April 17, 2017 - Arconic 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 resigned as a board member.
David P. Hess, a current board member, was appointed interim CEO. Hess has decades of experience in leading aerospace and industrial businesses. Patricia F. Russo, Arconic’s current lead director, was appointed as interim chair of the board. She has served on Arconic’s board since 2008 and as lead director since 2015.
Kleinfeld agreed to step down after the board learned that, without consultation with or authorization by the directors, he had sent a letter directly to a senior officer of Elliott Management. Elliott Management, a shareholder, was agitating for change at the company.
The board determined that sending the letter autonomously “showed poor judgment.”
“This decision was not made in response to the proxy fight or Elliott Management’s criticisms of the company’s strategy, leadership or performance and is not in any way related to the financials or records of the company,” the board states.
“The board continues to believe that under Kleinfeld’s leadership, the company successfully executed a transformative vision and improved business performance amid a complex market environment, and the board reaffirms the strategy developed under Kleinfeld’s leadership and shared with our investors, customers and employees.”
Russo says, “The board is deeply grateful to Klaus Kleinfeld for his dedication and service” at Arconic and previously at Alcoa Inc. Klaus “led a complex and highly successful transformation of Alcoa that culminated in the launch of two strong, standalone companies.”
Kleinfeld says he will support Hess and the board through this transition.
Elliott Management’s central objective, a CEO change, has now been realized.
“The company has recently undergone a tremendous amount of change,” Arconic’s board states. “It is Elliott Management's decision whether to continue to burden Arconic and its shareholders with its highly disruptive and distracting proxy fight, or to support Arconic in facilitating an effective CEO search and a strong transition.”
The company will hold its annual meeting May 16.