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NEW YORK -- More changes are in store for Hess Corp. In addition to selling off its retail division, the company is now planning to separate its chairman and CEO roles. The move will immediately follow its annual meeting in Houston on May 16.
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, according to the company.
"There is tremendous value in Hess, and management is executing on a clear and measurable plan that is already unlocking that value," said Krenicki. "Many shareholders with whom my fellow nominees and I have met over the past few months confirm and support this view. I speak for all of Hess’ nominees in stating unequivocally our commitment to vigorously oversee the execution of the Hess plan on behalf of all shareholders, as well as the careful consideration, study and pursuit of all strategies to ensure continued value creation at Hess."
In addition to previously serving as former vice chairman of GE, Krenicki was also president and CEO of GE Energy. He joined private equity firm Clayton, Dubilier & Rice this year after 29 years in senior leadership roles at GE.
"As we continue our transformation to a pure play E&P [exploration and production] company, we have heard from shareholders who approve of our strategy, while also expressing a desire for better accountability, increased board oversight and the adoption of best-in-class corporate governance practices," said Hess Lead Director John Mullin. "We understand our shareholders’ views and recognize that our corporate governance structure should have been improved sooner. Separating the roles of chairman and CEO and declassifying our board reflects our commitment to shareholders."
John B. Hess, the company’s chairman and CEO, has stated his full support for the decision, the company added.
Following the annual meeting, the newly constituted corporate governance and nominating committee will outline responsibilities for the non-executive chairman that are consistent with corporate governance best practices.
Hess is currently embroiled in a fight with activist investor Elliot Management Corp. over the direction of Hess’ board of directors. Elliot Management owns 4.52 percent of Hess, valued at more than $1 billion and has repeatedly stated Hess' stock price is considerably undervalued.
Elliot Management introduced its own slate of proposed Hess board members at the end of April, as CSNews Online previously reported.