In a dramatic conclusion to one of the most heated corporate governance battles of the year, both Phillips 66 and activist hedge fund Elliott Investment Management secured two seats each on the oil refiner’s board of directors. The result, confirmed at the company’s annual shareholder meeting on Wednesday, reflects a hard-fought compromise following months of intense conflict over the company’s direction and leadership.

The shareholder vote capped a turbulent campaign during which Elliott aggressively advocated for operational shake-ups, including asset sales and performance overhauls. In contrast, Phillips 66 maintained that its current strategic path was sound and positioned to deliver long-term shareholder value. The final outcome—a split board decision—indicates investors desire reform but not the sweeping overhaul Elliott was pushing for.

Elliott had initially sought to place four of its nominated directors on the board, aiming to fill all open seats. However, shareholders opted for a middle ground, electing two of Elliott’s picks—Sigmund Cornelius and Michael Heim—while also supporting two candidates from Phillips 66’s list. Long-serving director John Lowe and nominee Howard Ungerleider were unseated as a result.

"Shareholders are demanding substantial, not superficial, changes at Phillips 66," said Elliott in a post-vote statement. On the other side, Phillips CEO Mark Lashier responded by saying, “The vote underscores faith in our long-term integrated strategy, even if the full value of our approach has yet to be fully realized.” Despite these reassurances, the company’s stock fell over 7% in early trading on the New York Stock Exchange.

Industry observers noted that the newly elected board members bring valuable sector knowledge and operational expertise. Analysts believe this balanced outcome could ultimately benefit Phillips 66, injecting fresh perspectives without completely derailing the current strategic blueprint. However, sources revealed that large index funds withheld support from Elliott, although the hedge fund did manage to gain backing from around 40% of the company’s employee pension fund.

This vote marks a milestone for Elliott, one of the most active activist investors globally. While the firm has succeeded in boardroom takeovers in Europe—most notably gaining control of Telecom Italia’s board in 2017—this is its first proxy vote outcome in a U.S. board election. Elliott's push for change at Phillips 66 began with a $1 billion stake in 2023, which it later increased to $2.5 billion, intensifying its pressure for corporate transformation. The split result now sets the stage for a tense but potentially productive boardroom dynamic in the months ahead.