by Tony Robinson
Axalta Coating Systems Ltd. Chief Executive Officer Terrence Hahn is leaving after just a month, following an investigation into conduct that the specialty-chemical maker said was inconsistent with its policies.
The company declined to comment on the investigation, which was conducted by outside counsel, or whether it involved activities before Hahn, 52, joined the company. Axalta doesn’t plan to hold a conference call on the ouster.
Chief Financial Officer Robert Bryant, 50, was named interim CEO, the Philadelphia-based company said in a statement Monday.
Axalta, the world’s largest maker of automotive refinishing paints, has been grappling with higher costs for raw materials while demand from automakers has slowed. The company is the No. 3 original equipment manufacturer for car paints, behind PPG Industries Inc. and BASF SE. Berkshire Hathaway Inc. is Axalta’s largest investor, with a 10% stake, according to data compiled by Bloomberg.
Hahn’s resignation was unrelated to financial matters, Axalta said. Preliminary results for the third quarter are in line with guidance released during its second-quarter update, the company said.
“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 LLC, said in a note to investors. The company’s forecast indicates third-quarter earnings before interest, taxes, depreciation and amortization of about $232 million, Harrison wrote. He had estimated $237 million.
The resignation should have little effect on the company’s operation, given Hahn’s short tenure, according to Bloomberg Intelligence analyst Christopher Perrella. “Axalta should continue to execute on its long-term strategy.”
Shares rose 1.3% to $28.46 at 9:45 a.m. in New York. Axalta fell 13% this year through Oct. 5, while the Russell 1000 Materials & Processing Index fell 5.1%.
Having joined Axalta on Sept. 4, Hahn marked one of the shortest tenures at the top of a publicly traded U.S. company. He also stepped down from Axalta’s board Monday. He had been named in July to succeed Charlie Shaver, who remains company chairman.
Hahn most recently served as CEO of Honeywell International Inc.’s home and building technologies group and worked for the industrial conglomerate for four years through October 2017. He previously spent nearly 20 years at Air Products & Chemicals Inc.
Bryant has been Axalta’s finance chief since 2013. He previously served as CFO of Roll Global LLC, which he joined in 2007.