Opinion: Activist fund Elliott Investment Management takes aim at Suncor’s safety record

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Activist fund Elliott Investment Management takes aim at Suncor’s safety record

board of directors is making it easy for activist Elliott Investment Management LP to win support for a shakeup at one of Canada’s largest energy companies.

Ahead of Suncor’s 2020 annual meeting last May, Royal London Asset Management, which invests a total of £159-billion The board said the right things. In the proxy circular explaining the logic behind 2021 executive compensation, the directors said: “Safety is, and always has been, a core value for Suncor.” The directors also said: “We suffered some operating setbacks and recognize that we must do better.”This year, Mr. Little’s package includes a $1.96-million cash bonus that is 127 per cent of his target payment. In other words, the board signalled the CEO exceeded expectations. Mr.

“Due to operational and safety issues, Suncor’s former premium valuation has given way to a deep discount,” said Elliott in a 45-slide presentation that detailed plans for each arm of the company. Across industries – from oil to logging, autos or construction – there’s a direct link between worker safety and financial performance.

Suncor’s stock price, which has underperformed peers since 2020, soared on news of the activist’s arrival. Last week, equity traders said long-term Suncor investors held on to their stakes, anticipating Elliott will succeed in improving performance, while hedge funds piled in, planning to ride the activist’s coattails.

Will Elliott’s campaign to renew Suncor’s board succeed? Consider what happened back in 2011, when activist investor Bill Ackman’s Pershing Square Capital Management rode into Calgary, pushing for a revamped board and new CEO at a flagship company, Canadian Pacific Railway Ltd.

 

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