GE’s Immelt to step down after 16 years as CEO
General Electric Co.’s Jeff Immelt is stepping down after 16 years as chief executive of the giant conglomerate, having succeeded in repositioning the company as a producer of large industrial products but failed to fully revive its lagging stock price.
John Flannery, president and CEO of GE’s healthcare unit, will take over as CEO in August, the company said Monday.
Immelt took the helm in 2001 from legendary CEO Jack Welch. After the financial crisis, he sharply pared down the financial services business that Welch had built up and went on a spending spree to acquire businesses in the power and oil and gas sectors. During his tenure, Immelt also disposed of GE’s appliance unit and the NBC television business.
The 61-year-old Immelt will stay on as chairman until his retirement from the position at the end of the year, with the 55-year-old Flannery stepping into the role after that.
GE traces its roots to 1878, when inventor Thomas Edison formed Edison Electric Light Co. in New York City after having opened his famous laboratory in Menlo Park, N.J. The next year, Edison invented the first successful incandescent electric lamp.
Recent reports say GE is considering selling the lighting business, which could fetch about $500 million.
Although GE credits Immelt with improving its financial performance and its focus, GE’s stock price has lagged behind the market during his time as CEO.
The stock was worth a bit less than $40 on Immelt’s first day in 2001, with the U.S. in the middle of a recession. The stock briefly rose above $40 in 2007, just ahead of the economic crisis. It sank to as low as $6.66 in March 2009 in the depth of the crisis, and closed at $27.94 a share Friday.
Analyst Robert McCarthy at Stifel Nicolaus wrote in a note to clients that the timing of the leadership change was “unsurprising since the serial underperformance of the stock.” GE said the moves were part of its succession plan. GE’s stock rose 3.6% to $28.94 on Monday. Flannery is a longtime General Electric executive, starting his career at GE Capital in 1987.