Elliott Management Proposes All Nominees Join Hess' Board

NEW YORK -- Elliott Management Corp. today made a last-ditch effort to compromise with Hess Corp. regarding the future of the latter's board of directors.

Just two days before shareholders must decide between five individuals nominated by the activist investor group or a different set of five candidates selected by the oil company, Elliott Management issued a statement recommending that all 10 nominees join a reconstituted board of directors.

"Consistent with Hess' promise to refresh the board, Elliott proposes that all shareholder nominees and all management nominees step onto a reconstituted board," read the statement. "Shareholders want real change and a renewed board. Hess has promised such renewal and this solution will follow through on that promise."

Hess has yet to respond to Elliott Management's latest proposal, but is certainly expected to do so prior to its May 16 annual meeting in Houston. Yesterday, the oil company offered a proposal of its own, which would allow two of Elliott Management's nominees to become members of Hess' board of directors as long as all five of its own nominees are allowed to join the same board.

"We are prepared to add two Elliott nominees whom we would choose in consultation with shareholders," Hess said in a statement yesterday. "We would effect this change promptly after [our] annual meeting if all five of Hess' new independent nominees are elected." 

Elliott Management, which owns 4.52 percent of Hess' stock, rejected the oil company's proposal.

Hess has repeatedly upheld that a bevy of Wall Street analysts believe its decision to become a pure-play exploration and production company is enough to move the company forward. As part of this transformation, Hess plans to sell off its entire network of 1,361 convenience stores and gas stations.

In addition to support from Wall Street, Hess made another concession by announcing plans to separate its chairman and CEO roles. As CSNews Online reported on May 10, John Krenicki, former vice chairman of GE, has agreed to serve as non-executive chairman if he is elected together with the other Hess board nominees.