Elliott Sends Letter to Shareholders and Mails Definitive Proxy Materials Outlining Why Board Change is Needed at Phillips 66

Core Viewpoint - Elliott Investment Management argues that Phillips 66 has consistently underperformed compared to its industry peers, with shares lagging behind Valero Energy and Marathon Petroleum by -138% and -188% over the past decade, respectively [1][10]. Group 1: Streamline 66 Plan - Elliott proposes a three-part "Streamline 66" plan aimed at increasing Phillips' stock price to over $200 per share, which includes simplifying the portfolio, reviewing refinery operations, and enhancing Board oversight [2][12]. - The plan emphasizes the need to divest non-core assets, such as the midstream business, which could be valued at over$40 billion, to focus on improving refining operations [21]. Group 2: Board Accountability and Governance - Elliott advocates for all directors to commit to a one-year term and stand for election at each Annual Meeting, enhancing accountability and governance [3][31]. - The current staggered Board structure limits accountability, and past proposals to address this have failed due to the high voting threshold required [32][34]. Group 3: Director Nominees - Elliott has nominated four highly qualified director candidates to bring necessary experience and perspectives to the Board, including individuals with significant backgrounds in refining and energy sectors [6][29]. - The nominees are expected to enhance Board independence and oversight, which is crucial for restoring investor trust and improving company performance [30]. Group 4: Historical Context and Comparisons - Elliott draws parallels with Marathon Petroleum, which successfully implemented changes after Elliott's engagement, resulting in a ~150% relative outperformance in share price [11]. - The letter highlights that Phillips 66's management has resisted necessary changes and has not prioritized shareholder value, leading to ongoing underperformance [9][25].