Shares of global engineering and construction giant Fluor (NYSE:FLR) were higher by 12% at 3 p.m. EST today, with most of that gain coming within the first hour of trading. An update on the company's leadership was the driving force of the advance.
CEO Carlos Hernandez will be retiring at the end of 2020 after 13 years in the top spot. Taking his place will be David Constable. Given the stock price advance, investors were clearly pleased with the selection. That makes a lot of sense.
Constable is not new to the company or to being a CEO. He worked for Fluor between 1982 and 2011. In 2011 he left to become CEO of Sasol, a South African chemicals and energy company with operations in 30 countries. He held that role for five years, helping the company shift its business focus more toward growth. Then, in 2019, Constable joined the Fluor board of directors, providing him a deeper insight into what was going on at his former company. Wall Street clearly believes he will be able to hit the ground running when he takes over at the start of 2021.
Notably, Hernandez oversaw a strategic review of Fluor's business in 2019. He got the ball rolling on an effort to de-risk the portfolio and strengthen the company's balance sheet. Now Constable will step in and see the plan through its next stage. Although there's no guarantees when it comes to investing, the board has clearly selected someone who is well versed with running a company and with what it means to work at Fluor.