By LOU WILIN
STAFF WRITER
Marathon Petroleum Corp. announced Monday that it has entered into an agreement with its most vocal critic and shareholder, hedge fund Elliott Management.
As part of the agreement, Marathon Petroleum on Monday appointed energy industry veteran Jonathan Z. Cohen to its board of directors. Cohen will fill the seat of retiring executive and board member Greg Goff.
Cohen, a founder and executive of multiple energy-related businesses, will help Marathon Petroleum chart a new future, said Elliott Management, of New York, and Marathon Petroleum officials.
Elliott and other outspoken shareholders in October prevailed on Marathon to agree to split the company to boost stock prices.
Marathon Petroleum will spin off Speedway, possibly by fall 2020. Marathon also has formed a special committee of its board of directors to evaluate options for its subsidiary MPLX. The logistics, storage and natural gas processing subsidiary, has been criticized by investors for having underpriced equity units. Cohen will serve on the committee to study options to boost MPLX’s unit prices.
Cohen was co-founder and vice chairman of Atlas Energy; co-founder of Atlas Pipeline Partners and Arc Logistics Partners.
Cohen also will serve on a special committee overseeing a search for a successor to Heminger as chief executive officer. Heminger last October announced that he will retire in spring 2020.
Elliott applauded Cohen’s appointment to the positions.
“Jonathan will be a positive addition to the (Marathon) board and the special committees given his extensive energy experience and financial expertise,” said Elliott’s Senior Portfolio Manager John Pike and Associate Portfolio Manager Phillip Zeigler. “We look forward to the continued progress of the company’s ongoing strategic initiatives and think Jonathan will add a valuable perspective to those efforts.”
Elliott three years ago called for Marathon Petroleum to split itself into three separate companies and make other moves to boost stock prices. Marathon, agreeing its stock was underpriced at the time, made several moves to boost it. But it disagreed with the recommendation to split itself. In fact, within two years, it bought western rival Andeavor for $23.3 billion in October 2018. Andeavor, like Marathon Petroleum, was an “integrated” company, with refining, retail and pipeline operations.
So, earlier this year — just months after Marathon’s big purchase — Elliott returned with a larger chorus of critical voices. It said Marathon had recommitted to its “failed conglomerate model” when it should have been simplifying it corporate structure.
On Oct. 31, Marathon announced its willingness to split itself. Heminger announced his retirement plans the same day.
Cohen currently serves as chairman of the board of directors of Falcon Minerals Corp. and previously served on the board of directors of Energen Corp. He received a bachelor’s degree from the University of Pennsylvania and a law degree from American University.
“We are pleased to welcome Jonathan to the MPC board,” Heminger said. “We look forward to his contributions as we continue executing on our strategic initiatives.”
In addition, Marathon Petroleum announced Monday it agreed to the addition of an independent advisor to serve in a non-voting capacity as advisor to the special committee evaluating MPLX options.
Wilin: 419-427-8413 Send an E-mail to Lou Wilin
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