By Lauren Thomas

Elliott Investment Management scored a key endorsement this week in its heated proxy battle at oil refiner Phillips 66, which is nearing a shareholder vote later this month.

Winning ISS support

On Monday, the activist firm received the backing of the prominent proxy adviser Institutional Shareholder Services. ISS recommended shareholders elect all four of Elliott's director nominees at Phillips 66's annual meeting set for May 21.

Earlier this month, Elliott received similarly favorable backings from both Glass Lewis, which backed three of Elliott's nominees, and Egan-Jones, which recommended support for all four of Elliott's candidates.

"ISS has now fully validated Elliott's case for change -- making clear that the status quo at the company has failed to serve shareholders," Elliott said in a statement.

Phillips 66 said in a statement that it disagrees with the recommendations issued by ISS and Glass Lewis. "Elliott is seeking rapid, irreversible change in pursuit of a short-term thesis that would introduce significant risks to Phillips 66 shareholders," the company said Tuesday.

The ISS report called attention to Phillips 66's disappointing operating performance and poor corporate governance, among other concerns. It said Elliott's nominees were strong and brought necessary experience.

Elliott has been pushing the oil refiner to sell or spin off its midstream business along with a chemicals joint venture it has with Chevron. Chevron recently said it is open to buying Phillips 66's stake in that business. Phillips 66 has called Elliott's suggestions "misguided and risky."

A rare vote for Elliott

This is only the second time in 15 years that ISS has supported an entire dissident slate of directors at a company whose market value is over $20 billion. The other instance was in 2013 at Hess, where Elliott ran another heated campaign that ended up settling the day of the vote.

Elliott's activist fights have very rarely gone all the way to a vote. The fight at Phillips 66 is being spearheaded by Elliott partner John Pike, who is also overseeing a big investment in British oil major BP.

Write to Lauren Thomas at lauren.thomas@wsj.com

(END) Dow Jones Newswires

May 13, 2025 10:32 ET (14:32 GMT)

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