NEW YORK (AP) — Hess Corp. will split the positions of CEO and chairman as it fights off a campaign by a major shareholder for a change in leadership at the New York energy company.
John Hess, son of the company founder, will hold on to the CEO title, but the non-executive chairmanship will go to John Krenicki, former GE vice chairman, if shareholders approve during the company's annual meeting next week.
Earlier this year in a letter to shareholders, Elliott Management accused the Hess board of "poor oversight" of management for "over a decade of failures," and revealed a 4 percent stake in the company.
The hedge fund is seeking to place its own slate of nominees on the board and on Friday, dismissed the company's actions.
"A resolution to split the Chairman & CEO roles at Hess is on this year's proxy," Elliott said. "Hess's announcement today is not a concession or step on the part of the Company, rather it is a reaction to the shareholder vote currently underway. It is significant to note that Hess's Board recommended against this split only a few weeks ago."
Elliott recently bumped up its stake in Hess to 4.52 percent.
Elliott was seconded earlier this month by the influential firm Institutional Shareholder Services, which backed its efforts publicly and recommended that shareholders support Elliott's slate of five nominees for the board.
Hess is undergoing substantial changes.
In March, the company announced that it would sell its retail gas stations business, along with its energy trading and marketing businesses, to become more purely an exploration and production company. It's also selling U.S. oil storage terminals and plans to close a New Jersey refinery as it exits the volatile refining business.
Hess had already rejected Elliott's nominees and says it believes that the ISS report on the proxy contest is flawed and doesn't address key issues.
Company shares slid 2 percent, or $1.38, to $69.58 in early trading.