Leading Proxy Advisory Firm ISS Recommends Phillips 66 Shareholders Vote for All Four of Elliott's Director Nominees

ISS Validates Elliott's Case for Change and Recommends Nominees Brian Coffman, Sigmund Cornelius, Michael Heim and Stacy Nieuwoudt

Notes Phillips 66's "Disappointing" Operating Performance, "Selective Disclosure, Unverifiable Claims About Various Operational Successes, and Ambiguous and Vague Responses to Otherwise Basic Questions"

Cites the Board's "Failure" to Ensure Strong Governance and Board Oversight as Evidence of the Company's "Disconnect from Shareholders"

All Three Proxy Advisory Firms – ISS, Glass Lewis and Egan-Jones – Have Now Endorsed Elliott's Case for Change at Phillips 66 

WEST PALM BEACH, Fla., May 12, 2025 /PRNewswire/ -- Elliott Investment Management L.P. ("Elliott"), which manages funds that together make it a top-five shareholder in Phillips 66 (NYSE:PSX) (the "Company" or "Phillips"), today announced that leading independent proxy advisory firm Institutional Shareholder Services Inc. ("ISS") has recommended that shareholders support all four of Elliott's nominees: Brian Coffman, Sigmund Cornelius, Michael Heim and Stacy Nieuwoudt.

ISS's report follows reports issued by Glass, Lewis & Co., LLC ("Glass Lewis") and Egan-Jones Ratings Company ("Egan-Jones"), both of which also advised shareholders to support meaningful boardroom change at Phillips 66. Shareholders will have the opportunity to vote for the election of Elliott's nominees to the Company's Board of Directors (the "Board") at the 2025 Annual Meeting of Shareholders (the "Annual Meeting") on May 21, 2025.

Elliott stated:

"By recommending that Phillips 66 shareholders vote for all four Elliott nominees, ISS has now fully validated Elliott's case for change – making clear that the status quo at the Company has failed to serve shareholders. Notably, ISS cited Phillips 66's disappointing operating performance, poor corporate governance and 'track record of providing selective and ambiguous disclosure' as reasons to support Elliott's 'strong slate.' With all three proxy advisory firms having endorsed Elliott's case, it is clearer than ever that urgent and meaningful change is needed in the Phillips 66 boardroom. In our view, electing all four of Elliott's independent, highly qualified nominees represents the surest step toward restoring accountability and driving improved long-term performance at Phillips 66."

In its report, ISS supported Elliott's case for change at Phillips 66, stating:

• "In summary, the dissident has assembled a strong slate, which has the experience and independence that PSX requires."
  
  
  
  
• "Operating performance has been disappointing, particularly when considered alongside management's messaging. The big picture is that PSX has not been able to sustain improvements or contend with market volatility effectively. This is clearly reflected in vacillating performance over the past three years, which culminated in deterioration relative to peers in 2024. It has also become increasingly evident that there is a disconnect between communication and results."
  
  
  
  
• "The board's [decision to combine the Chair and CEO roles] evidences a disconnect from shareholders, and undermines the argument about its commitment to ensuring strong corporate governance and board oversight."

ISS criticized the Board's performance and strategy, noting:

• "…the data does not support the board's argument that the integrated strategy results in superior returns over the long-term…"
  
  
  
  
• "PSX has established a track record of providing selective and ambiguous disclosure that obfuscates results, makes it difficult to assess decisions, and creates impediments to evaluating performance. All in, it is difficult to view turnaround efforts since the CEO transition as successful."
  
  
  
  
• "…despite claims that PSX has made significant improvements since the CEO transition, the refining segment has struggled more than peers to contend with shifting market conditions. These and other concerns have been reflected in TSR. Returns have been positive, but PSX began underperforming refining peers in mid-2021, and has not been able to close the gap."
  
  
  
  
• "PSX has also struggled over all historical measurement periods relative to midstream peers. Communication with investors has provided minimal assurance about these concerns. Instead, PSX has presented shareholders with selective disclosure, unverifiable claims about various operational successes, and ambiguous and vague responses to otherwise basic questions. In other words, shareholders cannot adequately assess the strategy or performance."

ISS detailed the Board's poor corporate governance and misguided refreshment efforts, writing:

• "…there are serious concerns with the manner in which the board communicates important financial information to shareholders. This is part of a broader pattern that is also reflected in evasive maneuvers and defensive statements made by the board during this proxy contest."
  
  
  
  
• "When the dissident went public in November 2023, the majority of the most relevant refining and midstream experience on the board was concentrated in the hands of the legacy directors. The settlement should have been the first step in addressing this defect. On Feb. 13, 2024, the board appointed Robert Pease. He was expected to be the first of two additions made in cooperation with the dissident. Instead, he was the only one, and his alignment with the board has become an important point in this contest."
  
