Elliott proposes creation of new Hess board
NEW YORK (AP) — With a shareholder vote just days away, the activist investor battling for spots on Hess Corp.'s board is proposing that a new board be created that includes both its own and the company's nominees.
Elliott Capital Management, which holds a 4.52 percent stake in the New York-based energy company, has been pushing to get its slate of five nominees elected to Hess' board. The company is running its own slate of nominees.
Shareholders will vote on board members at the company's annual meeting set for Thursday in Houston.
On Tuesday, Elliott proposed that both its and the company's nominees join a reconstituted board of an agreed upon size and composition.
A Hess spokesman didn't immediately return an email seeking comment.
The proposal follows Hess' offer on Monday to add two of Elliott's nominees to the board after the annual meeting if all of the company's nominees are elected. Elliott rejected that offer, saying it wants shareholders to hold out for bigger changes.
Also on Monday, Elliott's nominees said in a filing that they would forgo further compensation from the hedge fund if elected to the board.
Elliot has been pushing for drastic changes at the company, while Hess has accused the firm of trying to disrupt progress it has already made in reshaping itself.
Hess said it has taken steps to respond to shareholder requests, including its announcement last week that it will split the roles of chairman and CEO following the annual meeting.
Hess also is trying to sell its retail gas stations business, along with its energy trading and marketing businesses, as it shifts its focus further toward exploration and production. The company also plans to sell U.S. oil storage terminals and will shutter a New Jersey refinery as it exits the volatile refining business.
Elliott argues that those moves fall short of the kind of change needed. Its efforts got a boost last week when the influential firm Institutional Shareholder Services backed Elliott's argument and recommended that investors support the firm's slate of nominees.
Hess says the ISS report is "a fundamentally flawed analysis" that does not address key issues.
Hess shares rose 31 cents to $69.70 in premarket trading about 15 minutes before the market opening.