WASHINGTON — Lockheed Martin’s board of directors ousted chief-executive-in-waiting Christopher Kubasik Nov. 9 following an investigation that uncovered his “close personal relationship” with a subordinate employee.
Kubasik, who was the firm’s president and chief operating officer, was slated to take over for departing Lockheed Martin Chief Executive Robert Stevens on Jan. 1. Instead, Marillyn Hewson, tapped as Kubasik’s right hand following the leadership transition, will fill his current job immediately and will take over as the Lockheed head come Jan. 1.
The company has no intention of immediately filling the chief operating officer position once Hewson moves up in January.
In a press release and conference call Nov. 9, the company declined to provide details on the relationship, citing confidentiality concerns, but said the relationship was discovered after an employee not involved came forward in October “with an expression of concern.” The company retained an outside group to investigate, and the Lockheed board met Nov. 9 to push through the leadership changes.
“I look at this as a personal indiscretion,” Stevens said during the call with reporters. “It is very disappointing to me and I am genuinely saddened by this, but our responsibilities here are very clear. We have a code of conduct, we have a standard of ethics and integrity in our business, and absolutely every employee including me and everyone else is held accountable to meeting those standards.”
Stevens, who will remain chairman of the board for another year after he steps down as chief executive on Jan. 1, balked at a reporter’s suggestion that the company is in crisis.
“I don’t believe the company is in crisis,” he said. “I believe that we’re changing course as a result of the observations that were brought forward to us in this ethics matter. We’ve acted cleanly, clearly and decisively with regard to the action we’ve taken.”
Hewson has been heading Lockheed’s Electronic Systems division. Kubasik has long been Stevens’ selected successor, known as the company’s bridge to Wall Street due to his financial knowledge, having served as chief operating officer for almost three years.
Stevens will have to be far more hands on during the early stages of Hewson’s tenure, sources said.
“Investors likely will be disappointed by this news as Marillyn is not as well known a commodity on the Street as Kubasik,” one Wall Street source said.
While Stevens and Kubasik were considered a close team with a long history, the Lockheed board’s election of Hewson suggests no change in current strategic plans or capital allocation policies and priorities, said Byron Callan of Capital Alpha Partners.
Loren Thompson, chief operating officer of the Lexington Institute and an industry consultant who has close ties to Lockheed, described Hewson as “hard as nails when it comes to the business aspects of her job” and “very much of a buttoned-down, focused, pleasant person.”
“Marillyn is very much a straight shooter,” Thompson said. “She’s very highly regarded inside the company and with the customers.”
In addition to her duties at Lockheed, Hewson chairs the Sandia Corp. board of directors and serves on the board of directors of DuPont, according to her company biography.
“Frankly, I think this is a better outcome for the employees than the elevation of Kubasik,” Thompson said of Hewson’s appointment. “Although I must say, nobody was expecting anything like this.”
Stevens applauded the employee who came forward with information on the relationship, citing the disclosure as an example of the company’s ethical standards.
“I personally regard the action undertaken by our employee to be quite courageous,” he said. “I’m very pleased that our employees have enough trust in our leadership and enough confidence in our process that they would step forward with an allegation about the highest-level executives in our company without fear of reprisal, and without concern, and know that they would be treated fairly and that their concerns would be given full expression in an investigation, and that’s exactly what’s happened here.”
John T. Bennett contributed to this report.