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Activist investor Elliott Management has won the backing of influential proxy adviser Institutional Shareholder Services for all four board nominees in its campaign against oil refiner Phillips 66, according to a report seen by the Financial Times.
The recommendation from ISS, which advises big money managers such as BlackRock and State Street over how to vote in proxy votes, gives Elliott the upper hand in a shareholder proxy battle expected to climax at Phillips’ annual meeting later this month.
ISS on Monday recommended that Phillips 66’s shareholders vote in favour of Elliott’s four board nominees instead of the refiner’s candidates. Elliott’s nominees include former ConocoPhillips executives Brian Coffman and Sigmund Cornelius as well as former Targa Resources executive Michael Heim and ex-Citadel energy analyst Stacy Nieuwoudt.
“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,” said the ISS report.
In one of its most contentious fights in recent years, Elliott is pushing Phillip 66 investors to back its demand that the Houston-based refiner sell assets, improve performance at its refining business and overhaul corporate governance.
ISS’s recommendation comes after Glass Lewis, another proxy adviser, backed three of Elliott’s nominees on Saturday. Shareholders will vote at the annual meeting on May 21. Only four of the 14 positions of Phillips 66’s board are up for nomination at the vote.
Previous Elliott proxy fights, including against oil and gas company Hess and air carrier Southwest Airlines, were settled at the eleventh hour before a vote took place.
Elliott declined to comment. Phillips 66 and ISS did not immediately respond to requests for comment.
This is a developing story
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