After 30 years with General Electric Company (NYSE: GE), GE Healthcare Limited CEO and President John Flannery is about to inherit all of corporate leadership. Immelt bought a $7.5 million home on Commonwealth Avenue in Back Bay past year ahead of the move, according to Boston Magazine.
Flannery, 55, will become CEO on August 1 and assume chairman duties following Immelt's retirement on December 31. In March, GE said that it would focus on reducing costs in its industrial business as it faced mounting pressure to do so from Trian Fund Management, which is run by the billionaire investor Nelson Peltz.
In fact, he has nursed it back to improving sales and profits by focusing primarily on organic growth opportunities, and the business remains core to GE.
In addition, Chief Financial Officer Jeff Bornstein was named vice chair.
The systemically important designation was removed from GE Capital previous year.
An investor who bought $1,000 in GE stock when Immelt took over would have $1,243 today, including dividends.
After earning a bachelor's degree in finance and a Wharton MBA, he spent 10 years at GE Capital's Stamford, Connecticut, office before being sent to Argentina in 1997 to help the Latin American operations.
GE's shares were up 2.7 per cent in premarket trading.
In his view, Flannery's prior experience leading GE's business development team, which seeks out M&A deals, would make him "readily adept at maximizing value and structuring potential exits" - as Flannery did through the 2015 acquisition of Alstom's power and grid business. That said, Immelt's departure comes amid mounting investor impatience, particularly given the stock's underperformance relative to peers, despite having completed what we see as one of the most transformational periods in the company's history.
Immelt led GE through a portfolio transformation, the 9/11 tragedy, the financial crisis and oil price dynamics, since succeeding Jack Welch as CEO in 2001.
Flannery, 55, tweeted that it was an honor to take over as head of General Electric. GE also said it would seek to link bonuses for senior managers to achieving those cost-cutting and profitability goals.
Trian took a big stake in GE almost two years ago.
$2 billion in costs to align executive bonuses with cuts and profit goals.
This story has been corrected to say that the former CEO of GE is Jack Welch, not Welsh.
Sales and earnings are expected to be down this quarter, and being a multinational the company is going to be hurt by a strong dollar, he said. "He has a track record of success and led one of our most essential businesses", Immelt said. Over that time, General Electric sold its insurance, credit card, plastics and security divisions.
In a sign of continuity, GE said Kieran Murphy, who currently heads life sciences, would lead the wider GE Healthcare division - and the company stated bluntly: "Healthcare is a key GE business now and in the future".