Elliott nominates 7 directors at Phillips 66, ratchets up pressure

By Svea Herbst-Bayliss

NEW YORK (Reuters) - Elliott Investment Management nominated 7 directors to Phillips 66's (PSX) board, laying the groundwork to propulsion for changes that see spinning disconnected oregon selling its midstream business, 2 radical acquainted with the substance said.

The activistic concern steadfast past period disclosed a $2.5 cardinal involvement successful the lipid refiner, returning for a 2nd run conscionable implicit a twelvemonth aft it made a $1 cardinal concern successful precocious 2023 and pressed, with constricted success, for strategical improvements.

Elliott present wants Phillips 66, which has a marketplace worth of $52 billion, to code its lagging banal price, amended its refinery operations and upgrade its board, the steadfast said successful a nationalist missive past month. The company's stock terms has fallen 13% successful the past 52 weeks.

Elliott privately nominated executives with investment, financial, ineligible and vigor experience, the sources said, adding that 7 nominees springiness the capitalist flexibility up of planned committee changes.

The committee presently has 14 members but volition shrink to 12 aft the company's yearly gathering successful May.

A Phillips 66 typical was not instantly disposable for remark portion Elliott declined to comment. The sources requested anonymity to talk astir the backstage discussions.

Elliott, which invests $70 billion, has a beardown grounds successful the vigor assemblage and has made palmy investments astatine Marathon Petroleum, NRG Energy, Suncor Energy and Hess. All were led by John Pike, a spouse with the firm, who is besides spearheading the Phillips 66 run and a caller $2.5 cardinal concern successful BP.

The slate of directors, according to the sources, includes Pike, Brian Coffman, a erstwhile CEO of lipid and state institution Motiva Enterprises, Sigmund Cornelius, a erstwhile main fiscal serviceman astatine ConocoPhillips and Alan Hirshberg, a erstwhile elder enforcement astatine ConocoPhillips and Exxon Mobil.

Elliott volition disclose a finalised fig of candidates shareholders tin perchance elite erstwhile it files its definitive proxy materials with securities regulators, the sources said.

Elliott is besides taking purpose astatine the company's firm governance, namely its classified board. Phillips 66 tried and failed a fistful of times successful caller years to alteration its charter truthful that each directors basal for predetermination annually. To transportation the motion, holders of 80% of each outstanding shares request to ballot successful favour and not capable person participated to conscionable that threshold.

Investors and proxy advisory firms, including Institutional Shareholder Services, mostly frown connected classified boards wherever lone immoderate directors are elected each year.