8-K
Phillips 66 (PSX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: April 12, 2022
(Date of earliest event reported)
Phillips 66
(Exact name of registrant as specified in its charter)
| Delaware | 001-35349 | 45-3779385 |
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| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (I.R.S. Employer<br> <br>Identification No.) |
2331 CityWest Boulevard
Houston, Texas 77042
(Address of principal executive offices and zip code)
(281) 293-6600
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br> <br>symbol | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common stock, $0.01 par value | PSX | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
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(b) Greg C. Garland, Chairman of the Board and Chief Executive Officer of Phillips 66 (the “Company”) announced today that he intends to retire from his position as Chief Executive Officer of the Company effective July 1, 2022. Mr. Garland has served in this capacity since the Company became an independent company in May 2012. Mr. Garland will continue to serve as Executive Chairman of the Board with an expected retirement date from that position in 2024.
Upon assuming the role of Executive Chairman of the Board, Mr. Garland’s base salary will be reduced to $1,000,000 from $1,675,008. The target opportunity for Mr. Garland in the Company’s variable cash incentive program (“VCIP”) will remain at 160% of his base salary. His actual VCIP payout, if any, will be based on performance relative to the performance goals established under the VCIP. Mr. Garland’s 2022 long-term incentive target was reduced to $10,000,000 in the form of 25% restricted stock units (“RSUs”), 25% stock options, and 50% under the 2022-2024 performance share program (“PSP”).
(c) The Board of Directors of the Company has appointed Mark E. Lashier to become President and Chief Executive Officer effective July 1, 2022. Mr. Lashier, age 60, currently serves as the President and Chief Operating Officer of the Company, a position he has held since April 2021. Prior to joining the Company, Mr. Lashier served as President and CEO of Chevron Phillips Chemical Company LLC from 2017 to 2021.
In his role as President and Chief Executive Officer, Mr. Lashier’s annual base salary will be increased to $1,500,000. The target opportunity for Mr. Lashier in the Company’s VCIP will equal 150% of his base salary. His actual VCIP payout, if any, will be based on performance relative to the performance goals established under the VCIP. Mr. Lashier’s 2022 long-term incentive target is $6,503,750 in the form of 25% RSUs, 25% stock options, and 50% under the 2022-2024 PSP. In connection with this announcement, Mr. Lashier will receive a supplemental long-term incentive grant with a grant date fair value of approximately $462,500 in the form of RSUs and $462,500 in the form of stock options.
There are no other arrangements or understandings between Mr. Lashier and any other persons pursuant to which Mr. Lashier was appointed the Company’s President and Chief Executive Officer. There are also no family relationships between Mr. Lashier and any director or executive officer of the Company. Mr. Lashier has no direct or indirect interest in any transaction or proposed transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
| Item 7.01. | Regulation FD Disclosure. |
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On April 12, 2022, the Company issued a news release announcing Mr. Garland’s retirement from his position as Chief Executive Officer and the appointment of Mr. Lashier as President and Chief Executive Officer, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
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The information in this Item 7.01 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
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(d) Exhibits. The following exhibits are furnished with this report:
| Exhibit<br>No. | Description |
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| 99.1 | News release issued by the Company on April 12, 2022 |
| 104 | Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document (contained in Exhibit 101) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Phillips 66 | ||
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| Dated: April 12, 2022 | By: | /s/ Vanessa Allen Sutherland |
| Vanessa Allen Sutherland | ||
| Executive Vice President |
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EX-99.1
EXHIBIT 99.1
NEWS RELEASE
Phillips 66 Announces CEO Transition Plans
| • | Greg Garland to step down as Chief Executive Officer on July 1 after 10 years of leading company; will<br>remain as Executive Chairman of the Board of Directors |
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| • | Mark Lashier, current President and Chief Operating Officer, will assume President and Chief Executive Officer<br>role |
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HOUSTON – April 12, 2022 – Phillips 66 (NYSE: PSX) has named its current President and Chief Operating Officer, Mark Lashier, as President and Chief Executive Officer effective July 1. Lashier will succeed Greg Garland, who will remain as Executive Chairman of the Board of Directors until he retires in 2024.
