In the end, it was an old-fashioned letter that took down Klaus Kleinfeld.
The German executive, who stepped down April 17 as CEO of Arconic (a recent Alcoa spinoff that makes aerospace and automotive parts), was called out by his board for using “poor judgement” in a letter he sent to Paul Singer, the head of an activist hedge fund engaged in a proxy battle against the company.
On April 21, the hedge fund, Elliott Management, published Kleinfeld’s letter, which he sent to Singer without informing his board. It is a doozy.
In three rambling, vaguely ominous paragraphs, Kleinfeld appears to insinuate that he knows some embarrassing details of Singer’s behavior during a 2006 visit to the World Cup in Germany with his family. It is less a piece of business correspondence than a prose painting that leaves the reader with an image of Singer warbling “Singin’ in the Rain” in a German fountain while wearing a feathered headdress.
Kleinfeld also enclosed a soccer ball.
Elliott’s lawyers sent the letter—and the ball—to Arconic’s board with a letter of their own. After presenting their evidence that Kleinfeld wrote and sent the letter himself (it was on his stationary, with his signature, and delivered by an Arconic messenger from Arconic’s offices), they made clear it was not received well.
“While much of what it says doesn’t make sense, we do understand Dr. Kleinfeld to be making veiled suggestions that he might intimidate or extort Mr. Singer,” they wrote. “This is highly inappropriate behavior by anyone and certainly by the CEO of a regulated, publicly traded company, in the midst of a proxy contest, and it raises a number of obvious issues.”
In an era of errant tweets and reply-all disasters, there’s something old-fashioned about imploding one’s own career with a personal letter.
This is the full text of Kleinfeld’s letter:
Dear Mr Singer,
In the last eighteen months, we have enjoyed the unique attention and unlimited pleasure of multiple exchanges with various representatives of yours in every such way remarkable firm. Unfortunately, we have not yet had the pleasure to meet. More than once I have been wondering what a special person the founder of such a firm must be.
It was much to my delight when I recently learned from Berlin what a phenomenal soccer enthusiast you must be. Quite a few people who accompanied you in Berlin in 2006 during and especially after the many matches you attended are still full of colorful memories about this obviously remarkable time; it indeed seems to have the strong potential to become lastingly legendary. How you celebrated your soccer enthusiasm and the ‘great time’ you must have had in your Berlin weeks—unforgettable without a doubt—left a deep impression on them.”
As a token of my appreciation to learn about this completely “other side” of you, I allow myself to send you a little souvenir, which might bring back some “vivid (hopefully positive) memories”: The official match ball of the FIFA World Championships 2006 (called “Teamgeist”, in English “Team spirit”). I would be honored if it found an adequate place on your memorabilia shelfs.
PS: If I manage to find a native American Indian’s feather headdress I will send this additional essential part of the memories. And by the way: ‘Singing in the Rain’ is indeed a wonderful classic—even though I never tried to sing it in a fountain.