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Investing.com -- Elliott Investment Management secured two seats on the Phillips 66 (NYSE:PSX) board following a closely watched proxy contest that came to a head at the company’s annual meeting on Wednesday, sources told Investing.com, with the news later released publicly by both companies. The result marked a partial victory for the activist fund, whose more sweeping proposals for change ultimately fell short.
Shareholders elected Elliott nominees Sigmund Cornelius and Michael Heim, while also re-electing company-backed directors Robert Pease and Nigel Hearne. Two incumbent directors, John Lowe and Howard Ungerleider, were not returned to the board based on preliminary results.
The campaign marks Elliott’s first-ever U.S. proxy battle to go to a full shareholder vote and caps months of rising tensions. After initially disclosing a $1 billion stake in 2023, Elliott expanded its position to more than $2.5 billion earlier this year and pressed for strategic changes including a separation of midstream assets and the chemicals joint venture with Chevron Corp (NYSE:CVX).
“Today’s vote sends a clear message: Shareholders demand meaningful change at Phillips 66,” Elliott said in a statement, while also noting it plans to remain constructively engaged. “We are confident Sig (LON:SHI) and Mike will work collaboratively with the incumbent directors to improve operational execution and share-price performance.”
Phillips 66, which has a market capitalization of roughly $50 billion, thanked investors for their participation and reiterated support for its integrated strategy. “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,” said CEO Mark Lashier.
Despite advancing two board candidates, shareholders rejected other proposals backed by Elliott, including one requiring annual director resignations. A management proposal to declassify the board also failed to meet the high threshold required, though the company said it remains committed to moving toward annual elections.
Phillips stock has dropped 6.2% as of 10:50 AM, ET, since the news broke, as investors take profits and "sell the news."