GE Finance Chief Jeff Bornstein to Leave Company in High-Profile Shake-Up -- 4th Update
October 06 2017 - 8:00PM
Dow Jones News
By Thomas Gryta
General Electric Co. said three top executives are leaving, as
new CEO John Flannery moves abruptly to clean out the leadership
ranks of the struggling industrial conglomerate.
Jeff Bornstein, GE's chief financial officer, will depart at
year's end as will veterans Beth Comstock, the head of marketing
efforts, and John Rice, the company's top international
executive.
All three were top lieutenants to former CEO Jeff Immelt, who
stepped aside on Aug. 1 and announced earlier this week that he had
resigned as chairman, three months ahead of schedule.
Mr. Bornstein was considered a potential successor to Mr. Immelt
and when Mr. Flannery was selected for the top spot, GE said the
two would work closely together.
The company said Jamie Miller, the head of the company's
transportation business, will take over as its chief financial
officer starting Nov. 1. Ms. Miller joined GE in 2008 from
WellPoint Inc. and later served as GE's chief information
officer.
Mr. Bornstein has spent 28 years at GE and took over as CFO in
2013. In recent years, he helped oversee the unwinding of its
massive finance business.
"As John evaluates the strategy for GE and puts his leadership
team in place, he and I have concluded that this is the right time
to bring in a new CFO with a fresh perspective," Mr. Bornstein said
in a release.
Mr. Bornstein was named a vice chair in June and granted a
special retention package. He will forfeit 80% of the award and his
decision to leave was described as mutual by one person familiar
with the matter.
Ms. Comstock is the company's top female executive. She has
spent 27 years at the GE, serving as its chief marketing officer
and recently heading its business innovations unit. Mr. Rice has
spent 39 years at GE, where he lead several of the business units,
and was recently tasked with expanding GE's overseas business.
GE declined to make the departing executives available for
comment.
The management changes come as Mr. Flannery is trying to
turnaround the struggling company and is under pressure from
activist investor Trian Fund Management, which has taken a large
stake and has called for additional cost-cutting.
"I think this is Flannery sending a message to the organization
that credibility needs to be rebuilt," said Scott Davis, CEO of
Melius Research, who said the Friday executive moves were "cleaning
house 101."
"I think he has no choice," Mr. Davis said, adding that he
thinks the changes are positive for the company's future.
Since taking over, Mr. Flannery has been reviewing the entire GE
portfolio and cutting costs, including cutting corporate staff,
delaying part of its new Boston headquarters and moving to sell its
fleet of corporate jets.
The company is widely expected to cut its financial projections
at a planned meeting in November, when Mr. Flannery will lay out
his long-term plans for the turnaround. GE shares, which have
slumped 23% this year, fell 15 cents to $24.39 on Friday.
GE said Pascal Schweitzer, who joined the company in 2015 from
Alstom, will serve as interim head of the transportation
business.
GE is coming off a 16-year run under Mr. Immelt, who moved the
company away from struggling and lower-margin businesses like
appliances toward industrial machinery and energy. But the stock
lagged behind during his tenure, which included the financial
crisis.
Mr. Immelt and Mr. Bornstein wound down GE's massive financial
business, but struggled to meet profit targets and boost growth.
They also struck a big bet on the oil business last year, agreeing
to combine its oil-and-gas business with Baker Hughes, an oilfield
services provider. But the prolonged slump in the energy markets
have weighed on GE's results.
Mr. Bornstein's no-nonsense approach endeared him to investors,
including activist Nelson Peltz, who took a $2.5 billion stake in
GE in 2015 and was said to be unhappy with the company's
performance under Mr. Immelt. But Mr. Bornstein largely avoided
blame for the company's troubles and has been active in helping cut
costs.
Earlier this year, GE pledged to cut $1 billion in annual costs
from its industrial operations this year and next. Since being
named to his new role, Mr. Flannery has moved with a sense of
urgency in reviewing the company's operations, along with meeting
with investors and customers. Despite the company's struggles, he
has pledged to maintain the company's dividend.
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
October 06, 2017 19:45 ET (23:45 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Anthem (NYSE:ANTM)
Historical Stock Chart
From Aug 2024 to Sep 2024
Anthem (NYSE:ANTM)
Historical Stock Chart
From Sep 2023 to Sep 2024