Arconic announced that Klaus Kleinfeld “has stepped down as Chair and Chief Executive Officer of Arconic and has resigned as a Board member.”

Klaus Kleinfeld

Arconic appointed current board member David P. Hess as interim CEO.

“Hess has decades of experience in leading aerospace and industrial businesses,” the company stated.

Patricia F. Russo, Arconic’s current lead director, has been appointed interim chair of the board. Russo has been a board member since 2008 and has served as lead director since 2015.

Arconic, which includes Alcoa’s former $1.8 billion Fastening Systems and Rings business, claimed Kleinfeld’s departure was a mutual decision.

“Mr. Kleinfeld stepped down as Chair and CEO by mutual agreement after the Board learned that, without consultation with or authorization by the Board, he had sent a letter directly to a senior officer of Elliott Management that the Board determined showed poor judgment.”

Hedge fund Elliott Management owns about 13% of Arconic stock and for months has been pressuring the company for leadership changes.

“Elliott Management’s central objective – a CEO change – has been realized at Arconic. 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 last year, and now the departure of Mr. Kleinfeld as CEO and Chair of the Board, it is clear that the Company has recently undergone a tremendous amount of change.

“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.”

Until Monday, Arconic’s board had stuck by Kleinfeld “as Elliott, billionaire Paul Singer’s hedge fund, accused him of financial underperformance, an ‘obsession’ with image, and wasteful spending on a Manhattan headquarters,” Bloomberg reports.

According to the FIN Fastener Stock Index, Arconic was the biggest winner in stock value during the opening quarter of 2017. Overall stock results for the company jumped 42% during the period.

For 2016, Arconic results included a net loss of $900 million on income of $12.4 billion in 2016.

“For Kleinfeld, a member of President Donald Trump’s manufacturing council, today’s departure is the second time he has left a company under a cloud,” according to Bloomberg. “In 2007, he stepped down as CEO of Siemens AG as the company worked to recover from a bribery scandal.”

Arconic was formed in 2016 after Alcoa’s board unanimously approved a plan to separate Alcoa into two independent, publicly-traded companies. Web: arconic.com