General Electric's new Chief Executive Officer John Flannery made a big bet that the industrial company's flagging fortunes will improve, buying nearly $2.7 million in GE stock, according to a regulatory filing.
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Flannery bought 103,983 GE shares for his 401(k) account on Tuesday and reported in a filing dated Wednesday. He now has about 615,000 shares worth $15.5 million at Thursday's closing price.
When Flannery, 55, took over from longtime CEO Jeff Immelt on Aug. 1, he told employees he plans to improve GE's performance, which has caused its stock to fall 19 percent this year, even as broad stock indexes advanced.
Investors think the company needs to generate more cash, widen its profit margins and reduce overhead costs, Flannery said in the letter, adding, "I heard them loud and clear."
Flannery was not available to comment and GE declined to comment on the filing.
Immelt, who remains GE's chairman through year-end, bought 1.2 million shares of GE stock during his 16-year tenure as CEO, during which he focused GE on large industrial businesses such as power generators, renewable energy and aircraft engines while shedding most of GE's finance business along with NBCUniversal and its plastics and appliances units.
(Reporting by Alwyn Scott; editing by Grant McCool)