Spirit AeroSystems ex-CEO Larry Lawson sues over nixed retirement contract worth $50 million
Spirit AeroSystems' former CEO Larry Lawson is suing the airplane manufacturer to recover more than $50 million worth of cash and stock shares he says were wrongly withheld from him after he retired from the company in 2016.
Lawson, in a lawsuit filed Wednesday, accused Spirit of breaching his retirement agreement, which promised him more than $4 million in pay and benefits and more than a half million stock shares for his work. The lawsuit comes more than a year after Spirit cut off Lawson's post-retirement pay and demanded he return more than $2.7 million over a purported violation of a non-compete clause in his retirement agreement.
At the center of the fight is consulting work Lawson did for investment firm, Elliott Management, last year.
Elliott Management hired Lawson in January 2017 during a bid to oust executives of specialty metals maker Arconic Inc., in which Elliott was a shareholder. The investment firm hoped Lawson eventually would become a candidate for chief executive officer of Arconic, which engineers and manufactures lightweight metal products used in the automotive, construction and aerospace industries.
Ultimately, Lawson was passed up for the role. But within days of Spirit learning that Elliott Management had retained Lawson, it refused to continue paying him.
The retirement agreement, according to the lawsuit, barred Lawson from having direct or indirect involvement with other businesses that manufacture or maintain aerostructures. The non-compete clause lasts through July of this year.
Lawson, in the lawsuit, contends his involvement with Elliott did not violate the non-compete clause of his retirement contract because "Arconic is not a competitor of Spirit," which makes wing components, fuselages and other equipment for commercial and military aircraft.
"Interpreting the non-competition provision ... so broadly as to lump Spirit and Arconic into the same 'Business' merely because they both make materials that end up in airplanes would be entirely improper," the lawsuit says.
Spirit AeroSystems' spokesman Fred Malley said Thursday that the company does not comment on pending litigation.
Lawson is seeking damages from Spirit including $2.032 million in cash and 538,160 stock shares. His total retirement package, at current market value, is worth more than $50 million, the lawsuit says.
Lawson joined Spirit as its president and CEO in April 2013. According to his lawsuit, he was brought in "to revitalize" the company as it struggled. During his three-year tenure, the lawsuit says, revenue, net income and share prices surged.
He often is credited with turning the company around.
"When Mr. Lawson retired in July 2016, Spirit's board understandably rewarded him for his success," the lawsuit says, including agreeing to pay him about $4.7 million in cash and give him 408,596 shares of stock He was also given a chance to receive another 129,564 stock shares based on the company's future performance, the lawsuit says.
The stock shares are estimated to be worth around $45 million. Spirit's price per share was about $84 on Thursday afternoon.
"The shares awarded to Mr. Lawson have appreciated in value as a direct result of the hard work he undertook in turning Spirit around," the lawsuit says.
"Mr. Lawson's agreement to remain available to serve in a role (with Arconic Inc.) that ultimately he did not secure was not a violation of his non-competition obligations and posed no risk to Spirit," the lawsuit says.
The lawsuit was filed in U.S. District Court for the District of Kansas.
This story was originally published March 29, 2018 at 3:52 PM with the headline "Spirit AeroSystems ex-CEO Larry Lawson sues over nixed retirement contract worth $50 million."