It’s getting personal now between Delek US Holdings and Carl Icahn.
CVR Energy, an oil refiner majority-owned by Icahn Enterprises, in January said it wants Brentwood-based Delek to make some serious changes to its strategies and its governance practices. In early February, the Texas-based company put forward candidates for three board seats.
On Monday, it took aim at Chairman and CEO Uzi Yemin.
In a sharp letter, CVR President and CEO David Lamp took the Delek board to task for its approach to compensating Yemin over the better part of the past decade. Calling the board “supine,” Lamp particularly called out the payments Yemin received as a minority owner of Delek Logistics until the company bought out his 5 percent stake last year for more than $21 million. (Yemin’s stake was 1 percent when Delek Logistics was spun out a decade ago but grew in size per the parties’ contract.) But he also took note of Yemin’s $6.7 million average pay package over the past seven years.
“All of this raises severe questions both as to whether the company’s board of directors and Mr. Yemin have been acting in a manner consistent with their fiduciary duties and whether the current directors are competent or even knew what Mr. Yemin’s total compensation was during these years,” Lamp wrote. “The days of Mr. Yemin’s ability to take what he wants, however, are over.”
Lamp’s letter also asked for more information about Delek’s pay practices and said CVR may file suit if it find what it thinks are fiduciary breaches.
In a brief response, Delek officials said they will review CVR’s request for records and other information and respond in due course. But the local company also fired back more than it did against CVR’s previous calls.
“CVR has launched its activism campaign and proxy fight to drive its agenda — which we believe is not in the best interests of Delek shareholders,” the company said. “Indeed, CVR's previous letter demanded that Delek take a number of actions that would benefit CVR, to the detriment of Delek and its shareholders. The successful execution of Delek's long-term strategy has clearly delivered value for our shareholders, demonstrated by a five-year total shareholder return of +92% in comparison to +28% for the average of our peers, including CVR, over the same period.”
Shares of Delek (Ticker: DK) fell nearly 3 percent to $23.88 Monday, a day that saw sizable gains across the market. They are still up more than 50 percent year to date.