DEF 14A 1 nc10021503x3_def14a.htm DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )


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Phillips 66
(Name of Registrant as Specified in its Charter)


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From Our Chairman of the Board

Dear Fellow Shareholders,

Over the past year, we were faced with a number of unprecedented challenges. When it mattered the most, the employees of Phillips 66 rose to the challenge. Our employees delivered exceptional performance and achieved record safety results for the year. Management and the Board were highly engaged, focusing on the health and safety of our people and our communities. We also focused on our strategy - not just to weather the current environment - but on how we plan to thrive in a lower-carbon future. In 2020, we made progress executing our strategic priorities of growth, returns and distributions supported by a strong foundation of operating excellence and a high-performing organization:

► As a company in a critical infrastructure sector, we continued providing energy to our communities where we live and work. We implemented procedures and put measures in place to keep our employees safe and our facilities on-line. We reconfigured work areas, provided protective equipment and put policies in place to support employees with underlying conditions or children at home, among others. We did this while achieving our best ever rate for personal safety at the Company.

► We took swift action to secure liquidity and maintain our dividend. We suspended our share repurchases, identified projects that could be deferred while still meeting our commitment to personal and process safety, and implemented measures to reduce our controllable costs.

► We focused on the future, announcing further investments in a lower-carbon economy and continuing to expand our participation in the energy transition. Our Rodeo Renewed project will convert our San Francisco Refinery into one of the world’s largest renewable fuels facilities and is expected to reduce the facility’s greenhouse gas emissions by 50%. We formed a new organization within the Company, Emerging Energy, that is dedicated to working on a lower-carbon business platform and opportunities within our portfolio to commercialize emerging energy technologies.

► We completed major growth projects and progressed milestones on others. We completed the Gray Oak Pipeline and the Sweeny Hub Phase 2 expansion. We also added a fourth dock at our Beaumont Terminal, and two docks began crude oil export operations at the South Texas Gateway Terminal during 2020.

► We added two new directors to our Board. We continued our Board refreshment, adding two new directors in 2020 who bring diverse experience to our Board. The addition of these directors adds to our Board’s industry expertise, further increases our Board’s gender diversity, and broadens the depth and breadth of the skills and experiences our directors bring to the Board.

Finally, I would like to note that we are optimistic about the impact of the COVID-19 vaccines on economic recovery and longer term, the opportunities for value creation across our portfolio. To ensure everyone’s health and well-being, the 2021 Annual Meeting will be held exclusively online. You can find information about how to attend in the attached Proxy Statement.

Thank you for your continued support and investment in Phillips 66.

In safety, honor and commitment,

/s/ Greg C. Garland

Greg C. Garland
Chairman and CEO
March 31, 2021

We Work Together, We Get It Done

In a year full of challenges and uncertainty, the people of Phillips 66 stayed committed, determined and resilient. They worked safer than ever before and looked out for one another, their families and communities. As essential workers in a critical infrastructure industry, they kept our refineries, pipelines, terminals and businesses going, helping to fuel the response against COVID-19 and the economic recovery.

Nowhere was that more apparent than in Southwest Louisiana, home to hundreds of Phillips 66 employees and several Company assets — and ground zero for two destructive hurricanes in 2020. Hurricane Laura struck the Lake Charles area in late August and Hurricane Delta tested the community’s resolve once more six weeks later.

The Lake Charles Manufacturing Complex in Southwest Louisiana was still without utility power in early September because of Hurricane Laura, but workers at the site made sure to hoist a U.S. flag in remembrance of 9/11 victims on the 19th anniversary of the attacks.

“That’s just the way people are down here in Louisiana,” said Jerry Lemons, a senior safety consultant at the Lake Charles Manufacturing Complex in Westlake. “We work together, and we just get it done.”

Like Lemons, most Phillips 66 employees in the area endured significant damage to their homes and property from the storms. Many were displaced. Some suffered unimaginable losses. Yet, they suited up, showed up and displayed exemplary focus in helping Phillips 66 repair, rebuild and restart operations as soon as it was safe to do so.

Phillips 66 did what was needed to take care of its people. Right after Hurricane Laura, it set up a distribution center with essentials, including portable generators and A/C units, carbon monoxide detectors, roof repair supplies, water and ice. The Company also expedited financial hardship, benefits and claims assistance to employees, and it secured temporary housing for many of those who were displaced. The Lake Charles complex donated fuel to local law enforcement and supplies to first responders volunteering to tarp roofs. Phillips 66 donated $750,000 to the American Red Cross in support of relief efforts. But it was the people of Phillips 66 who led by example.

“We’re going to rebuild,” Lemons said. “We’re grateful we’ve got a place to work that’s open and running, and we’ll just work through it, like we always do.”

Notice of 2021 Annual
Meeting of Shareholders

2331 CityWest Blvd.

Houston, Texas 77042

DATE

Wednesday, May 12, 2021

TIME

9:00 a.m. Central Daylight Time

PLACE

virtualshareholdermeeting.com/PSX2021

The 2021 Annual Meeting will be held exclusively online at www.virtualshareholdermeeting.com/PSX2021. To join as a shareholder, you must enter the 16-digit control number on your proxy card, voting instruction form, or Notice of Internet Availability you previously received. During the meeting shareholders may ask questions, examine our shareholder list and vote their shares (other than shares held through employee benefit plans, which must be voted prior to the meeting). Other interested parties may join the meeting as a guest, in which case no control number is required. For more information, please see the section entitled ADDITIONAL INFORMATION in this Proxy Statement. We are making the Proxy Statement and the form of proxy first available beginning on March 31, 2021.


*At the meeting, shareholders will be asked to vote on:* • The election of two directors • A management proposal for the annual election of directors • The ratification of Ernst & Young LLP as independent auditors • An advisory proposal to approve executive compensation • Two shareholder proposals contained in this Proxy Statement, if properly presented • Any other business that is properly raised at the meeting	*Shareholders of record at the close of business on March 17, 2021, may vote at the meeting or any postponements or adjournments of the meeting.*
	*HOW TO CAST YOUR VOTE:*
		Online www.proxyvote.com
		By phone (800) 690-6903
		Proxy card Complete, sign and return your proxy card
		At the meeting You also may vote online during the annual meeting by following the instructions provided on the meeting website during the annual meeting. To vote at the meeting, visit www.virtualshareholdermeeting.com/PSX2021
	If you are a beneficial owner and received a voting instruction form, please follow the instructions provided by your bank or broker to vote your shares.
For the Board of Directors,	IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 12, 2021 The Notice of 2021 Annual Meeting of Shareholders, Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2020 are available at www.proxyvote.com
/s/ Paula A. Johnson Paula A. Johnson Corporate Secretary March 31, 2021

Table of Contents

The Company will provide the Notice of Internet Availability, electronic delivery of the proxy materials or mailing of this Proxy Statement, the Annual Report on Form 10-K for the year ended December 31, 2020, and a proxy card to shareholders beginning on March 31, 2021.

