Latest news with #Lashier
Yahoo
23-05-2025
- Business
- Yahoo
Phillips 66 and Elliott's contentious proxy battle ends in split vote over fight to break up energy giant
The barroom brawl of a boardroom fight between Phillips 66 and activist investor Elliott Investment Management to break up the massive energy company concluded May 21 with a split vote and both sides declaring victory. With four board positions up for grabs, Phillips 66 and Elliott each claimed two seats amid Elliott's campaign to force Phillips 66 to sell or spin off its petrochemical and midstream pipeline businesses and focus on its legacy refining unit. The battle pits one of the energy sector's most storied players against arguably the most influential activist fund manager in the world, led by billionaire Paul Singer. On a 14-person board chaired by CEO Mark Lashier, the future of Phillips 66 remains murky, but the vote is significant because no activist at an S&P 500 company had successfully won a board seat in at least 15 years without support of one of the big three index funds—BlackRock, Vanguard, and State Street, according to Insightia. While Elliott's campaign was backed by prominent proxy advisory firms Institutional Shareholder Services, Glass Lewis, and Egan-Jones, Phillips 66's top three passive investors—the big three index funds—all sided with the company. Elliott called the vote a clear mandate for change. 'Today's vote sends a clear message: Shareholders demand meaningful change at Phillips 66,' Elliott said in a prepared statement. On the other hand, Lashier called the vote supportive of maintaining Phillips 66's current integrated structure. 'We welcome our new directors and look forward to working constructively as a board,' Lashier said in a statement. 'This vote reflects a belief in our integrated strategy and a recognition that our early results do not yet reflect the full potential of our plan or the value inherent in this business.' Elliott owns a nearly 6% stake in Phillips 66 and has pushed for major change, arguing that Phillips 66 has performed below peers such as Marathon Petroleum and Valero Energy. Likewise, Chevron has expressed an interest in buying out Phillips 66's stake in its Chevron Phillips Chemical joint venture, which Lashier has resisted to this point. Breaking up the company runs counter to Phillips 66's strategy of late to grow its midstream pipeline business, especially in natural gas liquids (NGLs), such as propane, butane, and ethane—the primary petrochemical feedstock, which Phillips 66 sees as its largest growth potential. Lashier argues Phillips 66 is in the early stages of its transformation strategy with refining improvements already demonstrated and that it needs to stay the course. The two Elliott nominees elected were Sigmund 'Sig' Cornelius, who recently retired as the president of Freeport LNG, and Michael Heim, an operating partner with Stonepeak who also was a founder and president of the Targa Resources midstream pipeline giant. Elliott said Cornelius and Heim will aim to 'improve operational execution and share-price performance, enhance corporate governance and help set a strategic course that can unlock Phillips 66's full value-creation potential.' On the Phillips 66 candidate slate, Robert Pease was reelected, and Harbour Energy Chief Operating Officer Nigel Hearne was added to the board. Pease's reelection stands out because he was originally backed by Elliott before being opposed this year. Elliott first reached out to Phillips 66 in late September 2023. They reached a deal and détente—after Elliott privately threatened to start a proxy fight with six board nominees—naming Pease, former CEO of refiner Motiva Enterprises, to the board in mid-February 2024. But Elliott alleged Pease flipflopped and supported Lashier as chairman when Elliott wanted a non-executive chair. With Pease's seat up for grabs, Elliott took aim at his as well when the proxy fight escalated earlier this year. Phillips 66 is making some divestments though, even if they were ones the company expressed a willingness to make last year. Just last week, Phillips 66 agreed to sell 65% stakes in its Germany and Austria retail fueling business to a consortium led by Energy Equation Partners and Stonepeak that will bring in $1.6 billion in pre-tax cash proceeds, giving the businesses a total enterprise value of $2.8 billion. The deal includes 970 retail fueling sites, of which 843 are JET-branded stores. Phillips 66 said the proceeds will go toward debt reduction and shareholder returns. Last fall, Phillips 66 also sold off its Switzerland and Lichtenstein businesses. This story was originally featured on
Business Journals
21-04-2025
- Business
- Business Journals
Phillips 66 CEO Mark Lashier responds to Elliott criticisms
