{"id":54488,"date":"2022-05-16T17:51:55","date_gmt":"2022-05-16T17:51:55","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2022\/05\/16\/aerojet-rocketdyne-reprimands-chairman-over-attempt-to-oust-ceo\/"},"modified":"2026-08-07T23:58:41","modified_gmt":"2026-08-07T23:58:41","slug":"aerojet-rocketdyne-reprimands-chairman-over-attempt-to-oust-ceo","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/industry\/2022\/05\/16\/aerojet-rocketdyne-reprimands-chairman-over-attempt-to-oust-ceo\/","title":{"rendered":"Aerojet Rocketdyne reprimands chairman over attempt to oust CEO"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">WASHINGTON \u2014 Aerojet Rocketdyne has reprimanded its executive chairman, Warren Lichtenstein, over a series of comments he made criticizing the company\u2019s chief executive and hunting for a replacement as well as about its failed <a href=\"https:\/\/www.defensenews.com\/industry\/2022\/02\/13\/lockheed-martin-says-its-effort-to-acquire-aerojet-is-over\/\" target=\"_blank\">merger with Lockheed Martin<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In a memorandum dated May 2 and <a href=\"https:\/\/ml.globenewswire.com\/Resource\/Download\/6372b724-eef1-4c8c-997f-774300148d6d\" target=\"_blank\">released Monday<\/a>, the non-management committee of Aerojet\u2019s board of directors ordered Lichtenstein to follow the company\u2019s code of conduct in the future and not make unauthorized comments to outside parties about Aerojet\u2019s management or strategic direction.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The board hadn\u2019t authorized a search for a replacement CEO, the committee said in the memo outlining its investigation\u2019s findings and explaining its decision to reprimand Lichtenstein, and he had acted improperly by approaching two parties to gauge their interest in the job.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And at least one \u2014 probably both \u2014 of those approaches came after Lichtenstein had been warned in a September memo not to make this type of outreach, the committee said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But the committee concluded Lichtenstein\u2019s \u201cextensive questioning and demands for information\u201d from Aerojet\u2019s CEO, Eileen Drake, and other top executives on contingency plans if the Lockheed deal fell through did not amount to harassment or retaliation and were not improper.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The investigation provides a glimpse into the turmoil behind the scenes of Aerojet as the stalled acquisition by Lockheed Martin led to uncertainty as well as a look at the remarkable bad blood between Lichtenstein and Drake.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Lockheed\u2019s initially announced its attempted <a href=\"https:\/\/www.defensenews.com\/industry\/2020\/12\/20\/lockheed-buys-aerojet-rocketdyne-in-44b-deal\/\" target=\"_blank\">$4.4 billion acquisition of Aerojet<\/a>, which is a key supplier of solid rocket motors, in December 2020. The deal would have greatly strengthened Lockheed\u2019s position in the space and hypersonic market.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some on Capitol Hill supported the transaction, saying it would restore competitive balance to the industry after Northrop Grumman\u2019s acquisition of Orbital ATK. But Sen. Elizabeth Warren, D-Mass., criticized it as a potential <a href=\"https:\/\/www.defensenews.com\/congress\/2021\/02\/17\/raytheon-to-challenge-lockheed-aerojet-merger-ceo-says\/\" target=\"_blank\">blow to competition<\/a> and urged regulators to closely scrutinize it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In January 2022, the <a href=\"https:\/\/www.defensenews.com\/industry\/2022\/01\/25\/lockheed-says-planned-aerojet-acquisition-faces-federal-antitrust-roadblock\/\" target=\"_blank\">Federal Trade Commission announced<\/a> it would sue to block the acquisition over antitrust concerns, arguing the deal could allow Lockheed to cut competitors off from critical Aerojet-made missile components like scramjet engines. One month later, Lockheed said it had abandoned the deal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In 2021, with the deal stuck in limbo, the conflict between Aerojet\u2019s leadership grew.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Drake originally objected to Lichtenstein\u2019s conduct in a May 2021 memo to the company\u2019s then-general counsel, Arjun Kampani. She sent follow-up memos in September and October.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Drake described an \u201congoing erosion of trust\u201d with Lichtenstein and accused him of defaming her character and \u201claying the groundwork with the board \u2026 to remove me as CEO so he can pursue his strategy and personally benefit financially.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In her memos, she said Lichtenstein was fixated on scenarios in which the Lockheed deal fell through and engaged in \u201cpremature contingency planning requests\u201d that undermined the deal. She repeatedly called him a \u201cliability.