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Marathon Petroleum Reaches Elliott Accord Amid CEO Search


By Melodie Warner and Scott Deveau

(Bloomberg) Marathon Petroleum Corp. entered into a cooperation agreement with activist investor Elliott Management Corp. as its continues to look for a replacement for Gary Heminger, the U.S. oil refiner’s outgoing chief executive officer.

Elliott will support the slate of directors proposed at next year’s meeting of Marathon shareholders, according to a filing. The slate will include veteran energy executive Jonathan Z. Cohen to the board, who was nominated and appointed to the board Monday, replacing Greg Goff, who’s retiring.

Marathon capitulated in late October to pressure from Elliott and other shareholders to split up the company. Findlay, Ohio-based Marathon plans spin off its Speedway retail fuel-station segment as well as review its pipeline business, while Heminger has agreed to retire.

Elliott isn’t happy with the stock’s decline since then and wants to provide some assurance to the market that progress is still being made at Marathon, according to people familiar with the situation. Cohen will sit on the special board committee overseeing the CEO search and another committee that’s evaluating options for Marathon’s pipeline unit.

Marathon said in a separate statement it expects to provide an update on the work of its special midstream committee in the first quarter, and is targeting the completion of the Speedway spinoff in the fourth quarter of next year.

As part of the cooperation agreement, Marathon agreed to propose ending the classified structure of its board, meaning directors would be elected at each annual shareholder meeting. The accord also includes standstill restrictions: While Elliott can continue to criticize Marathon publicly, it’s prevented from soliciting investor support for a proxy battle.

Marathon rose 3.7% to $60.77 at 12:16 p.m. in New York trading. Elliott has a 1.3% stake in Marathon, according to a Sept. 30 filing.



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