In an interview with the HBJ and a podcast episode released by Elliott, leaders of the two companies share their contrasting perspectives about the direction of Phillips 66. Story Highlights Phillips 66 CEO Mark Lashier and Elliott leader John Pike share opposing views on their proxy battle. Four directors will be elected at Phillips 66's annual shareholder meeting on May 21. The decisions any elected directors might make are still up in the air. Houston-based Phillips 66 (NYSE: PSX) CEO Mark Lashier is standing firm behind the company's midstream business, his role as CEO and chairman, and Phillips 66's progress over the past few years — all things activist investor Elliott Investment Management LP has criticized. With Phillips 66's annual shareholder meeting coming up in about a month, investors are preparing to vote either for the company's nominated slate of directors or for those nominated by Elliott, who has demanded Phillips 66 sell or spin off its midstream business and sell its 50% stake in Chevron Phillips Chemical Co. Most recently, Elliott released a third-party survey — without disclosing who conducted the survey — touting the support the investor is receiving from shareholders who Elliott said believe Phillips 66 is 'coasting along' and isn't measuring up to its competitors. 'We've not only delivered our commitments, we far exceeded the initial commitments that we made,' Lashier countered in an interview with the Houston Business Journal. Lashier highlighted the amount the company has returned to shareholders, cost savings and synergies after its acquisition of DCP Midstream LP by the end of 2024, which he said were all higher than the targets announced in 2022. 'We've taken some pretty decisive, pretty dramatic action in two and a half years, and I've had board members tell me that they're just stunned at the progress that we've been able to make in such a short period of time,' Lashier said. Meanwhile, in a podcast released on April 17, John Pike, the partner at Elliott leading the Phillips 66 investment, reasserted that the company is underperforming in similar ways to companies Elliott has engaged with in the past. 'All of these companies had underperformed very significantly over long periods of time. And that underperformance manifests itself in poor operations — but also in poorly performing stocks,' Pike said. 'What is also a common thread is you generally have poor capital allocation and management that is often not being held accountable by boards of directors. In Phillips 66, we certainly see all those elements.' Pike was included in Elliott's initial slate of seven people the investor was considering nominating to the board of directors, but he was not included in the final list of four nominees. Shareholders will elect four directors at Phillips 66's annual shareholder meeting on May 21. A trend of CEO removals While Elliott has not explicitly called for Lashier's removal, the firm has made repeated comments about the company's poor management, as well as Lashier's position as both CEO and chairman of the board. Elliott said when it supported the appointment of director Bob Pease to Phillips 66's board last year, it specifically liked that he believed having a CEO also serve as chair of the board was detrimental to a company in need of change. Soon after that, Lashier became chairman of the board of directors in addition to his role as CEO. Many companies have lost their CEOs during engagements with Elliott — but Elliott often directly called for those CEOs' removal, and those engagements did not turn into proxy battles. The CEO of Houston-based NRG Energy Inc. (NYSE: NRG) abruptly left the company in 2023 after Elliott called for him to step down, and the CEO of Houston-based Crown Castle Inc. (NYSE: CCI) retired in early 2024 after Elliott called for new executive leadership. The outcomes of a proxy battle, however, can be uncertain because the decisions new directors might or might not make in the future cannot be guaranteed. 'I can't speculate on what they may want to change; I do know that they've got an activist playbook, and that is typically part of their activist playbook,' Lashier said when asked if he believed Elliott would come for his job next. 'I think Phillips 66 stands behind me," Lashier said. "The board stands behind me. We are all aligned on our strategy. We wouldn't be pursuing a strategy if the board wasn't aligned on it.' What about a midstream spinoff? Since February, Elliott has called for Phillips 66 to consider options to sell or spin off its midstream business, which the company has been working to build out since acquiring DCP Midstream for $3.8 billion in 2023. In an interview with the Houston Business Journal last year, Don Baldridge, executive vice president of midstream and chemicals, said the transportation of natural gas liquids was a great opportunity for Phillips 66 as it strived to become a fully integrated downstream company. Lashier said of Phillips 66's integrated operations: 'They have physical integration, they have molecular integration, and they provide tremendous financial resiliency. The midstream business provides very steady earnings; the marketing business provides very steady earnings, while we've got refining and chemicals that are a bit more volatile but can throw off tremendous cash flow. 