HOUSTON â€" The Hess Corporation reached an accord on Thursday with Elliott Management, the activist hedge fund seeking to claim a significant portion of its board, ending a bitter fight just hours before Hess’s annual shareholder meeting.
Under the terms of the settlement, Elliott Management will back Hess’ slate of five nominees, all of whom are new and independent of management. In return, Hess will seat three of the hedge fund’s candidates shortly after the meeting.
“We are pleased to reach an agreement that we believe is in the best interests of Hess shareholders, and we welcome each of our new directors,†Mr. Hess said in a statement.
The pact ends one of the bigger corporate governance fights of the year, as activist investors grow increasingly bolder in seeking out ever-larger targets.
Elliott had argued that years of indiscipline and lack of board accountability at Hess had left the company’s stock price badly trailing its peers. The oil driller announced plans to shed noncore businesses, like its famous white-and-green gas stations, even as it countered that an already-planned transformation effort was beginning to bear fruit.
Thursday’s settlement will go hand in hand with other moves that will further shake up Hess’ board. The roles of chairman and chief executive â€" both currently held by John Hess, the son of the company’s founder â€" will be split. And the Hess family will recommend that the entire board come up for election every year instead of every three years.
The agreement was reached late Wednesday night, after a few phone calls between the two sides in recent days, according to a person briefed on the matter. Hess and its advisers heard from a number of large shareholders who expressed support for the company’s slate, but also wanted to seat at least some of Elliott’s nominees.
Elliott had held a lead in the voting heading into the meeting, people briefed on the results have said previously.
“We are pleased to welcome a highly qualified and refreshed board at Hess,†John Pike, a senior portfolio manager at the hedge fund, said in a statement.
