Wall Street starts to contemplate General Electric after Jeff Immelt

After 15 years as CEO, Immelt shows no signs of slowing, but investors wonder aloud about succession plans

Jeff Immelt gives no public signs he’s ready to end his 15-year tenure as chief executive of General Electric Co., but investors are increasingly preparing for the inevitable.

Mr. Immelt, who turned 61 this week, 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.

“The last notable GE catalyst and elephant in the room is the likely yearend 2017 or 2018 retirement of CEO Jeff Immelt,” wrote Scott Davis, a Barclays analyst who has covered the company for years, in a note to investors last month.

Mr. Immelt, a 35-year GE veteran, has never given a timeline for his retirement nor any indication that he is ready to leave. GE doesn’t have a mandatory retirement age. But Mr. Immelt’s tenure is now approaching that of his predecessor, Jack Welch, raising expectations among investors that the company will soon have to demonstrate how it is planning for succession.

People who have spoken to Mr. Immelt about the direction of the company describe him as energized by current initiatives, including its bid to establish a software division to serve industrial customers and the relocation of its Fairfield, Conn., headquarters to Boston. In recent months, he has kept up a frenetic travel schedule, traveling to Nigeria, Italy and Brazil to meet with customers. “On the ground in Argentina,” Mr. Immelt tweeted on Valentine’s Day. “Encouraged by what I see.”

John Inch, an analyst for Deutsche Bank, wrote to investors after a breakfast meeting with GE executives in December that the executives “bristled” when asked repeatedly by analysts about succession planning. “The tone and answers to the question suggested the leadership has zero intention of stepping down anytime soon, in our opinion,” Mr. Inch wrote.

Mr. Immelt has told people close to him for years that he doesn’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 wants his eventual departure to be quick and seamless.

For CEOs before Mr. Welch, “the GE tradition has been that the new guy walks into the office and the old guy hands him the key and walks out that day,’’ a person familiar with GE said. It’s common practice for a departing CEO of a public U.S. company to stay on for a transition period as a chairman.

As in years past, people familiar with the company’s planning said, tapping an outsider as CEO would be highly unlikely. Those most likely to succeed Mr. Immelt include the leaders of some of GE’s largest business units, or perhaps the company’s chief financial officer, these people said.

And despite Mr. Immelt’s efforts to improve the gender and ethnic diversity at GE, the internal CEO contenders are all white men.

Steve Bolze, 53 years old, leads GE’s power business, its largest industrial division at $26.8 billion in 2016 sales. Mr. Bolze has risen in prominence at the company since the 2015 deal to buy the power assets of French conglomerate Alstom SA, which vastly expanded its fleet of power plants across Asia and Africa.

Mr. Bolze helped to pitch the deal to investors and Wall Street analysts. Under his leadership at GE Power, the company says its integration of Alstom is ahead of schedule.

As GE’s chief financial officer since 2013, Jeffrey Bornstein, 51, has led a yearslong initiative to slash corporate costs and simplify the structure SPECIAL of the company. Mr. Bornstein also helped drive the spin-off of much of the GE Capital lending business, where he once worked.

Mr. Bornstein’s bluntness has won him praise among Wall Street analysts. He has also won public support from activist Nelson Peltz’s Trian Fund Management LP, which disclosed a $2.5 billion stake in GE in October 2015.

Another name on the shortlist: John Flannery, a former head of the company’s India business and leader of its deals team, who is now CEO of GE Healthcare. Mr. Flannery, 55, 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. GE Healthcare’s sales rose to $18.29 billion in 2016, back to levels it sustained in the beginning of the decade, while increasing operating profits.

Lorenzo Simonelli, the CEO of GE’s oil and gas unit, had been viewed as a CEO candidate in the past. Much was riding on his efforts to steer that unit—which provides equipment and services for oil exploration and production—through the more than twoyear slump in crude oil prices.

Mr. Simonelli, 43, is seen as less likely to succeed Mr. Immelt now that he is slated to take over the new public company that is to be formed later this year with the merger of GE’s oil and gas business with oil-field services giant Baker Hughes Inc., analysts who cover the company said.