After leading Waltham defense giant Raytheon Co. for more than a decade, chief executive William Swanson is stepping down.
Swanson’s departure from the helm of one of Massachusetts largest public companies, and one of the world’s biggest defense contractors, was announced Wednesday but appears to have been in the works for about a year. Swanson plans to step aside March 31, following his 65th birthday in February. He will remain chairman of the board as his successor, company chief operating officer Thomas Kennedy, becomes chief executive.
Swanson, who joined Raytheon in 1972, is credited with helping transform the company that was once primarily known as a maker of missiles into a military electronics and technology powerhouse with a growing cybersecurity business.
“Under Swanson, Raytheon was transformed,” said Loren Thompson, a defense analyst with the Lexington Institute in Washington. “People used to think of Raytheon as the biggest component maker in the defense industry, but it’s much bigger than that.”
But Kennedy, 58, will inherit Raytheon at a time when Defense Department spending is contracting.
So far, however, the company has done well despite the slowdown.
Its stock price hit a record of $91.85 Wednesday before it closed at $91.16. It has gained 57 percent for the year.
“It has to continue the strong results that it has sustained despite the downturn in Pentagon demand,” said Thompson.
Prior to becoming Raytheon’s chief operating officer, a newly created position last year, Kennedy ran the company's integrated defense systems business, its most profitable unit and the division responsible for the Patriot missile systems.
When Kennedy took on his new position last March, he led a consolidation of the company’s six business units into four as part of an overall reorganization.
Even though Swanson is going out on a high note for Raytheon, one of the state’s biggest employers, his tenure has been marked with some controversy. In 2006, The New York Times revealed that a popular management book written by Swanson, “Swanson’s Unwritten Rules of Management,” borrowed from other books without proper credit. As a result, according to the Times, Raytheon’s board cut Swanson’s pay by about $1 million.
Still, Swanson has been one of the state’s most highly compensated executives. In 2012, according to Raytheon documents, his total compensation was $16.4 million.
Neither Swanson, nor Raytheon, would comment on what he plans on doing next. Some speculate he will spend more time at his California vineyard, Center of Effort.