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Klaus Kleinfeld Out at Arconic After Activist Investor Criticizes Letter

Klaus Kleinfeld Out at Arconic After Activist Investor Criticizes Letter

Arconic said Kleinfeld's resigned as he sent the letter - the content of which neither party made public - without consulting the board, and not in response to the proxy fight or Elliott' criticisms of the company's strategy, leadership or performance.

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

Arconic said with Mr. Kleinfeld's departure, Elliott has achieved the main objective of the proxy fight it launched this year.

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Arconic on Monday announced the resignation of chairman and CEO Klaus Kleinfeld, citing an inappropriate letter he sent to a senior officer of the hedge fund that was trying to oust him.

"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".

Elliott has engaged Larry Lawson, who resigned as CEO of aircraft parts supplier Spirit AeroSystems Holdings Inc, last July, as a consultant and has said that Lawson is a strong candidate to be Arconic's CEO.

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Kleinfeld was appointed CEO of Alcoa, May 2008 and shepherded the combined company through the commodities down-cycle. A spokesman for Elliott didn't immediately comment. Alcoa Corp's shares had risen 34.7 percent.

Klaus Kleinfeld's unauthorized contact with Elliott Management in the midst of a proxy battle gave directors an easy excuse to let the poor-performing boss go.

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