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.
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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.
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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 calling for additional cost-cutting.
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.
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(END) Dow Jones Newswires
October 06, 2017 19:06 ET (23:06 GMT)