Massive US industrial conglomerate General Electric Co has finally found a new chief investment officer.
Perhaps out of pressure from majority shareholder Trian Fund Management, the industrials company has elected the hedge fund’s chief investment officer, Edward Garden, to replace Robert Lane. Lane is retiring after 12 years as GE director, for health reasons.
The move came as a bit of a surprise, but perhaps fortunately so as shareholders at consumer products company Procter & Gamble are about to make a decision whether or not to elect Trian’s Chief Executive Officer, Nelson Peltz, to its board.
More importantly, the move comes at a time when GE needs to make a significant change in order to recover from a big slump. It has been four months ago since GE said that its longtime CEO Jeff Immelt will step down. In his place, the company would move 30-year General Electric healthcare head John Flannery into his place.
Some say that it was the company’s sustained poor performance that probably prompted Immelt to depart, many months before analysts had expected. Still, shares continue to fall, now down 3 percent as the week opens.
Garden, of course, already works closely with Peltz; and comments:
“Like other GE shareholders, I am disappointed by the recent performance of GE’s stock. But I continue to believe that GE represents an attractive long-term investment opportunity with significant upside.”
Indeed, shares dropped 2.6 percent to $23.76 before 11 am, in New York. Shares of General Electric have tumbled 23 percent through Friday, on the year so far. This puts the stock on track for the worst year through Friday, putting it on track for the worst performance in a single calendar year since 2008.
This is only one of the most recent executive departures GE announced last week. These announcements also include Chief Financial Officer Jeffrey Bornstein. Jamie Miller—current CEO of GE Transportation—will succeed as CFO in October.
His resignation comes, perhaps not surprisingly, after he was passed over for new CEO in favor of Immelt. After Flannery was appointed, the 51-year-old Bornstein was promoted to vice chair.