Table of Contents	4
PROXY SUMMARY	1
INFORMATION REGARDING THE BOARD OF DIRECTORS	5
DIRECTOR INDEPENDENCE	5
BOARD LEADERSHIP STRUCTURE	5
BOARD MEETINGS, COMMITTEES AND MEMBERSHIP	6
BOARD'S ACTIVE ROLE IN RISK OVERSIGHT	9
RELATED PARTY TRANSACTIONS	10
DIRECTOR QUALIFICATIONS AND NOMINATION PROCESS	10
BOARD SKILLS AND EXPERIENCE	12
PROPOSAL 1: ELECTION OF DIRECTORS	16
PROPOSAL 2: MANAGEMENT PROPOSAL REGARDING ANNUAL ELECTION OF DIRECTORS	17
BENEFICIAL OWNERSHIP OF PHILLIPS 66 SECURITIES	18
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS	18
SECURITIES OWNERSHIP OF OFFICERS AND DIRECTORS	18
CORPORATE RESPONSIBILITY	20
SHAREHOLDER ENGAGEMENT	20
HUMAN CAPITAL MANAGEMENT	21
COMMUNITY INVOLVEMENT AND ENGAGEMENT	22
POLITICAL ACTIVITIES AND LOBBYING ACTIVITIES	22
SUSTAINABILITY AND TRANSITION TO LOWER-CARBON FUTURE	22
PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG	23
ERNST & YOUNG LLP FEES	23
AUDIT AND FINANCE COMMITTEE REPORT	25
PROPOSAL 4: ADVISORY APPROVAL OF EXECUTIVE COMPENSATION	26
COMPENSATION DISCUSSION AND ANALYSIS	27
COMPANY PERFORMANCE SUMMARY	27
EXECUTIVE COMPENSATION PROGRAM SUMMARY	28
EXECUTIVE COMPENSATION PROGRAM DETAILS	32
OTHER BENEFITS AND PERQUISITES	44
EXECUTIVE COMPENSATION GOVERNANCE	45
ROLE OF THE HUMAN RESOURCES AND COMPENSATION COMMITTEE	47
HUMAN RESOURCES AND COMPENSATION COMMITTEE REPORT	48
EXECUTIVE COMPENSATION TABLES	50
SUMMARY COMPENSATION TABLE	50
GRANTS OF PLAN-BASED AWARDS	53
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END	54
OPTION EXERCISES AND STOCK VESTED FOR 2020	55
PENSION BENEFITS AS OF DECEMBER 31, 2020	56
NONQUALIFIED DEFERRED COMPENSATION	57
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL	59
CEO PAY RATIO	62

TABLE OF CONTENTS

DIRECTOR COMPENSATION	63
OBJECTIVES AND PRINCIPLES	63
DIRECTOR COMPENSATION TABLE	64
EQUITY COMPENSATION PLAN INFORMATION	65
SHAREHOLDER PROPOSALS	66
ADDITIONAL INFORMATION	73
ABOUT THE ANNUAL MEETING	73
VIRTUAL MEETING INFORMATION	77
COMMUNICATIONS WITH THE BOARD	78
GENERAL INFORMATION	78
PROXY SOLICITATION	78
HOUSEHOLDING	79
SUBMISSION OF FUTURE SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS	79
Appendix A – Certificate of Amendment to the Amended and Restated Certificate of Incorporation	A-1
Appendix B – Non-GAAP Financial Measures	B-1

PROXY SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement, but does not contain all of the information that you should consider. You should read the entire Proxy Statement before you vote.

YOUR COMPANY

Phillips 66 is a diversified energy manufacturing and logistics company. With a unique portfolio of assets and investments in the midstream, chemicals, refining, and marketing and specialties businesses, we process, transport, store and market fuels and products globally. At Phillips 66, we provide energy that improves lives and contributes to meeting the world’s growing energy needs. Affordable, reliable and abundant energy is essential to sustaining human health and well-being and improving the global standard of living.

VOTING MATTERS

	Proposals	Board Recommendation
*Item 1*	Election of two director nominees	FOR (each nominee)
*Item 2*	Management proposal regarding annual election of directors	FOR
*Item 3*	Ratification of the appointment of our independent registered public accounting firm	FOR
*Item 4*	Approval, on an advisory basis, of compensation paid to our named executive officers	FOR
*Items 5-6*	Two shareholder proposals, if properly presented	AGAINST

CORPORATE GOVERNANCE HIGHLIGHTS

✔ Majority voting for directors

✔ Demonstrated commitment to Board refreshment

✔ Director retirement age policy of 75

✔ Meaningful director and executive stock ownership guidelines

✔ Annual evaluation of the Board and committees

✔ Board level oversight of corporate culture and human capital management

✔ Shareholder right to proxy access (3% for 3 years, up to 20% of the Board)

✔ Robust Lead Director duties

✔ Clawback policy for incentive compensation

✔ Commitment to diverse candidate pools

✔ Policy prohibiting pledging and hedging of Company stock

✔ Annual evaluation of CEO by independent directors

SHAREHOLDER ENGAGEMENT

Ongoing engagement with our shareholders is important to us. We communicate with our shareholders through a variety of means, including meetings, investor presentations, our website, and publications we issue. As part of our engagement program, we reach out to shareholders for dialogue concerning their priorities – which in 2020 generally included environmental, human capital and Board governance matters. During 2020, we solicited feedback from investors representing approximately 48% of our outstanding shares and engaged with nearly 20 global institutional investors, representing over 39% of our outstanding shares. Our Lead Director and the Chair of

PHILLIPS 66 PROXY STATEMENT 2021 1

PROXY SUMMARY

our Public Policy and Sustainability Committee also have participated in our engagements with shareholders. More information about our engagement process can be found under CORPORATE RESPONSIBILITY.

BOARD HIGHLIGHTS

We currently have a classified Board, meaning our Board is divided into three classes of directors, with each class elected for a three-year term. This year, as we did in 2015, 2016 and 2018, we are submitting a proposal to shareholders to amend our organizational documents to declassify the Board over the next three years. If shareholders approve the proposal, beginning with the annual meeting in 2024, all directors will be elected annually. For more information, see PROPOSAL 2: MANAGEMENT PROPOSAL REGARDING THE ANNUAL ELECTION OF DIRECTORS.

