Investors Like GE’s Plan to Shrink. Nelson Peltz, Especially.

John Flannery, the chief executive of General Electric, has finally unveiled his turnaround plan for the embattled conglomerate. It’s an ambitious and significant shrinking of the business — and Nelson Peltz’s Trian, one of the company’s most vocal investors, is pleased with the result.

“Trian supports the strategic initiatives announced today by GE and believes that these initiatives will create substantial value for shareholders,” Anne Tarbell, a spokeswoman for Trian, said in a statement.

When Trian, one of the most prominent activist investors in corporate America, first took a stake nearly three years ago, shares of GE were trading above $25. Trian’s initial plan for GE didn’t involve breaking up the company. It focused on operational improvements, fixing sales margins and buying back stock. The firm had predicted that GE’s stock would reach at least $40 a share by the end of last year.

By 2017, GE’s performance had begun to suffer, however, and its shares were sliding.

As GE struggled, Trian pushed it to take big steps to revive its fortunes, and expressed frustration with the conglomerate’s performance under its previous chief executive, Jeffrey R. Immelt.

Relations between GE and Trian appeared to stabilize last fall shortly after Flannery took the helm. Ed Garden, a Trian co-founder and its chief investment officer, joined GE’s board and was part of a yearlong examination of the conglomerate’s sprawling businesses, which aimed to shrink the company.

That review — which Flannery had said would have no sacred cows — involved examining every possible move, including a bigger breakup of the company. On Tuesday, the board decided to spin off the health care business and sell its 62.5 percent stake in Baker Hughes.

Here are some of the main findings from the review that the board is acting on:

— GE’s aviation and power-generation businesses should remain together since the foundation of much of what each division produced was turbines.

— GE’s current structure is unsustainable, and appropriate attention — and money — couldn’t be paid to each business unit without a reduction in size. Separating nonessential divisions out would help them perform better.

— Whittling down GE’s enormous debt load is crucial. The company announced Tuesday it planned to cut its debt load by $25 billion, some of which will be moved to the new health care company.

— Costs throughout the company need to be cut, and GE leaders need to continue to remake the culture by giving individual business unit leaders more control. The company will do this, in part, by trimming corporate overhead by $500 million by 2020.

Investors appeared to agree with the moves. Shares of GE rose nearly 8 percent, closing at $13.74.