Thyssenkrupp CEO resigns amid shareholder backlash
Thyssenkrupp CEO Heinrich Hiesinger has resigned after leading the company for seven years, giving in to shareholder pressure over falling revenue and share price.
News of Hiesinger’s resignation came days after he helped Thyssenkrupp and Tata Steel reach an agreement over their long-awaited European merger. Although Hiesinger managed to pass the Tata deal, he came under intense pressure from activist investors Elliott Management Corp. and Cevian Capital.
The two activist investors control about 20% of the company and pressed constantly for a quicker solution to Thyssenkrupp’s complex structural issues, as well as ultimately a new chief who would help enact sweeping reforms.
“We view Hiesinger’s departure as a sign of a growing divergence in vision between management and an increasingly disenchanted supervisory board spurred on by two activist investors, Cevian and Elliott,” wrote Jefferies International Ltd. analysts including Seth Rosenfeld.
Thyssenkrupp shares gained more than 6% following news of the CEO’s departure. The stock had fallen about 30% since Hiesinger took control in 2011.
Thyssenkrupp’s board, who were due to meet today to discuss Hiesinger’s new strategy, will now talk about his potential replacement.