Summarized information about our continuing directors and the nominees for election at this Annual Meeting is shown below. Earlier this year, Harold W. McGraw III and Victoria J. Tschinkel, each of whom had served on our Board since 2012, decided to retire in March and not stand for reelection at the Annual Meeting. As a result, Lisa A. Davis, who originally was appointed to the class of directors whose terms expire in 2023, will stand for election at this meeting in order to have the classes of directors as nearly equal as possible.

*Current Nominees*	Director Since	Independent	Committee Memberships						Other Public Boards
*Current Nominees*	Director Since	Independent	AFC	HRCC	NGC	PPSC		EC	Other Public Boards
Julie L. Bushman	2020	✔	l			l			2
Lisa A. Davis	2020	✔		l		l			3
*Directors whose terms expire in 2022*
Greg C. Garland	2012								2
Gary K. Adams	2016	✔		l		l			1
John E. Lowe	2012	✔			l	l		l	2
Denise L. Ramos	2016	✔	l		l			l	2
*Directors whose terms expire in 2023*
Charles M. Holley	2019	✔	l			l			2
Glenn F. Tilton	2012	✔		l		l		l	2
Marna C. Whittington	2012	✔			l	l		l	2
AFC = Audit and Finance Compensation HRCC = Human Resources and NGC = Nominating and Governance PPSC = Public Policy and Sustainability EC = Executive							l = Member		= Chair

Our Board seeks to achieve a diverse and broadly inclusive membership. Our directors bring varying perspectives to the Board by virtue of their backgrounds and experiences. The Board views diversity in terms of skills, as well as gender, age, race, ethnicity, background, tenures, professional experience and perspectives. In late 2019, Charles Holley was appointed to the Board and in 2020, Julie Bushman and Lisa Davis were both appointed. We believe these new directors add to the breadth of experience and perspective of our Board. Our Nominating and Governance Committee is focused on Board refreshment and evaluates directors’ skills in the context of our Company’s evolving business and prioritizes diversity to ensure effective Board oversight. To more completely convey our Board’s composition, we have included a skills matrix under the INFORMATION REGARDING THE BOARD OF DIRECTORS section of this Proxy Statement that our Nominating and Governance Committee uses to review and identify the competencies of directors and composition of the Board as a whole.

2 PHILLIPS 66 PROXY STATEMENT 2021

PROXY SUMMARY

8 of 9 directors are independent	Average tenure of 4 years	45% gender diversity	Average age of 65

2020 PERFORMANCE HIGHLIGHTS

Operating Excellence

Growth

Returns

Distributions

High-Performing Organization

Company best and industry leading safety and environmental performance

Advanced digital innovation across business segments

Gray Oak Pipeline and Sweeny Hub Phase 2 expansion completed

Established Emerging Energy organization and announced Rodeo Renewed project

Generated over $2 billion of operating cash flow

On target to achieve AdvantEdge 66 program value targets

Expanded retail presence through West Coast joint venture

Maintained competitive dividend, distributing $1.6 billion in 2020

Preserved liquidity through cost reductions and suspension of share repurchases

Accelerated efforts to advance inclusion and diversity

Supported our people and communities through volunteerism and financial assistance

EXECUTIVE COMPENSATION HIGHLIGHTS

Our executive compensation programs are designed to pay for performance. We link compensation to Company performance and use metrics we believe will drive long-term shareholder value and that are aligned with Company strategy. We also align the interests of our executives with our shareholders through equity compensation.

Our executives’ compensation includes base salary, an annual bonus opportunity under our Variable Compensation Incentive Program (“VCIP”), and equity-based compensation, including stock options, restricted stock units (“RSUs”) and awards under our Performance Share Program (“PSP”). The illustrations below show the percentage each pay element comprises of our CEO and other named executive officers’ (“NEOs’”) target total direct compensation for 2020.

PHILLIPS 66 PROXY STATEMENT 2021 3

PROXY SUMMARY

CEO Target Mix

Other NEOs Target Mix

PIE CHART

The VCIP is designed to align annual bonus awards with shareholder interests and execution of our corporate strategy. Performance under the VCIP is based on operational and financial metrics. In 2020, 45% of VCIP was weighted to operational metrics − operating excellence and high-performing organization − and 55% was weighted to financial metrics – adjusted EBITDA and controllable costs. For 2021, the weighting has changed, and two new metrics were added – Low Carbon Priorities and Greenhouse Gas Priorities. These changes were made to reinforce our commitment to the energy transition and further align our compensation program with shareholder interests. More information can be found in the COMPENSATION DISCLOSURE AND ANALYSIS section of this Proxy Statement.

CORPORATE RESPONSIBILITY AND SUSTAINABILITY

Our vision is to provide energy in ways that improve lives, which we reinforce through our core Company values of safety, honor and commitment. Operational, economic, social and environmental sustainability is at the heart of how we deliver on our vision. By maintaining strong operating excellence, we are committed to safety, reliability and environmental stewardship while delivering shareholder value.

We also are committed to achieving a high-performing organization that is focused on culture, inclusion and diversity, as well as building community through volunteerism, financial support, and engagement, including community awareness and education.

More information can be found in the CORPORATE RESPONSIBILITY section of this Proxy Statement.

4 PHILLIPS 66 PROXY STATEMENT 2021

INFORMATION REGARDING THE BOARD OF DIRECTORS

DIRECTOR INDEPENDENCE

Our Corporate Governance Guidelines contain director independence standards, which are consistent with the listing standards of the NYSE. These standards assist the Board in determining the independence of the Company's directors. The Board of Directors has affirmatively determined that each director, other than Mr. Garland, meets our independence standards. Mr. Garland is not considered independent because he is an executive officer of the Company.

In making independence determinations, the Board specifically considered the fact that many of our directors are directors of companies with which we may conduct business. Additionally, some of our directors may purchase products, such as gasoline from our retail sites, from the Company. In all cases, it was determined that there are no relationships or transactions that are material to the Company or the director and accordingly, there are no relationships that would affect the independence of any director other than Mr. Garland.

Executive Sessions of Independent Directors

The independent directors hold regularly scheduled executive sessions of the Board and its committees without Company management present. These executive sessions are chaired by the Lead Director at Board meetings or by the committee chairs at committee meetings.

