Jeff Immelt the General Electric Co.’s CEO the past 16 years is stepping down this summer, which is a departure earlier than had been expected that leave’s the biggest company in Boston under new top leadership only one year after its relocation there from Connecticut.
Fifty-five year old John Flannery the current head at GE Healthcare will become the new CEO August 1, said GE on Monday.
Immelt has dramatically transformed GE during his tenure of 16 years as its No. 1 executive selling off companies like NBC Universal and its appliances unit to focus on returning its industrial lines into today’s digital age.
Now, it is up to incoming CEO Flannery to carry through his mentor’s vision in such a way it satisfies GE’s investors who have become increasingly more impatient.
Analysts have said that Flannery, a veteran of 30 years with GE, will have challenges to face but has a strong combination of both operational and financial skills.
During an interview on Monday, Flannery said he would take the strategies he has been using to turn around the GE healthcare business that he has operated since 2014 and will apply them to all of GE as a whole. GE has 300,000 worldwide employees and generated over $135 billion last year in revenue.
Immelt moved the headquarters of GE from Fairfield, Connecticut to Boston, Massachusetts in 2016 saying GE would benefit from Boston’s large number of universities, innovative startups and healthcare organizations.
However, he also has come under heavy pressure from company investors to show results, for the most part to increase the stock prices at the company and its profitability.
On Monday GE stock was up 3.6% on a day the markets were down.
Immelt, who is 61, will stay on the GE Board as Chairman prior to his December 31 retirement, when Flannery then becomes chairman. Immelt’s pension is valued at $81 million, showed regulatory filings by the company.
It is common knowledge that GE was trying to find Immelt’s successor. Immelt has been at the helm since just prior to the attacks of 9/11 and for the last two years, GE investors were paying attention closely to the company for signs of who would be his replacement.
Other possibilities included GE CFO Jeff Bornstein, Steve Bolze a power businessman and Lorenzo Simonelli a CEO in oil and gas.
However, the announcement on Monday was sooner than most had anticipated.