L3Harris to review its business after pact with major shareholder
A L3Harris Technologies building in Arlington, Virginia. Anadolu via Getty Images
By
Ross Wilkers
The multinational hedge fund involved in this agreement will also be represented on the board of directors of L3Harris Technologies.
On the day before L3Harris Technologies' planned walkthrough of its long-term strategy to investors, the blue chip defense hardware maker has given an initial glimpse of how the strategy comes together.
L3Harris said Monday that its board of directors will bring in new members and establish an ad hoc committee to review the company's overall business after reaching a pact with a major shareholder.
The review will cover L3Harris' operational performance, cost structure, portfolio composition and what the company called "all available value creation levers." L3Harris expects that review to complete in 2024.
L3Harris announced the review in the wake of the cooperation pact with D.E. Shaw & Co., a multinational hedge fund that had approximately $60 billion in assets under management as of the end of 2022.
Former Raytheon CEO Bill Swanson and former JELD-WEN CEO Kirk Hachigian have joined the board and review committee, effective immediately, while Swanson will co-chair the committee alongside current L3Harris board member Roger Fradin.
Fellow L3Harris board member Rita Lane will be the fourth member on the committee undertaking the review, while former L3Harris CEO Bill Brown will work as a special adviser to the committee. Brown was chief executive for the first two years after the merger to create the company, which is now led by CEO and Chair Chris Kubasik.
D.E. Shaw and L3Harris will also agree on an additional independent director to join the board in 2024. The addition of Hachigan and Swanson means L3Harris' board has14 directors with 13 of them independent, while six have been elected since 2021.
L3Harris is scheduled to hold its next investor day on Tuesday, an event that centers around the company's in-depth description of its long-term strategy and key priorities.
The presentation is taking place less than a week after L3Harris hired a new chief financial officer in Ken Bedingfield, who formerly worked in that position at Northrop Grumman, and one month after it announced the planned divestiture of a commercial aviation business.
L3Harris is also adjusting its long-term incentive compensation plan to make relative total shareholder return a core metric for performance share units, as opposed to being only a modifier.