BOARD LEADERSHIP STRUCTURE

Chairman and CEO Roles

The Board of Directors believes that currently, it is in the best interests of the Company and shareholders to combine the roles of Chairman and CEO. However, there is no Company policy regarding whether the roles should be combined or separated, and our Corporate Governance Guidelines state that the Board will retain flexibility and periodically consider whether the roles should be separated and, if so, the Chairman should be an independent director or an employee. The Board believes that Mr. Garland’s extensive industry experience and direct, day-to-day involvement in managing the Company as the CEO makes him best suited to also serve as Chairman and guide the Board in setting Company priorities and addressing Company risks and challenges.

Independent Director Leadership

Our Corporate Governance Guidelines state that when the Chairman of the Board is an employee of the Company, the non-employee directors will name a Lead Director. Glenn Tilton was appointed to serve as our Lead Director in 2016. As Lead Director, Mr. Tilton chairs executive sessions, coordinates the activities of the non-employee directors and performs other duties and responsibilities as determined by the Board, including:

•

advising the Chairman on Board meeting schedules, seeking to ensure that the non-employee directors can perform their duties responsibly without interfering with operations;

•

providing the Chairman with input on agendas for Board meetings to assure there is sufficient time for discussions;

•

advising the Chairman on the quality, quantity and timeliness of the flow of information from management to allow directors to perform their duties effectively and responsibly, including specifically requesting certain materials be provided to the Board;

•

recommending to the Chairman the retention of consultants who report directly to the Board of Directors;

•

interviewing Board candidates and making nomination recommendations;

PHILLIPS 66 PROXY STATEMENT 2021 5

INFORMATION REGARDING THE BOARD OF DIRECTORS

•

assisting in assuring compliance with and implementation of the Corporate Governance Guidelines;

•

ensuring that he, or another appropriate director, is available for engagement with shareholders when warranted;

•

calling meetings of the non-employee directors as needed, developing the agenda for and chairing any such meetings and executive sessions;

•

acting as principal liaison between the non-employee directors and the Chairman on sensitive issues;

•

participating with the Human Resources and Compensation Committee in the periodic discussion of CEO performance;

•

leading the Board’s annual self-assessment, which includes individual interviews with each director, and meeting with the CEO to discuss the results of the annual self-assessment; and

•

working with the Nominating and Governance Committee to recommend Board committee membership and committee chairs.

The Board of Directors believes that its current structure and processes encourage its non-employee directors to be actively involved in guiding its work. The chairs of the Board's committees review their respective agendas and committee materials in advance of each meeting, communicating directly with other directors and members of management as each deems appropriate. Moreover, each director may suggest agenda items and raise matters that are not on the agenda at Board and committee meetings.

BOARD MEETINGS, COMMITTEES AND MEMBERSHIP

The Board of Directors met six times in 2020. In addition to the regularly scheduled meetings of the Board, in October of each year, the Board holds a two-day strategy session with members of management to provide deep dives into the Company’s operating segments and corporate functions. All of our directors attended at least 75% of the meetings of the Board and committees on which they served. Recognizing that director attendance at the Company's annual meeting can provide the Company's shareholders with an opportunity to communicate with the directors about issues affecting the Company, the Company actively encourages directors to attend the annual meetings of shareholders. All of our directors who were serving as such as of the date of our 2020 Annual Meeting attended virtually.

BOARD COMMITTEES AND MEMBERSHIP

The Board has five standing committees, as described below. The charters for each of the committees may be found in the “Investors” section on the Phillips 66 website (www.phillips66.com) under the “Corporate Governance” caption. Shareholders may also request printed copies of these charters by following the instructions located under ADDITIONAL INFORMATION. Other than our Executive Committee, all members of our Board’s committees meet the independence standards under our Corporate Governance Guidelines, the NYSE listing standards, and SEC rules or regulations, as applicable. The tables below show the composition of the committees as of March 15, 2021; as disclosed elsewhere in this Proxy Statement, Mr. McGraw and Ms. Tschinkel retired from the Board at the end of March 2021 and will not continue to serve as members of the committees.

6 PHILLIPS 66 PROXY STATEMENT 2021

INFORMATION REGARDING THE BOARD OF DIRECTORS

	Audit and Finance Committee (the “Audit Committee”)

Members: John E. Lowe (Chair), Julie L. Bushman, Charles M. Holley, Denise L. Ramos, Victoria J. Tschinkel Met 11 times in 2020
Primary Responsibilities: · Oversee the integrity of the Company's accounting policies, internal controls, financial statements, and financial reporting practices, and certain financial matters covering the Company's capital structure, complex financial transactions, financial risk management, retirement plans and tax planning. · Review significant risk exposures and management’s monitoring, control and reporting of such exposures. · Monitor our compliance with legal and regulatory requirements, including our Code of Business Ethics and Conduct; the qualifications and independence our independent auditors; and the performance of our internal audit function and independent auditors. *Financial Expertise and Financial Literacy of Audit Committee Members* The Board has determined that each of Mr. Lowe, Mr. Holley and Ms. Ramos satisfies the SEC's criteria for “audit committee financial experts.” Additionally, the Board has determined that each member is financially literate within the meaning of the NYSE listing standards.

	Human Resources and Compensation Committee (the “Compensation Committee”)

Members: Marna C. Whittington (Chair), Gary K. Adams, Lisa A. Davis, Harold W. McGraw III, Glenn F. Tilton Met 6 times in 2020
Primary Responsibilities: · Oversee our executive compensation programs, policies and strategies and approve metrics, goals and objectives under incentive compensation programs, including those relevant to executive officers. · Approve goals and objectives relevant to CEO compensation, evaluate CEO performance in light of those goals and objectives, and determinate the CEO’s overall compensation. · Oversee initiatives and strategies in the areas of inclusion and diversity, management succession planning, talent management and human capital. Additional information about the Compensation Committee can be found in the COMPENSATION DISCUSSION AND ANALYSIS.
*Compensation Committee Interlocks and Insider Participation* None of the members of the Compensation Committee during fiscal year 2020 or as of the date of this Proxy Statement is or has been an officer or employee of Phillips 66 and no executive officer of Phillips 66 served on the compensation committee or board of any company that employed any member of Phillips 66’s Compensation Committee or Board.

