Johnson Controls International PLC said Monday that Chief Operating Officer George Oliver will assume the chief executive post from Alex Molinaroli sooner than planned as the company looks to regain its footing following its merger with Tyco International PLC.
Mr. Oliver, who had been Tyco's CEO, will take on the top role late next week rather than six months from now.
Johnson Controls said its board unanimously approved a plan for Mr. Molinaroli, who started with the company in 1983 and has been CEO since 2013, to leave his post and the board effective Sept. 1. Mr. Molinaroli was expected to remain as chairman of the board for a year after relinquishing his role as chief executive under the original transition plan sketched out at the time of the merger.
The news sent Johnson Control shares up 3.5% in Monday trading.
Deane Dray, an analyst for RBC Capital Markets, said the disappointing fiscal third-quarter results Johnson Controls posted in July likely contributed to the board's decision to speed up Mr. Molinaroli's departure. Shares in the company are down almost 9% in the past year versus an 11% gain for the S&P 500 index over the same time.
Changing leadership now eliminates the "transition overhang and enables the company to start its fiscal 2018 [on Oct. 1] with the leadership change already effective," Mr. Dray said in a note to investors.
He added that Mr. Oliver will get a crack at setting Johnson Controls guidance for fiscal 2018 at the start of the year instead of inheriting a set of numbers March 1 from Mr. Molinaroli.
In conjunction with the change, board member Jürgen Tinggren will become the board's lead independent director.
Mr. Tinggren said in prepared remarks that the board has been impressed by Mr. Oliver's handling of the integration and believes that "accelerating the transition provides clarity and continuity."
Johnson Controls has been plagued by what analysts have called an "alarming" cash flow shortfall, leaving it particularly vulnerable to competition. The company also cut its 2017 earnings per share range by 6 cents and its organic growth guidance from 3% to 2%.
Mr. Molinaroli and other executives spent much of an earnings call last month attributing the company's choppy cash flow to strategic decisions, including the merger, and promising a quick turnaround.
The tie-up with Tyco, completed last year, gave the maker of power equipment and building controls a larger portfolio of commercial heating, ventilation, air conditioning, and fire and security offerings. Many investors have pushed for it to diversify and pivot away from its core automotive equipment segment faster.
Bob Tita contributed to this article.
Write to Cara Lombardo at email@example.com
(END) Dow Jones Newswires
August 21, 2017 13:10 ET (17:10 GMT)