Parkland’s largest shareholder Simpson Oil Ltd. sent a letter to fellow shareholders nominating nine nominees to Parkland’s board of directors. It also listed priorities for a newly appointed board. First on the list: Begin the process of recruiting a new CEO to replace Bob Espey, who has led the fuel marketer and convenience retailer for 14 years.
The letter, dated Monday, is the latest in a series of back-and-forth criticisms and suggestions for change between Parkland and Simpson Oil. In early March, Calgary, Alberta-based Parkland said it was undergoing a strategic review of the company, which included considering a sale, to identify opportunities to maximize value for all shareholders. Simpson Oil had called for a strategic review in April 2024.
Simpson Oil holds 19.8% of Parkland’s outstanding common shares, and it has been Parkland’s largest shareholder since 2019.
The elements of Parkland that attracted Simson Oil in 2019 have been “mismanaged out of existence,” the company said. Parkland is plagued by financial underperformance, significant management churn, a strategy that ignores the company’s competitive advantages, a misguided capital allocation plan, excessive overhead costs and a lack of accountability, Simpson Oil said.
“There is a fundamental obstacle to addressing these problems: Parkland’s entrenched leadership, which consistently prioritizes management interests over those of shareholders,” Simpson Oil wrote in its letter Monday.
To address this, a “wholesale board change” is needed, Simpson Oil said. That’s why ahead of Parkland's annual general meeting of shareholders on May 6, it is nominating nine independent directors. Those directors are Monty Baker, retired partner, PWC; Michael Christiansen, investment manager, The Simpson Group; Mark Davis, former president and CEO, Chemtrade Logistics Income Fund; Jackie Doak, director, Dart Family Office; Chris Folan, former managing director, global investment banking, CIBC Capital Markets; Brian Gibson, corporate director and investment consultant; Marc Halley, investment manager, The Simpson Group; Darcy Morris, co-founder and CEO, Ewing Morris & Co. Investment Partners; and Karen Stuckey, principal, Askher Consulting.
Christiansen and Halley were previously on the board of directors but left in January 2024.
Simpson Oil said the newly appointed board’s first priority should be to “immediately begin the process of recruiting a new CEO that has deep industry knowledge, global business experience, operational excellence and first-class team-building capabilities.”
It said Espey has exceeded the median CEO tenure of about five years. “It is time for him to go,” Simpson Oil said.
Other priorities include the strategic allocation of capital, adding transparency and focusing on the highest profit core value chain.
Parkland’s Response
Parkland said it received notice on Friday of Simpson Oil’s intention to nominate nine directors at the annual general meeting of shareholders.
“This is a self-interested attempt by Simpson, a minority shareholder, to seize full control of Parkland without paying a control premium,” Parkland said in statement on its website.
Parkland said it is disappointing that Simpson has chosen this “adversarial approach, despite Parkland’s board and management’s repeated, good faith efforts, to engage constructively and reach a resolution that appropriately recognizes their minority shareholding.”
“Many members of the Simpson slate lack credibility and relevant experience to meet the standards required to govern a public company of Parkland’s scale and complexity,” said Michael Jennings, chair of Parkland’s board. “However, in the interest of resolution and collaboration with Simpson, Parkland has selected three of Simpson’s nominees who meet Parkland’s governance standards and propose to include one of the Simpson nominees on the special committee overseeing the strategic review. Simpson nominees Brian Gibson and Karen Stuckey bring skills that are expected to be additive to our board. Michael Christiansen brings valuable perspective, as he works for Simpson directly and was previously a nominee of Simpson on the Parkland board.
“We are committed to maximizing value for all shareholders. We are confident that Parkland’s proposed board, including three of Simpson’s nominees, is the best choice to oversee the strategic review process, protect the interest of all shareholders and find a resolution with Simpson while ensuring day-to-day operations remain on track,” Jennings said.
Parkland Corp. is No. 38 on CSP’s 2024 Top 202 ranking of U.S. convenience-store chains by store count.
Parkland’s nominees for election at the upcoming shareholder meeting are Felipe Bayon, Nora Duke, Espey, Sue Gove, Tim Hogarth, Richard Hookway, Angela John, Jennings, James Neate, Mariame McIntosh Robinson, Stuckey, Brian Gibson and Christiansen.
Parkland’s board is proposing a slate of 13 directors. As part of the board’s ongoing refreshment of longer-tenured directors, it expects to reduce the size of its membership to 11 before the 2026 general meeting of shareholders, Parkland said.
Parkland also appointed Brad Monaco as permanent CFO of the company, effective immediately. Monaco has held progressively senior leadership roles within Parkland’s capital markets and Canadian business segment and has served as interim CFO since Jan. 1. Marcel Teunissen, Parkland’s former CFO, transitioned to the role of president, North American, on Jan. 1.
Parkland is an international fuel distributor, marketer and convenience retailer with operations in 26 countries across the Americas. It has more than 4,000 retail and commercial locations across Canada, the United States and the Caribbean region. This includes about 210 company-operated c-stores in the United States, under brands including On the Run. In September, Parkland said it would sell its struggling Florida retail and commercial businesses.
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