PHILLIPS 66 PROXY STATEMENT 2021 7

INFORMATION REGARDING THE BOARD OF DIRECTORS

	*Nominating and Governance Committee*

Members: Glenn F. Tilton (Chair), John E. Lowe, Denise L. Ramos, Marna C. Whittington Met 4 times in 2020
Primary Responsibilities: · Identify individuals to become Board members, recommend nominees for election and Board committee assignments. · Review and recommend compensation and benefits policies for our non-employee directors. · Recommend appropriate corporate governance policies and procedures for our Company. · Oversee Board’s annual self-evaluation of performance and monitor Board composition. · Jointly with Compensation Committee evaluate potential successors for the CEO.

	*Public Policy and Sustainability Committee*

Members: Denise L. Ramos (Chair), Gary K. Adams, Julie L. Bushman, Lisa A. Davis, Charles M. Holley, John E. Lowe, Harold W. McGraw III, Glenn F. Tilton, Victoria J. Tschinkel, Marna C. Whittington Met 4 times in 2020
Primary Responsibilities: · Review policies, programs and practices regarding health, safety and environmental protection; social impact and corporate responsibility matters. · Review the Company’s sustainability program and oversee progress of sustainability initiatives. · Review and approve budget for charitable contributions and for political contributions and independent expenditures, and oversee all such expenditures and the administration of any political action committees.

	*Executive Committee*

Members: Greg C. Garland (Chair), John E. Lowe, Denise L. Ramos, Glenn F. Tilton, Marna C. Whittington Met 1 time in 2020
Primary Responsibilities: · Exercise the authority of the full Board, if needed, in intervals between regularly scheduled Board meetings, other than (1) those matters expressly delegated to another committee of the Board, (2) the adoption, amendment or repeal of any of our By-Laws, and (3) those matters that cannot be delegated to a committee under statute, our Certificate of Incorporation, or our Bylaws.

To ensure continued Board effectiveness, the Nominating and Governance Committee periodically considers committee rotations, including in the event of a change in the composition of the Board. In 2020, J. Brian Ferguson, who previously had served as Chair of the Audit Committee, retired and the Nominating and Governance Committee recommended, and the Board approved, the appointment of Mr. Lowe as Chair of the Audit Committee and Ms. Ramos as Chair of the Public Policy and Sustainability Committee.

Additionally, in 2020 the Public Policy Committee changed its name to the Public Policy and Sustainability Committee. This name change was in connection with revisions to the committee’s charter that broadened the scope of its responsibilities to specifically include oversight of the Company’s sustainability program and initiatives.

8 PHILLIPS 66 PROXY STATEMENT 2021

INFORMATION REGARDING THE BOARD OF DIRECTORS

BOARD'S ACTIVE ROLE IN RISK OVERSIGHT

The Company's management is responsible for the day-to-day conduct of our businesses and operations, including management of risks the Company faces. To fulfill this responsibility, our management has established an enterprise risk management (“ERM”) program. The program is designed to identify and facilitate the management of significant risks facing the Company as well as the approaches to addressing risks.

The Board of Directors has broad oversight responsibility over the Company's ERM program and receives management updates on its development and implementation. In this oversight role, the Board is responsible for satisfying itself that the risk management processes designed and implemented by the Company's management are functioning as intended, and that necessary steps are taken to foster a culture of risk-adjusted decision making throughout the organization.

The Board exercises its oversight responsibility for risk assessment and risk management directly and through its committees. However, the full Board maintains responsibility for oversight of strategic risks. Setting the strategic course of the Company and providing oversight of strategic risks involves a high level of constructive engagement between management and the Board. The Board regularly discusses the strategic priorities of the Company and the risks to the Company's successful execution of its strategy, including global economic and other significant trends, as well as changes in the energy industry and regulatory initiatives.

The Board of Directors receives regular updates from its committees on individual areas of risk falling within each committee's area of oversight and expertise, as outlined below.

Committee Risk Oversight Responsibilities

Audit Committee

The Audit Committee has primary responsibility for overseeing Phillips 66’s ERM program. The Audit Committee discusses the guidelines and policies to govern the process by which ERM is handled, and has been delegated responsibility to facilitate coordination among the Board's committees with respect to the Company's risk management programs. The Audit Committee’s meeting agendas throughout the year include discussions of individual risk areas, as well as an annual summary of the ERM process. The Audit Committee also oversees the Company’s information security (including cybersecurity) and technology risk management programs, which are fully integrated into the overall ERM program.

Public Policy and Sustainability Committee

The Public Policy and Sustainability Committee assists the Board in identifying, evaluating and reviewing social, political and environmental trends and related risks. It also reviews management's proposed actions to anticipate and adjust to such trends and manage risks to achieve the Company's long-term business goals. The Public Policy and Sustainability Committee considers risks relating to: (i) the health, safety and environmental matters; (ii) the Company’s lobbying priorities and activities; (iii) Company issues related to public policy, including political spending policies and practices; (iv) Company issues related to corporate social responsibility and sustainability; and (v) emerging issues potentially affecting the reputation of the energy industry and the Company.

Other Board Committees

The Board’s other committees oversee risks associated with their respective areas of responsibility. For example:

• The Compensation Committee considers the risks associated with our compensation policies and practices for both executive compensation and compensation generally, as well as corporate culture and human capital risks generally.

• The Nominating and Governance Committee reviews policies and practices in the areas of corporate governance and is responsible for overseeing Board composition and director qualifications through the nomination process. Additionally, the Nominating and Governance Committee is responsible for CEO succession planning.

PHILLIPS 66 PROXY STATEMENT 2021 9

INFORMATION REGARDING THE BOARD OF DIRECTORS

RELATED PARTY TRANSACTIONS

Our Code of Business Ethics and Conduct requires all directors and executive officers to promptly report any transactions or relationships that reasonably could be expected to constitute a related party transaction. The transaction or relationship is reviewed by the Company's management and the appropriate committee of the Board to ensure that it does not constitute a conflict of interest and is appropriately disclosed.

Additionally, the Nominating and Governance Committee conducts an annual review of related party transactions between each director and the Company and its subsidiaries in making recommendations to the Board regarding the continued independence of each director. Since January 1, 2020, there have been no related party transactions in which the Company or a subsidiary was a participant and in which any director, executive officer, or any of their immediate family members had a direct or indirect material interest.

The Nominating and Governance Committee also considered relationships that, while not constituting related party transactions where a director had a direct or indirect material interest, nonetheless involved transactions between the Company and an organization with which a director is affiliated, either directly or as a partner, shareholder or officer. The Nominating and Governance Committee determined that there were no transactions impairing the independence of any member of the Board.