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In Drake\u2019s second memo in September, she said she had become aware of several conversations Lichtenstein had had with outside parties about the deal and Aerojet Rocketdyne\u2019s leadership.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">She alleged Lichtenstein had told Jim McAleese of McAleese and Associates in August 2021<b> <\/b>that if the deal didn\u2019t go through, Lichtenstein would run the company himself. This reinforced Drake\u2019s belief that Lichtenstein was defaming her and preparing to oust her.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After Drake sent that second memo, the board of directors\u2019 independent members warned Lichtenstein in another memo his comments to outside parties about the Lockheed deal and company management were unacceptable, even if they didn\u2019t go so far as to violate the December 2020 merger agreement.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The board members also warned Lichtenstein his alleged discussion of plans for Aerojet\u2019s executive management would be \u201chighly sensitive\u201d topics and discussing them openly could open the company up to potential harassment and defamation liabilities.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In his response, Lichtenstein strongly denied the allegations. He said he had not provided confidential information to any third parties, sought to blow up the deal, or defamed, harassed, threatened, or been hostile to any Aerojet management official.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Lichtenstein also said Aerojet must be prepared for the possibility \u2014 which eventually became a reality \u2014 that the deal might not go through.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And he said he continued \u201cto be frustrated by management\u2019s lack of responsiveness and transparency related to operational issues since the agreement and plan of merger [was] executed.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But one month later, Drake sent another memo about Lichtenstein\u2019s further alleged \u201cimproper behavior.\u201d She said an unidentified industry colleague had been personally approached by Lichtenstein about the possibility of becoming Aerojet\u2019s chief executive.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Lichtenstein allegedly told this person he wasn\u2019t confident the merger would go through and that he was searching for a replacement CEO, Drake said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In her own release issued Monday, Drake applauded the committee\u2019s findings and reprimand of Lichtenstein and suggested he\u2019s not fit to continue as executive chairman.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cShareholders should ask themselves, if Mr. Lichtenstein\u2019s allies believe he should be reprimanded for his conduct as the executive chairman of the company, why should he be entrusted to run the company without independent oversight?\u201d Drake said in her release.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Lichtenstein also issued a release in which he reiterated his stance he was acting in shareholders\u2019 best interests by talking to third parties about contingency plans if the deal went under.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIf these conversations truly crossed a line, one would expect that the committee would call them a violation of applicable company policies or of my fiduciary duty,\u201d Lichtenstein said. \u201cThe committee did not.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And he criticized Drake specifically, saying she pushed for the investigation for her own \u201cpersonal motives\u201d and wasted company resources in the process.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThese conclusions also speak volumes about Ms. Drake\u2019s utter lack of credibility and selfish and self-serving motivations,\u201d Lichtenstein said.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The conflict between Aerojet&#8217;s chief executive and executive chairman became increasingly rancorous as 2021 proceeded with the Lockheed acquisition stuck in 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By:"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.0 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Aerojet Rocketdyne reprimands chairman over attempt to oust CEO - Defense News<\/title>\n<meta name=\"description\" content=\"The conflict between Aerojet&#039;s chief executive and executive chairman became increasingly rancorous as 2021 proceeded with the Lockheed acquisition stuck in limbo.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Aerojet Rocketdyne reprimands chairman over attempt to oust CEO\" \/>\n<meta property=\"og:description\" content=\"The conflict between Aerojet&#039;s chief executive and executive chairman became increasingly rancorous as 2021 proceeded with the Lockheed 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