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UPDATE 2-Arconic taps two directors ahead of shareholder vote
May 4, 2017 / 1:39 PM / 7 months ago

UPDATE 2-Arconic taps two directors ahead of shareholder vote

(Adds Elliott statement)

By Michael Flaherty

May 4 (Reuters) - Arconic Inc on Thursday nominated two directors for its board, as it gears up for a shareholder vote later this month that pits the specialty metals maker against activist investor Elliott Management in a fight for direction of the company and control over the board.

The $10 billion specialty metals company, which separated from aluminum producer Alcoa Corp late last year, has five board seats up for election at the annual meeting, which it said on Thursday will be held on May 25. It was previously slated for May 16.

Arconic said its nominees are former Boeing Commercial Airplanes Chief Executive Officer Jim Albaugh and retired Air Force General Janet Wolfenbarger.

The abrupt resignation of former CEO and Chairman Klaus Kleinfeld last month created a vacancy in one of those five seats. On Thursday, Arconic said Indian businessman Ratan Tata was resigning from the board.

With Kleinfeld and Tata off the table, Arconic moved ahead with the nomination for Albaugh and Wolfenbarger.

“Change is not simply about bringing in new people,” Elliott said in response to the nominations. “Change requires a belief that real improvements are warranted in the way a company operates and approaches important issues ranging from strategy to governance.”

Elliott has nominated four directors for election at the annual meeting.

The two sides have been locked in a bruising fight since the beginning of the year - a battle that claimed Kleinfeld last month and forced his resignation after he sent a letter to Elliott founder Paul Singer that Arconic’s board did not authorize.

Discussions of a compromise to avoid the proxy fight broke down shortly after Kleinfeld’s resignation.

Arconic said on Thursday that if its candidates are elected, nine directors of 13 will have joined the board in the last 16 months. The company’s board will stay at 13 members, the company said, 12 of whom are independent from the company. Three of the company’s current directors were Elliott nominees who were appointed to the board in February 2016, as part of an agreement that Alcoa struck with Elliott at the time.

On Wednesday, the United Steelworkers, which represent more than 4,700 Arconic employees, said it opposed Elliott’s board nominees. Arconic provides aluminum and titanium alloys used in planes and cars.

Additional reporting by Ankit Ajmera in Bengaluru; Editing by Bernard Orr and Lisa Shumaker

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