'We've looked at that ourselves and came to the conclusion, with the support of well-known investment bankers, that it doesn't make sense to spin off our deeply integrated NGL midstream business — that we would risk destroying value rather than create value.' In the podcast, Pike called out this line of thinking, saying investors can choose to diversify their own assets without Phillips 66 doing it for them. 'I think Mark Lashier and this board is, to a certain extent, hiding behind their own inability to run the refining assets. In other words, if the refining assets were run as they're run today, then yeah, it would trade in a very volatile way. Our plan is to eventually have these assets separated but also to have them run well and efficiently,' Pike said. How can the board declassify? Lastly, the two companies disagree on how to move forward with declassifying the board, which would put every director up for reelection ever year. While Phillips 66 has filed a proposal to amend the company's charter, a move the company has tried five times in the past nine years and requires approval by 80% of the company's shares, Elliott has proposed a change to the company's governance policy. The proposed policy would require each incumbent director to commit to a one-year term at each meeting, making all board seats open annually. 'This is something they can do. We've run it down with our lawyers, Delaware lawyers. This is something that they can do. They would have to do it on a voluntary basis,' Geoff Sorbello, Elliott's managing director of engagement, said in the podcast with Pike. However, Lashier doesn't think the policy will hold up in court. 'What Elliot has proposed is a mechanism that actually, in our view, circumvents Delaware law. So we don't think what they've proposed would pass legal muster in Delaware, and that's why we don't think it's a legitimate way to essentially declassify the board. It would be in violation of our founding documents, our bylaws,' Lashier said. Sign up here for the Houston Business Journal's free morning and afternoon daily newsletters to receive the latest business news impacting Greater Houston.
Business Wire
21-04-2025
- Business
- Business Wire
Phillips 66 Announces Increase in Quarterly Dividend
HOUSTON--(BUSINESS WIRE)-- 'We are pleased to announce an increase in our quarterly dividend, reflecting our ongoing commitment to delivering value to our shareholders,' said Mark Lashier, chairman and CEO of Phillips 66. 'Our disciplined approach to capital allocation and strong cash flow generation enables us to return over 50 percent of our net operating cash flow to investors,' Lashier said. 'Since our formation in 2012, the annual dividend has increased every year, resulting in a significant 15 percent compound annual growth rate. This increase underscores our confidence in our team's ability to deliver on our strategic priorities and leverage our integrated portfolio to continue to provide a secure, competitive and growing dividend for our shareholders.' About Phillips 66 Phillips 66 (NYSE: PSX) is a leading integrated downstream energy provider that manufactures, transports and markets products that drive the global economy. The company's portfolio includes Midstream, Chemicals, Refining, Marketing and Specialties, and Renewable Fuels businesses. Headquartered in Houston, Phillips 66 has employees around the globe who are committed to safely and reliably providing energy and improving lives while pursuing a lower-carbon future. For more information, visit or follow @Phillips66Co on LinkedIn. Cautionary Statement for the Purposes of the 'Safe Harbor' Provisions of the Private Securities Litigation Reform Act of 1995 —This news release contains forward-looking statements within the meaning of the federal securities laws relating to Phillips 66's operations, strategy and performance. Words such as 'anticipated,' 'estimated,' 'expected,' 'planned,' 'scheduled,' 'targeted,' 'believe,' 'continue,' 'intend,' 'will,' 'would,' 'objective,' 'goal,' 'project,' 'efforts,' 'strategies,' 'priorities' and similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements included in this news release are based on management's expectations, estimates and projections as of the date they are made. These statements are not guarantees of future events or performance, and you should not unduly rely on them as they involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include: changes in governmental policies relating to NGL, crude oil, natural gas, refined petroleum or renewable fuels products pricing, regulation or taxation, including exports; our ability to timely obtain or maintain permits, including those necessary for capital projects; fluctuations in NGL, crude oil, refined petroleum products, renewable fuels, renewable feedstocks and natural gas prices, and refined product, marketing and petrochemical margins; the effects of any widespread public health crisis and its