Saudi Prince Hands Ousted Arconic CEO Job of Building Giant CityJack Farchy, Lynn Thomasson and Simon Casey
Former Aluminmum executive will lead project on Red Sea Coast
Kleinfeld resigned this year after spat with activist investor
Klaus Kleinfeld may have just proved the value of making an annual pilgrimage to Davos.
After years of networking at the annual World Economic Forum, Kleinfeld landed himself a new job at the so-called ‘Davos of the Desert’ in Riyadh. The executive, who was ousted in April as chief of U.S. engineering firm Arconic Inc., will build a city from scratch for Saudi Arabia’s Crown Prince Mohammed bin Salman.
Kleinfeld -- the epitome of a Davos Man who is a trustee of the World Economic Forum as well as a regular speaker there -- was named as chief executive officer of the city, called NEOM.
The appointment marks a dramatic return for Kleinfeld after his abrupt departure from New York-based Arconic, which said he had shown "poor judgment" in sending a letter to activist investor Elliott Management Corp. during a proxy fight. Kleinfeld resigned as CEO of Siemens in 2007 in the wake of a bribery probe into the German company’s business.
Kleinfeld’s reputation was tarnished by a battle earlier this year with Elliott, which publicly called for his departure from Arconic, describing him as the "worst performing continuously tenured CEO in the S&P 500."
That view may reflect the bad blood between Elliott and Kleinfeld. During his time running Arconic’s predecessor, Alcoa’s total return was minus 72 percent as the global financial crisis caused a years-long slump in metals prices. The S&P 500 returned 81 percent over the same period.
He left Arconic, spun out of Alcoa last year, after sending Paul Singer a soccer ball and bizarre and vaguely threatening letter full of innuendos about the Elliott founder’s supposed partying in Berlin during the 2006 World Cup.
NEOM, a new city on the Red Sea coast, is the latest project in Prince Mohammed’s drive to remake the kingdom in a time of dwindling resources. The plan includes a bridge spanning the Red Sea, connecting the proposed city with Egypt and the rest of Africa. Some 10,000 square miles have been allocated for the development of an urban area stretching into Jordan and Egypt.
“Dr. Kleinfeld has a track record in leading some of the world’s most dynamic, advanced and best-performing businesses and we believe these skills and his leadership will ensure NEOM’s success,” Prince Mohammed said in a press release on Tuesday.
The project is the latest ambitious project to be championed by the prince: like previous headline-grabbing announcements, it is likely to be met with a mixture of awe and skepticism.
Kleinfeld -- whom Elliott accused of overseeing a "culture of grandiose rhetoric devoid of any real substance or follow-through" at Arconic -- is unlikely to be put off.