Tom Linebarger, who has led Indiana-based engine manufacturing giant Cummins Inc. since 2012, will step down Aug. 1, the company announced Thursday morning.
Linebarger, 60, will be replaced by Cummins President and Chief Operating Officer Jennifer Rumsey, who has been with Cummins for 22 years, including the last 16 months as COO.
Rumsey, 48, will be the seventh CEO and first woman to lead Cummins since it was founded in 1919. Cummins is the state’s third-largest public company, according to IBJ research, based on 2021 revenue of $24 billion.
Linebarger, who has been with Cummins since 1993, will continue to serve as chairman of the board of directors and in an executive chairman role, working directly with Rumsey on specific initiatives, including completing the pending $3.7 billion acquisition of Troy, Michigan-based electric axle and brake maker Meritor Inc. The acquisition is expected to close by the end of the year.
Rumsey joined Cummins as a technical advisor in 2000 and was named president and COO in March 2021 after serving as vice president and president of Cummins’ components segment. She also previously held the role of chief technical officer.
“Jen is a once in a generation talent and the right leader for Cummins at this important time in our history,” Linebarger said in written remarks. “Jen uniquely understands our customers and business, having worked in many different parts of the business during her more than 20-year career, and in every role, she has consistently delivered results.”
Rumsey was elected to the Cummins board of directors in February and the company says she will maintain her seat on the board.
“Growing up in Columbus, Indiana, where Cummins was founded, and spending most of my career here makes this announcement incredibly meaningful,” said Rumsey. “I am grateful to Tom for his support and mentorship over the years and to the Board for their confidence in my leadership. My technical background, business experience and focus on people, purpose, and impact have prepared me for this moment.”
Linebarger began his career at Cummins as an intern before joining the company full-time in 1993. He has held numerous executive positions at the company, including serving as president and COO from 2008 to 2011.
Cummins Lead Director Tom Lynch thanked Linebarger for his work over the last three decades.
“His leadership has grown Cummins’ global business, positioned the company to lead in zero- and low-carbon solutions, and developed a highly capable and diverse management team to lead us through the technology transition,” Lynch said in written remarks. “We look forward to his continued contributions as executive chairman.”
The leadership change comes two months after Cummins shareholders rejected a proposal to split the duties of chairman and CEO. At the time, the board said in a proxy statement that it believed “it is in the best interests of our company for the roles of our chairman and chief executive officer to be combined.”
Cummins did not provide a timeline for naming a successor to Rumsey as COO.
In a March 2021 interview on Inside INdiana Business with Gerry Dick, Rumsey discussed women executives operating in what has traditionally been male-dominated space and how she broke the glass ceiling.You can watch the full interview by clicking here.
According to Cummins’ latest proxy statement, Linebarger realized more than $12 million in compensation in 2021, while Rumsey realized more than $2.6 million. In a public document released Thursday, Cummins said Linebarger’s base salary would be reduced to $1.15 million, while his target annual bonus would be increased to 150% of base salary.
Rumsey’s base salary was being increased to $1.5 million, with possible incentive bonuses topping $10 million.
According to Bloomberg News, Rumsey’s promotion will bring the number of women leading S&P 500 companies to 34, adding back to the ranks after female leaders at First Republic Bank and Match Group Inc. departed earlier this year.
Cummins shares were down 2.8% Thursday morning to $193.98.