Phillips 66
For the period ended May 13, 2026. Filed Apr 2, 2026.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
May 13, 2026 · Filed Apr 2, 2026
Contents
Executive Compensation Program Overview
Through the use of a VCIP and equity-based award programs, the compensation realized by our executives is directly linked to our performance. In order for our NEOs to earn and sustain competitive levels of compensation, the Company must meet or exceed its strategic objectives, perform well relative to peers, and deliver market-competitive returns to shareholders.
COMPENSATION PROGRAM MIX
The Chief Executive Officer’s target compensation mix is 91% at risk and 68% performance-based. The average target mix for the other NEOs is 83% at risk and 63% performance-based. Based on its evaluation of performance, the HRCC has the authority to reduce or eliminate the performance-based payouts that may be awarded under the PSP and VCIP. RSUs may lose value depending on stock price performance. The charts below outline the relative size, in percentage terms, of each element of the 2025 annualized target compensation.
| Key Elements of Pay | |||||
| CEO | Other NEOs(Average) | Delivered via | Performance Drivers and Weightings | ||
| Base Salary | Cash | •Annual fixed cash compensation to attract and retain NEOs | |||
| Annual Incentive | Variable Cash Incentive Program (VCIP) | 50% Operational Performance | |||
| •Safety & Operating Excellence (25%) •Environment (15%) •High-Performing Organization (10%) | |||||
| 50% Financial Performance | |||||
| •Adjusted VCIP Controllable Costs(1) (10%) •Adjusted VCIP EBITDA(1) (40%) | |||||
| Long-Term Incentives | Performance Share Program (PSP)70% of LTI Target3-year performance period | •Adjusted PSP ROCE(1) (50%)•Relative TSR (50%) | |||
| Restricted Stock Units (RSUs) 30% of LTI Target3-year cliff vesting | •Long-term stock price appreciation | ||||
(1)See Appendix A for a reconciliation to the nearest GAAP financial measures.
| Compensation Discussion and Analysis | 53 |
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2025 OPERATING AND FINANCIAL HIGHLIGHTS THAT IMPACTED PAY OUTCOMES
2025 was a transformative year for our Company, which required our team to embrace a continuous improvement mindset, reliably operate our assets, and faithfully execute the Company's strategy. Through the strength of our integrated portfolio, we delivered shareholder value throughout the year while maintaining our focus on improving our world-class operations. We also advanced our growth strategy by continuing portfolio optimization; fully funding $3.5 billion of strategic acquisitions through divestitures of non-core assets.
Our key accomplishments for the year include:
reinforcing our position as leaders in industry safety by achieving a combined total recordable rate of 0.11;
achieving above-industry average annual refining utilization rate of 94% while setting record annual refining clean product yield of 87%;
achieving record NGL transportation and fractionation volumes in our Midstream segment;
enhancing our portfolio through asset dispositions and acquisitions, most notably the acquisition of the remaining 50% interest in WRB Refining LP and the acquisition of EPIC NGL (subsequently renamed Coastal Bend);
returning $3.1 billion to shareholders, representing more than 50% of our net operating cash flow; and
continuing to evolve our continuous improvement approach to savings, reflecting disciplined execution of cost and operating model improvements across the organization.
Operating Performance
| COMBINED TOTAL RECORDABLE RATE (TRR) | TIER 1 AND 2 PROCESS SAFETY EVENT RATE(1) |
|---|
Financial Performance
| NET INCOME ($MM) | ADJUSTED VCIP EBITDA ($MM)(2) | ADJUSTED PSP ROCE (%)(2) |
|---|
(1)The 2024 Industry Average for Tier 1 and Tier 2 Process Safety Event Rates is the 2024 AFPM Refining Average (most recent available).
(2)See Appendix A for reconciliations to the nearest GAAP financial measure.
| 54 | Phillips 66 2026 Proxy Statement |
Total Shareholder Return Performance
The actions that we have undertaken to position Phillips 66 as the leading downstream energy provider have enabled us to deliver substantial value for our shareholders through the commodity cycles. This includes a total shareholder return of more than 5x for the period from May 1, 2012 to December 31, 2025. The graphic below presents our cumulative total shareholder return from our
spin-off from ConocoPhillips to year-end 2025, as compared against our 2023-2025 performance peer group and the S&P 100 over the same period.
TOTAL SHAREHOLDER RETURN(1)
(1)Presented on a simple average basis using the 2023-2025 performance peer group. Dividends assumed to be reinvested in common stock. Phillips 66's common stock-initiated trading on the NYSE in May 2012. Source: Bloomberg.
| Compensation Discussion and Analysis | 55 |
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