General Electric ended the week up 16.7 percent at $13.18 a share, the stock’s best week in nearly a decade after naming Larry Culp chairman and CEO.
GE was far and away the best performing stock in the struggling S&P 500 index, which finished the week down 1 percent overall. GE’s week was the stock’s best since March 2009, when shares surged more than 36 percent.
This has been a historic five-day run for the beleaguered industrial giant – GE has jumped more than 10 percent in a single week just nine times over the past 10 years.
Culp takes the helm at a dire time for GE, as the company struggles to turnaround its power business and produce the returns GE shareholders once knew. Named chairman and CEO on Monday, Culp brings more than a decade of success as the CEO of Danaher to his new role. Danaher now holds its place as one of the world’s largest science and technology conglomerates, after Culp more than quintupled the company’s market value and revenue while CEO.
GE will pay Culp handsomely if he gets the stock rising again. Culp’s compensation package grants him up to $21 million a year in salary, bonuses and stock for the next four years. But that’s not the best part for Culp: If the stock rises more than 50 percent, he also gets a payday of about $47 million. And he gets more money if it rises further.
Despite this week’s bump, shares of GE have been hit hard this year, down more than 24 percent versus the S&P 500’s 8 percent gain. And, over the past decade, GE’s stock has plunged more than 39 percent, compared to the S&P 500’s 163 percent return. The company’s market capitalization fell below $100 billion last week – down from a peak of nearly $600 billion in August 2000.
The benchmark S&P 500 fell below its 50-day moving average for the first time since early July. The next best performer this week was pharmaceutical giant Eli Lilly, boosted by strong results from its latest diabetes drug. That stock, though, gained only 7.2 percent – less than half of GE’s performance this week.
