Jeffrey Immelt is stepping down as chairman and chief executive of General Electric Co. (IW 500/6), ending a 16-year tenure during which he dramatically reshaped one of the world’s top manufacturers yet struggled to win the approval of Wall Street.
John Flannery, a 30-year company veteran who currently heads up GE Healthcare, will take over as CEO of the parent company Aug. 1, the Boston-based company said Monday in a statement. The 55-year-old will assume chairman duties following Immelt’s retirement on Dec. 31.
Immelt’s departure follows months of stepped-up pressure from activist investor Trian Fund Management, which called on GE to improve performance and cut costs more aggressively as shares missed out on a broad stock rally. GE has dropped 12% this year, compared with an 8.6% gain for the Standard & Poor’s 500 Index.
Immelt, 61, led several of GE’s largest-ever acquisitions, expanding the company’s focus on making jet engines, medical scanners and gas turbines through moves including the 2015 purchase of Alstom SA’s energy business. He has also withdrawn GE almost entirely from financial services, which once accounted for about half of the company’s sales.
GE shares rose 4.2% to $29.11 before regular trading in New York.
Flannery, who was named the head of GE Healthcare in 2014 after handling M&A for GE, has boosted sales and profit margins in the division. He joined GE in 1987. The appointment is the result of succession planning that’s been under way since 2011, the company said.
The CEO-designate “has led complex financial and industrial businesses all over the world, including running GE Healthcare, GE in India and the business development team for GE through the successful acquisition of Alstom,” Jack Brennan, the company’s lead independent director, said in the statement.
Kieran Murphy was named president and CEO of GE Healthcare, the company said in a separate statement.
By Richard Clough