Top Parkland Holder Ups Fight, Seeks CEO Ouster, Board Shakeup

Simpson Oil Ltd. has launched a fight for control at Parkland Corp., which includes overhauling the gas station chain’s board and ousting long-serving Chief Executive Officer Bob Espey, aiming to fix what the investment firm calls a “chronic underperformance.”

In a letter sent to fellow shareholders reviewed by Bloomberg News, Simpson Oil — which holds a 19.8% stake — blamed Parkland’s board and management for a “deeply flawed capital allocation strategy,” amid a “strategy that ignores the company’s competitive advantages,” marking a sharp escalation in a dispute that has simmered for more than a year.

Parkland didn’t immediately reply to requests for comment.

“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 a statement on Monday, responding to a notice received from Simpson Oil that it was putting forward nine new directors ahead of Parkland’s shareholder meeting on May 6. “It is disappointing that Simpson have 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.”

Simpson Oil, which sold its Caribbean fuel business to Parkland in 2019 and became its biggest shareholder, said it had lost faith in the company’s leadership. Since the sale, Parkland’s total shareholder return has lagged peers by more than 95%, the investment firm said. “This is not simply underperformance — it is a failure of leadership and strategic execution,” Simpson Oil wrote.

Board Changes

Among Simpson Oil’s candidates to the board are industry executives and investment professionals, including Monty Baker, a former partner at PwC, Brian Gibson, chair of the Investment Management Corporation of Ontario pension fund and Mark Davis, former CEO of Chemtrade Logistics Inc.

Also nominated is Karen Stuckey, a former Walmart Inc. executive who is a board member at Gildan Activewear Inc., the apparel maker that recently racked up $77 million in costs in a shareholder battle that led to the reinstatement of CEO Glenn Chamandy.

The new board would then launch a global CEO search, review capital allocation policies, slash overhead costs and conduct a “totally unbiased” strategic review, evaluating all possibilities to unlock value, including selling underperforming assets, restructuring core operations, or pursuing a sale of the whole company, Simpson Oil said.

“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,” Michael Jennings, the chair of Parkland’s board, said in the statement Monday.

Still, “in the interest of resolution and collaboration with Simpson,” Parkland has included three of Simpson’s nominees to its 13-person slate, including Gibson and Stuckey. Parkland is also nominating Michael Christiansen, a previous nominee of Simpson on the board.

The Cayman Islands-based firm accused Parkland’s current board of “entrenchment,” pointing to the company’s decision to expand the board to 11 members and dismiss calls for strategic reviews. The shareholder also criticized Parkland’s recent divestitures, such as that of its Florida business and its Canadian propane assets, as “capitulation and divestiture on unfavourable terms after integration failures.”

CEO in the Crosshairs

At the center of the campaign is CEO Espey, who has led Parkland for 14 years. Simpson said Espey’s tenure was marked by missed guidance, failed acquisitions, speculative trading losses and poor succession planning.

“Espey has outstayed his welcome,” Simpson wrote, pointing out that his compensation has increased by 47% since 2019 despite falling margins, surging debt levels and a C$60 million ($42.2 million) trading loss in 2022.

Parkland shares have fallen 24% over 12 months, giving it a market value of C$5.5 billion.

Simpson Oil also alleged that Espey has manipulated the company’s leadership structure to insulate himself, contributing to high executive turnover and a lack of accountability.

The shareholder letter raised concerns about inconsistent financial reporting, opaque segment disclosures and “buried” expenses, asserting that Parkland’s communications obscure its true performance. Simpson Oil pledged to restore transparency and rebuild investor trust.

The boardroom drama comes as Parkland conducts a strategic review launched in early March. The review is being led by a special committee made up entirely of independent directors, the Calgary-based company said. Parkland hired Goldman Sachs Group Inc. and Bank of America Corp. as financial advisers for the review.

Despite the strategic review, Simpson Oil isn’t convinced. Shareholders shouldn’t be “fooled by window dressing,” it said in the letter, urging them to support wholesale governance change.

Simpson Oil had been pushing for a sale since at least April 2024, and recently won a crucial legal battle over shareholder rights and board access that invalidated a 2019 governance agreement restricting its ability to engage in activism.

Parkland, which distributes fuel and convenience store goods across Canada, the US and the Caribbean, made board changes in response to previous shareholder concerns. Felipe Bayon, former CEO of Ecopetrol SA, and Sue Gove, a retail veteran and former chief executive of Bed Bath & Beyond, were named to its board of directors in March. The move followed a campaign by New York-based hedge fund Engine Capital LP, which holds a 2.5% stake, to reconstitute the board and accelerate strategic alternatives, including a potential sale.

“Parkland should not spend additional shareholder capital to resist overdue change. As a long-term investor in Parkland, we believe that the board should work with — instead of against — its largest shareholders to maximize value,” Engine said in a statement at the time.