David M. Cote
|Born||David M. Cote
19 July 1952
Manchester, New Hampshire, U.S.
|Alma mater||University of New Hampshire|
|Salary||$29,142,121 (total compensation, FY2014)|
|Children||3 (2 from first marriage, 1 from second)|
David M. "Dave" Cote (born July 19, 1952) is an American businessman, the chairman and chief executive officer (CEO) of Honeywell, a large American multinational conglomerate. Before Honeywell, Cote worked for General Electric and TRW. He was on the JP Morgan Chase risk committee during the period in which the firm lost $2 billion trading credit derivatives.
Cote was born in Manchester, New Hampshire and graduated from Pembroke Academy in Pembroke, New Hampshire. In 1976, he graduated from the University of New Hampshire with a bachelor's degree in business administration.
Cote joined General Electric in November 1979, where he served twenty years. In 1985, an unexpected meeting with CEO Jack Welch became the catalyst for Cote's advancement at GE. Welch promoted Cote three levels of management, progressing through a series of positions in manufacturing, finance, marketing, strategic planning and general management. He became corporate senior vice president and president and CEO of GE Appliances in 1996.
In November 1999, Cote joined TRW as president and COO where he introduced the Six Sigma management system to reduce defects in manufacturing. In February 2001, Cote was appointed CEO, and later chairman of the board. Cote led the creation of the TRW subsidiary Velocium, which manufactured ultra-high-speed semiconductors.
Honeywell selected Cote as successor to Lawrence Bossidy, following the Allied Signal acquisition of Honeywell and European Union's rejection of Honeywell's merger with General Electric. On February 19, 2002, Cote was elected president, CEO and a member of the board of directors at Honeywell. After Bossidy retired as chairman, in July 2002, Cote was elected chairman of the board.
While CEO of Honeywell International in 2014, Cote earned a total compensation of US$21,931,769 which included a base salary of $1,865,769, an annual bonus of $5,500,000, and $9,816,000 in stock options.
In June 2016, it was announced that Cote would step down as CEO at Honeywell at the end of March 2017. He will be succeeded by Darius Adamczyk. Cote will continue as executive chairman through April 2018.
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. 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.
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. The election papers did not mention Cote's role at JPMorgan Chase in his candidate C.V.
Government and political donations
In 2010, President Obama named Cote as one of the Chief Executives he most admired. In 2009, Cote was invited to the White House to meet the President for a briefing on the US economic recovery plan and in November 2009, he was one of 12 businesspeople asked by the White House to host the US-India CEO Forum, which Cote and Ratan Tata co-chaired. In February 2010, Cote was selected by President Obama to be on the National Commission on Fiscal Responsibility and Reform, more commonly known as the debt panel.
Attitude to deficit reduction
Cote is a co-founder of Fix the Debt, a group of executives and former legislators who campaign for deficit reduction and tax reform. In a 2013 interview with the New Hampshire Union Leader, Cote identified the problem of debt reduction in the United States as being the fact that "Washington is ruled by fear of voters ... and the three 'h's' prevail—hysteria, histrionics and hyperbole". He also framed the options for deficit reduction in terms of either increases in taxes or a reduction in social security benefits, saying, "If you have people saying, 'Don't raise my taxes, but don't cut my benefits,' it makes it really difficult to get anything done."
Kevin Connor, director of the Public Accountability Initiative, as quoted in The New York Times, identified a possible conflict of interest between the broad objectives of the group and the reality of their day to day lobbying of Washington for favorable tax treatment of their own industries and continued government spending on programs that benefit their companies. He also pointed out that the group calls for a reduction in government spending on social security but not on defence spending, a major business area for Honeywell. "It’s easier to get face time in Washington as a deficit hawk than as a corporate hack," he said, continuing "They are spending millions, but they are protecting billions in defense contracts and tax giveaways that would otherwise be on the chopping block."
In 2013, during negotiations over the Federal deficit during which some Republicans threatened a default, one lobbyist was quoted as identifying "the rise of an ideological wing [within the Republican Party] that is now willing to stand up to business interests". Cote was quoted as saying "It's clearly this faction within the Republican Party that's causing the issue right now" which was interpreted by OpenSecrets.org as an implied threat that if the dissident Republicans did not co-operate, contributions from Honeywell's Political Action Committee could be cut. In 2012, Honeywell's PAC and employees made political donations of about $5.3 million to candidates and committees.
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- Tully, Shawn (14 May 2012). "How Dave Cote got Honeywell's groove back". Fortune Magazine. Retrieved 15 March 2014.
- Beetz, Kirk H. "Cote, David M. 1952–." International Directory of Business Biographies. Ed. Neil Schlager. Vol. 1. Detroit: St. James Press, 2005. 323–24.
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- Pasztor, Andy "Honeywell Names TRW's Cote As Successor to Retiring Chairman", Wall Street Journal, A.6, 26 June 2010.
- Pae, Peter (20 February 2002). "TRW Chief Leaves for Honeywell Post". Los Angeles Times. Retrieved 14 October 2014.
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- "Honeywell 2015 Proxy Statement". Honeywell. Retrieved 24 September 2015.
- Mann, Ted. "Honeywell CEO Cote to Step Down in March". The Wall Street Journal. WSJ. Retrieved 29 June 2016.
- Kopecki, Dawn; Abelson, Max (2012-05-25). "JPMorgan Gave Risk Oversight to Museum Head With AIG Role". Bloomberg.
- "JPMorgan Gave Risk Oversight to Museum Head With AIG Role". Bloomberg News, 26 May 2012. Retrieved 17 March 2015.
- "Two Steps Forward and One Step Back for the Federal Reserve" Simon Johnson, The New York Times, 20 February 2014. Retrieved 12 March 2015.
- Election of Class B Director. Federal Reserve Bank of New York, 18 February 2014.
- The Business Council, Official website, Executive Committee
- 2014 PAC Summary Data, Honeywell International. OpenSecrets.org. Retrieved 12 March 2015.
- "President Obama's favorite CEOs not from Wall Street" Victoria McGrane, Politico, 12 February 2010. Retrieved 12 March 2015.
- "Dave Cote Introduces President Obama at White House Media Briefing on U.S. Recovery Plan « Honeywell Now – Keeping you up to date on Honeywell". Honeywellnow.com. 2009-01-27. Retrieved 2010-03-16.
- "Statement by the Press Secretary on the U.S. – India CEO Forum | The White House". Whitehouse.gov. 2009-11-23. Retrieved 2010-03-16.
- "Obama Names Debt Commission Picks". Huffington Post. 2010-02-26.
- "Honeywell CEO, a Manchester native, takes on deficit, Social Security crisis". Dave Solomon, New Hampshire Union Leader, 11 February 2013. Retrieved 17 March 2015.
- "Public Goals, Private Interests in Debt Campaign" Nicholas Confessore, The New York Times, 9 January 2013. Retrieved 12 March 2015.
- "Business Groups See Loss of Sway Over House G.O.P." Eric Lipton, et al., The New York Times, 9 October 2013. Retrieved 12 March 2015.
- "Unhappy with Dissident Republicans, Honeywell Could Make Them Feel the Pain" Russ Choma, OpenSecrets.org, 10 October 2013. Retrieved 12 March 2015.
- Testimony of David M. Cote Chairman and CEO Honeywell Before the House Committee on Financial Services United States House of Representatives Washington, DC March 25, 2014. Retrieved 17 March 2015.
- Donlon, JP (2013-05-31). "Chief Executive Magazine Names Honeywell CEO David Cote 2013 CEO of the Year". Chief Executive magazine.
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