Hess Continues Push for Board Nominees in Proxy Fight

Hess Corp. stepped up an ongoing push for its director nominees Monday after two proxy advisory firms last week recommended shareholders back the board slate put forth by dissident holder Elliott Management Corp.

Hess's five director nominees released a letter to shareholders defending their role, while Hess separately accused proxy advisory firm Institutional Shareholder Services Inc. of having an "institutional bias toward activist shareholders," an allegation the firm denied.

The proxy battle between the oil company and Elliott, a hedge fund that owns about 4.52% of Hess's shares, has gone on for months.

Elliott has argued Hess's board has sat by, allowing management to pursue costly and ineffective strategies that have eroded the company's value. Meanwhile, Hess has said it is on track to transform itself into a more focused exploration and production company, and Elliott is pursuing a destructive and flawed plan to break up the company.

Hess shareholders will vote on the board composition at the annual meeting May 16 in Houston.

In Monday's letter, the Hess nominees solicited the support of shareholders, saying Elliott's characterization that Hess's board members are required to support the company's strategic plan as a precondition for serving on the board "is simply false."

In response, Elliott Management called Hess's plea "desperate," adding, "rather than address the real operational and governance issues that have plagued the company for nearly two decades, Hess has decided to attack the independent shareholder advisory services."

Meanwhile, Hess said ISS has "adopted a pervasive policy of bias in favor of the activist," citing a recent New York Times survey that shows the advisory firm has backed the insurgent slate in 73% of cases so far in 2013.

Hess cited prior proxy contests in which ISS has backed the insurgent slate, including battles between AOL Inc. and Starboard Value LP, Motorola Solutions Inc. and Carl Icahn, Actelion Ltd. and Elliott, and Target Corp. and Pershing Square Capital Management.

ISS disputed the charge, saying it has recommended shareholders vote in favor of management nominees in 45% of cases since 2011 and only fully backed a board slate from a dissident shareholder in 12% of circumstances.

In its report last week, ISS cited the company's "significant underperformance," and what it said are signs that the board's "new-found attentiveness to the business is a response to the proxy contest," adding Hess's transformation appears to have occurred only on the surface and a slate of board members already aligned with the company's management isn't in the best position to oversee the company.

Two other proxy firms have weighed in. Glass Lewis & Co. on Wednesday sided with the dissidents, concluding that while the shift toward becoming a pure exploration and production company may be the right one, "we find little cause to suggest that the current board is best suited to oversee that change."

Egan-Jones Proxy Services, however, said Hess's efforts at transformation are translating into lower spending and driving production growth, and the dissidents haven't offered a persuasive strategy.

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Hess Continues Push for Board Nominees in Proxy Fight

Hess Corp. stepped up an ongoing push for its director nominees Monday after two proxy advisory firms last week recommended shareholders back the board slate put forth by dissident holder Elliott Management Corp.

Hess's five director nominees released a letter to shareholders defending their role, while Hess separately accused proxy advisory firm Institutional Shareholder Services Inc. of having an "institutional bias toward activist shareholders," an allegation the firm denied.

The proxy battle between the oil company and Elliott, a hedge fund that owns about 4.52% of Hess's shares, has gone on for months.

Elliott has argued Hess's board has sat by, allowing management to pursue costly and ineffective strategies that have eroded the company's value. Meanwhile, Hess has said it is on track to transform itself into a more focused exploration and production company, and Elliott is pursuing a destructive and flawed plan to break up the company.

Hess shareholders will vote on the board composition at the annual meeting May 16 in Houston.

In Monday's letter, the Hess nominees solicited the support of shareholders, saying Elliott's characterization that Hess's board members are required to support the company's strategic plan as a precondition for serving on the board "is simply false."

In response, Elliott Management called Hess's plea "desperate," adding, "rather than address the real operational and governance issues that have plagued the company for nearly two decades, Hess has decided to attack the independent shareholder advisory services."

Meanwhile, Hess said ISS has "adopted a pervasive policy of bias in favor of the activist," citing a recent New York Times survey that shows the advisory firm has backed the insurgent slate in 73% of cases so far in 2013.

