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Arconic investor nominates replacement directors

Arconic Inc. shareholder Elliott Management Corp. has put forward five nominations for appointment to the board of the U.S.-based aerospace and automotive component manufacturer, according to a Jan. 31 news release.

Elliott Management, which owns 10.5% of Arconic, has raised concerns over the company's spending and missed forecasts and wants a leadership change.

The major shareholder has named Chris Ayers, Elmer Doty, Charles Hall, Bernd Kessler and Patrice Merrin as its choices for replacement directors.

Ayers is currently the CEO and president of WireCo WorldGroup Inc. and previously served in the roles of executive vice president and president of global primary products with Alcoa Inc.

Doty has more than 40 years of experience in heavy industry, while Hall has over 40 years of experience in the defense sector.

Kessler is the former CEO of SRTechnics and has served as a director of Polaris Industries, president and CEO of MTU Maintenance and executive at Honeywell International.

Merrin, who is the former president and CEO of Canadian coal giant Luscar Ltd., currently serves as a director for Stillwater Mining Co., Glencore Plc and Novadaq Technologies.

Elliott Management has also engaged former Spirit AeroSystems Inc. CEO Larry Lawson as a consultant.

The investor noted that during Lawson's tenure at Spirit, the company outperformed the S&P 500 by an average of 34% per year.

Elliott Management said the executive "has the ideal set of skills needed to turnaround Arconic's woefully and continually underperforming business."

Arconic has responded to the nominations by saying that the current board unanimously supports Klaus Kleinfeld as the company's chairman and CEO.

Six of the 12 independent directors joined the board within the last year, with three nominated by Elliott Management.

Arconic said that the board has conducted an intensive and extensive review of Elliott Management's allegations and has concluded that many of them are misleading or not substantiated.

"Klaus and the management team are 100% focused on continuing to improve operating results, expand margins, improve return on net assets and deliver sustained shareholder value," lead director Pat Russo said. "The board supports Klaus and the management team as they execute on our stated strategy."

Arconic will present its recommended slate of director nominees in documents that will be mailed to shareholders ahead of the 2017 annual general meeting, which is yet to be scheduled.