David M. Cote

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David Cote
Dave Cote Headshot.jpg
Born David M. Cote
(1952-07-19) 19 July 1952 (age 64)
Manchester, New Hampshire, U.S.
Education Pembroke Academy
Alma mater University of New Hampshire
Salary $29,142,121 (total compensation, FY2014)[1]
Children 3 (2 from first marriage, 1 from second)[2]
Dave Cote presented CEO of Year Award 2013
Cote cuts the ribbon with Richard Walden to open the Ecole Nationale Jacob Martin Henriquez school in Jacmel, Haiti on March 11, 2011.

David M. "Dave" Cote (born July 19, 1952[3]) is an American businessman. Cote previously worked for General Electric[4] and TRW Inc.[5] before he was appointed chairman and chief executive officer (CEO) of Honeywell in 2002,[5] 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.[6]

Early life[edit]

Cote was born in Manchester, New Hampshire and graduated from Pembroke Academy in Pembroke, New Hampshire in 1970.[7] The following year, Cote enrolled at the University of New Hampshire,[4] and while attending UNH full-time, he worked an hourly job on the night shift at a nearby GE jet engine plant.[4] In 1976, he graduated from the University of New Hampshire with a bachelor's degree in business administration.[4][8]

Career[edit]

General Electric[edit]

Cote joined General Electric full-time in November 1976, where he served over 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.[4] In 1985, his handling of an interaction with CEO Jack Welch became the catalyst for Cote's advancement at GE.[4] Welch promoted Cote three levels of management.[4] Over his career there, he held positions in manufacturing, finance, marketing, strategic planning and general management,[8] before becoming CEO of GE Appliances in 1996.[8]

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.[9][10] In February 2001, Cote was appointed CEO, and later chairman of the board.[11] Cote led the creation of the TRW subsidiary Velocium, which manufactured ultra-high-speed semiconductors.[9]

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.[12][13]

Honeywell[edit]

Honeywell selected Cote as successor to Lawrence Bossidy,[14] following the AlliedSignal acquisition of Honeywell[4] and European Union's rejection of Honeywell's merger with General Electric.[14] 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.[14]

The year Cote took office, Honeywell lost $220 million.[8] 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.[4] Honeywell saw improved quality in design, increased production, and lower production costs after it implemented a new productivity management system.[15][16] During the 2008-2009 recession, the company instituted furloughs to reduce overall operating costs rather than lay off workers.[4][17] As of June 2016, Honeywell's market value has risen from $28 billion[18] to $87 billion since 2002.[19]

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.[20]

Cote stepped down as CEO at Honeywell at the end of March 2017 and was succeeded by Darius Adamczyk. Cote will continue as executive chairman through April 2018.[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]

Other[edit]

Cote was a member of the Executive Committee of The Business Council for 2011 and 2012.[27]

Government and political donations[edit]

Rise in Honeywell International's political donations since appointment of David Cote in 2002.[28]

In 2010, President Obama named Cote as one of the Chief Executives he most admired.[29] In 2009, Cote was invited to the White House to meet the President for a briefing on the US economic recovery plan[30] 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.[31] 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 Simpson Bowles Commission.[32][33]

Since his tenure at Honeywell began in 2002, the company's donations via its Political Action Committee have risen from $212,112 in 2002 to $7,879,570 in 2014.[28]

Attitude to deficit reduction[edit]

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."[34]

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."[35]

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".[36] 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.[37]

In March 2014, Cote presented his views on deficit reduction and American competitiveness to the House Committee on Financial Services of the United States House of Representatives.[38][third-party source needed]

Awards[edit]

  • 2013-2016 World's Best CEOs, Barron's[39][40]
  • 2013 Chief Executive of the Year, Chief Executive Magazine[41]

References[edit]

