#USA #Glass Lewis #West Palm Beach #Elliott Management #Phillips 66

Glass Lewis Backs Elliott in Phillips 66 Boardroom Contest

In a significant development for Phillips 66, renowned proxy advisory firm Glass Lewis has recommended that shareholders back the director nominees proposed by Elliott Investment Management L.P. The announcement is viewed as crucial as the company faces increasing scrutiny over its governance practices and operational performance. Glass Lewis emphasized the need for independent perspectives within the Phillips 66 boardroom, calling for a much-needed overhaul of a group it describes as lacking transparency and accountability.

A Compelling Case for Change

Elliott, a major shareholder of Phillips 66, argues that the company has consistently failed to deliver robust shareholder returns and maintain effective governance. Among the suggestions provided by Glass Lewis, the firm advocates for the election of nominees Brian Coffman, Sigmund Cornelius, and Michael Heim, each of whom brings a wealth of experience and expertise to the table. Glass Lewis stated, “In our view, the more compelling case is offered by Elliott, in this case by a relatively decisive margin.” This endorsement highlights Elliott's argument that Phillips 66's existing board is disconnected from the on-ground realities impacting the company's performance.

The proxy advisory firm noted that the company's attempts to demonstrate strong, forward-thinking governance appear increasingly dubious. In their report, they represented Phillips 66's claims as riddled with “creative representation” of data, casting doubt on the board’s ability to align operational realities with shareholder value creation. As such, Glass Lewis concluded that the current governance framework is not conducive to sound decision-making, ultimately harming shareholder interests.

Corporate Governance Under Fire

The current board of directors at Phillips 66 has come under intense scrutiny for its approach to engagement with shareholders. Glass Lewis voiced concerns over the board's tendency to centralize discussions through the CEO, which limits the transparency and effectiveness of communication. Furthermore, they pointed out instances where the board seemed to delay consideration of Elliott's nominees until pressed by public scrutiny, which only deepened questions about the current board's commitment to genuine shareholder engagement.

Glass Lewis's report draws attention to Phillips 66's inability to demonstrate effective management of its core refining business and its failure to bridge the perceived gap between its asset mix and shareholder value. They pointed out that the board struggled to establish a convincing narrative linking its strategic direction to positive outcomes for shareholders.

Strong Nominees with Diverse Expertise

Elliott's nominees, as highlighted by Glass Lewis, are seen as a crucial step toward revitalizing the board's effectiveness. Sigmund Cornelius, previously senior vice president and CFO of ConocoPhillips, is expected to introduce pivotal executive knowledge and insights into refining operations. Meanwhile, Michael Heim's background as COO of Targa Resources positions him to offer vital perspectives on midstream assets—an area critical for Phillips 66's future growth potential. Brian Coffman, another nominee, brings established refining experience, further strengthening the case for Elliott's slate.

Support for Elliott's proposed changes is gathering momentum, with Egan-Jones Proxy Services also advocating for the independent nominees, citing their potential to unlock shareholder value. This alignment of independent advisory firms with Elliott suggests a broader consensus amongst industry experts about the necessity for sweeping changes at Phillips 66.

Conclusion: A Call to Action for Investors

As Phillips 66 prepares for its 2025 Annual Meeting, the advice from Glass Lewis serves as a rallying cry for investors. The call to support Elliott’s nominees is not merely about elevating new individuals to the board; it represents a fundamental shift in direction for Phillips 66, focusing on accountability, operational transparency, and a renewed commitment to shareholder value. Investors are urged to reflect on the profound implications of this leadership change and to consider how it may shape the future trajectory of Phillips 66. With sustained pressure from Elliott and advisory support from firms like Glass Lewis, the landscape of the boardroom is poised for transformation, potentially altering the future of this established energy giant.