negative impact on commercial activity and demand for our products; changes to government policies relating to renewable fuels and greenhouse gas emissions that adversely affect programs including the renewable fuel standards program, low carbon fuel standards and tax credits for biofuels; liability resulting from pending or future litigation or other legal proceedings; liability for remedial actions, including removal and reclamation obligations under environmental regulations; unexpected changes in costs or technical requirements for constructing, modifying or operating our facilities or transporting our products; our ability to successfully complete, or any material delay in the completion of, any asset disposition, acquisition, shutdown or conversion that we may pursue, including receipt of any necessary regulatory approvals or permits related thereto; unexpected technological or commercial difficulties in manufacturing, refining or transporting our products, including chemical products; the level and success of producers' drilling plans and the amount and quality of production volumes around our midstream assets; risks and uncertainties with respect to the actions of actual or potential competitive suppliers and transporters of refined petroleum products, renewable fuels or specialty products; changes in the cost or availability of adequate and reliable transportation for our NGL, crude oil, natural gas and refined petroleum and renewable fuels products; failure to complete definitive agreements and feasibility studies for, and to complete construction of, announced and future capital projects on time or within budget; our ability to comply with governmental regulations or make capital expenditures to maintain compliance; limited access to capital or significantly higher cost of capital related to our credit profile or illiquidity or uncertainty in the domestic or international financial markets; damage to our facilities due to accidents, weather and climate events, civil unrest, insurrections, political events, terrorism or cyberattacks; domestic and international economic and political developments including armed hostilities, such as the war in Eastern Europe, instability in the financial services and banking sector, excess inflation, expropriation of assets and changes in fiscal policy, including interest rates; international monetary conditions and exchange controls; changes in estimates or projections used to assess fair value of intangible assets, goodwill and properties, plants and equipment and/or strategic decisions or other developments with respect to our asset portfolio that cause impairment charges; substantial investments required, or reduced demand for products, as a result of existing or future environmental rules and regulations, including greenhouse gas emissions reductions and reduced consumer demand for refined petroleum products; changes in tax, environmental and other laws and regulations (including alternative energy mandates) applicable to our business; political and societal concerns about climate change that could result in changes to our business or increase expenditures, including litigation-related expenses; the operation, financing and distribution decisions of our joint ventures that we do not control; the potential impact of activist shareholder actions or tactics; and other economic, business, competitive and/or regulatory factors affecting Phillips 66's businesses generally as set forth in our filings with the Securities and Exchange Commission. Phillips 66 is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
Yahoo
04-03-2025
- Business
- Yahoo
Phillips 66 to speak at Piper Sandler 25th Annual Energy Conference
HOUSTON, March 04, 2025--(BUSINESS WIRE)--Mark Lashier, chairman and CEO of Phillips 66 (NYSE: PSX), will participate in a fireside chat at the Piper Sandler 25th Annual Energy Conference at 1:50 p.m. ET on Tuesday, March 18, 2025. Lashier will discuss the company's plans to continue advancing strategic priorities across its segments to deliver shareholder value and maintaining its ongoing commitment to disciplined capital allocation. To access the webcast, go to the Events and Presentations section of the Phillips 66 Investors site, A replay will be archived on the Events and Presentations page the day after the event, and a transcript will be available at a later date. About Phillips 66 Phillips 66 (NYSE: PSX) is a leading integrated downstream energy provider that manufactures, transports and markets products that drive the global economy. The company's portfolio includes Midstream, Chemicals, Refining, Marketing and Specialties, and Renewable Fuels businesses. Headquartered in Houston, Phillips 66 has employees around the globe who are committed to safely and reliably providing energy and improving lives while pursuing a lower-carbon future. For more information, visit or follow @Phillips66Co on LinkedIn. View source version on Contacts Jeff Dietert (investors) Owen Simpson (investors) Thaddeus Herrick (media)
