L3Harris CEO Kubasik ousted over conduct, stock -4%
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- L3Harris ousted CEO Chris Kubasik on Sunday for 'certain conduct … that was not consistent with the values of the Company,' sending shares down more than 4% on the news.
- The board promoted Sam Mehta — previously president of L3Harris's Space & Mission Systems and Communications & Spectrum Dominance segments — to president and CEO, and named lead independent director Lewis Hay III as independent chairman.
- Semafor, citing two people briefed on the investigation, reported that an independent probe found Kubasik engaged in an 'inappropriate relationship with an employee'; CNBC has asked L3Harris to confirm.
- L3Harris stressed the ouster was 'unrelated to the Company's financial reporting, controls, customer relationships or operational performance,' and Kubasik 'expressly disclaimed' any policy violation under his separation agreement.
- Kubasik forgoes his 2026 incentive plan bonus but retains nearly 384,000 stock options; he had been CEO since 2021 and was also chairman of the board.
- In 2012, Lockheed Martin asked for and received Kubasik's resignation as president and COO weeks before he was set to become CEO after an ethics probe 'confirmed that he had a close personal relationship with a subordinate employee.'
- The change at the top comes seven months after the Defense Department committed a $1 billion convertible preferred equity investment in L3Harris's missile solutions business, whose IPO has slipped from late 2026 to mid-2027.
Why it matters: Mehta inherits execution risk on a Pentagon-anchored missile spinoff — the $1 billion convertible preferred equity deal and a delayed IPO now mid-2027 — while L3Harris also has to manage the reputational overhang of Kubasik's nearly identical 2012 ethics ouster at Lockheed Martin over a subordinate relationship. Investors got a 4% drop and a vague 'conduct' rationale; Semafor's reporting fills in the specific allegation the company's statement left out.
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