GE Surges on Report That Peltz's Ire May Lead to CEO Change

  • Immelt is ‘on the hot seat,’ Fox Business’s Gasparino says
  • Trian took $2.5 billion stake in 2015 as GE shifted strategy

General Electric Co. jumped the most in four months after a report that activist investor Nelson Peltz is unhappy with the company’s recent performance, potentially putting pressure on Chief Executive Officer Jeffrey Immelt to step down.

Immelt is “on the hot seat” with Peltz’s Trian Fund Management, according to a tweet from Fox Business reporter Charles Gasparino. The shares rose 2.4 percent to $30.38 at 1:29 p.m. in New York after climbing as much as 2.5 percent for the biggest intraday gain since Nov 10.

Nelson Peltz

Photographer: Patrick T. Fallon/Bloomberg

Trian took a $2.5 billion stake in GE in late 2015, saying it endorsed Immelt’s efforts to slim down the lending operations and refocus the company on manufacturing jet engines, gas turbines and locomotives. Trian, which doesn’t have a seat on GE’s board, has called for the Boston-based industrial giant to cut costs and take a disciplined approach to acquisitions.

For GE, “a change in CEO alone is worth 5 percent in the stock,” Scott Davis, an analyst at Barclays Plc, said in a note Friday before the Fox Business report. Davis said in December that Immelt is “in the 8th or 9th inning” of his tenure and could step down by 2018.

Jeffrey Immelt

Photographer: Christophe Morin/Bloomberg

GE declined to comment. Trian didn’t immediately respond to a request for comment. Gasparino cited a statement by Trian in which the firm said it and GE “continue to work constructively together to optimize shareholder value.”

Immelt’s compensation fell 35 percent last year as GE’s shares underperformed the market amid persistent challenges in the oil and gas industry.

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