A former American executive from Exxon Mobil Corp. will succeed Mark Little at the reins of Suncor Energy Inc., ending a seven-month long search amid pressure from shareholders urging an overhaul in leadership.

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Suncor names former Imperial chief Rich Kruger as new CEO amid shareholder pressure Back to video

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The oilsand company’s board of directors unanimously selected Rich Kruger to be Suncor’s next chief executive, starting April 3, the company said in a release. Interim CEO Kris Smith will assume the role of chief financial officer and executive vice-president of corporate development and current CFO, Alister Cowan, will retire at the end of the year.

A nearly 40-year veteran of Exxon Mobil, Kruger retired from Imperial Oil Ltd. — which is majority owned by Exxon — in 2019 after serving as chief executive for six years. He takes the helm at Suncor at a critical moment for the company as it tries to turn the page on a period dogged by safety problems and missed production targets.

Suncor launched its search for a new CEO in July after Little resigned on the heels of a series of workplace deaths and production misses that had frustrated some shareholders, including activist U.S. investor Elliott Investment Management LP.

The Wall Street firm began an aggressive push for change at the company in April and was perceived to be a driving force behind Little’s ejection. Elliott had publicly blamed Suncor’s problems on the “slow-moving, overly bureaucratic corporate culture” under Little — and the investment firm was believed to be agitating for an outsider to take the helm.

Suncor’s choice in appointment appears to have satisfied Elliott’s brief, according to a source familiar with the U.S. hedge fund.

“Elliott is pleased the board went with an external CEO candidate, which is what they believe the company needs in order to achieve the necessary safety and operational improvements,” the source said, adding the investment firm hopes to see the new CEO delivering on a “new culture” at Suncor focused on safety, operational efficiency and overall better performance.

Still, the appointment came as a surprise to some in the investment community who thought until recently that Smith was likely to be tapped as CEO.

“It was unexpected. I hadn’t heard (Kruger’s) name thrown out there by anybody as a potential candidate,” said Eight Capital analyst Phil Skolnick.

“I think, from Elliott, the pressure was to get an outsider, so I think that’s why an outsider happened.”

But despite his outsider credentials, Kruger also brings significant oilsands experience — and familiarity with Suncor — since Imperial is a joint owner in oilsands company Syncrude Canada Ltd. alongside Suncor, China Petrochemical Corp. and China National Offshore Oil Corp.

“I do see it as positive,” Skolnick said. “He worked at ExxonMobil for almost 40 years and led Imperial through some challenges at their Kearl mining project. Suncor and Imperial are pretty similar in many ways. They both have retail, refineries and then oilsands projects, mining and in-situ, and they’re partners in Syncrude together.”

Analysts have also pointed out Suncor’s announcement still clears a potential path for Smith’s succession in the future. Smith won’t be returning to his former post as executive vice-president of downstream, but instead will take over as CFO amid praise for his efforts in getting company performance back on track as interim CEO.

Under Smith, Suncor augmented its stake in its troubled Fort Hills’ oilsands project and announced a multi-year strategy aimed at improving safety and reliability at the open-pit truck and shovel mine in northern Alberta.

“We are pleased that Kris Smith will remain in a leadership role with Suncor — which also lays a clear CEO succession path in our minds,” said RBC Capital Markets analyst Greg Pardy in a note.

Following a transition period, Smith is expected to assume the role of CFO and executive vice-president of corporate development on May 9.

“I would also like to thank Kris for his tremendous leadership through this interim period,” Suncor board chair Mike Wilson said in a statement. “He took decisive action to drive necessary improvements in Suncor’s performance. The Board is confident that Kris will continue to provide Suncor with strong leadership as CFO and head of Corporate Development while working closely with Rich in moving Suncor forward. Not only does he have strategic vision, a deep understanding of the business and uncompromising integrity, but Kris also brings strong financial acumen and commercial experience to his new role.”

• Email: mpotkins@postmedia.com | Twitter: mpotkins