Arconic Jumps As CEO Kleinfeld Exits Amid Proxy Fight

  • Arconic Jumps As CEO Kleinfeld Exits Amid Proxy Fight

Arconic Jumps As CEO Kleinfeld Exits Amid Proxy Fight

The letter "showed poor judgement", Arconic said in a statement.

Kleinfeld was CEO of Alcoa Inc. since 2008, then became CEO of Arconic after he led the aluminum giant's separation into two companies.

Arconic's stock, which had risen 13.7 percent since Elliott mounted its proxy bid through its last close, rose as much as 9.8 percent to $28.44 in early trading.

Arconic (ARNC) shares were up more than 5% premarket after the company announced that CEO Klaus Kleinfeld was stepping down from his position.

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-City Chamber of Commerce data.

The hedge fund reported in a regulatory filing in March that Spirit had said Lawson breached his retirement contract by consulting for Elliott.

But Arconic also noted that Kleinfield had left by mutual agreement after the board learned that he had written a letter directly to a senior Elliott employee without consultation with, or authorisation from, the board. But, as we have noted before, Alcoa Corp. has been flying high along with all other commodity aluminum producers ever since while Arconic has not been able to take advantage of the higher price of commodity-grade products.

The company, however, added that Elliott's central objective - a CEO change - had been realized at Arconic and that the hedge fund should not "continue to burden Arconic and its shareholders with its highly disruptive and distracting proxy fight".

Elliott was not immediately available for comment.

Elliott Management has an 11.6 per cent stake in Arconic.