These are top 10 stocks traded on the Robinhood UK platform in July
WEST PALM BEACH, Fla. - Elliott Investment Management L.P., a major shareholder in Phillips 66, has called for significant changes in the boardroom of the $42.9 billion energy company, criticizing the current directors for fostering a culture of complacency and challenging governance practices. The criticism comes as Phillips 66’s stock has declined 25.6% over the past year, significantly underperforming the market. According to InvestingPro analysis, the company appears undervalued at its current price of $105.14. The investment firm, which manages funds that make it a top-five shareholder in Phillips 66, has nominated four independent candidates to the board and is urging shareholders to vote on the Gold Card to support its initiative.
Elliott’s campaign follows more than 18 months of attempts to engage with Phillips 66’s leadership, which, according to Elliott, were met with resistance and a lack of transparency. The company maintains a FAIR Financial Health Score of 2.19 on InvestingPro, with annual revenues of $137.8 billion and a notable dividend yield of 4.64%. The investment firm has accused Phillips 66 of undermining its efforts and misrepresenting its engagement with the board. Elliott asserts that Phillips 66 has failed to fulfill a previous agreement to add two new independent directors, dragging its feet and ultimately reneging on the commitment.
The firm also criticizes Phillips 66 for consolidating power in the hands of CEO Mark Lashier, who also serves as Chairman, a move Elliott believes has been detrimental to the company. Elliott has highlighted its concerns about the company’s performance, governance, and engagement with shareholders, suggesting that the addition of new independent directors is necessary to improve the company’s trajectory and shareholder value.
Elliott’s proposed governance improvements include addressing Phillips 66’s classified board structure, which it views as a barrier to accountability. The firm has also responded to Phillips 66’s accusations regarding conflicts of interest, particularly concerning Elliott’s involvement in the CITGO auction process, which it claims poses no conflict.
The investor’s letter to shareholders is part of a broader proxy contest ahead of Phillips 66’s annual meeting, where Elliott hopes its nominees will be elected to the board. This move signifies Elliott’s commitment to instigating change at Phillips 66, emphasizing the importance of independent board oversight and challenging the company’s current governance practices. Wall Street analysts maintain a positive outlook, with price targets ranging from $106 to $149 per share. For deeper insights into Phillips 66’s valuation and performance metrics, investors can access the comprehensive Pro Research Report available on InvestingPro, which offers detailed analysis of the company’s financial health and growth potential.
The information in this article is based on a press release statement from Elliott Investment Management L.P.
In other recent news, Phillips 66 reported its financial results for the first quarter of 2023, announcing earnings of $487 million, or $1.18 per share, despite facing challenging market conditions. The company also noted an adjusted loss of $368 million, or $0.90 per share. Additionally, Phillips 66 returned $716 million to shareholders, which included $247 million in share repurchases. In response to shareholder Elliott Investment Management’s proposals, Phillips 66 defended its current strategy, highlighting a 67% total shareholder return and significant cost reductions under CEO Mark Lashier. Meanwhile, Elliott Investment Management has proposed a "Streamline 66" strategy aimed at revitalizing Phillips 66, including board enhancements and operational improvements. Elliott has filed a proxy statement with the SEC to solicit proxies for their director candidates at the upcoming 2025 annual meeting. The firm is advocating for changes it believes will unlock substantial value for stakeholders.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.