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Investing.com -- Parkland Fuel Corporation (TSX:PKI) announced today that Chief Executive Officer Bob Espey will resign from his role. The decision comes as the fuel distributor faces increasing pressure from its largest shareholder, Simpson Oil, to implement major changes to its business and governance. Espey has been at the helm of the company since 2011.
Espey stated that his decision to step down might help resolve the ongoing situation with Simpson Oil Limited and benefit all shareholders. He will continue to support a smooth transition to new leadership and work closely with Jennings in his new role as Executive Chair.
Parkland’s Board of Directors has formed a CEO search committee, consisting of independent directors, to conduct an extensive executive search for Espey’s replacement. Espey will remain in his position until a new CEO is appointed, the strategic review is completed, or until December 31, 2025, whichever comes first.
This comes after Simpson Oil, the largest shareholder of Parkland, holding 19.8% of the outstanding common shares, outlined a plan yesterday to restore performance, accountability, and long-term value at Parkland. Simpson Oil expressed concerns about the company’s missed guidance and consensus, significant management churn, rising expenses, and flawed M&A strategy under Espey’s leadership.
In the fourth quarter of 2024, Parkland reported disappointing results, posting an earnings per share (EPS) of $0.57, lower than analyst expectations of $0.68. The company also reported revenue of $6.73 billion on the quarter, well below consensus estimates of $7.64 billion.
Simpson Oil proposed a plan to revitalize the management team, refocus Parkland on its core strengths, restore transparency and accountability, and continue a strategic review process led by a refreshed Board. The plan includes the nomination of nine director candidates to Parkland’s Board at the upcoming Annual Meeting of Shareholders on May 6, 2025.
The nominees include Monty Baker, Michael Christiansen, Mark Davis, Jackie Doak, Chris Folan, Brian Gibson, Marc Halley, Darcy Morris, and Karen Stuckey. Shareholders will have to choose between the Simpson Oil nominees and the current Board at the upcoming Annual Meeting.
Shares in Parkland have ticked down 2% on the day since the news, as investors gauge the company’s future under new management.