Garland has led Phillips 66, which is headquartered in Houston, for the past 10 years.
“Greg’s leadership and commitment to Phillips 66, our employees and our investors have been invaluable,” said Glenn Tilton, lead Independent Director on the Phillips 66 Board of Directors and chair of the Board’s Nominating and Governance Committee. “He embodies our values of safety, honor and commitment and our vision to provide energy and improve lives.”
Since Garland assumed the Chairman and CEO role in May 2012, Phillips 66 has recorded many notable achievements. The company has:
| • | Become an industry leader in operating excellence, including safety, reliability and environmental stewardship;<br> |
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| • | Pioneered disciplined capital allocation in the energy business, targeting 60% of cash flow back in the business<br>while returning 40% to shareholders; |
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| • | Returned $29 billion to shareholders through dividends, share repurchases and exchanges;<br> |
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| • | Raised its dividend 10 times for a CAGR of 17%; |
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| • | Grown its Midstream business, establishing leading positions in the crude and NGL value chains;<br> |
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| • | Established a values-based organization that is true to its vision of providing energy and improving lives.<br> |
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“On behalf of the Board of Directors, I want to thank Greg for his outstanding leadership as Chairman and CEO,” Tilton continued. “He stood up Phillips 66 as an independent company and created a leading diversified energy manufacturing and logistics company, while investing for the future and delivering strong financial returns.”
Lashier joined Phillips 66 in April 2021 as President and Chief Operating Officer.
“Mark is the right leader at the right time for Phillips 66,” Garland said. “He has demonstrated a strong track record of delivering growth, and driving excellence in both financial and operating results. He will lead a company that has a solid strategy, proven track record, strong leadership, outstanding employees, and will successfully navigate and thrive in the energy transition.”
“I have known Mark a long time,” continued Garland. “We have a great relationship based on trust and respect, and I am confident he will serve Phillips 66, our employees, our communities and our shareholders well.”
Lashier said he planned to continue to build on the success Garland has had since the company was established in 2012.
“Greg’s leadership in fostering a culture of operating excellence and financial strength will benefit us for decades,” Lashier said. “That foundation is critical as we face the opportunities and challenges of the next 10 years. I am excited to embark on this new role and leverage the talent of our team and the strength of our assets as we continue to deliver shareholder value.”
About Greg Garland
Garland has served as Chairman and Chief Executive Officer of Phillips 66 since 2012. A chemical engineer, he previously served as Senior Vice President, Exploration and Production, Americas for ConocoPhillips and as President and Chief Executive Officer of Chevron Phillips Chemical Company, LLC (CPChem), a joint venture between Phillips 66 and Chevron. He began his career with Phillips Petroleum Company in 1980 as a project engineer for the Plastics Technical Center. He serves on several philanthropic boards, including the Barbara Bush Houston Literacy Foundation, the Greater Houston Partnership, Junior Achievement of Southeast Texas and the Board of Visitors for MD Anderson.
About Mark Lashier
Lashier joined Phillips 66 in April of 2021 as President and Chief Operating Officer. He has over 30 years of energy industry experience. Lashier served as President and Chief Executive Officer of CPChem from 2017 to 2021. Prior to that role, he held several leadership positions at CPChem, including Executive Vice President of Olefins and Polyolefins and Senior Vice President of Specialties, Aromatics and Styrenics. He began his career with Phillips Petroleum Company as a research engineer.
About Phillips 66
Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Headquartered in Houston, the company has 14,000 employees committed to safety and operating excellence. Phillips 66 had $56 billion of assets as of Dec. 31, 2021. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.
CONTACTS
| Jeff Dietert (investors)<br> <br>832-765-2297<br> <br>jeff.dietert@p66.com | Shannon Holy (investors)<br> <br>832-765-2297<br> <br>shannon.m.holy@p66.com | Thaddeus Herrick (media)<br>855-841-2368<br><br><br>thaddeus.f.herrick@p66.com |
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