PITTSBURGH _ Arconic and Elliott Management announced Monday they have resolved their bitter proxy fight, with the specialty metals part maker agreeing to put three more representatives of the activist hedge fund on its board of directors.
Arconic also agreed to elect its entire board annually and do away with a requirement for a supermajority vote of shareholders on some matters, two more demands that Elliott had made. The company earlier this year had said it would make those changes.
The agreement marks a significant achievement for Elliott, a $32 billion hedge fund that controls about 13.2 percent of Arconic's shares. The activist hedge fund has a track record of convincing targets of the wisdom of its advice.
The settlement, which will be filed with the U.S. Securities and Exchange Commission, averts a showdown at Arconic's shareholder meeting Thursday in Purchase, N.Y., where investors were scheduled to vote on opposing slates of four directors offered by Arconic and Elliott.
Instead, they will vote on a unified slate of four directors, including three nominated by Elliott: former Precision Castparts executive Christopher L. Ayers, former Vought Aircraft Industries president and CEO Elmer L. Doty, and former Sherritt International executive Patrice E. Merrin.
Arconic's nominee is former United Technologies Corp. executive David P. Hess, who was named Arconic's interim CEO in April, when Klaus Kleinfeld suddenly stepped down after writing an ill-advised letter to Elliott founder Paul Singer. Kleinfeld's departure was one of Elliott's main objectives when it launched the proxy fight in late January
Shareholders will also vote on a fifth director, former Spirit AeroSystems executive Ulrich R. Schmidt, who was added to aluminum producer Alcoa's board last year at Elliott's request.
Alcoa, which is relocating its headquarters to Pittsburgh later this year, subsequently split into two companies: the mining, refining and smelting business that retained the Alcoa name; and Arconic, the downstream businesses that make precision aluminum and titanium parts for the aerospace, automotive and other industries. Schmidt was placed on Arconic's board when the split occurred in November.
Under the terms of the settlement, one of Elliott's directors will be named to the search committee appointed to find a permanent CEO. Arconic said one of the candidates that the committee will consider is another former Spirit AeroSystems executive, Larry Lawson, Elliott's choice for the job.
Arconic shares rose 0.2 percent, to a close of $27.63, in trading Monday. They are up about 23 percent since Elliott launched the proxy fight.