DIRECTOR QUALIFICATIONS AND NOMINATION PROCESS

Director Skills and Qualifications Aligned with Company Strategy

In evaluating potential candidates for nomination to the Board, as well as evaluating the Board's overall composition, the Nominating and Governance Committee and the Board consider several factors. First, all directors are expected to possess the highest personal and professional ethics, integrity and values and be committed to representing the long-term interests of the Company's shareholders. Additionally, directors are expected to devote sufficient time and effort to their duties as a director.

The Nominating and Governance Committee believes that the Board should reflect a range of talents, ages, skills, experiences, diversity, and expertise sufficient to provide sound and prudent guidance with respect to the Company's strategic and operational objectives. The Board has committed to seeking women and minority candidates, as well as candidates with diverse backgrounds, skills and experiences, as part of the search process for new directors.

The core skills and qualifications considered in evaluating director nominees and Board composition as a whole are described below.

C-Suite experience

Executive management experience provides valuable insights and practical understanding of companies, and the methods to drive change and growth within an organization

Industry experience

Energy experience brings pertinent background and knowledge to provide perspective on issues specific to the Company’s industry, business, operations and strategy

Risk management experience

Experience in managing risk ensures capabilities necessary for risk oversight responsibilities, bringing background and experience that increase directors’ effectiveness

Financial experience

Finance and financial reporting experience provide knowledge necessary to evaluate our performance by reference to financial targets and to oversee financial reporting

Global experience

Global business or international experience provides valuable perspectives on our operations and enables the oversight of our strategic initiatives

Environmental experience

Experience in environmental regulation helps in effective evaluation and oversight of our strategy to provide energy and improve lives while securing a healthy environment

10 PHILLIPS 66 PROXY STATEMENT 2021

INFORMATION REGARDING THE BOARD OF DIRECTORS

Board Refreshment

The Board strives to maintain an appropriate balance of tenure, turnover, diversity, skills and experience. Our average director tenure is five years, representing an appropriate balance of tenures. The Board does not maintain term limits, as the Board believes that continuity of service can provide stability and valuable insight. Our Corporate Governance Guidelines include a mandatory retirement that provides that no director may serve past the annual meeting immediately following his or her 75^th birthday. The average age of our continuing directors is 65.

The Board ensures refreshment and continued effectiveness through evaluation, nomination, and other policies, processes and practices. For example:

•

The Nominating and Governance Committee annually reviews with the Board the qualifications for Board members and the composition of the Board as a whole.

•

The Nominating and Governance Committee annually reviews each director nominee's continuation on the Board and makes recommendations to the full Board.

•

The Company's Corporate Governance Guidelines provide that any director whose principal outside responsibilities have changed since election to the Board should volunteer to resign to give the Board the opportunity to review the appropriateness of continued Board membership under the circumstances.

•

Each committee of the Board performs an annual self-assessment, and the Nominating and Governance Committee and Lead Director oversee an annual self-assessment of the full Board. The self-assessment includes an evaluation survey and individual discussions between the Lead Director and each other director. A summary of the results of each committee's self-assessment is presented to the committee and discussed in executive session. The Lead Director presents a summary of the results of the Board evaluation to the Board in executive session. Any matters requiring further action are identified and action plans developed to address the matter.

Recent Board Refreshment

In 2020, the Board appointed Julie L. Bushman and Lisa A. Davis. These directors’ skills and perspectives further enhance our diversity and expertise in the boardroom. Their appointments were informed by the Board’s continued focus on its composition, as well as insights provided through the Board’s annual self-evaluation process. In March of this year, Harold W. McGraw III and Victoria J. Tschinkel, who have served on our Board since 2012, informed us that they would be retiring from the Board and not standing for reelection at this Annual Meeting.

How We Select Our Director Nominees

The Board is responsible for nominating directors and filling vacancies that may occur between annual meetings, based upon the recommendation of the Nominating and Governance Committee. The Nominating and Governance Committee considers the Company’s current needs and long-term and strategic plans to determine the skills, experience and characteristics needed by our Board. The Nominating and Governance Committee identifies, considers and recommends director candidates to the Board of Directors with the goal of creating a balance of knowledge, experience and diversity. Generally, the Nominating and Governance Committee identifies candidates through the use of a search firm or the business and organizational contacts of directors and management. In 2018, the Board amended our Corporate Governance Guidelines to formalize its commitment to ensuring that the pool of candidates in any search process for new directors includes diverse candidates.

Shareholder Recommendation of Candidates

The Nominating and Governance Committee will consider director candidates recommended by shareholders. A shareholder wishing to recommend a candidate for nomination by the Nominating and Governance Committee should follow the procedures described under SUBMISSION OF FUTURE SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS. In addition, the shareholder should provide such other information deemed relevant to the Nominating and Governance Committee's evaluation. Candidates recommended by the Company's

PHILLIPS 66 PROXY STATEMENT 2021 11

INFORMATION REGARDING THE BOARD OF DIRECTORS

shareholders are evaluated on the same basis as candidates recommended by the Company's directors, management, third-party search firms or other sources.

BOARD SKILLS AND EXPERIENCE

Throughout the year, the Board continued its proactive assessment of board succession planning and refreshment. The Nominating and Governance Committee and full Board works to ensure we maintain a Board that embodies a broad and diverse set of experiences, qualifications, attributes and skills to provide effective oversight of management and the Company. When seeking new candidates, the Board considers a diverse pool of qualified candidates who could potentially serve as Board members. We view diversity in terms of skills, as well as gender, age, race, ethnicity, background, professional experience and perspectives.

As the needs of the Company change, the Board revisits the skills and experiences it seeks. Included in the matrix below are the core skills and experiences of C-suite, environmental, risk management, international/global and industry experience, as well as additional skills and experiences the Board currently considers, for our continuing directors.

TABLE

*As of March 15, 2021

12 PHILLIPS 66 PROXY STATEMENT 2021

INFORMATION REGARDING THE BOARD OF DIRECTORS

Directors Whose Terms Expire at the 2022 Annual Meeting

Greg C. Garland, 63 – Director since 2012

Chairman and CEO of Phillips 66 (2012 to present)

Experience: Mr. Garland brings extensive knowledge of all aspects of our business and industry, having served in executive positions at ConocoPhillips, as president and chief executive officer of Chevron Phillips Chemical Company, and currently as the chairman and chief executive officer of Phillips 66 Partners. Through his more than 35 years of service and experience in the energy industry, Mr. Garland brings to the Board each of the key skills we seek in a director.

