Defense contractor Lockheed Martin Corp. (LMT: Quote) said Friday that its vice chairman, president and chief operating officer, Christopher Kubasik, who was previously slated to succeed Robert Stevens as the company's chief executive officer in January, has resigned, effective immediately, after an ethics investigation confirmed that he had a close personal relationship with a subordinate employee.
The Bethesda, Maryland-based company also said that its board of directors has elected Marillyn Hewson president, COO and a director, effective immediately, and CEO and president, effective January 1, 2013.
Hewson will also retain her role as executive vice president of Electronic Systems business area until the end of this year.
Hewson, who joined Lockheed Martin in 1983, has served as executive vice president of the Electronic Systems business area since January 2010 and was named President and COO-elect by the board in April this year.
"While I am deeply disappointed and saddened by Chris' actions, which have been inconsistent with our values and standards, our swift response to his improper conduct demonstrates our unyielding commitment to holding every employee accountable for their actions," said Stevens, Lockheed Martin's chairman and CEO. "Fortunately, we have a strong leadership team and a robust succession plan that allowed the board and me to react quickly and appropriately to this situation."
Stevens was elected executive chairman, effective January 1, a role in which he will work with Marillyn to facilitate a smooth CEO transition.
Lockheed Martin had announced in April that Stevens would retire as its chief executive officer by the end of this year after 25 years of service with the company, but that he would remain as chairman through January 2014. At that time, the company said Kubasik would succeed Stevens as CEO, effective January 1, 2013. In June, the company appointed Kubasik as a board member and to the newly created position of vice chairman.
The news of Kubasik's resignation came just hours after reports surfaced that CIA Director David Petraeus has resigned, citing an extramarital affair and "extremely poor judgment."
Kubasik is definitely not the first top executive to lose his job for unethical relationship. In August 2010, Hewlett-Packard Co. (HPQ) CEO Mark Hurd resigned over sexual harassment allegations by former actress and an ex-HP contractor Jodie Fisher. In May this year, Best Buy Co., Inc. (BBY) founder and chairman Richard Schulze resigned after an investigation revealed that he failed to alert the board about allegations of an inappropriate relationship involving the company's former CEO Brian Dunn.
Lockheed Martin shares, which has traded in a range of $72.37 to $95.92 oer the past year, closed Friday's regular trading session at $89.98, up 6 cents. The shares are gaining 0.07% in after hours trading.
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by RTT Staff Writer
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