Honeywell International Inc. said David Cote will step down as CEO at the end of March, paving the way for current COO Darius Adamczyk to succeed him.
Cote, 63, will stay on as executive chairman until April 2018 and then start a five-year consulting and non-compete agreement, the company said in a statement Tuesday. Adamczyk, 50, became chief operating officer in April after rising in just eight years to run one of Honeywell’s three business units.
“The best-planned orderly leadership transitions are ones that are well-signaled and reasonably paced,” said Deane Dray, an analyst with RBC Capital Markets, in a research note. “So to Honeywell’s credit, this succession news comes as no surprise.”
The early announcement of Adamczyk as CEO quells any speculation over the leadership change at the maker of aerospace components, refining equipment and commercial building systems as Cote nears retirement. The tactic is the opposite of a transition at General Electric Co. in which Cote was an early contender before leaving the company. The well-publicized process at GE led to the departure of two other candidates as Jeffrey Immelt was chosen as successor to Jack Welch.
The choice of Adamczyk will build on Cote’s push to hire software engineers, incorporate more technology into products and buy companies with digital offerings to drive profit margins and gain market share. With a degree in electrical and computer engineering from Michigan State University and a master’s degree in computer engineering from Syracuse University, Adamczyk has “deep expertise in software,” Cote said. Honeywell’s next CEO also has an MBA from Harvard University.
“Darius is absolutely the right person to lead our company into a new era where we will need to keep evolving to become even more global, more of a software company, and more nimble,” Cote said in the statement. “Darius has succeeded in every business leadership role he has ever held.”
Honeywell’s market value has climbed to $87 billion from $20 billion during Cote’s 14-years at the helm, according to the statement. Cote took over a company with sagging profit margins and deflated morale after a GE acquisition of Honeywell was nixed by European authorities. The turnaround led to shareholder gains of 556%, which more than doubled the return of the S&P 500 Index, the company said.
The company also said it named Jaime Chico Pardo as lead director for two years with expanded responsibilities to help with the transition. Chico Pardo has been a Honeywell board member for 16 years. He’s a former CEO of the Mexican phone company Telefonos de Mexico, which is now part of America Movil SAB.
By Thomas Black