the company’s health care business, John Flannery, and remain as chairman of the board until Dec. 31.

The company also said that finance chief Jeff Bornstein has been promoted to vice chairman.

Mr. Immelt, 61, has steered GE through the financial crisis and divested the bulk of the company’s once-massive lending business. While the share price is little changed from when he took over in 2001, the conglomerate has refocused on its industrial businesses, shedding low-margin units like home appliances and striking a big oil-and-gas deal last fall.

Write to Austen Hufford at austen.hufford@wsj.com

General Electric Co. said longtime leader Jeff Immelt will step aside as chief executive on Aug. 1, ending a 16-year run atop the conglomerate that he reshaped after the financial crisis but has struggled recently to boost profit.

GE said Monday that Mr. Immelt will be replaced by the head of the company’s health care business, John Flannery, and remain as chairman of the board until Dec. 31. Mr. Flannery, 55 years old, is a 30-year veteran of GE who spent much of his career in the company’s once sprawling financial business.

Mr. Immelt will stay on as chairman of the board through the end of his retirement from the company on Dec. 31. Mr. Flannery, 55, is a 12-year veteran of GE.

GE shares, which had fallen 12% year to date, rose 3.7% to $28.96 in premarket trading.

The change comes as GE has been under pressure by activist investor Trian Fund Management to slash costs and boost profits in the company’s core industrial business. Mr. Immelt recently laid out two-year cost saving target and revamped GE’s executive bonus program under pressure by Trian. Some Wall Street analysts had recently openly wondered about when Mr. Immelt might retire, but the CEO gave no sign he was ready to step aside.

Mr. Immelt, who turned 61 earlier this year, has steered GE through the financial crisis and divested the bulk of the company’s once-massive lending business. While the share price is little changed from when he took over in 2001, the conglomerate has refocused on its industrial businesses, shedding low-margin units like home appliances and striking a big oil-and-gas deal last fall.

GE said the leadership change has been in the works for years, with the board deciding on the timing in 2013 and voting Mr. Flannery CEO Friday. Last month, Mr. Immelt told analysts the board had been working on succession plans but didn’t indicate a decision was imminent.

Mr. Flannery is a veteran of the GE Capital business, served as the head of GE’s India business and was the former leader of its deals team. On Mr. Flannery’s watch, GE spun off its consumer credit business, Synchrony Financial, sold its appliance business, and purchased of the energy business of Alstom SA.

He stepped in to lead the health-care business in 2014 when the unit was struggling and some analysts called for GE to spin it off or sell it. Instead, Mr. Flannery and GE have doubled down. The unit, which makes imaging and diagnostic equipment, has been expanding into life sciences. GE Healthcare’s revenue rose to $18.29 billion in 2016, back to levels it sustained in the beginning of the decade, while increasing operating profit.

Mr. Flannery was one of several business units heads that were seen as potential successors. Mr. Immelt had told people close to him for years that he didn’t want to repeat the divisive and protracted succession process that put him in the top job when he took over from Mr. Welch. Instead, he wanted his eventual departure to be quick and seamless.

Chief Financial Officer Jeffrey Bornstein, another potential CEO successor, will remain in that role and become vice chairman, GE said.

Write to Thomas Gryta at thomas.gryta@wsj.com

(END) Dow Jones Newswires

June 12, 2017 07:44 ET (11:44 GMT)

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GE Names Flannery CEO as Immelt to Step Down After 16 Years

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Bloomberg
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June 12, 2017, 6:42 AM EDT June 12, 2017, 7:09 AM EDT
  • Move follows stepped-up pressure from activist investor Trian
  • Tenure included finance exit, renewed focus on manufacturing

General Electric Co. named health-care head John Flannery its new chairman and chief executive officer, ending Jeffrey Immelt’s 16-year tenure, which included a withdrawal from financial services and a renewed focus on equipment manufacturing.

Flannery, 55, will become CEO on Aug. 1 and will add the title of chairman on Jan. 1, the Boston-based company said in a statement Monday. The appointment is the result of succession planning that’s been under way since 2011, the company said.

The CEO-designate “has led complex financial and industrial businesses all over the world, including running GE Healthcare, GE in India and the business development team for GE through the successful acquisition of Alstom,” said Jack Brennan, the company’s lead independent director. Flannery joined GE in 1987 and has led the health-care unit since 2014.

The company’s move followed months of stepped-up pressure on Immelt, 61, from activist investor Trian Fund Management over a slide in GE’s stock to the lowest level in a year and a half. The shares have fallen 12 percent this year, compared with an 8.6 percent gain for the Standard & Poor’s 500 Index.

GE shares rose 4.2 percent to $29.11 before regular trading in New York.

Kieran Murphy was named president and CEO of GE Healthcare, the company said in a separate statement.

https://www.bloomberg.com/news/articles/2017-06-11/asia-shares-set-to-open-mixed-after-u-s-tech-rout-markets-wrap

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One Response to “GE CEO Jeff Immelt to Step Down After 16 Years”

  1. daveyone1 Says:

    Reblogged this on World Peace Forum.

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