Larry Culp, the CEO of General Electric, is set to finalize the process of breaking up the conglomerate by splitting off the power business from its aircraft engine division. Culp, who has been praised for his restructuring efforts at GE, is set to receive a significant payout of 1.74 million shares, worth roughly $300 million, as part of a long-term incentive package. With this payout, Forbes estimates that Culp will become a billionaire, joining a small group of U.S. chief executives with 10-figure fortunes.
When Culp took over as CEO of GE in 2018, the company was facing significant challenges, including a massive amount of debt and a shrinking market cap. Under Culp’s leadership, GE has made significant progress in reducing its debt, divesting non-core businesses, and improving operational efficiency. Culp has also implemented a renewed focus on the customer and a philosophy of process optimization called lean, which has helped drive improvements in GE’s operations and finances.
Despite criticism from corporate governance advocates and investors, Culp’s turnaround efforts have been successful, with GE’s stock price increasing by 260% since the beginning of 2023. Analysts are bullish on the company’s future, with 14 out of 20 recommending investors buy the stock. Culp’s next focus will be on improving performance at GE Aerospace, the world’s No. 1 maker of aircraft engines, which saw profits double in 2023 and revenue increase by roughly 50% over the same period.
With the spinoff of the power business complete, Culp can now dedicate all his efforts to growing GE Aerospace. The company is expected to see continued growth in revenue, with operating margins of roughly 20% by 2025. This will give Culp the resources to invest in R&D projects, such as the development of a next-generation engine called Rise, which could reduce fuel use and carbon emissions by 20%. Analysts believe there is still significant potential for growth in GE Aerospace under Culp’s leadership.
Culp’s operational focus and dedication to quality products and customer service have set him apart from other CEOs in the industry. Unlike companies like Boeing, which have focused on shareholder returns through dividends and buybacks, Culp’s philosophy is centered on delivering high-quality products and taking care of customers. This approach has helped drive success at GE Aerospace and is expected to continue to drive growth in the future.
Overall, Culp’s leadership at GE has been characterized by a focus on operational efficiency, divestitures of non-core assets, and a commitment to innovation. As he prepares to lead GE Aerospace as a standalone company, there are high expectations for continued growth and success under his leadership. With a strong track record of success and a significant payout on the horizon, Culp’s reputation as an industrial mastermind is well-deserved.
