Santos CEO Kevin Gallagher’s Mineral Resources move draws rebuke from investor group

Kevin Gallagher’s decision to take up a position on the board of iron ore and lithium producer Mineral Resources has drawn criticism from an activist shareholder group.

Santos managing director Kevin Gallagher has defended taking on a board role at Mineral Resources. Picture: Simon Cross

The appointment of Santos’ boss Kevin Gallagher to the board of iron ore and lithium producer Mineral Resources was slammed by a prominent investor activist, warning the move would distract from its $21bn Oil Search integration and ability to tackle broader climate issues.

Mr Gallagher was named a non-executive director of billionaire Chris Ellison’s MinRes late on Monday, an unexpected appointment just a month after Santos wrapped up its blockbuster merger with rival Oil Search.

The move would annoy Santos shareholders and was inappropriate for a modern CEO, the Australasian Centre for Corporate Responsibility said.

Mineral Resources chief executive Chris Ellison. Picture: Colin Murty / The Australian

“Santos shareholders expect Gallagher to be entirely focused on the integration with Oil Search, and the acute risks posed by the energy transition. Santos shareholders will be asking why the Santos board approved this appointment and what are Gallagher’s intentions,” said ACCR climate and environment director, Dan Gocher.

“The Santos board’s approval of this appointment suggests the board is out of touch and has failed to comprehend investors‘ expectations of modern CEOs. It’s very unusual for the CEOs of ASX-listed companies to maintain non-executive director roles at other companies.”

However, Mr Gallagher hit back at the criticism and said he was committed to Santos until at least 2025.

“I remain fully committed to leading Santos successfully out until the end of 2025 and I am passionate about continuing to drive the delivery of our growth strategy, the transition to a leading clean fuels business and the achievement of our net-zero emissions target,” Mr Gallagher said in a statement.

“I have very few external commitments outside my Santos role and I am confident there will be no conflict on my time through taking up this non-executive role.”

Santos was sued by the ACCR over its clean energy claims last year but the legal claim has yet to be heard in court.

A deal was arranged last year which will see Mr Gallagher receive a $6m “once-off growth projects incentive” to deliver the oil and gas giant’s major projects to 2025, in a move that was designed to keep him out of the race for Woodside’s top job.

Originally published as Santos CEO Kevin Gallagher’s Mineral Resources move draws rebuke from investor group