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U.S. energy major, Hess Corporation (HES - Analyst Report) announced the imminent separation of the two key management posts of chairman and chief executive officer, immediately straight away after its Annual Meeting scheduled on May 16. As of now, John Hess is serving as both the chairman and chief executive officer of the company. The move comes from the company’s focused approach to avert hedge fund Elliott Management Corporation’s continued pressure about the future direction of the company.

Hess remains focused on continuing its transition from an integrated oil and gas company to a predominantly exploration and production (E&P) entity. To keep the rein of the company in its own hands, the company has put forward the candidature of a former vice chairman of General Electric Company (GE - Analyst Report) – John Krenicki – for the newly created post of non-executive chairman. This tactical move is aimed at keeping John Hess as the chief executive officer.

After acquiring a 4.5% stake in Hess, Elliott Management has recently been seeking to elect five of its own directors to the Hess board. The Elliot game plan is in sharp contrast to Hess’s objective of shifting its growth approach from a high-impact exploration to lower-risk unconventionals and a smaller, more focused exploration portfolio.

The company is of the opinion that Elliott Management is moving ahead with its own plan of action without even making an effort to learn about Hess. The company is of the viewpoint that the Elliott directors are being compensated directly by the hedge fund through an unusual contingent payment scheme that incentivizes them to support a short-term break-up plan that will effectively liquidate Hess.

Elliott Management is proactive in playing its role of an activist investor. Recently the hedge fund, which oversees $21 billion in assets, was helping Stan Lee Media in its wrangle with The Walt Disney Company (DIS - Analyst Report). The tussle was over the ownership rights of the Stan Lee-created superheroes like Spider-Man, X-Men, The Incredible Hulk and The Fantastic Four.

Hess is an integrated energy company engaged in oil and gas E&P and refining as well as marketing. The company’s E&P activities are concentrated in Algeria, Australia, Azerbaijan, Brazil, Denmark, Egypt, Equatorial Guinea, Gabon, Ghana, Indonesia, Libya, Malaysia, Norway, Russia, Thailand, the United Kingdom and the United States. As of year-end 2012, Hess’ proved reserves tally stood at 1.55 billion oil-equivalent barrels, while the company replaced 141% of its production, resulting in a reserve life of 10.3 years.

Hess carries a Zacks Rank #3, which is equivalent to a short-term Hold rating. However, the Zacks Ranked #1 stock of SM Energy Company (SM - Analyst Report) is expected to outperform the market over the next few months.

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