The chairman and CEO of Arconic Inc. has abruptly left the company, Arconic officials announced Monday.
Klaus Kleinfeld agreed to leave his job as a result of a challenge from the company's largest shareholder, Elliott Management Corp.
Arconic, which split off from Alcoa Inc. last year, operates Arconic Davenport Works in Riverdale, the 10th largest employer in the Quad-Cities, according to Quad-Cities Chamber of Commerce data.
According to an Arconic news release, Kleinfeld stepped down after its board of directors learned he had sent a letter directly to a senior officer of Elliott Management without consulting the board. This was a case of "poor judgment," the company said in a prepared news release.
Shares of Arconic climbed 79 cents, to $26.69 in trading after the announcement.
In January, Elliott Management launched a campaign to oust Kleinfeld, 59, citing the company's lackluster stock performance, missed profit forecasts and inefficient spending during the nine years he headed the firm.
In a prepared statement, Elliott Management called the departure "long-overdue" and a "necessary first step on a path to a new, stronger Arconic."
"Unfortunately, the Arconic Board appears determined to remain an obstacle to that worthy goal," the statement continued. "The Board continues to insist that shareholders trust its judgment and defer to its wisdom in shaping the future of Arconic. But at this critical juncture, Arconic shareholders simply cannot afford to trust this Board’s judgment in shaping the future of our company."
Elliott Management officials also took issue with the characterization that Kleinfeld's letter was a matter of "poor judgment."
"To be clear, the letter read as a threat to intimidate or extort a senior officer of Elliott Management based on completely false insinuations, a threat that we took seriously and about which we immediately and privately informed the Board," the statement said. "This is highly inappropriate behavior by anyone and certainly by the CEO of a regulated, publicly traded company, in the midst of a proxy contest."
On its website, Arconic defended Kleinfeld, noting he presided last year over the change that divided Alcoa, the aluminum producer based in New York, from Arconic, the product manufacturer that makes aluminum, titanium and nickel parts for planes, cars and electronics. The company also created more than $8 billion in stock market value since 2009.
David P. Hess, an Arconic board member who worked for United Technologies Corp. for 38 years in many leadership roles, was named interim CEO. Most recently, Hess was executive vice president and chief customer officer for Aerospace, and also was president of Pratt & Whitney. Patricia Russo was named interim chairwoman of the board. She was lead director on the Arconic board since it separated from Alcoa Inc.