  1. ^ "Executive Profile: David M. Cote J.D.". BloombergBusiness. Retrieved 17 January 2016. 
  2. ^ "David M. Cote 1952–". Reference for Business. Retrieved 22 January 2015. 
  3. ^ English, Jennifer Leach (October 2014). "Honeywell Chairman and CEO Dave Cote". Business Jet Traveler. The Convention News Co. Retrieved 3 February 2016. 
  4. ^ a b c d e f g h i j Tully, Shawn (14 May 2012). "How Dave Cote got Honeywell's groove back". Fortune Magazine. Retrieved 30 November 2016. Comment: It is on a page called Blogging, but at the bottom of the page it says, "This story is from the May 21, 2012 issue of Fortune." 
  5. ^ a b Beetz, Kirk H. "Cote, David M. 1952–." International Directory of Business Biographies. Ed. Neil Schlager. Vol. 1. Detroit: St. James Press, 2005. 323–24.
  6. ^ Gandel, Stephen (16 January 2013). "JPMorgan’s board is unchanged after $6 billion trading loss". Fortune. Retrieved 24 January 2017. 
  7. ^ "NH native Cote to receive Horatio Alger Award". New Hampshire Union Leader. Retrieved March 22, 2014. 
  8. ^ a b c d Machan, Dyan. "Mr. Cote Goes to Washington". Barron's. Retrieved 30 November 2016. 
  9. ^ a b Beetz, Kirk H. "Cote, David M. 1952–." International Directory of Business Biographies. Ed. Neil Schlager. Vol. 1. Detroit: St. James Press, 2005. 323–24.
  10. ^ White, Joseph B. (12 November 1999). "TRW Names Cote Its No. 2 In Blow to GE". Wall Street Journal. 
  11. ^ "David Cote". Forbes. Archived from the original on January 18, 2012.  Archived at Internet Archive.
  12. ^ Pasztor, Andy "Honeywell Names TRW's Cote As Successor to Retiring Chairman", Wall Street Journal, A.6, 26 June 2010.
  13. ^ Pae, Peter (20 February 2002). "TRW Chief Leaves for Honeywell Post". Los Angeles Times. Retrieved 14 October 2014. 
  14. ^ a b c Beetz, Kirk H. (2005). Schlager, Neil, ed. "Cote, David M. 1952–." International Directory of Business Biographies. Detroit: St. James Press. pp. 323–324. Retrieved 22 December 2016. 
  15. ^ "Honeywell International's CEO Presents at Electrical Products Group Conference (Transcript)". Seeking Alpha. Retrieved 17 March 2014. 
  16. ^ Williams, Lee (2007). "Accelerating Product Development in a Global Enterprise" (PDF). ANSYS Advantage. 1 (1): 36,37. Retrieved 21 December 2016. 
  17. ^ Cote, David "Honeywell’s CEO on How He Avoided Layoffs", Harvard Business Review, June 2013.
  18. ^ "HONEYWELL INTERNATIONAL INC. FORM 10-K 2002". Retrieved 22 December 2016. 
  19. ^ Black, Thomas. "Honeywell Names Adamczyk to Succeed Cote as CEO in March". Bloomberg.com. Retrieved 30 November 2016. 
  20. ^ "Honeywell 2016 Proxy Statement". Honeywell. p. iii. Retrieved 30 November 2016. 
  21. ^ Mann, Ted. "Honeywell CEO Cote to Step Down in March". The Wall Street Journal. WSJ. Retrieved 29 June 2016. 
  22. ^ "2017 Proxy Statement". investor.honeywell.com. Retrieved 18 April 2017. 
  23. ^ Kopecki, Dawn; Abelson, Max (2012-05-25). "JPMorgan Gave Risk Oversight to Museum Head With AIG Role". Bloomberg. 
  24. ^ "JPMorgan Gave Risk Oversight to Museum Head With AIG Role". Bloomberg News, 26 May 2012. Retrieved 17 March 2015.
  25. ^ "Two Steps Forward and One Step Back for the Federal Reserve" Simon Johnson, The New York Times, 20 February 2014. Retrieved 12 March 2015.
  26. ^ Election of Class B Director. Federal Reserve Bank of New York, 18 February 2014.
  27. ^ The Business Council, Official website, Executive Committee Archived July 21, 2013, at the Wayback Machine.
  28. ^ a b 2014 PAC Summary Data, Honeywell International. OpenSecrets.org. Retrieved 12 March 2015.
  29. ^ "President Obama's favorite CEOs not from Wall Street" Victoria McGrane, Politico, 12 February 2010. Retrieved 12 March 2015.
  30. ^ "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. 
  31. ^ "Statement by the Press Secretary on the U.S. – India CEO Forum | The White House". Whitehouse.gov. 2009-11-23. Retrieved 2010-03-16. 
  32. ^ "NH native Cote to receive Horatio Alger Award". New Hampshire Union Leader. Retrieved March 22, 2014. 
  33. ^ "Obama Names Debt Commission Picks". Huffington Post. 2010-02-26. Archived from the original on March 4, 2010. 
  34. ^ "Honeywell CEO, a Manchester native, takes on deficit, Social Security crisis". Dave Solomon, New Hampshire Union Leader, 11 February 2013. Retrieved 17 March 2015.
  35. ^ "Public Goals, Private Interests in Debt Campaign" Nicholas Confessore, The New York Times, 9 January 2013. Retrieved 12 March 2015.
  36. ^ "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.
  37. ^ "Unhappy with Dissident Republicans, Honeywell Could Make Them Feel the Pain" Russ Choma, OpenSecrets.org, 10 October 2013. Retrieved 12 March 2015.
  38. ^ 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.
  39. ^ "Profiles of the World’s Best CEOs (2016)". Barron's. Retrieved 18 January 2017. 
  40. ^ Bary, Andrew (25 March 2013). "Barron's Names World's Best CEOs". Barron's. Retrieved 24 February 2014. 
  41. ^ Donlon, JP (2013-05-31). "Chief Executive Magazine Names Honeywell CEO David Cote 2013 CEO of the Year". Chief Executive magazine. 

External links[edit]