- Phillips 66 (PSX, Financial) board addresses shareholder concerns over Elliott's corporate governance agenda.
- Calls for transparency and independence amidst Elliott's campaign to break-up the company.
- Highlights potential conflicts of interest between Elliott and direct competitor CITGO.
Phillips 66 (PSX) issued a letter from its Independent Directors to shareholders and proxy advisors, emphasizing the importance of transparency and independence in corporate governance. The message addresses concerns regarding Elliott Management's campaign, which the board views as contrary to best governance practices.
The letter outlines apprehensions over Elliott's attempts to replace a board member, Bob Pease, and questions the activist investor's expectations of director loyalty. Phillips 66 claims that Elliott's actions may indicate an expectation of allegiance to the activist's goals rather than an objective evaluation of shareholder interests.
Additionally, the board discusses potential conflicts of interest, noting Elliott’s subsidiary, Amber Energy, is pursuing CITGO, a competitor of Phillips 66. The ongoing bid for CITGO by Amber Energy is substantially higher than Elliott's investment in Phillips 66, raising further concerns about Elliott’s interests diverging from other shareholders.
The letter also addresses legal issues, criticizing Elliott's proposal for mandatory annual director resignations, which the board argues contravenes Delaware law and the company's charter. Phillips 66 highlights the potential legal repercussions if Elliott's demands were implemented.
Phillips 66 concludes by encouraging shareholders to independently evaluate all facts, emphasize legal compliance, and maintain strong governance standards. The company continues its commitment to transparency and safeguarding shareholder interests. For further information, Phillips 66 directs stakeholders to their investor relations website and communications.
