5 Things Partners Should Know About GE's New CEO
A New CEO In A Little Over A Year
General Electric stunned Wall Street Monday when the Boston-based industrial conglomerate announced that board member H. Lawrence Culp would take over as chairman and CEO, replacing John Flannery, the longtime GE executive who only served in the top leadership post for a year.
Flannery was appointed chairman and CEO last year after GE's previous CEO, Jeff Immelt, failed to stem a dramatic drop in stock price over his tenure as he tried to transform GE into a digital company. Despite Flannery's efforts to restructure the company, it wasn't enough for shareholders or the board.
However, GE investors seem optimistic about Culp's appointment. After the news dropped Monday morning, GE's stock price surged more than 10 percent that day.
In the following slides, we lay out five things you should know about Culp, who goes by Larry.
The First Outsider To Run GE
With his appointment, Culp has become the first CEO in GE's 126-year history to come from the outside. Culp only came into the company's inner circle earlier this year when he was appointed to GE's board of directors in April as part of a shakeup that saw the removal of several long-serving directors.
Longtime CEO Of Another Industrial Conglomerate
Culp spent most of his career at Danaher Corp., where he worked for roughly 25 years and served as the conglomerate's CEO from 2000 to 2014. Danaher is a Washington, D.C.-based company that runs several businesses across dental, life sciences, diagnostics and environmental and applied solutions divisions, including Beckman Coulter, Ormco, Hach and VideoJet Technologies.
Wall Street Loves Him
During his roughly 15 years as Danaher's CEO, Culp grew the company's market capitalization from $20 billion to $50 billion and gave shareholders a 465 percent return on their investments, according to The Wall Street Journal. Sales grew fivefold under Culp, who also led the company through several major acquisitions, including the company's 2011 purchase of Beckman Coulter. "Larry Culp has a proven track record in company transformation and delivering shareholder value," said Thomas W. Horton, who was appointed GE's lead board director on Monday.
Culp 'Will Move With Urgency' As GE's CEO
Culp is expected to follow through with GE's breakup plan that he approved with other board members in June, The Wall Street Journal reported, citing people familiar with the matter. That plan includes a sale of GE's ownership stake in gas services company Baker Hughes, as well as the spinoff of its health-care and railroad locomotive divisions. "We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency," Culp said in a statement.
GE Digital's Future Unclear—For Now
It's unclear if Culp will move forward with the company's rumored plan to sell key parts of software division GE Digital, which the company has previously declined to comment on. When asked about Culp's plans for GE Digital on Monday, a company spokesperson pointed to GE's press release about Culp, which makes no mention of GE Digital. But the release does indicate that Culp may consider selling off more assets to right-size the business. "We remain committed to strengthening the balance sheet including deleveraging," Culp said as part of his statement.