Elliott Director Nominees Send Letter to Phillips 66 Shareholders
- Elliott's nominees bring relevant industry expertise and board experience
- Potential for operational improvements and performance enhancement
- Commitment to constructive collaboration with incumbent directors
- Focus on improving accountability and corporate governance
- Current performance gap between Phillips 66 and competitors
- Indication of existing operational inefficiencies
- Potential board disruption during transition period
- Suggests current management underperformance
Insights
Elliott's board nominees aim to close Phillips 66's performance gap through operational focus, accountability, and governance improvements.
This proxy contest represents a significant governance challenge for Phillips 66, with Elliott Investment Management (a top-five shareholder) pushing for meaningful board refreshment ahead of the May 21 Annual Meeting. The four nominees—Coffman, Cornelius, Heim, and Nieuwoudt—bring targeted expertise in refining operations, portfolio transformation, midstream development, and investment analysis that directly addresses Phillips 66's perceived operational underperformance.
The proxy campaign centers on closing the performance gap between Phillips 66 and industry competitors through three specific strategies: 1) refocusing on operational excellence, 2) improving accountability metrics, and 3) enhancing corporate governance. Elliott's approach appears methodical rather than hostile, with nominees explicitly stating their willingness to work constructively with incumbent directors while still pushing for substantive change.
What's particularly noteworthy is the campaign's emphasis on both operational improvements and potential structural changes. The nominees' letter strategically acknowledges Phillips 66's "high-quality assets" and "talented employees" while suggesting these resources are underutilized under current leadership. Their mention of evaluating the company's "current structure" signals potential portfolio optimization or corporate restructuring initiatives if they secure board representation.
With Elliott's significant equity stake and the nominees' relevant industry credentials, this proxy contest represents a legitimate governance challenge that could substantially impact Phillips 66's strategic direction and shareholder value creation approach in coming years.
Elliott's proxy campaign follows the classic activist playbook but with notable refinement. Their nominees collectively form a specialized energy-sector SWAT team with complementary expertise across Phillips 66's value chain—Coffman brings refining operations knowledge (including prior experience with Phillips assets), Cornelius offers financial transformation expertise, Heim provides midstream operational excellence, and Nieuwoudt contributes an investor relations perspective.
What makes this campaign structurally interesting is Elliott's selective targeting of four board seats rather than attempting a full board takeover. This measured approach suggests they've identified specific operational and strategic deficiencies rather than fundamental business model problems. The nominees' letter carefully balances criticism with constructiveness, acknowledging Phillips 66's potential while emphasizing the "significant value-creation potential" still untapped.
The campaign's timing is strategically significant—launching this proxy contest while energy markets remain volatile indicates Elliott likely sees specific operational inefficiencies rather than simply betting on sector-wide recovery. Their emphasis on "closing the performance gap" with competitors points to benchmark-based analysis rather than speculative projections.
Elliott's website name "Streamline66" telegraphs their likely strategic focus on operational streamlining and portfolio optimization if successful. The nominees' commitment to "ask hard questions" about the company's "current structure and operations" signals potential divestiture recommendations for underperforming assets while improving capital allocation discipline across remaining operations—all aimed at returning Phillips 66 to "its rightful place among the industry's leaders."
Independent Director Nominees Brian Coffman, Sigmund Cornelius, Michael
Heim and Stacy Nieuwoudt Outline How Their Skills and Experiences Will Drive
Positive Change at the Company
Intend to Work Constructively with Incumbent Directors to Create Value for All
Shareholders
Elliott Urges Shareholders to Support Meaningful Board Change By Voting on the
Gold Card for Its Four Independent Nominees
For more information, including how to vote on Elliott's GOLD proxy card, please visit Streamline66.com.
The full text of the letter follows:
Dear Fellow Phillips 66 Shareholders,
Over the past several weeks, we have greatly appreciated the chance to meet with many of you and hear your perspectives. We hope what has come through in these conversations is our enthusiasm about Phillips 66 (the "Company") and its significant value-creation potential. The opportunity to help realize this value is why we agreed to take part in this campaign. With the annual meeting nearly upon us, we want to convey for a final time the reasons we believe our election would help drive positive change at the Company.
First, we would bring complementary and relevant skills and experiences to the Phillips 66 Board. Brian has decades of leadership experience in refining, including running some of Phillips 66's own assets while at its predecessor company, ConocoPhillips. Sig served as CFO of ConocoPhillips and has overseen complex portfolio transformations. Mike is a proven midstream operator and one of the founders of Targa Resources, which is among the sector's most successful companies. And Stacy brings an investor's mindset from her years covering the energy sector at leading institutions. All four of us have served on the boards of companies in various stages of development and maturity, facing differing needs and challenges. Together, we would bring a diverse and additive set of skills to the Phillips 66 boardroom.
Second, we believe that closing the performance gap between Phillips 66 and its competitors is readily achievable. Here we see a company with high-quality assets, talented employees and a storied legacy – an enormous amount of potential waiting to be unleashed. By refocusing on operational excellence, improving accountability and enhancing corporate governance, there is a clear path to unlocking the Company's substantial upside and returning it to its rightful place among the industry's leaders. Like you, we are investors in Phillips 66 – if we didn't believe in the opportunity at this Company, then we wouldn't have invested a significant amount of our own time and money in this endeavor.
Finally, if elected, we are fully prepared to hit the ground running and work constructively with the incumbent directors to strengthen Phillips 66. We are each independent thinkers and would enter the boardroom with open minds about the best way forward for all shareholders. That said, make no mistake – while we are ready to put the back and forth of the proxy contest behind us, all four of us fundamentally believe that change is needed at Phillips 66. That means we will ask the hard questions, seek to improve the Company's credibility with its shareholders and insist on a thorough and clear-eyed evaluation of its current structure and operations.
We humbly ask for your support to elect all four of us to the Board of Phillips 66. Together, we can help to unlock the tremendous value that the Company's people and its assets can deliver. Shareholders deserve a stronger, more valuable Phillips 66.
Let's get to work.
Sincerely,
Brian Coffman, Sigmund Cornelius, Michael Heim and Stacy Nieuwoudt
Nominees for the Board of Directors of Phillips 66
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
About Elliott
Elliott Investment Management L.P. (together with its affiliates, "Elliott") manages approximately
Media Contact:
Casey Friedman
Elliott Investment Management L.P.
(212) 478-1780
cFriedman@elliottmgmt.com
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(877) 629-6357
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SOURCE Elliott Investment Management L.P.
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