Hess Corporation HES
The three reasons
- 1
Hess has underperformed every relevant peer over every time frame of John Hess's 17-year CEO tenure
- 2
Woefully flawed capital allocation: $4bn destroyed in exploration, $6.7bn lost in hedging (9% of E&P revenues)
- 3
Six failed restructurings and a culture of denial; only externally-imposed board change can fix entrenched problems
Primary demands
- Elect Elliott's five shareholder nominees (Golub, Kurz, Smith, McManus, Chase) to the Hess board at the 2013 AGM
- Reassess and focus the portfolio by divesting non-core international operations (spin off Hess International)
- Instill capital discipline: halt wasteful exploration, exit proprietary trading/HETCO, return more cash to shareholders
- Restore accountability: de-stagger the board, separate Chairman/CEO, reset governance culture
- Execute an effective, credible restructuring rather than the seventh failed 'transformation'
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Notable slides (12)
Notes
161-page proxy-fight deck released ~mid-April 2013 (data cutoff 4/12/2013; exact day not printed, so presentation_date left null). Companion URL www.ReassessHess.com. Notable rhetorical craftsmanship: (1) Elliott co-opts Hess's own green corporate branding and logo on every page — the deck visually reads as a Hess document arguing against Hess management. (2) Recurring six-pillar skeleton slide ('Unrelenting Underperformance / Lack of Focus / Undisciplined Capital Allocation / Operational Mismanagement / Endless Ineffective Restructurings / Abysmal Governance Culture') serves as navigation, with a red box highlighting the current chapter; then mirrored later as 'Deny Stock Performance / Deny Lack of Focus / ...' to frame the 'culture of denial'. (3) Heavy weaponization of CEO quote contradictions — e.g., 'You can't judge us on a one-year basis' paired with 'Since July 24, 2012 [six-month] Hess shares have increased'. (4) Explicit before/after via a red trendline (47% underperformance / $9.4bn foregone market cap under 17-year tenure) vs a tiny green recovery (5% outperformance since Elliott involvement). Campaign phase = proxy_fight: Elliott filed a definitive proxy April 3, 2013 nominating five directors (Golub, Kurz, Smith, McManus, Chase) for the 2013 AGM. This follows Elliott's earlier 'Perspectives on Hess' deck, so it is a follow-up in the broader campaign, but within the activism framework proxy_fight is more specific and accurate. Valuation framing uses peer-multiple benchmarking and a Hess-International vs Hess-US implicit sum-of-parts (JP Morgan credit analysis reproduced).