GE’s turnaround playbook helped push shares up 96% in 2023, outperforming tech giants

In a new Fortune article, my colleague Shawn Tully writes about the company’s ongoing journey—and its CEO.

“Nearly six years ago GE CEO Larry Culp inherited a bulky, super-inefficient, possibly near-bankrupt enterprise,” Tully writes. “Now, through a lean manufacturing revolution and relentless deleveraging courtesy of rising profits and well-timed asset sales, Culp has successfully dismantled what was once the world’s most renowned conglomerate, and in its place succeeded in delivering what will soon be three independent, publicly traded names, all featuring investment-grade balance sheets.”

GE’s first spinoff, GE HealthCare, which produces medical imaging equipment and tech devices, went public Jan. 4, 2023. GE Vernova, which houses the energy portfolio, has a spinoff planned for early in the second quarter. That will leave GE Aerospace as the final piece of the old empire.

“For 2023, GE posted the largest share appreciation of any U.S. industrial, clocking a gain of 95.8%, including value of the GE HealthCare stock investors received at the spinoff,” Tully writes. “It speaks to Wall Street’s esteem for the future of GE’s remaining businesses that its current market cap of $144 billion is half again higher than its valuation when it owned GE HealthCare.” Also, GE stock outperformed the tech giants Apple, Google, and Microsoft in 2023.

Rahul Ghai became SVP and CFO of GE on Sept.1, 2023, succeeding Carolina Dybeck Happe. Ghai assumed this role in addition to his current responsibilities as CFO of GE Aerospace, which he has held since August 2022. Dybeck Happe has continued as an SVP of finance at GE for a period of time to assist with the transition and to prepare for separation readiness ahead of the planned GE Vernova spin-off. She joined GE as SVP and CFO in March 2020. 

In his report, Tully explains that the biggest source of market enthusiasm is for the aerospace franchise—“long GE’s crown jewel”—and Culp will serve as CEO and chairman. It’s the first time he’s run a single business and P&L since his earlier days at Danaher. “I’m just hopeful that I’m better at it than I was back in the 1990s,” he jokingly told Tully. 

To delve more into GE’s history, including where the company lost its way, and its turnaround playbook, you can read Tully’s complete article here. 

Have a good weekend.

Sheryl Estrada
sheryl.estrada@fortune.com

Leaderboard

Some notable moves this week:

Richard C. Puccio, Jr. was named EVP and CFO at Analog Devices, Inc. (Nasdaq: ADI), effective Feb. 5. Puccio joins ADI from Amazon Web Services (AWS), where he served as CFO. Before his role at AWS, Puccio was at PricewaterhouseCoopers, where he served as a partner for over two decades.

Vikram Luthar, CFO and SVP at ADM (NYSE: ADM), a provider of human and animal nutrition products, was placed on administrative leave. "Luthar’s leave is pending an ongoing investigation being conducted by outside counsel for ADM and the board’s audit committee regarding certain accounting practices and procedures with respect to ADM’s Nutrition reporting segment," according to ADM. Ismael Roig was named interim CFO. 

Elaine Paik was named CFO at Impossible Foods, a company that develops plant-based substitutes for meat, dairy, and fish products. In addition to 25 years spent at the Colgate-Palmolive Company where she served as global treasurer, Paik was most recently the CFO at Juul Labs, Inc.

Scott A. Kingsley, CFO at NBT Bancorp Inc. (Nasdaq: NBTB), was promoted to president and CEO succeeding John H. Watt, Jr., effective May 21. Kingsley joined NBT in 2021. Annette L. Burns, chief accounting officer at NBT, will be promoted to CFO. Burns joined NBT in 2013 with the company’s acquisition of Alliance Bancorp. 

Lars Sandström was named CFO, SVP, and head of group function finance at Ericsson, effective April 1. Sandström will replace Carl Mellander, whose departure Ericsson announced in April 2023. Sandström is currently CFO and a member of the executive team at Getinge. He previously held several senior positions at AB Volvo, Scania, and Swedish Orphan Biovitrum AB.

Akash Palkhiwala, CFO at Qualcomm Incorporated (Nasdaq: QCOM) has been appointed the additional role of chief operating officer (COO), effective immediately. In addition to his CFO responsibilities, as COO, Palkhiwala will now have oversight for the global go-to-market organization and operations and IT. Palkhiwala has served as CFO since 2019.

Amy Reeves, CFO at View, Inc., a smart building technology provider, informed the company on Jan. 17 that she will resign from her position, effective Feb. 2, 2024, according to an SEC filing. Reeves will continue to serve the company as an independent consultant as requested by the company from time to time. She joined View in 2021 and became CFO in 2022.

Big deal

For the full year of 2023, less than a third (33%) of employees in the U.S. were engaged in their work, according to a new report by Gallup. Last year, engagement was down from the annual high of 36% in 2020 and a peak of 40% in June of that same year. The firm has tracked worker engagement since 2000. 

According to Gallup, each percentage point gain or drop in engagement represents about 1.6 million full- or part-time employees in the U.S. Meanwhile, it's estimated that non-engaged or actively disengaged employees account for approximately $1.9 trillion in lost productivity nationally.

Going deeper

Here are a few Fortune weekend reads:

"From unicorns to unicorpses: Why billion-dollar startups and even VC firms keep imploding," by Jessica Mathews 

"How the sharing economy’s next big thing went from $2.5 billion smash hit to roadkill in record time" by Jason Del Rey 

"Harvard economist Jason Furman says the soft landing is here—and the risk we ‘veer off the runway’ into recession is not ‘unusually high’" by Will Daniel

"The secret to achieving your best is to stop caring what people think. A performance psychologist reveals 3 tips to break the cycle" by Alexa Mikhail 

Overheard

"We were dead wrong expecting Musk and team to step up like adults in the room on the call and give a strategic and financial overview of the ongoing price cuts, margin structure, and fluctuating demand. Instead, we got a high-level Tesla long-term view with another train wreck conference call."

—Wedbush Securities’ Dan Ives, a noted Tesla bull, said in a Thursday note that the company’s earnings call left Wall Street with “minimal answers and lots of questions and frustration yet again," Fortune reported.