Phillips 66 Disagrees With Recommendations Issued By ISS And Glass Lewis; Reiterates Commitment To Ongoing Transformation And Governance Refreshment

Disagrees with ISS' and Glass Lewis' Recommendations which Failed to Address Critical Issues Reiterates The Strength Of Phillips 66's Highly Qualified Board And Nominees

Phillips 66 (NYSE:PSX) today announced that it strongly disagrees with the recommendations issued by Institutional Shareholder Services ("ISS") and Glass Lewis & Co. ("Glass Lewis").

"We disagree with the recommendations issued by ISS and Glass Lewis," said the Phillips 66 Independent Directors. "We remain committed to engaging with and listening to our shareholders on the issues in this campaign."

The Company notes the following issues and omissions in the reports' analyses that remain critical factors for shareholders to consider:

• Elliott's break-up thesis not examined: The reports did not opine on the merits of Elliott's thesis to break up Phillips 66, which is the primary objective of Elliott's campaign. In fact, ISS stated clearly that its report "is not an endorsement of a Midstream and/or Chemicals separation." Supporting Elliott's directors implicitly supports this risky path and overrides the judgment of Phillips 66's highly qualified Board. Our Board continually evaluates the portfolio to maximize shareholder value and currently believes that the integrated model is the best path to shareholder value creation. As we always have, we remain committed to regularly and aggressively assessing these options going forward.
  
  
   
• Concerning assessment of director independence: By recommending against Robert Pease, the reports establish a concerning precedent on evaluating director independence.
  • The reports suggest a director selected and vetted by a shareholder can be determined to lack independence after one month on the board and one vote. The single vote was for a combined CEO and Chair, a policy that is in place at 44% of S&P 500 companies.1
  • This analysis disregards the fact that Mr. Pease's vote represented his professional judgment as a 30-year corporate leader and ignores the fact that Mr. Pease was carefully evaluated for his qualifications and independence by Elliott. It also fails to apply any scrutiny to Elliott's self-interested lack of support for its recently supported director.
• Reliance on board analysis from five years ago: ISS acknowledged that Phillips 66 has refreshed its Board substantially since July 2020. Yet, it still claimed that a lack of Board refreshment prior to the COVID-19 pandemic reflects a need for change now.
• Concerning governance overlooked: ISS and Glass Lewis disregarded Elliott's ongoing efforts to acquire CITGO. The reports also overlook the fact that this pursuit took place concurrently with discussions of a second director appointment. Notably, neither report mentions anything about Elliott's misleading disclosures and the overlapping relationships of its director nominees. These are unresolved issues that are highly relevant to shareholder considerations.

Phillips 66 reiterates its commitment to ongoing transformation and governance refreshment. The Company reminds shareholders of key facts including:

• Consistent refreshment: Phillips 66 has added five new independent directors in the past four years to equip the Board with fresh perspectives and independent viewpoints. In its report, ISS acknowledged the Company's board refreshment efforts, noting "Beginning in July 2020, the pace of board refreshment accelerated rapidly. The board appointed Julie Bushman early that month, Lisa Davis in October 2020, Denise Singleton and Doug Terreson in July 2021, and Greg Hayes in July 2022. Mark Lashier also joined in July 2022 in connection with his succession as CEO. Accompanying these appointments, Ferguson departed in August 2020, and McGraw and Tschinkel departed in March 2021."
• Strong governance practices: The Board is firmly committed to declassification that would require all directors to stand election each year. The last attempt to do so received approval from 73% of outstanding shares.
  • In its report, ISS supported Phillips 66's declassification proposal, arguing, "The proposed declassification, assuming it can clear the supermajority hurdle, would enhance board accountability to shareholders, and the resubmission of this proposal to a vote after it failed in prior years demonstrates a commitment to shareholders' interests on the part of management."
• Early days in transformation strategy: ISS recognizes that Phillips 66 has improved its operating results since Mark Lashier stepped in as CEO on July 1, 2022 and achieved a total shareholder return above that of key competitors. ISS noted, "Since the appointment of Lashier as CEO through May 8, 2025, PSX has outperformed VLO by 20.9 percentage points." Phillips 66 has made it clear that it is working to improve operations but is not satisfied with its results. In under three years, the Company has made progress on corporate cost takeout, refining performance, asset divestitures and more. These are facts recognized by the reports. These actions reflect a commitment to improvement that is continuing and will lead to further performance improvement and ultimately increased shareholder value.
• Relevant director skills: Phillips 66's Board composition is closely aligned with the Company's strategy and the issues raised in this campaign. Of the continuing Directors and nominees, six have refining experience, five have chemicals experience and five have midstream experience. The majority has experience in business transformations, several have expertise in finance and a number are experts in supply chains.2 Notably, the Company's Directors and nominees have overseen more than $300 billion in "breakup or major divestiture transactions.3

Phillips 66 encourages shareholders to reach their own informed conclusions.

Elliott is seeking rapid, irreversible change in pursuit of a short-term thesis that would introduce significant risks to Phillips 66 shareholders. Do not let Elliott's short-term and misinformed thesis disrupt your consistent and compelling returns.

Phillips 66 recommends that shareholders use the WHITE proxy card to vote:

• ‘FOR' only its four nominees using the WHITE proxy card;
• ‘FOR' management's proposal to approve the declassification of the Board of Directors, in line with the recommendations from ISS & Glass Lewis;
• ‘AGAINST' Elliott's proposal requiring annual director resignations, which implementing would violate Delaware law and put your Board at significant legal and reputational risk.

The Board strongly recommends that shareholders safeguard their investment in Phillips 66 by casting their vote as soon as possible, regardless of plans to attend the Annual Meeting virtually on May 21, 2025.

Shareholders may receive materials from Elliott Management that say "Gold proxy card" or "Gold voting instructions" or similar language. Phillips 66 recommends that shareholders DISCARD any Gold voting materials they may receive from Elliott. Shareholders may cancel out any vote made using a Gold proxy card by voting again TODAY using the Company's WHITE proxy card. Only the latest-dated vote will count.