Immelt stepping down as GE CEO
Company veteran Flannery taking over
General Electric CEO and Chairman Jeff Immelt is set to retire after a 16year tenure defined by moves to shed assets and attempts to redefine the industrial giant as a digital powerhouse.
GE said Monday that Immelt, 61, would relinquish his CEO post Aug.1 and continue as chairman through Dec. 31.
John Flannery, 55, a GE veteran who is leading its health care division, will take over as CEO. The company’s chief financial officer, Jeff Bornstein, was named as vice chairman.
The moves come after Immelt led GE through a dramatic downsizing that included shedding $260 billion of financial assets held in its GE Capital division. Under Immelt’s reign, the company has sought to emphasize its expertise in software and data analysis.
During Immelt’s tenure, the Bostonbased company sold off its media assets, including NBC, as well as plastics, appliances, industrial solutions and consumer finance. It bolstered its digital capability, renewable energy, oilfield services and life sciences, among other areas.
With the company significantly leaner, its revenue dipped by 1 percent in the first quarter, while total costs were cut by 3 percent.
The company also got increasingly global. Today about 60 percent of its revenue comes from foreign markets, up from 40 percent when Immelt joined.
“Jeff has positioned the company incredibly well for the future,” Jack Brennan, lead independent director on GE’s board, said in a statement. “He executed a massive portfolio transformation and navigated the company through economic cycles and business disruptions. Today, GE is a high-tech industrial company with a bright future.”
But in recent quarters the company has faced pressure from activist investors at Trian Fund Management, led by Nelson Peltz, to bolster its profit by shedding costs and overhauling its executive compensation.
After a period of squabbling, GE announced plans to shed $2 billion in annual industrial costs from 2016 to 2018, which Trian hailed in March as a positive step. Trian declined to comment.
Amid speculation about whether the showdown played a role in the executive turnover, GE revealed an unusual amount of detail about its succession planning process.
The board said the shakeup marked the culmination of a deliberate succession planning process that began in 2011. It had decided in 2013 that it should name a new CEO in summer 2017, the board said. It interviewed candidates early last month and picked Flannery on Friday.
“John is the right person to lead GE today,” Immelt said. “He has broad experience across multiple businesses, cycles and geographies. He has a track record of success and led one of our most essential businesses.”
GE’s leadership changes are closely observed by corporate historians. The company has repeatedly touted its ability to identify, nurture and place future leaders who move on to lead its key divisions and even other companies.