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Big Story 10

CVR Energy questions compensation of Delek chief executive

(Reuters) - U.S. refiner CVR Energy Inc, controlled by Carl Icahn, questioned the compensation of the chief executive of peer refiner Delek U.S. Holdings Inc as it seeks to add three new directors to Delek’s board, according to a letter filed by CVR Chief Executive David Lamp with the U.S. Securities and Exchange Commission.

Lamp specifically questioned the 5% general partnership interest Uzi Yemin held in Delek Logistics Partners that was bought out in 2020 for $21.4 million by Delek U.S. Holdings.

“For reasons that are not readily apparent, Mr. Yemin was also given a highly lucrative ownership interest in Logistics, despite the obvious conflicts of interest that presented,” Lamp wrote.

Delek said in a statement that it would respond to the letter in due course, adding that the company thinks CVR’s activism campaign “is not in the best interests of Delek shareholders”.

Lamp is seeking access to more detailed documentation to determine if Yemin breached his fiduciary duties, he wrote.

In January, CVR pressured Delek to divest its convenience store locations and shut down its refineries in Krotz Springs, Louisiana, and El Dorado, Arkansas, and potentially convert them to terminals or for renewable diesel production.

“CVR’s previous letter demanded that Delek take a number of actions that would benefit CVR, to the detriment of Delek and its shareholders,” Delek said in a statement, adding that the company’s strategy resulted in shareholder return of more than 92% over the past five years, significantly higher than its peers.

Delek Logistics Partners was formed by Delek US Holdings to own, operate, acquire and construct crude oil and refined products logistics and marketing assets, according to the company’s website.

Reporting by Laura Sanicola in New York; Editing by Steve Orlofskyd, Matthew Lewis and Jonathan Oatis

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