General Electric's new CEO H. Lawrence Culp Jr [Larry] is back in the spotlight after making his first earnings call with shareholders on Oct. 30. GE's performance fell short of Wall Street's expectations, reporting both a lower revenue and earnings per share than analysts anticipated. Adding to the bad news, the company slashed its dividend to a penny, while also disclosing an ongoing investigation by the Securities and Exchange Commission was expanded over accounting issues. Shares took another beating falling briefly below the $10 level, the lowest since 2009 and off 45 percent this year alone.
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|GE||GENERAL ELECTRIC COMPANY||7.23||-0.71||-8.94%|
In early October, the embattled industrial conglomerate announced it was replacing CEO John Flannery with Culp. The decision to remove Flannery, who'd been in the position for less than two years, was reportedly driven by the board's frustration with the slow pace of change under his tenure.
As GE attempts to turn around its performance, here's what to know about the new CEO:
1. Culp has a track record of success:
From 2000 to 2014, Culp served as CEO of the Danaher Corporation. During this time, he helped orchestrate the firm’s transformation from an industrial manufacturing conglomerate into a cutting-edge science and technology company, increasing the company’s market capitalization and revenue growth by five-fold, according to the company's announcement.
2. He’s a known entity in the business world:
In 2014, Harvard Business Review named Culp as one of the top 50 CEOs in the world. GE’s stock climbed by over 7 percent following news of Culp’s hiring, as Wall Street analysts largely expressed confidence in his ability to improve GE’s performance.
3. He has ties to the Boston area:
Culp attended Harvard Business School, graduating with an MBA in 1990. After his resignation from Danaher, he has served as a senior lecturer at Harvard. Culp will be based out of GE’s new Boston headquarters in Fort Point, according to the Boston Globe. During the October 30 2018 earnings call he gave a shout out to Red Sox manager Alex Cora who just won the World Series against the L.A. Dodgers, giving Boston its ninth World Series win in history.
4. He rose through the ranks at Danaher to become CEO, like legendary CEO Jack Welch at GE:
Culp joined Danaher in 1990 and worked his way up to the top position over his 24-year career with the company. He became president in 1993, executive vice president in 1999, and in 2001 was named COO and then CEO, according to Culp’s faculty biography at Harvard. Renowned former GE CEO Jack Welch similarly rose to his position after 21 years at the firm, joining initially as a junior chemical engineer.