BX Blackstone Inc

By Joshua Jamerson 

Caterpillar Inc. said Chairman and Chief Executive Doug Oberhelman is slated to retire next year after leading the equipment maker to its highest annual sales ever before overseeing the longest sales decline in the company's history.

The board selected Caterpillar executive Jim Umpleby, a company veteran and current head of the company's energy and transportation business, to succeed Mr. Oberhelman in the CEO role, effective Jan. 1. Caterpillar's board appointed Mr. Umpleby as CEO on Thursday, according to a filing Monday with regulators.

Mr. Oberhelman will remain as executive chairman of Caterpillar until March 31, when he will retire from the company. After that, board member Dave Calhoun will assume the role of nonexecutive chairman. Mr. Calhoun is senior managing director and head of private equity portfolio operations of Blackstone Group L.P.

A Caterpillar spokeswoman said the company's board members decided to split the CEO and chairman roles because they thought it was the appropriate governing structure at this time. The spokeswoman, though. declined to elaborate on why the board reached that decision. In the company's recent history, it has tended to have one person serve as chairman and CEO.

Mr. Oberhelman has led Caterpillar since 2010. He spent his first years as CEO putting billions of dollars into factories to build more of its familiar yellow machines and move the company deeper into mining equipment, which would prove to be a risky bet, The Wall Street Journal reported Sunday.

The year 2012 turned out to be a peak for Caterpillar, but soon after, miners began shelving equipment-buying plans as commodity prices fell, China's growth slowed and then oil prices fell, along with demand for related equipment. Caterpillar now faces its fourth straight year of falling sales, the longest decline in its history.

The Journal reported Sunday that the 63-year-old Mr. Oberhelman may not be at the helm when Caterpillar's fortunes turn, as the company's chiefs by tradition haven't stayed beyond age 65.

Of the members on Caterpillar's 12-member board, Mr. Oberhelman received the fewest number of "For" votes to be elected to the board at the company's annual shareholder meeting, according to a June filing with regulators.

Caterpillar sales fell 15% in 2015 to $44.15 billion. In 2012, sales hit $63.07 billion. Since then, the company has slashed 30,000 jobs in the past four years -- a 20% workforce reduction -- and has said it expected to close or consolidate as many as 20 plants.

Caterpillar shares fell 28 cents to $87.39 in morning trading in New York. Before Monday, the stock was up 29% this year -- the best-performing in the Dow Jones Industrial Average -- but was trading 25% below its 2012 peak. While the stock has risen about 46% from the beginning of Mr. Oberhelman's tenure, shares have trailed the S&P 500 index's 107% rise.

Write to Joshua Jamerson at joshua.jamerson@wsj.com

(END) Dow Jones Newswires

October 17, 2016 10:40 ET (14:40 GMT)

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