Published: Tue, April 18, 2017
Business | By Patricia Jimenez

Arconic CEO Klaus Kleinfeld steps down

Arconic CEO Klaus Kleinfeld steps down

In a statement Monday, Arconic says Kleinfeld "showed poor judgment".

Directors of Arconic, the aerospace and automotive industry supplier formed when Alcoa split into two companies in November, said Mr. Kleinfeld sent the letter to Elliott Management without consulting or seeking authorization from the board.

Elliot Management holds a 13.2% stake in the lightweight metals manufacturer.

Klaus Kleinfeld has been pushed out as chairman and chief executive officer of Arconic Inc., an abrupt departure following heavy pressure from activist investor Elliott Management Corp.

The company also said that it had not made the decision in reponse to Eliott's criticisms.

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Shortly after 11 a.m., Arconic shares were priced at $27.30, up $1.40.

Klaus Kleinfeld agreed to leave his job as a result of a challenge from the company's largest shareholder, Elliott Management Corp.

Arconic said since Elliott's central objective - a CEO change - had been realized, the hedge fund should now chose whether to go ahead with its proxy fight or help find Kleinfeld' successor. The stock had risen almost 14 percent since Elliott mounted its proxy bid through its close on Thursday.

Board member David Hess has been appointed as interim CEO.

"With the completion of Arconic's transformative separation transaction last November, the substantial refreshment of its board composition with seven of its twelve directors having joined the board since the beginning of previous year, and now the departure of Kleinfeld as chief executive and chair of the board, it is clear that the company has recently undergone a tremendous amount of change".

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