Trian Fund Management comments on General Electric framework.
NEW YORK, March 22, 2017 – Trian Fund Management, L.P., one of the largest stockholders of General Electric Company (NYSE: GE), with beneficial ownership of approximately 66.8 million shares, issued the following statement regarding its recent discussions with GE as detailed in the company’s Form 8-K filed today:
“Trian invested in GE in 2015 because we liked its industrial businesses, appreciated the initiative to separate GE Capital, and believed management would meet its public commitment to shareholders to earn $2.00 per share in 2018. Over the past month, Trian has intensified its dialogue with senior management regarding new initiatives to help ensure that GE can meet its financial commitments. We are pleased with the new framework that GE announced today. Trian believes GE’s commitment to reduce Industrial structural costs1 ratably over the next two years from $24.9 billion in 2016 to $22.9 billion in 2018 will help to improve long-term operating performance by further simplifying and streamlining the organization and is critical to ensuring that the company achieves its financial goals. We also believe that the 2017 Industrial operating profit target announced today is important because it requires management to achieve its EPS targets in a high quality manner (i.e. via Industrial operating profit growth).
Furthermore, we believe that the changes to the executive management team’s existing compensation packages along with the company’s commitment to review its framework for 2018 compensation (with a goal to align incentives around the financial metrics that most directly impact the creation of long-term shareholder value) is positive for shareholders. At this critical juncture, Trian believes that today’s announcements better position GE for the long-term and help to ensure GE will achieve its financial goals. We will continue to hold management accountable to its commitments.”
About Trian Fund Management, L.P.
Founded in 2005 by Nelson Peltz, Ed Garden and Peter May, Trian Fund Management, L.P. is a highly engaged shareowner that seeks to invest in high quality but undervalued and underperforming public companies and to work collaboratively with management teams and boards of those companies to execute operational and strategic initiatives designed to drive longterm sustainable earnings growth for the benefit of all stakeholders.
Trian Media/Investor Contact:
1 Per GE’s 3/22/17 8-K, Industrial structural costs include segment structural costs excluding the impact of business acquisitions and dispositions, plus total Corporate operating profit excluding non-operating pension costs, restructuring and other charges and gains.
See the full PDF below.