General Electric Co. named activist investor Trian Fund Management's co-founder Ed Garden to its board, the latest move by new CEO John Flannery to change the direction of the struggling industrial giant.
The move comes a week after GE's longtime leader, Jeff Immelt, resigned from the company's board. Since taking over, Mr. Flannery has been moving aggressively to revamp the conglomerate, replacing its finance chief and two other senior leaders on Friday.
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The new GE chief is under pressure to share his plans to cut costs and boost profits at a company whose shares have fallen more than 20% so far this year, missing out on a broad stock market rally.
Trian first invested $2.5 billion in GE in 2015 in what was portrayed as a collaborative partnership. But the investor has been unhappy with GE's stock performance and cost-cutting efforts under Mr. Immelt, who stepped down as CEO on Aug. 1.
For Trian, getting on GE's board comes a day before the largest proxy battle in history as it wages a high-profile fight for its co-founder Nelson Peltz to take a board seat at Procter & Gamble Co.
"Over the last 90 days, I've met with numerous investors and I value their input and views," Mr. Flannery said in a statement, adding that he looks forward to working with Mr. Garden.
Mr. Garden, who had worked closely with Mr. Immelt and former CFO Jeff Bornstein, is currently on the board of Bank of New York Mellon and Praxair PLC.
"Like other GE shareholders, I am disappointed by the recent performance of GE's stock," Mr. Garden said in his own statement. "I continue to believe that GE represents an attractive long-term investment opportunity with significant upside."
Trian will now have access to GE's board deliberations and detailed financial results, just as the more-than-300,000-person company is conducting a strategic review of its business portfolio and deciding how to cut costs and spend its cash.
Some GE investors and analysts have questioned whether change was needed at the board that supported Mr. Immelt in his 16-year tenure. Some questioned whether the latest changes meant that GE's longstanding dividend could be altered to free up cash.
"The dividend remains a top priority," said GE spokeswoman Deirdre Latour. Mr. Flannery has said no change would come to the payout, which the company puts at the top of its capital allocation list.
Mr. Garden replaces former Deere & Co. CEO Robert Lane, who is retiring from GE's board after 12 years. The board will have 18 members.
Cara Lombardi contributed to this article.
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(END) Dow Jones Newswires
October 09, 2017 10:02 ET (14:02 GMT)