Embattled Marathon Petroleum Corp. Chairman and CEO Gary Heminger fired back at critics Sept. 27, accusing former Andeavor board members of "grossly misleading" comments in a letter demanding he step down.
In a Sept. 26 letter, Paul Foster and Jeff Stevens, who hold approximately 1.7% of Marathon's outstanding stock, said Heminger had attempted to short-circuit their efforts for a dialogue on how to maximize shareholder value. The two men added their support to the Elliott Management Corp. proposal to split Marathon into three companies, which it said would create $39 billion in value.
"We believe Marathon has the best assets in the industry and, if managed correctly, they should yield the best returns to stockholders," the shareholders said in the letter, addressed to Heminger and Marathon's board. "Our recent experience trying to interact with Marathon's lead independent director and your insistence on being present at any such meeting demonstrates a stunning disregard for sound corporate governance."
Heminger shot back by midday Sept. 27, with a letter addressed to company employees. "You should know that the board and I are committed to doing the right thing for this company and its shareholders. While we know that we have work to do, we believe the letter is grossly misleading and it contains a number of significant inaccuracies," Heminger said.
The Marathon CEO said claims he and board members refused to meet with Foster and Stevens were false and that he had met with both of them in early August. A follow-up meeting scheduled for Sept. 30, he said, has already been canceled by the two men. Marathon acquired Andeavor for more than $23 billion last year, creating the nation's largest refiner.
"They did not respond to our offers to reschedule," Heminger said. "Our board and management team puts high value on shareholder engagement and constructive dialogue, which is why we are disappointed the letter is so misleading on this point."
Claims that Marathon has failed to capture synergies after acquiring Andeavor last year, he said, were also false. Heminger pointed to the company's second-quarter earnings call, where he said they had already achieved roughly $400 million in synergies with more to come.
"We … are well on track to achieve our target of up to $600 million of annual gross run-rate synergies by year-end 2019, and $1.4 billion by the end of 2021 — a 40 percent increase from our original estimate when our combination with Andeavor was announced," he said.
Heminger said he and the company's board are focused on increasing shareholder value.
"It is unfortunate that last night's letter paints a distorted picture of MPC and the efforts we collectively have taken to put the company on a good track for the future," he said. "We look forward to an open dialogue with our shareholders and to communicating forthrightly with all of our stakeholders as appropriate, including all of you."
