L3Harris CEO steps down amid conduct review, shares drop

Investing.com -- L3Harris Technologies shares fell roughly 2.7% in premarket trading Monday after the defense contractor announced the immediate departure of CEO Christopher Kubasik following a conduct review.

The company's board appointed Sam Mehta as president and chief executive officer, effective immediately. Lewis Hay III, L3Harris' lead independent director, was named independent chairman of the board. Kubasik stepped down as chairman and CEO, and as a board member.

The company said it became aware of certain conduct by Kubasik that was not consistent with its values as outlined in its Code of Conduct. The conduct was unrelated to the company's financial reporting, controls, customer relationships or operational performance, according to the statement.

Following an investigation with the assistance of independent counsel, the board determined it would be in the best interests of the company to enter into a separation agreement with Kubasik.

"The Board and Chris have agreed that implementing our succession plan today is the right thing to do. We thank him for his service," Lewis Hay III said.

Commenting on the announcement, Vertical Research Partners' analyst Karl Oehlschlaeger said: "While the company has given limited information, naturally investors are already alluding to Chris Kubasik’s departure from Lockheed Martin back in 2012. Whatever the reason for this surprise news, we think investors will no doubt conclude that the underlying business is not impacted by this management change."

The analyst also pointed out that "LHX has underperformed its US defense peers under Kubasik’s leadership (+25% over the last five years vs US defense +70%, S&P +75%)," adding: "We have high regard for Sam Mehta, who in our experience has been an effective manager and a good communicator. He may be a catalyst for closing LHX’s performance gap."

Mehta joined L3Harris in 2023 and has more than 25 years of strategic and operational leadership experience across the aerospace and defense industry. In his most recent role as president of the Space & Mission Systems and Communications & Spectrum Dominance segments, he was responsible for business strategy, financial performance and growth of the company's largest segments. These segments comprise more than 80% of L3Harris' total revenue.

In connection with his appointment, Lauren Barnes, president of Spectrum Superiority, was appointed president of SMS and Christopher Aebli, president of Mission Critical Communications, was appointed president of CSD.

Despite the abrupt change, L3Harris reaffirmed its 2026 consolidated revenue, organic growth, segment operating margin, GAAP earnings per share and free cash flow guidance.

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