The U.S. proxy advisory firm ISS has asked Hess Corp. (HES.N) shareholders to elect five new board members nominated by activist hedge fund Elliot Management.

Hess

ISS’s action comes close to another proxy firm, Glass Lewis, making a similar recommendation.

Hess Corp. (HES) Issued A Statement

In the light of the above developments, Elliot Management Corporation, one of the largest shareholders of Hess Corp. (NYSE:HES) issued Tuesday a fresh statement to shareholders. In its SEC filing on Tuesday, Elliot expressed confidence that for only the second time in the past five years, both proxy advisory firms fully endorse a multi-person shareholder nominee slate.

New York-based hedge fund Elliott Management, which owns a 4.5 percent stake in the oil and gas company, has asked Hess for a number of changes including the election of independent directors to the board to increase shareholder value.

The oil and gas company Hess Corp. (NYSE:HES) said in March that it plans 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 has announced plans to sell U.S. oil storage terminals and plans to close a New Jersey refinery as it exits the volatile refining business.

Since ISS and Glass Lewis announced their recommendations, John Hess has launched a number of attacks – against Elliott, against the independent Shareholder nominees, against ISS and Glass Lewis, and even against proxy voting advisory firms in general.

In its May 7, 2013, Schedule 14A filing with SEC, Elliot Management provided views echoed by leading players including Morningstar, Inc. (NASDAQ:MORN), Reuters and Goldman Sachs against Hess Corp. (NYSE:HES). For instance, it quoted Morningstar’s January 29, 2013 report highlighting “the simple face is the market doesn’t trust Hess to run its business well, and thus places a discount on everything the company controls”.

Amid the recent happenings, Hess Corp. (NYSE:HES) raised its dividend and initiated a $4 billion share buyback in March in an effort to boost shareholder returns, but has failed to pacify the activist investor. The company plans to nominate six new directors at its annual meeting in May in response to criticism that its current board lacks independence. Hess responded to Glass Lewis’ recommendations last week by urging shareholders to elect its nominees.

Hess had already rejected Elliott’s nominees and said Monday that it believes that the ISS report on the proxy contest is “a fundamentally flawed analysis” that does not address key issues, such as a “highly problematic compensation scheme” put in place for Elliott Management’s dissident nominees. However ISS said in a statement Tuesday that Hess Corp. (NYSE:HES)’s claims are unfounded.

The proxy battle between Hess Corp. (NYSE:HES) and activist investor Elliott Management is intensifying ahead of the energy company’s annual meeting later this month.