Committees: Executive (Chair)

Key Skills: C-Suite, Finance, Global Business, Risk Management, Environmental, Industry

Other current directorships: Amgen and Phillips 66 Partners


	*Gary K. Adams, 70 – Director since 2016* Former Chief Advisor - Chemicals for IHS Markit (2011 to 2017), Director of Westlake Chemical Partners LP (2014 to 2016) and Director of Phillips 66 Partners LP (2013 to 2016) Experience: Mr. Adams has over 40 years of experience in the petrochemicals and plastics industries, including 15 years at Union Carbide, where he began his career. Through various management positions, including as president, chief executive officer and chairman of Chemical Markets Associates Inc. (“CMAI”) before its acquisition by IHS, Mr. Adams also has leadership experience with operating responsibilities, and financial and risk oversight for a global business.
Committees: Compensation and Public Policy and Sustainability		Key Skills: Industry, Finance, Global Business, Risk Management	Other current directorships: Trecora Resources


	*John E. Lowe, 62 – Director since 2012* Senior Executive Advisor to Tudor, Pickering, Holt & Co. (2012 to present) and Director of Agrium Inc. (2010 to 2015) Experience: Mr. Lowe had a 30-year career with ConocoPhillips and Phillips Petroleum Company, including several executive positions with ConocoPhillips, providing him extensive industry experience. Mr. Lowe also has financial and risk oversight, international and environmental experience through the series of executive positions he has held and his service on the boards of publicly traded oil and gas and energy companies.
Committees: Audit (Chair), Nominating and Governance, Public Policy and Sustainability, and Executive		Key Skills: C-Suite, Finance, Global Business, Risk Management, Environmental, Industry	Other current directorships: TC Energy, Apache (Non-Executive Chairman)

PHILLIPS 66 PROXY STATEMENT 2021 13

INFORMATION REGARDING THE BOARD OF DIRECTORS


	*Denise L. Ramos, 64 – Director since 2016* Former Chief Executive Officer, President and director of ITT Inc. (2011 to 2018) and Director of Praxair, Inc. (2014 to 2016) Experience: Ms. Ramos has experience in the oil and gas industry, including more than 20 years in various finance positions at Atlantic Richfield Company. Having also served as CEO of ITT and chief financial officer at ITT as well as Furniture Brands International and Yum! Brands, Ms. Ramos brings extensive senior leadership, risk management and global business expertise to the Board.
Committees: Audit, Nominating and Governance, Public Policy and Sustainability (Chair) and Executive		Key Skills: C-Suite, Finance, Global Business, Risk Management, Environmental	Other current directorships: Bank of America and Raytheon Technologies

Directors Whose Terms Expire at the 2023 Annual Meeting


	*Charles M. Holley, 64 – Director since 2019* Former Executive Vice President and Chief Financial Officer of Walmart Inc. (2010 to 2015) Experience: Mr. Holley served as chief financial officer at one of the largest U.S. corporations, providing him with expertise in finance, senior management, risk and asset management, strategic planning and capital markets. He also has extensive experience in international operations and technology platforms.
Committees: Audit and Public Policy and Sustainability		Key Skills: C-Suite, Finance, Global Business, Risk Management	Other current directorships: Amgen and Carrier Global


	*Glenn F. Tilton, 72 – Director since 2012* Experience: Mr. Tilton previously served as chairman and chief executive officer of UAL Corporation, the parent company of United Air Lines as well as chairman of the Midwest of JPMorgan Chase & Co. Mr. Tilton’s career has provided him with strong management experience overseeing complex multinational businesses operating in highly regulated industries as well as expertise in finance and capital markets matters. He also has extensive experience in the energy industry through his more than 30 years in increasingly senior roles with Texaco Inc., including chairman and chief executive officer.
Committees: Compensation, Nominating and Governance (Chair), Public Policy and Sustainability, Executive		Key Skills: C-Suite, Finance, Global Business, Risk Management, Environmental, Industry	Other current directorships: Abbot Laboratories and AbbVie Inc. (Lead Director)

14 PHILLIPS 66 PROXY STATEMENT 2021

INFORMATION REGARDING THE BOARD OF DIRECTORS


	*Marna C. Whittington, 73 – Director since 2012* Experience: Dr. Whittington has many years of leadership experience and expertise as a former senior executive in the investment management industry, including as chief executive officer of Allianz Global Investors Capital. She has extensive knowledge of and substantial experience in management, and in financial, investment and banking matters and provides valuable insight from her previous experience serving as a public company board member.
Committees: Compensation (Chair), Nominating and Governance, Public Policy and Sustainability, Executive		Key Skills C-Suite, Finance, Global Business, Risk Management	Other current directorships: Macy’s, Inc and Oaktree Capital Group LLC

PHILLIPS 66 PROXY STATEMENT 2021 15

PROPOSAL 1: ELECTION OF DIRECTORS

The Board has nominated Julie L. Bushman and Lisa A. Davis to stand for election for a term that expires at the annual meeting of shareholders in 2024. Mr. McGraw and Ms. Tschinkel previously served in this class of directors, but both decided to retire in March of this year and not stand for reelection. Although Ms. Davis originally was appointed to the Board to serve in the class whose term ends at the annual meeting in 2023, the Board determined that Ms. Davis should stand for election at this meeting to make the classes of directors as nearly equal as possible.

Each nominee requires the affirmative vote of a majority of the votes cast in person or by proxy at the meeting. Directors are elected to serve until their successor is duly elected and qualified. If a nominee is unavailable for election, proxy holders may vote for another nominee proposed by the Board or the Board may reduce the number of directors to be elected at the Annual Meeting. No family relationship exists among any of our directors, director nominees or executive officers. There is no arrangement between any director or director nominee and any other person pursuant to which he or she was, or is to be, selected as a director or director nominee.

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE FOLLOWING DIRECTOR NOMINEES.


