Caterpillar CEO To Retire in March -- 4th Update
October 17 2016 - 10:55AM
Dow Jones News
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
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