Umair Gaines
General Electric (GE) is one of the world's largest and most diversified corporations, with a history spanning over a century. The company has had several notable officials who have played a significant role in shaping its direction and success. One of the key figures in GE's history is Owen D. Young, who served as GE's general counsel and vice president before becoming the company's CEO in 1922. Young founded the Radio Corporation of America (RCA) in 1919 and led GE through the challenging interwar period with his financial prudence and technological vision. Another notable CEO of GE is Jack Welch, who led the company from 1981 to 2001 and orchestrated one of the most dramatic corporate transformations in American history. Welch, nicknamed Neutron Jack for his ruthless efficiency, transformed GE into a lean and aggressive profit powerhouse through strategic acquisitions and relentless downsizing. Following Welch's retirement, Jeff Immelt became CEO in 2001 and navigated the company through the post-9/11 era and the Great Recession. As of 2021, H. Lawrence Culp Jr. is the current CEO of GE, overseeing the company's focus on energy solutions, jet engines, and healthcare technologies.
| Characteristics | Values |
|---|---|
| Current CEO | H. Lawrence Culp Jr. |
| Former CEO | John Francis Welch Jr. (retired) |
| Former General Counsel and Vice President | Owen D. Young |
| Number of employees | 174,000+ |
| Revenue in 2020 | $79.6 billion |
| Profit in 2020 | $7.3 billion |
| Share price in 2021 | $100+ |
| Number of countries operating in | 170+ |
| Global Rank in Fortune 500 | 33rd |
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What You'll Learn
John Francis Welch Jr., Chairman and CEO of GE from 1981 to 2001
John Francis Welch Jr., also known as Jack Welch, was an American business executive, chemical engineer, and writer. He served as the Chairman and CEO of General Electric (GE) from 1981 to 2001. During his tenure, Welch brought about significant changes and transformations within the company.
Welch became GE's youngest chairman and CEO in 1981, taking over from Reginald H. Jones. He quickly set out to restructure and streamline the company, advocating for a policy of informality in the workplace. Welch's leadership style was characterised by his aggressive strategic redirection, with a focus on speed, agility, and simplicity. He believed in combining financial strength, market position, and technology leadership to stay competitive in a rapidly globalising world.
One of Welch's notable directives was his "number one or number two globally" strategy, where he emphasised that GE had to be a top player in the industries it participated in. To achieve this, he reorganised the company into 14 distinct businesses, including aircraft engines, medical systems, engineering plastics, major appliances, NBC television, and financial services. This strategic redirection proved successful, as GE achieved world market-share leadership in almost all of its 14 businesses.
Under Welch's leadership, GE's market value increased significantly, growing from $12 billion in 1981 to $410 billion by the time of his retirement in 2001. During this period, Welch oversaw 600 acquisitions and expanded into emerging markets. His impact on the company was substantial, and he received a severance payment of $417 million, the largest in business history at the time.
However, Welch's practices and legacy have also been subject to criticism. Some, like author David Gelles, argue that his actions were ultimately self-destructive and negatively influenced corporate America. Welch's focus on financial services created challenges for his successors, especially during the Great Recession. Additionally, he faced scrutiny for his views on CEO compensation and the lack of compassion for the middle and working classes.
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H. Lawrence Culp Jr., GE's fourth CEO since Welch's departure
H. Lawrence Culp Jr., also known as Larry Culp, is GE's fourth CEO since Jack Welch's departure. Culp is the first outsider to run GE in the company's 126-year history. He was appointed CEO of GE in October 2018 and has since taken on additional roles as CEO of GE Aviation, CEO of GE Aerospace, and non-executive chairman of GE HealthCare.
Culp was born in March 1963 and raised in the Washington, D.C. area. His father owned a small welding company. He earned a bachelor's degree from Washington College and an MBA from Harvard Business School, where he later served as a senior lecturer. Culp began his career at Danaher Corporation in 1990 and served as its CEO from 2001 to 2014. During his tenure at Danaher, he led the company's successful transformation from an industrial manufacturer into a leading science and technology company. He joined the GE board of directors in April 2018, along with Thomas W. Horton, who was appointed Lead Director.
As Chairman and CEO of GE, Culp has led the company's multi-year financial and operational transformation. Under his leadership, GE has strengthened its balance sheet, reduced debt, increased profit and adjusted earnings-per-share, and quadrupled its market capitalization. He has focused on improving operations across GE's businesses by implementing a lean approach with a strong emphasis on safety, quality, delivery, and cost.
Culp's compensation package at GE has attracted attention, with a potential pay of up to $21 million per year, including bonuses tied to stock price increases. In 2020, he was offered a two-year contract extension by the GE board, which was set to last until August 2024. However, in April 2021, Culp faced pushback from some of the company's largest shareholder advisers regarding his pay package. Despite this, Culp continues to lead GE and its various businesses, aiming to drive growth and long-term success for the company.
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Owen D. Young, GE's general counsel and vice president who founded RCA in 1919
Owen D. Young, an American industrialist, businessman, lawyer, and diplomat, was born on October 27, 1874, and died on July 11, 1962, at the age of 88. Young played a significant role in the history of General Electric (GE), serving as its general counsel and vice president before going on to become GE's president in 1922.
Young's association with GE began when he represented Stone and Webster in a case against the company around 1911. His performance in this case impressed Charles A. Coffin, GE's first president, who invited Young to become the company's chief counsel in 1912, following the death of Hinsdill Parsons. Young accepted the position and moved to Schenectady. In 1913, he became GE's vice president in charge of policy. During his time as general counsel and vice president, Young played a pivotal role in the founding of the Radio Corporation of America (RCA) in 1919.
