GE stock is up 4.7% on Monday following the news CEO Jeff Immelt is retiring.
John Flannery was announced to succeed Jeff Immelt as chief executive officer of General Electric. Flannery is coming from the position of president of GE Healthcare and is credited with turning around the division under his tenure.
GE has been misunderstood as of late, as Credit Suisse pointed out earlier this month. Analysts have been bearish on the stock for a while, even though promising acquisitions and new products have added potential to the company’s shares.
Under Immelt’s leadership, GE shares have fallen 26.4% from $US39.66. While this is a dramatic drop, Immelt took control of the company on September 7, 2001, several days before the September 11, 2001 terrorist attacks and also led the company through the financial crisis in 2008.
Since the company’s low of $US7.06 on March 9, 2009, Immelt has increased the stock price by 314.6% to its current trading price.
The CEO shakeup is not a surprise, according to Lauren Thomas at CNBC. Investors have been unhappy with the way Immelt struggled to “connected with investors” over the past decade.
“I am privileged to have spent the last 16 years at the company working for Jeff, one of the greatest business leaders of our time,” Flannery said of Immelt. “He has transformed the GE portfolio, globalized the company and created a vision for the GE of the future by positioning the company to lead in digital and additive manufacturing.”
Flannery should be popular with investors. He increased revenue and margins at GE Healthcare when he was president, and led the company’s equity business in Latin America.
The executive moves are part of a succession plan in place since 2011.
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