Siemens Chief Executive Klaus Kleinfeld will leave the scandal-hit group when his contract expires at the end of September, the company said on Wednesday, deepening its leadership crisis.
"In times like these, the company needs clarity about its leadership. I have therefore decided not to make myself available for an extension of my contract," Kleinfeld said in a statement after a supervisory board meeting.
"The company must have complete freedom of action."
Markets had been on tenterhooks waiting for word on whether a divided board would support or rebuff Kleinfeld after Chairman Heinrich von Pierer resigned last week amid escalating corruption allegations that have rocked the German conglomerate.
Siemens shares closed down 0.9% at 88.36 euros.
In the statement, incoming Chairman Gerhard Cromme thanked Kleinfeld for "his decisive and successful leadership of Siemens over the past two years" and said internal investigations had not linked him to any wrongdoing.
Sources familiar with the matter had told Reuters on Tuesday the supervisory board was split on the question of whether to renew Kleinfeld's contract, with some members wanting to put off the decision until later.
But Siemens insisted the question would be decided at Wednesday's meeting, limiting the anti-Kleinfeld faction's room for manoeuvre, especially after Linde said its CEO, who had been touted as a replacement, would not leave.
Second-Quarter Earnings Results
Siemens's profit rose 36% in the second quarter, the German engineering and technology firm said Tuesday.
The Munich-based company earned 1.26 billion euros ($1.71 billion) in the second quarter compared with 923 million euros in the same period a year earlier, according to the surprise announcement on a day after its shares tumbled 2.9% to close at 89.20 euros ($121.15).
That was better than the 1.13 billion euros ($1.53 billion) analysts polled by Dow Jones Newswires had forecast.
Sales rose 10% to 20.63 billion euros ($28.02 billion) from 18.82 billion euros in same period the previous year, beating the 19.93 billion euros ($27.07 billion) forecast by analysts.
Siemens said it will publish its full quarterly report Thursday.