Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Activist investor Elliott Management has garnered the support of influential proxy adviser Institutional Shareholder Services for all four board nominees in its battle against oil refiner Phillips 66, as reported by the Financial Times.
ISS, known for advising major money managers like BlackRock on proxy voting, has recommended that Phillips 66 shareholders vote in favor of Elliott’s four board nominees over the refiner’s candidates. Elliott’s nominees include industry veterans Brian Coffman, Sigmund Cornelius, Michael Heim, and Stacy Nieuwoudt.
The ISS report highlighted concerns about the lack of independent oversight of management within Phillips 66’s board. Elliott has been urging investors to support its proposals for asset sales, refining business performance improvements, and governance reforms.
Elliott, which increased its stake in Phillips 66 to $2.5bn this year, criticized the company for not fulfilling its promises, such as adding independent directors. Glass Lewis, another proxy adviser, also backed three of Elliott’s nominees alongside one of Phillips 66’s candidates.
The upcoming annual meeting on May 21 will see shareholders deciding on the board composition, with ISS questioning the independence of director Bob Pease and criticizing the company’s governance practices. Phillips 66’s stock price currently stands at just over $118, with Elliott emphasizing the company’s underperformance compared to industry peers.
Past proxy battles involving Elliott, like those with Hess and Southwest Airlines, were resolved before a vote, suggesting potential negotiations in the Phillips 66 case. Both Elliott and Phillips 66 declined to comment, while ISS did not provide an immediate response to requests for comment.
The ongoing saga between Elliott Management and Phillips 66 underscores the importance of shareholder activism in corporate decision-making and the impact it can have on company strategies and governance. Stay tuned for updates on this high-stakes proxy battle.
