PHILLIPS (PSX)
Sector: Energy
2026 Annual Meeting Analysis
PHILLIPS · Meeting: May 13, 2026
Directors FOR
4
Directors AGAINST
0
Say on Pay
FOR
Auditor
FOR
Director Elections
Election of 4 Class II Directors to Hold Office until the 2029 Annual Meeting
Hayes joined the board in 2022 and brings extensive leadership experience as former CEO and Executive Chairman of RTX Corporation; PSX's 3-year price return of 95.5% outperforms XLE by +44.6 percentage points, well below the 65pp threshold required to trigger an AGAINST vote for a strong-positive TSR company, and no overboarding, attendance, or independence concerns are present.
Holley joined in 2019 and brings deep financial and accounting expertise as former CFO of Walmart and a designated audit committee financial expert; the TSR trigger does not fire given PSX's +44.6pp outperformance versus XLE falls short of the 65pp threshold, and he holds 2 outside board seats, within the 4-seat limit.
Singleton joined in 2021 and brings strong legal, governance, and cybersecurity expertise as Chief Legal Officer of Amrize Ltd; the TSR trigger does not fire as PSX's outperformance versus XLE (+44.6pp) does not exceed the 65pp threshold, and she holds 0 current outside public board seats.
Ungerleider joined the board in March 2026 and is exempt from the TSR trigger as his tenure is under 24 months; he brings over 35 years of chemicals and energy industry experience as former President and CFO of Dow Inc. and qualifies as an audit committee financial expert, though shareholders should note he currently holds 3 outside public board seats, within the 4-seat policy limit.
All four Class II nominees pass policy screens: PSX's strong 3-year price return of 95.5% outpaces the XLE sector ETF benchmark by +44.6 percentage points, which does not reach the 65-percentage-point threshold needed to trigger a vote against any director for a company with strong positive absolute returns. No overboarding, attendance, independence, or familial-relationship concerns are identified for any nominee. Ungerleider is additionally exempt as a director joining within the past 24 months.
Say on Pay
✓ FORCEO
Mark Lashier
Total Comp
$23,113,403
Prior Support
N/A
CEO Mark Lashier received total compensation of approximately $23.1 million in 2025, which is in a reasonable range for the chairman and CEO of a $70+ billion integrated downstream energy company. The pay structure is strongly performance-based: 91% of the CEO's target compensation is at risk and 68% is explicitly performance-based, well above the 50-60% variable pay threshold required by policy. Incentive pay alignment with shareholder experience is strong — the 2023-2025 performance share program paid out at 160% of target driven by above-maximum return on capital employed and above-median total shareholder return versus peers, and PSX's 3-year stock return of 95.5% substantially outperformed the XLE benchmark by +44.6 percentage points, confirming that above-benchmark incentive payouts were earned alongside genuine shareholder value creation. The company also maintains robust clawback provisions and a fully independent compensation committee.
Auditor Ratification
✓ FORAuditor
Ernst & Young LLP
Tenure
15 yrs
Audit Fees
$12,800,000
Non-Audit Fees
$2,600,000
Ernst & Young has audited Phillips 66 since 2011 (approximately 15 years), well below the 25-year tenure threshold that would raise independence concerns. Non-audit fees (audit-related fees of $2.1M plus tax fees of $0.2M plus all other fees of $0.3M, totaling $2.6M) represent about 20% of audit fees of $12.8M, comfortably below the 50% threshold. EY is a Big 4 firm appropriate for a $70+ billion market cap company, and no material financial restatements attributable to audit failure are disclosed.
Overall Assessment
The 2026 Phillips 66 annual meeting presents a clean ballot with no significant governance concerns: all four Class II director nominees are qualified, independent, and not overboarded, and PSX's strong stock performance relative to the XLE energy ETF benchmark means the TSR underperformance trigger does not apply to any director. The executive compensation program is heavily performance-based and well-aligned with shareholder returns, the auditor fees are within policy limits, and EY's 15-year tenure remains below the concern threshold.