Hess cited prior proxy contests in which ISS has backed the insurgent slate, including battles between AOL Inc. and Starboard Value LP, Motorola Solutions Inc. and Carl Icahn, Actelion Ltd. and Elliott, and Target Corp. and Pershing Square Capital Management.

ISS disputed the charge, saying it has recommended shareholders vote in favor of management nominees in 45% of cases since 2011 and only fully backed a board slate from a dissident shareholder in 12% of circumstances.

In its report last week, ISS cited the company's "significant underperformance," and what it said are signs that the board's "new-found attentiveness to the business is a response to the proxy contest," adding Hess's transformation appears to have occurred only on the surface and a slate of board members already aligned with the company's management isn't in the best position to oversee the company.

Two other proxy firms have weighed in. Glass Lewis & Co. on Wednesday sided with the dissidents, concluding that while the shift toward becoming a pure exploration and production company may be the right one, "we find little cause to suggest that the current board is best suited to oversee that change."

Egan-Jones Proxy Services, however, said Hess's efforts at transformation are translating into lower spending and driving production growth, and the dissidents haven't offered a persuasive strategy.

Copyright (c) 2013 Dow Jones & Company, Inc.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Itching for Floor Fight Over Higher Energy Taxes

Why did energy supporters in the U.S. Senate stand aside to allow consideration of legislation they oppose – raising taxes on America’s oil and natural gas companies? After all, there were more than enough votes to keep the proposal from coming to the floor.

Simple, in politics you choose the fights you think you can win, and Senate opponents of higher energy taxes feel like they’ve got the American people behind them.

Here’s why. A spate of surveys shows that strong majorities of Americans favor more production of oil and natural gas here at home. Both Gallup and Rasmussen have new polls showing Americans support construction of the Keystone XL pipeline, which would bring up to 830,000 barrels of oil per day from neighbor and ally Canada. Another Rasmussen survey indicates 2-1 support for developing energy from shale via hydraulic fracturing.

Then there was a Pew Research Center poll that suggests the reason for the findings in the others. Pew found that as gasoline prices rise, so does Americans’ interest in greater oil and natural gas production.

A Harris Interactive poll ties things together: It found 76 percent of voters nationwide believe higher taxes on the country’s energy producers could cost them more at the gas pump – which the Congressional Research Service substantiated in a report last year.

Americans’ reaction to increasing fuel costs – driven higher by the rising cost of crude on the global market – is understandable. They’re saying let’s have policies and strategies that could put downward pressure on crude supply as opposed to policies that would make energy producers’ operations costlier – potentially reducing exploration, development and production while elevating prices.

Thus, a Senate debate that supporters of more oil and natural gas production are eager for the American people to see and hear.

View the original article here

Itching for Floor Fight Over Higher Energy Taxes

Why did energy supporters in the U.S. Senate stand aside to allow consideration of legislation they oppose – raising taxes on America’s oil and natural gas companies? After all, there were more than enough votes to keep the proposal from coming to the floor.

Simple, in politics you choose the fights you think you can win, and Senate opponents of higher energy taxes feel like they’ve got the American people behind them.

Here’s why. A spate of surveys shows that strong majorities of Americans favor more production of oil and natural gas here at home. Both Gallup and Rasmussen have new polls showing Americans support construction of the Keystone XL pipeline, which would bring up to 830,000 barrels of oil per day from neighbor and ally Canada. Another Rasmussen survey indicates 2-1 support for developing energy from shale via hydraulic fracturing.

Then there was a Pew Research Center poll that suggests the reason for the findings in the others. Pew found that as gasoline prices rise, so does Americans’ interest in greater oil and natural gas production.

A Harris Interactive poll ties things together: It found 76 percent of voters nationwide believe higher taxes on the country’s energy producers could cost them more at the gas pump – which the Congressional Research Service substantiated in a report last year.

Americans’ reaction to increasing fuel costs – driven higher by the rising cost of crude on the global market – is understandable. They’re saying let’s have policies and strategies that could put downward pressure on crude supply as opposed to policies that would make energy producers’ operations costlier – potentially reducing exploration, development and production while elevating prices.

Thus, a Senate debate that supporters of more oil and natural gas production are eager for the American people to see and hear.

View the original article here