Elliott Releases Third-Party Survey Results Finding That Phillips 66 Shareholders Rank the Company Last in Operations, CEO Effectiveness and Value Creation

Rhea-AI Summary

Elliott Investment Management, a top-five shareholder in Phillips 66 (PSX), has released findings from a third-party survey of institutional investors representing over 60% of PSX's institutional shares. The survey reveals significant shareholder dissatisfaction with the company's performance and strategy.

Key findings show that Phillips 66 ranked last among peers in operational execution, CEO effectiveness, and capital allocation. Investors strongly support divesting non-core assets, particularly midstream assets, to eliminate the 'conglomerate discount' and unlock value.

Shareholders expressed frustration with management's failure to meet financial and operational targets, describing PSX as 'coasting along' and 'dragging its feet.' Elliott has proposed a three-part 'Streamline 66' plan and nominated four directors - Stacy Nieuwoudt, Brian Coffman, Sigmund Cornelius, and Michael Heim - to the Phillips 66 Board, advocating for urgent strategic changes.

Positive

• Strong shareholder support for strategic changes and asset divestment
• Significant potential for value creation through restructuring
• High-quality assets and strong market position acknowledged by investors
• Clear path forward proposed through 'Streamline 66' plan

Negative

• Ranked last among peers in key performance metrics
• Management's failure to meet financial and operational targets
• Significant shareholder dissatisfaction with current strategy
• Perceived lack of focus on creating shareholder value

Third-Party Findings Are Based on Feedback From Phillips 66 Investors Representing More Than 60% of the Company's Institutional Shares Outstanding

Shareholders Do Not Believe the Company's Strategy or Conglomerate Structure Make Sense

WEST PALM BEACH, Fla., April 16, 2025 /PRNewswire/ -- Elliott Investment Management L.P. ("Elliott"), which manages funds that together are a top-five shareholder in Phillips 66 (NYSE: PSX) (the "Company" or "Phillips"), today released findings from a recent Elliott-commissioned, third-party survey of the Company's institutional investors. The survey – conducted approximately two months ago – polled shareholders representing more than 60%¹ of Phillips 66's institutionally owned shares outstanding and revealed that investors share Elliott's frustration with the Company's underperformance and lack of a compelling strategic direction. More information on the survey results can be found at streamline66.com/phillips-66-shareholders-speak-out/

Key findings from the survey include:

• Phillips 66 ranked last among its peers² on operational execution, CEO effectiveness, capital-allocation strategy and overall delivery against its value-creation agenda.
  
  
• Investors want Phillips 66 to prioritize divesting its non-core assets to eliminate its "conglomerate" discount and unlock value.

• • Notably, they are highly supportive of evaluating a sale of the midstream assets.
    
    
  • Support for divesting Phillips 66's other non-core businesses was also high.

• Shareholders perceive Phillips 66 as "coasting along", which has led to significant undervaluation and investor uncertainty.

• • Phillips 66's strategy and portfolio do not make sense to investors, who want the Company to unlock trapped value. However, many see Phillips 66 as "dragging its feet" and not bringing the level of speed or execution quality required.
    
    
  • In contrast, investors are supportive of Elliott's involvement and see the firm as "holding management accountable."

Shareholders made clear they are frustrated with Phillips 66's underperformance and management's failure to hit its financial and operational targets, despite repeatedly claiming success and that the strategy is working: 

• "In their own words, they do have a clearly defined strategic direction, and you can talk the talk, but you might not walk the walk…They are clearly not walking the walk. At all." – Phillips 66 Shareholder A
  
  
• "Looking at [Phillips 66's] strategic direction, significant divestment and cleaning up of operations would be certainly beneficial. Getting back into what they do best, which is integrated refining." – Phillips 66 Shareholder B
  
  
• "What can they do now that will help them longer-term? In terms of execution, I want them to have a much more independent board…I want them to continue divesting. I don't want them to have a conglomerate discount…They just have too many unrelated businesses, and I think that's just not good for them longer-term." – Phillips 66 Shareholder C

Elliott has publicly released its three-part "Streamline 66" plan and detailed how this could achieve significant share price upside for Phillips 66. Unfortunately, shareholders doubt the current Board and management team's appetite or ability to do what needs to be done:

• "The biggest issue for Phillips, in my opinion, is that they are not at all focused on creating shareholder value. They are focused on status quo." – Phillips 66 Shareholder D
  
  
• "Look at the performance. They have issue after issue after issue. It's not a question of the management is the problem…Look, they have a management problem. I don't know any other investor who doesn't think that is true." – Phillips 66 Shareholder E

In spite of the myriad issues, investors still recognize the substantial potential of Phillips 66 and the quality of its assets and portfolio:

• "There is definitely a lot of upside. Their market position is pretty good. Despite financial challenges that they have been facing, they remain a very key player…So as long as they handle their strategic directions and improve their cost performance, they should do well." – Phillips 66 Shareholder F

Notably, this investor view of Phillips 66's potential seems at odds with views expressed by the Company's own management, which has talked down the value of the stock and repeatedly defended a broken flawed status quo.

Former Citadel energy analyst and independent GOLD proxy card nominee Stacy Nieuwoudt summed it up on a recent episode of the "Streamline 66" Podcast:

• "Investors have been overwhelmingly supportive of this campaign…I've been covering the [energy industry] for over 20 years, I've attended thousands of meetings with management teams. I've never had a management team suggest to me that their stock was fully valued. That just inherently highlights the disconnect between the investor mindset and the management."

Shareholders can act today by voting on the GOLD proxy card to elect all four of Elliott's nominees to the Phillips 66 Board of Directors. Stacy Nieuwoudt, Brian Coffman, Sigmund Cornelius and Michael Heim would bring urgently needed expertise, new perspectives, and a willingness to enact bold changes to the Company's boardroom.

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

¹ Third-party survey conducted as of March 2025. Percentage based on analysis performed by Elliott's proxy solicitation firm, equivalent to 44.3% of total outstanding shares.
² Peers utilized for the survey were Valero Energy Corporation and Marathon Petroleum Corporation.
Note: Emphasis added in quotations.

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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SOURCE Elliott Investment Management L.P.

FAQ

What did Elliott's survey reveal about Phillips 66's (PSX) performance rankings?

The survey showed PSX ranked last among peers in operational execution, CEO effectiveness, capital-allocation strategy, and overall value-creation agenda delivery.

What are shareholders recommending for Phillips 66's (PSX) non-core assets?

Shareholders strongly support divesting non-core assets, particularly the midstream assets, to eliminate the conglomerate discount and unlock value.

Who are Elliott's nominated directors for the Phillips 66 (PSX) board?

Elliott nominated Stacy Nieuwoudt, Brian Coffman, Sigmund Cornelius, and Michael Heim to bring new perspectives and implement strategic changes.

What percentage of Phillips 66's (PSX) institutional shareholders participated in Elliott's survey?

The survey included institutional investors representing more than 60% of Phillips 66's institutionally owned shares outstanding.

What is Elliott's proposed plan for Phillips 66 (PSX)?

Elliott has proposed a three-part 'Streamline 66' plan aimed at achieving significant share price upside for Phillips 66.