Industrial gas producer Air Products & Chemicals Inc , feeling the heat from activist investor Bill Ackman, said Chief Executive John McGlade would retire in 2014.
Ackman's Pershing Square Capital Management, the company's top shareholder, spent $2.2 billion since June to acquire a 9.8 percent stake in Air Products.
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Pershing Square was supportive of the company's actions, McGlade said in a statement on Thursday.
McGlade was targeting $15 billion in annual sales and a 20 percent operating margin by 2015, but Air Products has lagged rivals Praxair Inc , Linde AG and Air Liquide SA .
Ackman has pushed for CEO exits at J.C. Penney & Co , Canadian Pacific Railway Ltd , Procter & Gamble Co and several other companies in which he has invested in the past.
Air Products also said three new independent directors would join the board immediately, with three unnamed current directors retiring before the company's annual meeting in 2014.
Pershing Square has agreed to vote in favor of two of the directors, Edward Monser and Matthew Paull, at the 2014 annual meeting.
The third director, Seifi Ghasemi, will stand for election at the 2015 annual meeting. The new CEO will also join the board as a director, Air Products said.
A committee of the board and an executive search firm will begin the search for a new CEO immediately, the company said, adding that McGlade would serve as chairman for an agreed-upon transition period in 2014.
Shares of Air Products closed at $107.32 on Wednesday on the New York Stock Exchange.
(Reporting by Swetha Gopinath in Bangalore; Editing by Kirti Pandey)