Elliott Associates has filed an official statement with the SEC congratulating management at Hess Corp. (NYSE:HES) on its decision to split the Chairman and CEO roles at the company. The move by the company brings an end to part of the proxy battle that Elliott has been fighting at the company.
In the statement, Elliott Associates said that the move was “not a concession or step on the part of the company, rather it is a reaction to the shareholder vote currently underway.” Earlier today, Hess Corp. (NYSE:HES) said that it would start a process that would see the majority of its board replaced by the end of 2013.
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The company did not explicitly state that its current CEO John Hess would continue in that role, but it did not nominate anybody to replace him, indicating that he will stay at the head of the company. The statement from Elliott noted that just a few weeks ago, the board of Hess Corp. (NYSE:HES) had voted against splitting the Chairman and CEO roles, both of which are currently held by John Hess.
Elliott also said that it was “excited about the tremendous and continuing support the Shareholder Nominees are receiving.” The statement goes on to campaign for its own nominees, stating that the incumbent board “presided over a long destruction of value” at the company, and asked whether the current board could “remain as invigorated as it now professes to be.”
The Elliott proxy battle has concentrated on poor management at Hess Corp. (NYSE:HES), particularly in the area of corporate governance. In a previous statement about its proxy battle Elliott brought attention to “glaring governance concern[s]” at the company, and pointed to its poor reputation for corporate governance as a reason that the firm was undervalued.
On today’s market, shares in Hess Corp. (NYSE:HES) fell by a little over 2 percent to $69.48 at time of writing. The company’s shares have benefited from the proxy battle being fought by Elliott Associates, with fund manager Paul Singer leading the charge. Since January 1, the company’s shares have increased by more than 30 percent.
There will be a board renewal process, and it appears that through 2013, Elliott Management has managed to unlock a huge amount of value at the firm. It is clear however, that the fight is not over and Elliott will continue to change the operational practices at the company through its board nominees.