David M. Cote (born July 19, 1952[2]) is an American businessman. Cote previously worked for General Electric[3] and TRW Inc.[4] before he was appointed chairman and chief executive officer (CEO) of Honeywell in 2002,[4] following their acquisition by AlliedSignal. Cote also sat on the JP Morgan Chase risk committee during the period in which the firm lost $6 billion trading credit derivatives.[5] Cote stepped down as CEO at Honeywell at the end of March 2017 and was succeeded by Darius Adamczyk.
Early life[edit]
Cote was born in Manchester, New Hampshire and graduated from Pembroke Academy in Pembroke, New Hampshire in 1970.[6] The following year, Cote enrolled at the University of New Hampshire,[3] and while attending UNH full-time, he worked an hourly job on the night shift at a nearby GE jet engine plant.[3] In 1976, he graduated from the University of New Hampshire with a bachelor's degree in business administration.[3][7]
Career[edit]
General Electric[edit]
Cote joined General Electric full-time in November 1976, and worked there for more than twenty years. He transitioned from his hourly production work at the General Electric aircraft-engine plant in New Hampshire to a full-time auditing job at another GE plant in Massachusetts.[3] In 1985, his handling of an interaction with CEO Jack Welch became the catalyst for Cote's advancement at GE.[3] Welch promoted Cote three levels of management.[3] Over his career there, he held positions in manufacturing, finance, marketing, strategic planning and general management,[7] before becoming CEO of GE Appliances in 1996.[7]
TRW[edit]
In November 1999, Cote joined TRW as president and COO where he introduced the Six Sigma management system to reduce defects in manufacturing.[4][8] In February 2001, Cote was appointed CEO, and later chairman of the board.[9] Cote led the creation of the TRW subsidiary Velocium, which manufactured ultra-high-speed semiconductors.[4]
In February 2002, Cote announced he would be leaving TRW. Reportedly, the news surprised employees and some executives, who learned of Cote's departure hours before the announcement.[10][11]
Honeywell[edit]
Honeywell selected Cote as successor to Lawrence Bossidy,[12] following the AlliedSignal acquisition of Honeywell[3] and European Union's rejection of Honeywell's merger with General Electric.[12] Cote was elected CEO, president, and a member of the board of directors on February 19, 2002. He was elected chairman of the board on July 1, 2002.[12]
The year Cote took office, Honeywell lost $220 million.[7] Cote instituted conservative accounting to streamline costs. In an effort to reduce the unpredictability of asbestos-plus-environmental expenses, Honeywell established a trust for claims and reclaim soil at chemical plants. As a result, that expense is consistently $150 million a year, after-tax.[3] Honeywell saw improved quality in design, increased production, and lower production costs after it implemented a new productivity management system.[13][14] During the 2008-2009 recession, the company instituted furloughs to reduce overall operating costs rather than lay off workers.[3][15] During his tenure at Honeywell, the company's donations via its Political Action Committee rose from rose from two hundred thousand dollars in 2002 to 8 million in 2014.[16] As of June 2016, Honeywell's market value has risen from $28 billion to $87 billion since 2002.[17][18]
While CEO of Honeywell International in 2015, Cote earned a total compensation of US$25,053,000 which included a base salary of $1,890,000, an annual bonus of $5,700,000, and $10,338,000 in stock options.[19]
Cote stepped down as CEO at Honeywell at the end of March 2017 and was succeeded by Darius Adamczyk. Cote continued as executive chairman through April 2018.[20][21][22]
Appointments[edit]
Banking[edit]
Cote was a member of the board of directors at JPMorgan Chase and an advisor to Kohlberg Kravis Roberts (KKR). In 2012, Cote came under criticism as one of the three members of JP Morgan Chase's risk committee, after CEO Jamie Dimon said on May 10, 2012 that the firm's chief investment office suffered a $2 billion loss trading credit derivatives.[23] Commentators identified a lack of relevant expertise among the members of the committee, identifying Cote and a museum official who also served, in particular for their lack of banking experience.[24]
In February 2014 it was announced that Cote would fill a vacancy on the board of the New York Federal Reserve. Simon Johnson, former chief economist of the International Monetary Fund, writing in The New York Times, raised doubts about the suitability of Cote's appointment, noting the "systematic breakdown of compliance and risk control" during the period when Cote was on the board of JPMorgan Chase, whilst also noting that some, but not all, of the problems there pre-dated Cote's appointment.[25] The election papers did not mention Cote's role at JPMorgan Chase in his candidate C.V.[26] Cote stepped down from the board of New York Federal Reserve in March 2018.[27]
Other[edit]
Cote was a member of the Executive Committee of The Business Council for 2011 and 2012.[28]
Books[edit]
- Winning Now, Winning Later. by David M Cote. 31 July 2020
Awards[edit]
- 2013-2016 World's Best CEOs, Barron's[38][39]
- 2013 Chief Executive of the Year, Chief Executive Magazine[40]
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