GE Names Ex-Chairman of Vanguard Brennan as Lead Board Director

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 [e-mail] and Joann S. Lublin at [e-mail]

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