Bloomberg the Company & Products

Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Hess Says Singer Paying Board to Liquidate Oil Company

Don't Miss Out —
Follow us on:

March 26 (Bloomberg) -- Hess Corp., the New York-based oil company, said shareholder Paul Singer’s Elliott Management Corp. is proposing to pay its board nominees fees to liquidate the company.

“Under this highly unusual scheme, Elliott would control its directors by potentially paying them millions in cash to effectively dismantle Hess,” Chairman and Chief Executive Officer John Hess said in a letter to shareholders today. Hess is fighting Elliott’s proposal to replace five of the company’s 13 board members at a meeting scheduled for May 16.

Elliott, the second-largest Hess shareholder, has said the company should sell assets and bring in new board members after years of “unrelenting underperformance.” Hess has rejected Elliott’s nominees, proposed its own slate of six new board members and announced plans to exit certain businesses as it transforms into an exploration and production company.

Under an agreement with its slate, Elliott will make a one-time $50,000 cash payment to each candidate nominated to the Hess board, according to a March 20 filing with the U.S. Securities and Exchange Commission. The New York-based hedge fund would make additional payments if Hess outperforms peers for three years, according to the document.

“It’s highly unusual to incent directors other than through ownership,” Charles Elson, director of the Center for Corporate Governance at the University of Delaware in Newark, said today in a phone interview. “Specific payments to them by specific shareholders for the achievement of specific goals would align their interest with that particular shareholder’s goals as opposed to the interests of all.”

Nominee Bonuses

Elliott would pay the nominees bonuses of $10,000 for each 1 percent that Hess shares exceed the average total return of peers in the first three years, if any of the candidates makes it onto the board. Members who are appointed or elected to the board will be eligible for another $20,000 for each 1 percent of outperformance.

Hess is making a “false statement” when it says the nominees are being paid to liquidate the company or carry out Elliott’s plans, the fund said in a statement. The payments are “earned in a manner clearly aligned with long-term shareholders’ interests,” Elliott said.

The payments would be capped at $9 million each, a level that would be reached if the company’s performance beat peers by 300 percent, Elliott said. That would mean the shares would have to rise to about $250.

Hess rose 1 percent to $71.11 at the close in New York. The shares have gained 34 percent this year.

To contact the reporter on this story: Jim Polson in New York at

To contact the editor responsible for this story: Susan Warren at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.