Marathon Petroleum Corp. shareholders Paul Foster and Jeff Stevens stood their ground on calls for CEO and Chairman Gary Heminger to step down, citing "overwhelming support" from discussions with around 100 shareholders.
Foster and Stevens said their fellow shareholders support efforts to improve corporate governance and transparency, as well as Elliott Management Corp.'s proposal to split Marathon into three independent companies, according to an Oct. 24 letter to Marathon shareholders.
"What is more telling, however, is that we have found there is overwhelming support for our calls to have Gary Heminger resign immediately from his chairman and chief executive roles," the activist investors said in the letter.
Foster and Stevens said the shareholders they talked to represent nearly half of the institutional base.
The former Andeavor board members also recommended that the board form a special committee, composed of independent directors, to seek the best candidates for the CEO and chairman positions. Both shareholders said they are willing to assist the committee in its search.
Foster and Stevens control around 1.7% of Marathon and were both former board members of Andeavor, which was acquired by Marathon for $23.3 billion last year.
Marathon board members reportedly met with activist investors, including Foster, Stevens and Elliott Management, on Oct. 16 and 17 about Heminger's future and the company's strategy.
Marathon lead director James Rohr earlier said the entire board backs Heminger as CEO and Chairman, given "his track record of delivering value to shareholders and all of the company's constituencies." Marathon Executive Vice Chairman Greg Goff, who is being seen as the potential replacement of Heminger, had also said he supports the current leadership.
In an emailed statement, Marathon expressed disappointment in Foster and Stevens' "misleading comments about [Marathon] as part of a public campaign to further their own objectives, including their prior false statements about the company's engagement with them."
"We value dialogue with our shareholders and have talked with many investors in recent weeks, including Foster and Stevens, to hear their feedback — Foster and Stevens' claims about the level of shareholder support for the company and management are inconsistent with our conversations with shareholders," Marathon said.
"As we have said publicly, the company is conducting a comprehensive strategic review. The review is ongoing and no conclusions have been reached," Marathon said. The board also reiterated its full support for Heminger.