A few months after the split from aluminum giant Alcoa Corp., several of the biggest Arconic Inc. shareholders are pressing the company to oust CEO Klaus Kleinfeld, The Wall Street Journal reported Jan. 30, citing people familiar with the matter.
The shareholders, who are concerned about the company's spending and missed forecast, blame Kleinfeld and have brought their concerns about him to Arconic's board.
Kleinfeld also serves as the chairman of the board.
Arconic's biggest shareholder, Elliot Management Corp., which recently boosted its stake in Arconic to 10.3%, is among those unhappy with the company's performance and said in a regulatory filing that the company's stock is "dramatically undervalued."
In response to the report on shareholder pressure for a leadership change, Arconic said Kleinfeld "has the unanimous support" of its board, Reuters wrote in a separate, same day report.
The company said in a statement that Kleinfeld's strategy of separating Alcoa has been "highly successful."
"Management has been relentless in driving costs down and productivity up, taking US$4.4 billion of cost out of Alcoa Inc. from the time Mr. Kleinfeld joined, through separation," Arconic added.
Before Arconic's separation from Alcoa, Elliott Management in February 2016 struck a deal, which barred it from a public fight with the company in return for three Elliot-supported directors on both the companies' board.
As the agreement is expiring, it has raised the possibility that the firm will seek additional board seats ahead of a Feb. 5 nominating deadline.
In October 2016, management forecast revenue to be between US$5.6 billion and US$5.8 billion, the second reduction from a 2015 analyst day forecast of US$7.2 billion. The forecast for adjusted EBITDA was lowered to about US$1.2 billion from about US$1.7 billion.