All aboard GE stock as CEO Immelt plans exit

Jeff Immelt, who over his 16 years as chief executive of General Electric produced the worst stock performance of any Dow 30 component, said Monday he will step down from leading the company on Aug. 1.

Investors quickly added more than $8 billion in value to the company — pushing its shares up 3.6 percent, to $28.94.

John Flannery, a 30-year veteran of the $250 billion conglomerate, will take over the top spot. Flannery, who led the restructuring group, signaled no major changes at GE.

It is a disheartening end for Immelt, 61, who succeeded Jack Welch in 2001 and oversaw the divestment of GE Capital, NBCUniversal and its appliances business — shifting the conglomerate’s focus toward technology, health care and manufacturing.

Despite investing heavily in developing digital products, including sensors in jet engines and locomotives, shareholders have been wary of the company’s new direction.

Since Immelt became CEO, GE’s shares have declined 27 percent, while the S&P 500 index more than doubled. That underperformance had some pressing for more urgency.

Activist investor Nelson Peltz’s Trian Fund Management bought a stake in GE in October 2015 and immediately pushed for asset sales and cost cuts.

Trian declined comment on Monday — but sources close to the investor said Peltz is not happy with Immelt’s leadership.

GE took pains on Monday to say Immelt’s exit was not related to Peltz’s pressure — that the succession plans were put in place in 2013.

The timing was not surprising given the serial underperformance of the stock and “investor fatigue with management’s continued perceived ungainly portfolio actions,” said Stifel analyst Robert McCarthy.