General Electric (NYSE:GE) announced that Jeff Immelt, CEO and Chairman, is stepping down from his position. The news comes as no surprise to investors who were anticipating a shakeup in the company’s ranks. GE will replace Immelt with John Flannery.
Flannery has extensive experience with the company as CEO and president of the company’s GE Healthcare unit.
Immelt will remain with the company until his retirement at the end of the year as chairman of the board. The company’s shares rose more than 3% in pre-market trading on the news. The change in positions will occur on August 1, 2017, when Flannery will be CEO of GE. He will resume position as chairman and CEO on January 1, 2018.
Chief Financial Officer Jeff Bornstein will transition into the role of vice chairman of the company. Kieran Murphy will replace Flannery, taking the reins of GE Healthcare.
General Electric (NYSE:GE) in Shake Up
The shakeup is part of the company’s succession plan, which has been in place since 2011. Immelt has been the company’s lead since 2001 and also helped the company transition to a manufacturing entity. The CEO and chairman also helped the company through 9/11 and the financial crisis.
Immelt also oversaw $260 billion in asset sales of GE Capital since 2015.
General Electric (NYSE:GE)’s financial performance has struggled over the past decade, with shareholders often voicing their concern over Immelt leading the company.
The company’s shares are down 29% since Immelt joined the company. The company’s lack of performance caused shareholders in the company to press for cost cutting measures and asset sales. The company’s performance was heavily criticized by investors.
Flannery’s track record includes the turnaround of GE Healthcare, which outperformed in 2016 with organic revenue rising 5% on the year. The company’s stock is down 6% in the last 90-day period and 6.34% in the past 12-month period.