Johnson Controls CEO George Oliver to retire amid stakeholder push for leadership change

Johnson Controls CEO George Oliver has announced his decision to retire from the role of chief executive officer. Oliver, who will continue in his position until a successor is found, will also remain as chair of the board. This announcement follows productive discussions with Elliott Management, a major stakeholder in the company.

Key Updates

• Leadership Transition:
  • Oliver stated, “I believe that now is the right time to begin the process of identifying the next leader of the new Johnson Controls.”
  • Former Xylem CEO Patrick Decker will join Johnson Controls’ board immediately. Elliott Management, which supports Decker as a potential CEO, is backing a thorough and public search process for the new leader.
• Stock Market Reaction:
  • Johnson Controls’ shares rose by 8% following the announcement of Oliver’s retirement.
• Financial Performance:
  • The company reported its fiscal third-quarter earnings, showing adjusted earnings per share (EPS) of $1.14.
  • Quarterly net sales reached $7.2 billion, marking a 1% increase from the previous year.
  • Net income decreased to $975 million, or $1.45 per share, down from $1.05 billion, or $1.53 per share, year-over-year.
• Portfolio Changes:
  • Johnson Controls has agreed to sell its residential HVAC business to Bosch for $8 billion, reflecting ongoing efforts to streamline its portfolio.

Elliott Management’s Role

• Stakeholder Influence:
  • Elliott Management has been vocal about the need for leadership changes and strategic portfolio adjustments. Their stake in Johnson Controls was valued at over $1 billion earlier this year.
  • Elliott partner Marc Steinberg expressed appreciation for the constructive discussions and support for the company’s new direction