  
  
  
• "Although the board has been reshaped since the pandemic, important industry perspectives have been overlooked, and there is strong evidence that the board is not willing to exercise independent oversight of management. The addition of Pease could have been the first step toward addressing these deficiencies. However, his decision to support the recombination of the chair and CEO positions raises questions about whether he is an independent voice on the board. Lowe is a member of the legacy cohort, which has failed to support appropriate corporate governance and has overseen sustained underperformance."

ISS also outlined the benefits of adding Elliott's nominees to the Board, stating:

• "Coffman and Heim offer focused experience in refining and midstream operations, which makes them logical additions. Cornelius has a well-rounded perspective of the industry, which includes senior leadership positions and extensive board service. Thus, he would not only fortify the board's independent industry experience, but he could provide a valuable perspective if PSX considers a separation of the midstream segment."
  
  
  
  
• "…Nieuwoudt offers an important perspective through her experience as an industry investor and analyst. With her background and independence, she should be able to begin repairing PSX's credibility, which has been damaged through years of suboptimal communication with investors."

Independent proxy advisory firm Glass Lewis also recently confirmed Elliott's case for change, stating:

• "In our view, the more compelling case is offered by Elliott, in this case by a relatively decisive margin."
  
  
  
  
• "…we believe the core argument that P66 has failed to drive compelling shareholder returns or a differentiated valuation as an extension of management's pursuit of further integration is fundamentally sound. We further consider Elliott lands much more effective ripostes on matters of cost management, synergy value and capital allocation, crimping core tenets of P66's defense."
  
  
  
  
• "These issues stack on what we consider to be fairly disconcerting corporate governance considerations, including a dubious commitment to good faith engagement, a questionable and counterproductive realignment of key oversight roles and a late-stage candidate pivot which seems to call into question the board's prior candor. These issues should, in our view, be of significant concern to P66 investors."
  
  
  
  
• "Narrative friction is at the fore, in our view, as the board firmly asserts that significant steps toward integration have been successful and 'will continue to drive long-term value' for investors. On review, this perspective appears disconcertingly disconnected from the boots-on-the-ground reality: P66 has regularly run afoul of market expectations, has not generated competitive value during the span of Mr. Lashier's executive service…"

Egan-Jones has also recommended support for all four of Elliott's nominees, writing that:

• "…Elliott's nominees possess a strong mix of best-in-class industry expertise and experience and have the potential to unlock value for shareholders…"
  
  
  
  
• "Phillips 66's current conglomerate structure appears to be suboptimal for sustained financial growth. We agree with the dissidents that a strategic shift towards refocusing on its core assets, particularly within the refining segment, is necessary to drive improved performance and value creation."
  
  
  
  
• "Currently, the Company has a combined Chairman and CEO leadership structure, a classified board, and over-tenured directors. A plethora of these problematic governance practices appear to be a driving force in the Company's underperformance. We believe that addressing these structural issues would enhance accountability and exercise of the directors' fiduciary duties."

For more information, including how to vote on Elliott's GOLD proxy card, please visit Streamline66.com.

ADDITIONAL INFORMATION

Elliott Investment Management L.P., together with the other participants in Elliott's proxy solicitation (collectively, "Elliott"), has filed a definitive proxy statement and accompanying GOLD universal proxy card with the Securities and Exchange Commission ("SEC") to be used to solicit proxies with respect to the election of Elliott's slate of highly qualified director candidates and the other proposals to be presented at the 2025 annual meeting of stockholders (the "Annual Meeting") of Phillips 66, a Delaware corporation ("Phillips" or the "Company"). Stockholders are advised to read the proxy statement and any other documents related to the solicitation of stockholders of the Company in connection with the Annual Meeting because they contain important information, including information relating to the participants in Elliott's proxy solicitation. These materials and other materials filed by Elliott with the SEC in connection with the solicitation of proxies are available at no charge on the SEC's website at http://www.sec.gov. The definitive proxy statement and other relevant documents filed by Elliott with the SEC are also available, without charge, by directing a request to Elliott's proxy solicitor, Okapi Partners LLC, at its toll-free number (877) 629-6357 or via email at info@okapipartners.com. 

About Elliott

Elliott Investment Management L.P. (together with its affiliates, "Elliott") manages approximately $72.7 billion of assets as of December 31, 2024. Founded in 1977, it is one of the oldest funds under continuous management. The Elliott funds' investors include pension plans, sovereign wealth funds, endowments, foundations, funds-of-funds, high net worth individuals and families, and employees of the firm. 

Media Contact:

Casey Friedman 

Elliott Investment Management L.P. 

(212) 478-1780

cFriedman@elliottmgmt.com

Investor Contact: 

Bruce Goldfarb / Pat McHugh

Okapi Partners LLC

(877) 629-6357

(212) 297-0720

info@okapipartners.com

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