Thread regarding Hess Corp. layoffs

Another Proxy Fight?

It's been reported that Elliott Management is getting geared up for another proxy fight with Hess with the intent of ousting the CEO. Elliott also wants a cut in dividend, increase share buyback, sell Malaysia assets, and possible sale of the company. Although I am not a fan of activist investors, Elliott has a point in shaking up the management at Hess. It is not just the CEO but the President also needs to go. These two individuals at the top have made decisions in the last few years that have led to tremendous value destruction at Hess. Look at the value lost in Marcellus, Utica, Eagle Ford, Australia, China, Indonesia, and the list goes on. One bright spot for Hess is Guyana but that is contingent on project staying within budget and no major political road blocks. Instead of selling money producing assets this year, Hess would have been better off giving up 5% of Guyana to bring in another partner to share in its development costs.

Now back to Elliott's suggestions. Dividend cut is always a death wish for the stock price so I don't know where that's coming from. Share buyback gives a temporary boost to the stock price but a good number of shares brought back to the treasury are handed out to upper management as stock awards. Management never looses. When commodity prices are up, the company does well

and they get rewarded handsomely. When commodity prices are down, the company does poorly, but the management gets rewarded for having the foresight to restructure the organization (layoffs). Elliott does have a point in finding a buyer for Hess. While Guyana is hot and Bakken not so bad, Hess may be able to fetch a good price. If something goes wrong with Guyana (God forbid another Macondo or a political event ), shareholders are screwed.

| 3511 views | | 4 replies (last January 4, 2018)
Post ID: @OP+QYJBamG

4 replies (most recent on top)

How exactly is Elliot the investment geniuses? The great idea of unlocking value by selling refineries and stations? Innovative, breakthrough thinking done at multiple E&P companies back in 2010-2012 timeframe when oil soared. Fast forward couple of years and the integrated companies with diversified assets managed better while the spin-off refineries soared when at same time layoffs at parent E&P's to weather the storm.

Seriously Elliot jokers are the experts?

Greg Hill and the other Aera expertise joke, is the earlier sad story edition that led to Elliot coming over to teach us supposedly what to do (since the guy on the helm was kindergarten material with his three-stool strategy).

I still think highly and respect John Hess. Made a mistake on his CEO pick. After that his hands were tied to make a change with Greg early enough since it seems Elliot got in the mix and impossible to send home the CEO when an outside hedge fund was first making noise back in 2012.

Post ID: @6bop+QYJBamG

It is easy to blame a lower level employee, especially if you hold a grudge against him. But your ire should be directed at the people who signed off on these and other money loosing deals. They are the ones getting paid millions for being "so smart". According to Morning Star, John Hess' total compensation for 2012-2016 added up to over $76 million while Greg Hill's amounted to over $39 million. You tell me if the company is better off today than it was in 2011/2012. Elliott Management is right to shake up things at the top at Hess Corp. The irony is that if Elliott can find a buyer for Hess, the Upper Management will walk with millions because they probably have themselves covered with "change of control" provisions in their contracts, and other employees will suffer.

Post ID: @6pzc+QYJBamG

No one wants to mention the lack of profits coming from the Gulf? Dollar General operator, trying to be Wal-Mart. Ops Of The Future. What a complete joke!

Post ID: @1fuu+QYJBamG

Having Elliott as an activist investor will be the death of the company . Just look at their previous disasters for the employees like Citrix, Dell, EMC and the list goes on

Post ID: @hhl+QYJBamG

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