Whether it’s a company that became an icon of the 20th century or one that hopes to do the same for the 21st, it’s been a bad past few days to be the leader of a multibillion-dollar business.
Elon Musk’s self-created fiasco with US regulators came to a dramatic head over the weekend, as the Tesla founder reached a settlement with the SEC that calls for him to step down as chairman of the electric automaker for at least three years and to pay a $20 million fine. Musk will remain CEO, however, a role that would have been in doubt if Musk had forgone a settlement and decided to battle the SEC, which officially filed suit against him late last week.
GE, meanwhile, announced on Monday the unexpected removal of John Flannery from the CEO role after just over a year on the job, with board member Larry Culp taking over as both CEO and chairman. The ouster comes several months after GE revealed falling profits driven by struggles in its power division, and amid talks of splitting up the company and a months-long decline in its stock price.
In some ways, the departures couldn’t be more different. Tesla is Musk’s baby, and the extremely close association between company and creator has been a major factor driving years of investor excitement in the innovative automaker. It’s difficult to think of one and not the other—even if Musk’s erratic behavior in recent months has perhaps brought into question whether that’s a good thing.
Flannery, meanwhile, was brought in last June to assume control of an aging empire from longtime CEO Jeff Immelt, who in turn had taken the reins from legendary leader Jack Welch in 2001. For a company that traces its roots to Thomas Edison and JP Morgan, it was perhaps too easy to think of Flannery as just another cog in the machine, the latest leader with a generic four-letter name that starts with a J.
For both companies, though, the immediate returns from the moves were positive. Stock in Tesla (NASDAQ: TSLA) shot up more than 16% on Monday, gaining back the losses it recorded last week after the SEC’s lawsuit became public—although surely part of that boost was due to a promising report released Monday regarding the production of Tesla’s Model 3. Shares of GE (NYSE: GE), meanwhile, opened Monday up some 15% before settling back to a more modest 7% increase.