During the failed effort of Lockheed Martin to buy Aerojet Rocketdyne late last year, it appears Aerojet’s executive chairman, Warren Lichtenstein, made improper public and private attempts to enlist others to replace the company’s CEO, Eileen Drake, even though the board had not authorized a search for a new CEO and had in fact issued a memo telling Lichtenstein not to look for one.
Yesterday a formal investigation [pdf] came to that conclusion, and reprimanded Lichtenstein for those actions.
Mr. Lichtenstein acted improperly in taking those actions, including by failing to follow the directives given to him in the Guidance Memo. This memorandum is a formal reprimand for that conduct, and a
mandate to Mr. Lichtenstein that he comply with the Company’s Code of Conduct and make no statements or communications to persons external to the Company concerning the Company’s CEO, any search for a new CEO, management tenure or succession generally, or the strategic direction of the Company, unless (i) specifically pre-approved by the Board, (ii) the statements or communications are made to stockholders as part of his efforts concerning the election of directors at the next annual meeting, or (iii) the statements or communications are made as part of his efforts seeking suitable persons to serve as CEO of the Company in the event his nominees are elected.
While most of this is typical corporate office politics, it does reflect badly on the management at Aerojet Rocketdyne. It appears the board is not working together well. For example, Lichtenstein claimed he had these discussions because he was concerned the merger — which he supported — would fail, and wanted to take actions to address those concerns. Apparently the board did not. Another example is the fight with Boeing over the valve problems in Starliner.
Since the merger failed, this rocket engine company is now on its own again. Though for awhile it seemed to be struggling, the recent deal with ULA for 116 engines appears to have put it on its feet again.
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