CHICAGO-- General Electric Co. on Wednesday named John J.
Brennan, a former chairman of mutual fund Vanguard Group, as lead
independent director on the company's board, a signal the company
is carefully considering investor interests.
Mr. Brennan, chairman emeritus and senior adviser to Vanguard,
GE's largest shareholder, was elected to GE's board in 2012. He
succeeds Ralph Larsen, the former chief executive of Johnson &
Johnson, who served as lead director since 2004. Mr. Larsen didn't
seek re-election to the board this spring.
GE Chief Executive Jeff Immelt announced the appointment at the
company's annual shareholder meeting in Chicago.
Mr. Brennan's election is a nod that GE is listening to
shareholders as the company seeks to restore its share price from
its plunge during the financial crisis. Mr. Immelt is pushing two
main strategic initiatives that investors have called for: reducing
the company's dependence on financial earnings and improving profit
margins from its industrial businesses such as jet engines, power
turbines and locomotives.
GE's stock price has remained stubbornly below the $30 threshold
since it plunged to a low of under $7 in 2009, at the depths of the
recession. The stock rallied last year, but so far this year is
down despite plans to sell its North American consumer retail
finance business and a 12% gain in earnings from its industrial
businesses in the first quarter.
GE shares recently traded up slightly at $26.62.
The elevation of an investor representative to a board
leadership position puts GE "clearly in the distinct minority"
among large companies, said Ann Yerger, executive director of the
Council of Institutional Investors, a Washington, D.C.-based group
that represents 125 pension funds with more than $3 trillion in
assets. Investors with important board roles "bring a perspective
that isn't always in abundance on boards," she added.
At Hewlett-Packard Co., activist investor Ralph Whitworth has
been interim outside chairman for the past year. Billionaire Carl
Icahn occasionally takes the chairmanship of businesses after his
Icahn Enterprises L.P. acquires sizable stakes.
Mr. Brennan, 59 years old, has an undergraduate degree from
Dartmouth College and graduate degree from Harvard Business School.
He joined Vanguard in 1982, eventually rising to CEO from 1996
through 2008.
In addition to his role as senior adviser to Vanguard, Mr.
Brennan also serves as the lead governor of the Financial Industry
Regulatory Authority, the industry's self-regulating body, and as a
director of Guardian Life Insurance Co. of America, and of LPL
Financial Holdings Inc. He also is a trustee of the University of
Notre Dame and the Vanguard Charitable Endowment Program.
Write to Ted Mann at ted.mann@wsj.com and Joann S. Lublin at
joann.lublin@wsj.com
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