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Arconic CEO Exits After ‘Poor Judgment’

Arcam's second largest shareholder and one of Arcam's high profile customers.

At bloomberg.com - Arconic CEO Exits After ‘Poor Judgment’ - April 17, 2017

The introduction:

-> Departure roils proxy battle ahead of May 16 annual meeting

-> Former Pratt & Whitney president to take over as interim chief

Arconic Inc. Chief Executive Officer Klaus Kleinfeld stepped down after showing what the board of directors called “poor judgment” in sending a letter to Elliott Management Corp. amid a proxy fight.

The resignation upends what had been shaping up to be the biggest and most aggressive U.S. proxy battle this season. Elliott since late January has sought to oust Kleinfeld and replace four directors at the aluminum parts maker’s May 16 annual meeting. The New York-based hedge fund founded by billionaire Paul Singer says it owns 13.2 percent of Arconic.

“I do think he was on a short leash with the board and it looks like the incident cited was the straw that broke the camel’s back,” said Justin Bergner, an analyst at Gabelli & Co. “Most investors probably thought that it was time for Klaus to begin to think about handing over the reins.”

Arconic rose 7.5 percent to $27.85 at 10:09 a.m. in New York after advancing as much as 9.8 percent for the biggest intraday gain since Feb. 1. That was the day after Elliott announced its campaign against Kleinfeld.

David Hess, a board member and former president of United Technologies Corp.’s Pratt & Whitney jet engines unit, has been appointed interim CEO, the company said in a statement Monday. Lead director Patricia Russo will take over as interim board chair.



At arconic.com - Klaus Kleinfeld Steps Down as Chair and CEO of Arconic - April 17, 2017

The introduction:

Patricia F. Russo, Lead Director, Appointed to Serve as Interim Chair

NEW YORK--(BUSINESS WIRE)--Arconic (NYSE: ARNC) today announced that Klaus Kleinfeld, by mutual agreement with the Arconic Board of Directors, has stepped down as Chair and Chief Executive Officer of Arconic and has resigned as a Board member.

David P. Hess, a current Board member, has been appointed as Interim CEO of Arconic and will remain on the Board. Mr. Hess has decades of experience in leading aerospace and industrial businesses. Patricia F. Russo, Arconic’s current Lead Director, has been appointed as Interim Chair of the Board. Ms. Russo has served on the Board since 2008 and has been serving as Lead Director since 2015.

“The Board is focused on hiring a world-class CEO to lead Arconic into its next chapter. We are focused on ensuring a smooth leadership transition for our customers, employees and many stakeholders,” said Ms. Russo. “The Board is deeply grateful to Klaus Kleinfeld for his dedication and service as Chair and CEO of Arconic, and previously of Alcoa Inc., and appreciates his assistance with this transition. Klaus led a complex and highly successful transformation of Alcoa Inc. that culminated in the launch of two strong, standalone companies – Alcoa Corporation and Arconic. Today, Arconic is a leading advanced manufacturer of highly engineered products with strong market positions.”

Mr. Kleinfeld said, “I have had the honor and the privilege of working with so many talented and dedicated colleagues at Alcoa Inc. and now at Arconic. Together we have accomplished a lot. Today, Arconic is well positioned for the next phase. I am committed to supporting David and the Board through this transition phase.”