News
21/05/25
Phillips 66 shareholders split board vote
Houston, 21 May (Argus) — Activist hedge fund Elliott Investment Management is
set to win two seats on Phillips 66's board of directors, short of its goal of
four seats, according to preliminary results. Two Phillips 66 nominees were also
elected in the vote, a positive result for the US refiner and midstream
operator. Elliott, which has amassed a $2.5bn stake in Phillips 66, had put
forth four nominees for the board in a proxy fight which culminated today at an
annual meeting of shareholders. Both sides declared victory after the split vote
on the four open seats. Phillips 66 said the vote reflects a belief in its
integrated strategy of holding assets in different sectors, while Elliott said
the vote "sends a clear message" that shareholders demand meaningful change at
Phillips 66. The two Elliott nominees elected to the 14-member Phillips 66 board
are Sigmund Cornelius, former chief financial officer of ConocoPhillips and
Michael Heim, former chief operating officer of Targa Resources, according to
preliminary voting results. The two Phillips 66 nominees elected to the board
are Nigel Hearne, a 35-year veteran of Chevron, and Robert Pease, a former
Motiva and Cenovus downstream executive who was appointed to the board in 2024
to address Elliott's concerns about a shift in focus from refining to midstream.
Phillips 66 also said today that shareholders "overwhelmingly" rejected an
Elliott proposal requiring annual director resignations, according to the
preliminary results. The voting tally will be tabulated and certified by an
independent inspector and final results will be reported to the US Securities
and Exchange Commission. The two Elliott nominees for the Phillips 66 board who
were not elected are Brian Coffman, former chief executive at Motiva, and Stacy
Nieuwoudt, former energy analyst at Citadel. The two Phillips 66 nominees to the
board that were not elected are current director John Lowe, who was up for
re-election, and Howard Ungerleider, a former Dow president and chief financial
officer. Long-running battle over direction Elliott contends that Phillips 66
has consistently trailed its industry peers and needs to streamline operations,
including spinning off or selling its midstream business, selling its 50pc stake
in Chevron Phillips Chemical (CPChem), and possibly other assets. Elliott has
waged an aggressive campaign, launching a website dubbed "Streamline 66" with
power point presentations, podcasts, biographies of its dissident board
nominees, press releases and information on how shareholders can vote. Phillips
66 has told shareholders that its board and management team are implementing a
transformative strategy that has delivered results. The company has expanded its
NGL business, improved its refining cost structure and continues to position
CPChem as the lowest cost producer of ethylene, Phillips 66 said. Phillips 66
told shareholders that Elliott was pushing "an aggressive short-term agenda"
that would cause disruption, slow momentum and jeopardize shareholders'
investment capital. Phillips 66 has made some adjustments since Elliot started
to agitate for change. In addition to adding Pease to the board, the company
recently agreed to sell off some of its European retail business , and expects
about $1.6bn in pre-tax cash proceeds from the sale that it will use toward debt
reduction and shareholder returns. But the refiner has resisted the other major
Elliott recommendations to divest its midstream business and sell its 50pc share
of CPChem, saying earlier this month that the Phillips board has evaluated them
and "came to the conclusion that neither action is in the best interest of
long-term shareholders at this time". Meanwhile, Chevron has advised Phillips 66
of its interest in acquiring the other half of CPChem "at a reasonable value for
both parties", Chevron chief executive Mike Wirth said on 2 May. Three top
shareholder advisory firms [backed the Elliott nominees]
(https://direct.argusmedia.com/newsandanalysis/article/2687988) in the proxy
fight. Institutional Shareholder Services (ISS) and Egan-Jones recommending all
four of Elliot's dissident nominees, while Glass Lewis backed three of the four.
By Eunice Bridges Send comments and request more information at
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