GE promotes insider to CFO, prepares for spin-offs next year

Dive Brief:

Rahul Ghai was appointed CFO and senior vice president of General Electric Co., effective Sept. 1, while also retaining his current duties as CFO of GE Aerospace — a role he has held since August 2022 — the company announced Thursday.
Ghai succeeds Carolina Dybeck Happe, who will be staying with the company as senior vice president for a “period of time to assist with the transition and continued work to prepare for separation readiness ahead of the planned GE Vernova spin-off,” the company statement said.
The Boston-based industrial giant first announced its planned spin-off into three separate entities in 2021 — GE Healthcare, GE Aerospace and GE Vernova — and with Ghai’s knowledge of the spin offs, “This is the right time to make this change as GE progresses toward launching GE Vernova and GE Aerospace as standalone businesses,” said GE chairman and CEO and GE Aerospace CEO H. Lawrence Culp, Jr. in the statement.

Dive Insight:

Prior to taking the financial helm of GE Aerospace, Ghai, 51, was the executive vice president and CFO of Otis Worldwide Corporation, an elevator and escalator manufacturing company, from July 2019 to August 2022, according to a filing with the Securities and Exchange Commission.

Referring to the outgoing CFO’s contributions to the company, Culp said in the statement, “Carolina has played a crucial role over the last few years, helping to significantly reduce GE’s debt, improve our financial and operating performance and build the strategy and execution of our spin-offs plan against a market backdrop unlike any other that I’ve experienced.”

“To facilitate the transition and secure her continuing assistance, GE and Ms. Dybeck Happe agreed that she will remain eligible for the severance benefits under her existing Employment Agreement and applicable equity award agreements if she resigns for ‘Good Reason’ on or before February 14, 2024 as a result of the CFO transition,” the SEC filing said.

Earlier this year, GE completed the spin-off in its healthcare unit and Ghai is set to focus on the combined operations of its digital, renewable energy and power units — which will operate under the name of GE Vernova, the statement said.

Experts have said that GE's planned spin off may be the only way to simplify its equity, according to reporting from the Wall Street Journal.

In 2019, when Dybeck Happe was appointed, the company was in the midst of an accounting revamp after its practices had come under investigation by the Justice Department and the SEC, according to previous reporting from CFO Dive. At that time, in an effort to reduce its debt levels, the company sold off assets, including a pending $21 billion sale of a biotech business to Danaher Corp.

The industrial giant reported an increase in renewable energy orders by 94% and increased revenue by 5% year-over-year in its Vernova division, according to an April 25 earnings release for the first quarter ending March 31.