RCA was established as a subsidiary of GE, with the aim of expanding international radio communications and securing American control over the struggling radio industry. Young became the first chairman of RCA, a position he held until 1929. The formation of RCA was promoted as a patriotic gesture, with requirements that corporate officers be U.S. citizens and that a majority of the company stock be held by American citizens. RCA quickly became the largest radio communications firm in the United States and played a crucial role in the development of radio and television technology.
In addition to his contributions to GE and RCA, Young had a distinguished career in public service. He counselled five U.S. presidents and played a significant role in drafting the Young Plan, which addressed German reparations after World War I. For his efforts, Young was named Time Magazine's Man of the Year in 1929. Young also made significant contributions to higher education, particularly in the development of a state university system in New York. He served as a trustee and president of the board at St. Lawrence University and was a member of the New York State Board of Regents.
Young's impact extended beyond his roles at GE and RCA. In 1939, he retired as president and chairman of GE, but briefly returned to serve as chairman of the board from 1942 to 1945. Young's leadership helped establish GE as a top company traded on the London Stock Exchange. His accomplishments brought him recognition from notable figures such as Abraham Lincoln biographer, Ida M. Tarbel, who wrote a biography of Young titled "Owen D. Young: A New Type of Industrial Leader."
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Philip Dunham Reed, GE's president after World War II
The General Electric Company (GE) is a multinational conglomerate headquartered in Boston, Massachusetts, with other important offices in New York City. GE has been a significant company in the US economy for over a century, with a history of innovation and diversification.
One of the notable figures in GE's history is Philip Dunham Reed, who served as the company's president and chief executive officer for almost two decades, barring a brief hiatus during World War II.
Philip D. Reed was born in Milwaukee, Wisconsin, in 1899, and received his early education in his home state. He attended the University of Wisconsin, where he obtained a Bachelor of Science in Electrical Engineering in 1921. He went on to pursue a legal education, receiving a Bachelor of Laws from Fordham University in 1924.
Reed's career at General Electric began in 1926 or 1927 when he joined the company's law department in New York. In 1928, he was transferred to the incandescent lamp division, becoming general counsel. Reed's expertise in law and business proved valuable, and he rose through the ranks, becoming assistant to the president in 1937 or 1938 and chairman of the board in 1939 or 1940.
During World War II, Reed took on various governmental roles. He served as a Senior Consultant to the Director of Priorities at the Office of Production Management and worked with the War Production Board. He also served as Deputy Director of the Materials Division of the War Production Board. Reed's governmental activities during the war are documented in the Hagley Museum and Library Archives.
After World War II, Philip D. Reed resumed his position as GE's president and chairman of the board from 1945 until his retirement in 1959. Under his leadership, GE experienced significant growth in sales and expansion. The company's sales grew from $396 million in 1939 to $4.3 billion in 1957, and the number of company jobs increased from 79,000 to over 250,000 during this period. Reed focused on customer and government relations and became a spokesman for the future of the electrical industry.
Reed's contributions were recognised with various awards, including the President's Certificate of Merit in 1947, and he was decorated as an officer of the Legion of Honor in France in 1947, achieving the rank of commander in 1951. He also played a role in encouraging Dwight D. Eisenhower to run for President in 1952.
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Jeff Immelt, CEO of GE from 2001 to 2017
Jeff Immelt was CEO of General Electric (GE) from 2001 to 2017. He joined the company in 1982 after graduating from Harvard Business School, working in GE's plastics, appliances, and healthcare businesses. Over the next 19 years, he held several executive positions, including becoming a GE corporate officer in 1989, joining the GE Capital board in 1997, and taking the reins of the corporate leadership of GE Healthcare. In 2001, he was picked to succeed Jack Welch, one of the most famous CEOs in U.S. history, and became the 9th Chairman of GE.
Immelt's tenure as CEO was controversial and challenging. Four days after he took over, the September 11 attacks took place, directly affecting the company's Aircraft Engines sector and costing GE's insurance division $600 million. During his time as CEO, GE's stock fell by about 30%, resulting in a loss of over $150 billion in market value. Analysts, investors, and fellow CEOs attributed these losses to Immelt's missteps. Additionally, in 2015, GE was involved in misleading investors and disclosure failures in its power and insurance businesses, leading to a $200 million payment to the Securities and Exchange Commission in 2017.
However, Immelt also actively participated in mergers and acquisitions during his tenure. He purchased Amersham PLC for $9.5 billion in 2004 and Alstom's power business for approximately €12.4 billion in 2015. He also sold several GE businesses, including the plastics business for $11.6 billion in 2007, NBC Universal for $8 billion in 2013, and the appliances business for $3.3 billion in 2014.
Immelt's executive compensation fluctuated significantly throughout his time as CEO. In 2007, he received a total compensation of $14,209,267, which increased to $15.2 million in 2010. In 2017, he was honoured with an Edison Achievement Award for his commitment to innovation throughout his executive managerial career. Despite the controversies, Immelt's time at GE has been recognised with numerous awards and honours, including being named one of the "World's Best CEOs" three times by Barron's.
In June 2017, GE announced that Immelt would retire as CEO and be replaced by John L. Flannery. Immelt stepped down in October of that year and has since taken on various roles, including becoming a Venture Partner at New Enterprise Associates (NEA), a global venture capital and private equity firm, and serving as executive chairman of the board at athenahealth, a private American healthcare company.
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Frequently asked questions
H. Lawrence Culp Jr. was named CEO in 2018.
Jeff Immelt was CEO of GE from 2001 until 2017.
John Francis Welch Jr., also known as Jack Welch, was Chairman and CEO of General Electric from 1981 until 2001.
Owen D. Young was CEO of General Electric for over a quarter of a century, taking over in 1922.
