Axalta Coating Systems Ltd., the Philadelphia-based paint-and-coatings company, announced Monday that CEO Terrence Hahn has resigned after just five weeks on the job "by mutual agreement with the board, following an investigation by outside counsel into conduct by Mr. Hahn unrelated to financial matters that Axalta believes was inconsistent with company policies."
The company says chief financial officer Robert Bryant is stepping in as acting chief executive.
Hahn, who previously held senior jobs at two other industrial manufacturers, Honeywell and Allentown-based Air Products & Chemicals Inc., had arrived with recommendations for his experience with multinational sales from his predecessor, former Axalta CEO Charlie Shaver, who remains the company's board chairman. The company did not release details about the investigation and fast departure, or explain why the undisclosed conduct issue wasn't identified and dealt with before Hahn was hired.
Bryant, who was also Axalta's executive vice president before his sudden interim promotion, called his fellow Axalta managers "resilient" and said they would "work tirelessly to put this distraction behind us" and focus on customer sales.
Bryant "has the leadership skills and financial acumen, as well as the respect of the management team and employees," affirmed Shaver, who had stepped down from Axalta's top job to head the chemical group at Akzo Nobel, the Dutch paints and chemicals conglomerate that tried to merge with Axalta last year.
In a brief statement, the departing Hahn said he wished "the best" to Axalta bosses and workers. He is off the Axalta board, also.
"We won't speculate on the conduct issues, but view it as positive that Axalta took action if the issue warranted," Michael Harrison, an analyst at Seaport Global Securities, said in a note to investors. He said that he remained cautious because of cost challenges but that the landscape should improve next year.
Axalta, which employs 14,000, earned $499 million in profits last year on sales of $4.6 billion. The company is building a $75 million headquarters and R&D center at the Navy Yard in South Philadelphia, and has bought a series of smaller companies in a bid to stay independent in the fast-consolidating global paints business, where Axalta's global rivals include AkzoNobel's paint division as well as PPG Industries.
Interim CEO Bryant joined Axalta in 2013, the year the company was spun off by DuPont Co. and purchased by Carlyle Group, which later took the company public. (Carlyle is also helping separate Shaver's chemical group from the rest of AkzoNobel.) Axalta's recent share price of about $23 a share is significantly below its all-time high in 2014 of $36. The company has blamed disappointing sales abroad.
Bloomberg Intelligence analyst Christopher Perrella said the resignation should have little effect on the company's operation, given Hahn's short tenure. "Axalta should continue to execute on its long-term strategy," he said.
On Monday, when major stock indexes were down, Axalta's shares closed up 51 cents, or 1.82 percent, to $28.60.
Bryant was previously CFO at Roll Global and executive vice president at Grupo Industrial Saltillo SAB de CV. He is a graduate of the University of Florida and has an MBA from Harvard Business School.