Activist investor Elliott Investment Management scored a victory on Monday when Institutional Shareholder Services recommended investors elect all four of Elliott’s director nominees to the Phillips 66 (NYSE:PSX) board, bolstering the hedge fund’s campaign for strategic changes at the oil refiner.
ISS is a top proxy advisory firm whose recommendations guide major investors on corporate votes, often swaying outcomes in boardroom battles.
“Although the board has been reshaped since the pandemic, important industry perspectives have been overlooked, and there is strong evidence that the board is not willing to exercise independent oversight of management,” ISS wrote in its report.
The proxy advisor also challenged Phillips 66’s argument that its integrated strategy delivers superior returns, noting the stock began underperforming peers in mid-2021 and “has not been able to close the gap.” PSX shares have dropped 18% over the past 52 weeks, closing at $118.68 on Monday.
Why It Matters: Elliott first disclosed its investment in Phillips 66 in February, expanding from an initial $1 billion position that had already secured a board seat for refining veteran Robert Pease last year. The activist fund’s larger stake now places it among Phillips 66’s top five shareholders.
Elliott said the ISS report “fully validates Elliott’s case for change,” according to the report.
Photo Courtesy: Ken Wolter on Shutterstock.com
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