Hess to Separate Chairman and CEO Roles
Hess Corporation (NYSE: HES) (“Hess” or “the Company”) today announced that, after consulting with its shareholders, it will separate the role of Chairman and Chief Executive Officer immediately following its Annual Meeting to be held on Thursday, May 16 in Houston, TX. John Krenicki, former Vice Chairman of GE, has agreed to serve as Non-Executive Chairman, if he is elected together with the other Hess nominees.
John Krenicki said, “There is tremendous value in Hess, and management is executing on a clear and measurable plan that is already unlocking that value. 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.”
Krenicki added, “My fellow nominees have served as directors and as senior managers of leading global businesses. We strongly believe a board that is structurally divided by misaligned incentives such as Elliott’s compensation scheme creates substantial risk. In an industry like oil and gas, where most successful projects produce returns over a longer time horizon, a subset of directors specifically incentivized to pursue short-term gains would introduce a troubling level of boardroom dysfunction. Rather than provide effective oversight, this structure could impede value creation by undermining a company’s ability to attract and retain top talent as well as the confidence of current and potential partners who rely on a reliable and stable counterparty over the life of a project.”
John Mullin, Hess’ Lead Director, said, “As we continue our transformation to a pure play E&P 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. 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.”
Mr. Mullin concluded, “John Krenicki has had a distinguished career as one of the top executives at GE where he ran GE Energy while overseeing GE’s Oil & Gas, Power & Water, and Energy management businesses. Based on strong leadership qualities and unimpeachable independence, the Board believes that he – along with Hess’ other director nominees – has the right blend of experience and sound judgment to provide accountability, while guiding Hess’ transformation to a pure play E&P company for the benefit of all shareholders.”
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. Further, Mr. Krenicki and the Board’s new and continuing directors are committed to:
Providing independent oversight and holding management accountable for the successful execution of Hess’ strategy;
Directing capital allocation decisions to strike the appropriate balance between funding growth and increasing shareholder returns;
When necessary, making changes to Hess’ strategy to ensure the Company is driving shareholder value; and,
A Board renewal process under which the majority of the Board will be comprised of new directors by the end of 2013, in addition to the six new directors who will sit on the Hess Board following this election.
John B. Hess, Hess’ Chairman and Chief Executive Officer, has stated his full support for the decision.
The annual meeting is less than one week away. Hess strongly recommends its shareholders to vote ‘FOR’ its world class slate of new, independent, unconflicted director nominees by promptly voting on the WHITE proxy card by telephone, by Internet, or by mail.
For information about Hess’ transformation and the 2013 Annual Meeting, please visit: www.transforminghess.com
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