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As someone who hasn't followed GE closely, why is Immelt considered a good CEO? Looking at the numbers, over his tenure, GE's stock is down ~38% while the S&P

As someone who hasn't followed GE closely, why is Immelt considered a good CEO? Looking at the numbers, over his tenure, GE's stock is down ~38% while the S&P 500 is up 123%. He did take over during some rocky times, but in the last 10 years, it's the same picture. If you put $100 into GE at the start of 2007, today you'd now have ~$105. For the S&P, you'd have $210. For a basket industrial stocks, you'd have $205. http://performance.morningstar.com/stock/performance-return.action?t=GE&region=usa&culture=en-US http://performance.morningstar.com/stock/performance-return.... How can the CEO who delivered this be considered good at his job?

mathattack 9y ago
All you can argue that his skills (adult leadership) are what's needed. But (similar to here) he took office after a legend who puffed up the stock, and couldn't take it back to the original glory. But perhaps his job is to land the plane at a $30 billion valuation.
Spooky23 9y ago
Welch left that company in a sorry state, and a lot of the financial machinations that pumped up that stock were played out (and worse became liabilities) by the time Immelt arrived. (Welch turned GE into a leveraged bank that happened to make generators and plastic) GE's stock performance imo is more about how the market no longer favors conglomerates and relatively boring industries.
- nebabyte 9y ago
  That's a good context, thanks. Is there a better indicator of Immelt's measure as a CEO in your opinion?
- thesausageking 9y ago
  If you assume Immelt was a great CEO and was just victim to Welch leaving GE in a very over-valued state, you'd expect the stock's performance to start off lousy and be better as Immelt's 16 year tenure went on. But that's not what we see. If you only take the last 10 or 5 years, GE has greatly underperformed both the market and similar industrial stocks. Total return for 5 and 10 years: GE 6.6% -1.6% S&P 500 13.7% 7.6% Diversified Industrials 13.0% 6.4%
  - Spooky23 9y ago
    Frankly I don't know enough to say the Immelt was good or bad. However... based on the experience of friends and colleagues who worked for different divisions of the company, I think that Welch's glory was a little overstated and not well understood at the time.
shostack 9y ago
I really can't comment on the specifics of Immelt or GE. But one question I've always had around situations of supposed lack luster performance is this... How much worse would it have been had they not been at the helm? And of course the logical follow-up of how do you know that it could actually be turned around?
- lovich 9y ago
  That's a fine question but it can't be answered. Unless there was some creditor saying they would wipe away a significant amount of debt unless that CEO was put in you can't figure out what could have been. Since every CEO that I know of is willing to evaluate and compensate their employees based on their actual results and not "what ifs" then I am perfectly fine evaluating CEOs the same way

mathattack 9y ago

All you can argue that his skills (adult leadership) are what's needed. But (similar to here) he took office after a legend who puffed up the stock, and couldn't take it back to the original glory. But perhaps his job is to land the plane at a $30 billion valuation.

Spooky23 9y ago

Welch left that company in a sorry state, and a lot of the financial machinations that pumped up that stock were played out (and worse became liabilities) by the time Immelt arrived. (Welch turned GE into a leveraged bank that happened to make generators and plastic) GE's stock performance imo is more about how the market no longer favors conglomerates and relatively boring industries.

nebabyte 9y ago
That's a good context, thanks. Is there a better indicator of Immelt's measure as a CEO in your opinion?
thesausageking 9y ago
If you assume Immelt was a great CEO and was just victim to Welch leaving GE in a very over-valued state, you'd expect the stock's performance to start off lousy and be better as Immelt's 16 year tenure went on. But that's not what we see. If you only take the last 10 or 5 years, GE has greatly underperformed both the market and similar industrial stocks. Total return for 5 and 10 years: GE 6.6% -1.6% S&P 500 13.7% 7.6% Diversified Industrials 13.0% 6.4%
- Spooky23 9y ago
  Frankly I don't know enough to say the Immelt was good or bad. However... based on the experience of friends and colleagues who worked for different divisions of the company, I think that Welch's glory was a little overstated and not well understood at the time.

shostack 9y ago

I really can't comment on the specifics of Immelt or GE. But one question I've always had around situations of supposed lack luster performance is this... How much worse would it have been had they not been at the helm? And of course the logical follow-up of how do you know that it could actually be turned around?

lovich 9y ago
That's a fine question but it can't be answered. Unless there was some creditor saying they would wipe away a significant amount of debt unless that CEO was put in you can't figure out what could have been. Since every CEO that I know of is willing to evaluate and compensate their employees based on their actual results and not "what ifs" then I am perfectly fine evaluating CEOs the same way