By Tess Stynes
Hess Corp. (HES) again urged shareholders to support its slate
of board candidates as the exploration-and-production company
continued its criticism of dissident investor Elliot Management
Corp.'s efforts to elect five board members and directly pay them
bonuses based on how Hess shares perform.
In a letter to shareholders Tuesday, Chairman and Chief
Executive John Hess outlined support for Hess's multiyear plan to
transform into a pure-play exploration and production company as
well as the company's board nominees. The letter provided a list of
quotes from Wall Street analysts in recent weeks and also touted
the company nominees' qualifications in the key areas such as
restructurings and alternative shale drilling.
In the letter to shareholders, Mr. Hess stated, "We find the
prospect of Paul Singer, a shareholder, potentially paying
directors millions of dollars in contingency fees for
pre-determined outcomes to be highly troublesome from a governance
perspective, and have concerns about the Singer directors' ability
to act as fiduciaries on behalf of all Hess shareholders."
Elliott, a hedge-fund manager that controls 4.4% of Hess'
shares, wants to split Hess into two companies in a bid to boost
the stock, which has lost 47% of its value since peaking in
2008.
Hess reiterated that Elliott's plan to pay bonuses to its board
nominees--in addition to the regular compensation they would
receive as directors from Hess-- means they wouldn't be truly
independent from the hedge-fund manager, a claim Elliott has
disputed.
The outcome of the contest is being closely watched in the
energy industry amid a rise in shareholder activism that has forced
changes in recent months at natural-gas producers Chesapeake Energy
Corp. (CHK) and SandRidge Energy Inc. (SD). The meeting is set for
May 16.
Hess shares closed Monday at $70.44 and were inactive in recent
premarket trading.
Write to Tess Stynes at Tess.Stynes@dowjones.com
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