Johnson Controls CEO to retire after 'productive' discussions with activist Elliott; shares surge

• Johnson Controls CEO George Oliver will retire following dialogue with activist Elliott Management.
• Elliott amassed a $1 billion stake in the company earlier this year.
• Bosch has acquired a major business from Johnson Controls, and Patrick Decker, the former CEO of Xylem, has been appointed to Johnson Controls' board with Elliott's approval.

The company announced that CEO George Oliver will retire from his position at the industrial conglomerate following "constructive dialogue" with Elliott Management, which acquired a stake in the company in 2021.

Oliver stated in a release that he believes now is the appropriate time to initiate the process of selecting the next CEO of Johnson Controls. He will continue to serve as CEO until a successor is identified and will also remain as chair after relinquishing his role as CEO.

On Wednesday, Johnson Controls' shares increased by more than 9% in premarket trading after the company announced its fiscal third-quarter earnings. The adjusted EPS was $1.14, and the quarterly net sales were $7.2 billion, an increase from the previous year.

The company announced the appointment of former Xylem CEO Patrick Decker to its board, with Elliott's approval.

Marc Steinberg, Elliott partner, stated in a release that the productive discussions with George and his team are appreciated.

Steinberg, as one of Johnson Controls' largest investors, stated that the company's recent leadership and board actions, as well as portfolio changes, will enable it to fully realize the benefits of its transformation. According to a source, Elliott's stake in the HVAC giant was worth more than $1 billion earlier this year.

Earlier this month, the company sold its residential HVAC business to Bosch for $8 billion as part of an effort to streamline its portfolio.