{ "docId": "019dd923-622b-71dc-a6d9-227a90417a7b", "docSlug": "73e2efbf483b", "documentTitle": "Phillips 66 (PSX)", "authorId": "02_Elliott_Management", "authorName": "Elliott Investment Management", "documentKindSlug": "shareholder-letter", "documentKindLabel": "Shareholder letter", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2025-05-01 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 1, "pageCount": 13, "prevPage": null, "nextPage": 2, "slideType": "executive_summary", "function": "frame_problem", "density": "overcrowded", "nDataPoints": 2, "notes": "This is the first page of a shareholder letter, serving as an executive summary of the activist campaign.", "elementsJson": [ "paragraph", "footnote" ], "metadataConfidence": 1, "imagePath": "https://imgproxy.kitesheet.com/W_gadpF1GH2cz02lZBPm6YTGygtjXM6wzMigJXl5l8Q/rs:fit:1200:1200:0/q:82/f:webp/czM6Ly9raXRlc2hlZXQvY29ycHVzL3NsaWRlcy83M2UyZWZiZjQ4M2IvcDAwMS5wbmc", "slideHref": "/slides/019dd923-622b-71dc-a6d9-227a90417a7b/1", "deckHref": "/decks/019dd923-622b-71dc-a6d9-227a90417a7b", "deckJsonHref": "/decks/019dd923-622b-71dc-a6d9-227a90417a7b.json", "deckAnchorHref": "/decks/019dd923-622b-71dc-a6d9-227a90417a7b#slide-1", "components": [ { "bbox": null, "kind": "callout", "text": "The Company’s intransigence at every turn is an illustration of its broken governance culture.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0f1d-76e6-8701-4d1945918748", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.8, "x": 0.1, "y": 0.86 }, "kind": "paragraph", "text": "In our experience, how a board treats a major shareholder seeking constructive change is a direct reflection of the overall health of a company and its ability to deliver for its investors, employees and partners. What we’re seeing in this proxy contest is not a one-off, but rather a reflection of how Phillips 66’s current Board responds when confronted with a challenge. The Company’s intransigence at every turn is an illustration of its broken governance culture. In our view, the Company’s lackluster performance will not improve until truly objective, independent directors – bringing perspectives that can help rectify this culture of insularity and deference – are added to the Board.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5e0b75ca-4553-420f-b135-67591b8506be", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.8, "x": 0.1, "y": 0.12 }, "kind": "paragraph", "text": "Dear Fellow Phillips 66 Shareholder: Elliott Investment Management L.P. (along with its affiliates, “Elliott”) manages funds that together are a top-five shareholder in Phillips 66 (NYSE: PSX) (the “Company”). We are asking for your help to make Phillips 66 a stronger, more valuable company by voting on the Gold Card for our four independent, exceptionally qualified director nominees and the governance improvements we have recommended.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7e6f9805-1515-41c8-9985-6b786abcdbec", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.8, "x": 0.1, "y": 0.28 }, "kind": "paragraph", "text": "We did not make the decision to take our case directly to our fellow shareholders lightly, but were compelled to do so after our attempts to constructively engage with Phillips 66’s leadership beginning in late 2023 were repeatedly rebuffed. Over the last 15 years, we have collaborated with more than 200 companies to reach mutually beneficial solutions that enhance shareholder value. During this period, we have only had to pursue a U.S. proxy contest to this stage of the process three other times, making Phillips 66 an extreme outlier.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ce8419c7-9b99-467b-b0d9-f909c580ca69", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.8, "x": 0.1, "y": 0.45 }, "kind": "paragraph", "text": "Tellingly, Phillips 66 has repeatedly mischaracterized our efforts to work with its Board, going so far as to claim that we have “no genuine interest” in engagement. On April 24, Phillips 66 even published a highly misleading “Letter to Investors and Their Stewardship Teams,” accusing Elliott of a lack of transparency and framing this accusation as a series of questions that we have supposedly refused to answer.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d6a35e12-7227-4a08-97ee-22cd0091a74a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.8, "x": 0.1, "y": 0.7 }, "kind": "paragraph", "text": "We believe the breakdown that led us to this impasse is the result of a deep-seated culture of complacency and blind deference to leadership that has taken root in the Company’s boardroom – and only worsened since the Board made CEO Mark Lashier its Chairman in March of 2024. This proxy contest offers a window into how this Board operates: Instead of welcoming new ideas, it rejects them; instead of empowering independent directors, it allows the CEO and Chairman to control the process; instead of being responsive to shareholders, it ignores them; and instead of embracing the support of respected experts, it acts as if it already has all the answers.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "da9cfa3a-ac50-4864-92e9-7d70ae0c7eb0", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.8, "x": 0.1, "y": 0.58 }, "kind": "paragraph", "text": "In reality, the voluminous set of materials and disclosures that Elliott has published over the course of this campaign contain all of the answers to Phillips 66’s misleading “questions,” but we thought it might be useful to consolidate the answers in one place for investors – which we have done in an appendix to this letter. The facts – and our track record – put the lie to the Company’s false narrative.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f6c72be1-5191-4bce-9ad5-bae460c4a8f0", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "“no genuine interest” — Phillips 66", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0f1d-76e6-8701-501825d4eead", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.6, "x": 0.1, "y": 0.96 }, "kind": "source-note", "text": "Phillips66Delivers.com: “Independent Directors of Phillips 66 Issue Letter to Investors and Their Stewardship Teams”", "attrs": { "numbered": true }, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "eb116352-15e4-4a6b-900e-22b1a85f6b51", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.25, "x": 0.05, "y": 0.02 }, "kind": "title", "text": "STREAMLINE 66", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "72c8eea0-7619-4a15-8908-13c69d87e6a6", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Thesis: Activist defense (for management)", "slug": "activist-defense", "agent": "storyteller", "layer": "slide", "matchId": "553c25fa-3890-447a-ba49-0cec0fc31473", "evidence": "In our experience, how a board treats a major shareholder seeking constructive change is a direct reflection of the overall health of a company and its ability to deliver for its investors, employees", "confidence": 0.8 } ], "frameworks": [], "arcBeats": [ { "to": 2, "from": 1, "beatId": "5badc222-efdd-4cba-86c7-14f7e5e692c2", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Problem", "beatSlug": "problem-agitate-solution-problem-identify-pain", "evidence": "expose_contradiction slides", "position": 0, "confidence": 0.8, "parentBeatName": "Complication", "parentBeatSlug": "complication" } ], "loops": [], "imagePathAlt": "https://imgproxy.kitesheet.com/WyjodwlsI4BITWLz4vPN6dC6lkFKmK9XyrGVLX4zUT4/rs:fit:1200:1200:0/q:82/f:webp/czM6Ly9raXRlc2hlZXQvY29ycHVzL3NsaWRlcy83M2UyZWZiZjQ4M2IvcDAwMS5qcGc", "thumbSrc": "https://imgproxy.kitesheet.com/ZULGsCzVztHZihpxOUxY3QgM_YL0yAdiGif_8b2s-58/rs:fit:480:480:0/q:78/f:webp/czM6Ly9raXRlc2hlZXQvY29ycHVzL3NsaWRlcy83M2UyZWZiZjQ4M2IvcDAwMS5wbmc", "thumbSrcAlt": "https://imgproxy.kitesheet.com/uh9vmkupbdJr8UY1lNQqHBLCiX1pqej9HlhytQUVaEo/rs:fit:480:480:0/q:78/f:webp/czM6Ly9raXRlc2hlZXQvY29ycHVzL3NsaWRlcy83M2UyZWZiZjQ4M2IvcDAwMS5qcGc" }