Activist hedge fund Elliott Management has secured two board seats at Phillips 66, marking its first-ever successful proxy vote campaign against a major US corporation and signalling a potential strategic shift at the $46bn oil refiner, according to a report by the Financial Times.
Shareholders of Phillips 66 voted in favour of Elliott-backed nominees Sigmund Cornelius, a former ConocoPhillips executive, and Michael Heim, formerly of Targa Resources. The results were confirmed in statements by both Elliott and Phillips 66 on Wednesday.
The vote concludes one of the most closely watched and contentious activist campaigns in recent years. Elliott, which more than doubled its stake in Phillips 66 to $2.5bn, had pushed for sweeping changes, including divestitures of non-core businesses, improved corporate governance, and a renewed focus on refining operations.
In addition to Elliott’s nominees, the company also added Bob Pease, an incumbent previously supported by Elliott before their falling out, and Nigel Hearne, COO of Harbour Energy, as part of its own slate.
While the activist fund secured only two seats, the presence of Elliott-aligned directors could still influence boardroom dynamics. “These directors will work collaboratively with the board to sharpen operational focus, drive value creation, and enhance corporate governance,” Elliott said in a statement.
The campaign drew strong opposition from key institutional shareholders. BlackRock, Vanguard, State Street, and T Rowe Price, which collectively control roughly 23% of the stock, voted against Elliott’s slate, according to sources. Retail shareholders, who account for approximately 25% of the register, played a crucial role in the final outcome.
Elliott had initially struck a settlement with Phillips 66 in 2023 to add two independent directors but accused the company of failing to follow through after only one, Bob Pease, was appointed—later approving a move that consolidated power under CEO Mark Lashier, who also became chairman.
Tensions escalated earlier this year, culminating in a full-blown proxy contest. Support for Elliott’s position was bolstered in recent weeks by Glass Lewis and ISS, both of which recommended voting in favour of Elliott’s nominees.
Despite Wednesday’s board win, a separate Elliott proposal to de-stagger the board failed to pass, falling short of the required 80% threshold.
Meanwhile, Phillips 66 has already begun signalling willingness to streamline. Just days before the vote, it announced the $1.6bn sale of its petrol station network in Germany and Austria to Energy Equation Partners and Stonepeak. Elliott has argued the company could unlock as much as $40bn by divesting its midstream and chemicals assets.
Phillips 66 shares fell 6.8% in early New York trading on Wednesday and are down 22% over the past 12 months.
