General Electric (GE) investors are embracing change in the C-suite. Shares gained +3.6%, the best one-day percentage gain since October 5, 2015, after CEO Jeff Immelt announced his retirement Monday. John Flannery, who heads up the healthcare unit, assumes his new role as CEO on August 1.
Immelt, who has been CEO for 16 years, has been dogged by an underperforming stock price. Shares have lost 29.5% compared to the S&P 500’s 124% rise through last Friday, as tracked by our partners at the WSJ Market Data Group.
“There are clearly some areas we need to improve on and improve on quickly, no one is happy with the stock price right now or some of the cash pictures that we have had, we know we can be better at those things, I want to focus on those things,” Flannery said while talking to employees alongside Immelt.
In March, FOX Business was first to report that Immelt was facing pressure from activist investor Nelson Peltz and his Trian Partners fund after missing key performance benchmarks.
Immelt took over the industrial giant from legendary CEO Jack Welch just four days before the September 11th attacks in 2001 and navigated the Dow component through the height of the financial crisis. The company’s finance arm, GE Capital, like other financial companies, threatened the overall stability of the corporation as well as the U.S. financial system.
While he has since divested GE Capital and worked to transform the company into higher growth businesses such as energy and technology, the share price did not rebound. The stock has lost 11% this year, as the broader market hovers at record highs.
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In reflecting on his tenure at the company Immelt said, “when you sat there in 2001 you could have never predicted the environment of the past 16 years but as leaders, as teams, as GE, what we became was more resilient, was incredibly resilient, tighter together, and stronger together and that is the platform we have built together” he added “the foundation we have has never been stronger.”
He will remain Chairman of the Board through the end of the year.