Hess agrees to replace some directors amid investor pressure

Hess Corp., which is under fire from a dissident shareholder group, has agreed to replace some of its longest-serving board members.

Investors led by Elliott Associates have accused chief executive John Hess of stacking the board with cronies, some of whom had served as directors for almost three decades.

Hess shares rose $2.74, or more than 4 percent, to $69.28 this afternoon.

Hess announced six new independent director nominees, four of whom are former senior executives with big oil companies — John Krenicki, former chief executive of GE Energy; Kevin Meyers, former senior vice president of ConocoPhillips; William Schrader, former chief operator officer of TNK-BP, the former Russian joint venture of BP; and Mark Williams, former executive committee member for Royal Dutch Shell.

The company said it also plans to continue with the sales of its refining and marketing operations to focus on exploration. Hess has prime properties in the Bakken shale formation of North Dakota as well as lucrative international holdings.

Not surprisingly, Elliott fired off a letter saying “while motivated by Elliott’s plan, Hess’s proposal falls dramatically short of what is needed.” Elliott contends that given the strength of Hess’s assets, the company’s shares should be trading at about $126 a share instead of its current price.

Elliott, which owns about 4 percent of Hess shares, has proposed its own slate of directors, several of which also have  executive experience at energy companies.

As the battle has unfolded in recent weeks, Hess shares have risen and shareholders could reap even more benefits as the dispute continues.