	*Julie L. Bushman, 60 – Director since 2020* Former Executive Vice President of International Operations of 3M (2017 to 2020) and Senior Vice President of Business Transformation and Information Technology of 3M (2013 to 2017); Director of Johnson Controls (2012 to 2016) Experience: As a former executive of 3M, Ms. Bushman brings executive management experience, as well as experience in international business, risk management and financial oversight. Ms. Bushman also brings environmental experience through her roles leading occupational health and environmental safety divisions at 3M.
Committees: Audit and Public Policy and Sustainability		Key Skills: C-Suite, Finance, Global Business, Risk Management, Environmental	Other current directorships: Adient plc and Bio-Techne Corporation


	*Lisa A. Davis, 57 – Director since 2020* Former member of Managing Board of Siemens AG and CEO for Siemens Gas and Power (2014 to 2020) Experience: Ms. Davis brings significant industry experience to the Board through her roles at Siemens, as well as over 25 years in engineering and management roles at large integrated oil companies including ExxonMobil, Texaco and Shell, including executive vice president strategy and portfolio at Shell. Ms. Davis’s career has provided her with each of the skills sought by the Board.
Committees:Compensation and Public Policy and Sustainability		Key Skills: C-Suite, Finance, Global Business, Risk Management, Industry	Other current directorships: Air Products and Chemicals, Kosmos Energy and Penske Automotive Group

16 PHILLIPS 66 PROXY STATEMENT 2021

PROPOSAL 2: MANAGEMENT PROPOSAL REGARDING ANNUAL ELECTION OF DIRECTORS

Currently, the Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) of the Company provides for a staggered Board, divided into three classes of directors, with each class elected for a three-year term.

After considering the advantages and disadvantages of declassification, including the opinion of our shareholders, the Board has determined it is in the best interests of the Company and its shareholders to amend the Certificate of Incorporation and the By-Laws of the Company to declassify the Board over the next three years. This will result in a fully declassified Board by the 2024 Annual Meeting of Shareholders.

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL TO AMEND THE
CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS.

The affirmative vote of the holders of 80% of the outstanding shares of stock entitled to vote is required to approve this proposal. We submitted this proposal in 2015, 2016 and 2018 and, while it received significant support, it did not receive the 80% vote required for adoption. Because brokers may not cast a vote on this proposal without your instruction, it is very important that you vote your shares.

The proposed amendment to the Certificate of Incorporation would eliminate the classification of the Board over a three-year period and provide for the annual election of all directors beginning at the 2024 Annual Meeting of Shareholders. The proposed amendment to the Certificate of Incorporation would become effective upon the filing of a Certificate of Amendment with the Secretary of State of the State of Delaware, which the Company would file promptly following the Annual Meeting if our shareholders approve the amendment. Board declassification would be phased-in over a three-year period, beginning at the 2022 Annual Meeting of Shareholders, as follows:

Nominees at this Annual Meeting will be elected to serve a three-year period ending at the 2024 Annual Meeting.

Directors whose terms end at the 2022 Annual Meeting will continue to serve until that meeting. At the 2022 Annual Meeting, they will be elected for one-year terms ending at the 2023 Annual Meeting.

Directors whose terms end at the 2023 Annual Meeting will be elected for one-year terms ending at the 2024 Annual Meeting.

At the 2024 Annual Meeting, all nominees presented for election to the Board at the 2024 Annual Meeting will be elected to one-year terms.

Beginning with the 2024 Annual Meeting of Shareholders, all directors will stand for election at each annual meeting of shareholders for a one-year term expiring at the subsequent annual meeting of shareholders. The proposed amendment does not change the number of directors or the Board's authority to change that number and to fill any vacancies or newly created directorships.

Delaware law provides, unless otherwise addressed in the certificate of incorporation, that members of a board that is classified may be removed only for cause. The proposed amendment provides that, once the Board is fully declassified as of the 2024 Annual Meeting of Shareholders, directors may be removed with or without cause. Before that time, directors serving in a class elected at any annual meeting between 2019 through 2021 may be removed only for cause. Directors elected for a one-year term at each annual meeting between 2022 through 2023 may be removed with or without cause.

The proposed Certificate of Amendment to the Certificate of Incorporation is attached to this Proxy Statement as Appendix A. If our shareholders approve the proposed amendment to the Certificate of Incorporation, the Board will make certain conforming changes to the Company’s By-Laws.

PHILLIPS 66 PROXY STATEMENT 2021 17

BENEFICIAL OWNERSHIP OF PHILLIPS 66 SECURITIES

SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth information regarding persons who we know to be the beneficial owners of more than five percent of our issued and outstanding common stock as of December 31, 2020. The information is based on reports filed by such person with the SEC:

NAME AND ADDRESS	NUMBER OF SHARES	PERCENT OF CLASS
The Vanguard Group⁽¹⁾ 100 Vanguard Blvd. Malvern, PA 19335	42,759,263		9.79	%
BlackRock, Inc.⁽²⁾ 55 East 52nd Street New York, NY 10055	32,908,454		7.5	%
State Street Corporation⁽³⁾ One Lincoln Street Boston, MA 02111	26,710,734		6.12	%

⁽¹⁾

Based solely on an Amendment to Schedule 13G filed with the SEC on February 10, 2021, by The Vanguard Group on behalf of itself, Vanguard Asset Management, Limited, Vanguard Fiduciary Trust Company, Vanguard Global Advisors, LLC, Vanguard Group (Ireland) Limited, Vanguard Investments Australia Ltd, Vanguard Investments Canada Inc., Vanguard Investments Hong Kong Limited and Vanguard Investments UK, Limited. The Amendment to Schedule 13G reports sole voting power for no shares of common stock, shared voting power for 694,259 shares of common stock, sole dispositive power for 40,851,991 shares of common stock and shared dispositive power for 1,907,272 shares of common stock.

⁽²⁾

Based solely on an Amendment to Schedule 13G filed with the SEC on January 29, 2021, by BlackRock, Inc. on behalf of itself, BlackRock Life Limited, BlackRock International Limited, BlackRock Advisors, LLC, BlackRock (Netherlands) B.V., BlackRock Institutional Trust Company, National Association, BlackRock Asset Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Japan Co., Ltd., BlackRock Asset Management Schweiz AG, BlackRock Investment Management, LLC, FutureAdvisor, Inc., BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock (Luxembourg) S.A., BlackRock Investment Management (Australia) Limited, BlackRock Advisors (UK) Limited, BlackRock Fund Advisors, BlackRock Asset Management North Asia Limited, BlackRock (Singapore) Limited and BlackRock Fund Managers Ltd. The Amendment to Schedule 13G reports sole voting power for 27,404,629 shares of common stock, no shared voting power for shares of common stock, sole dispositive power for 32,908,454 shares of common stock and no shared dispositive power for shares of common stock.

⁽³⁾

Based solely on a Schedule 13G filed with the SEC on February 9, 2021, by State Street Corporation on behalf of itself, State Street Bank And Trust Company, SSGA Funds Management, Inc, State Street Global Advisors Limited (UK), State Street Global Advisors Ltd (Canada), State Street Global Advisors, Australia Limited, State Street Global Advisors (Japan) Co., Ltd, State Street Global Advisors Asia Ltd, State Street Global Advisors Singapore Ltd, State Street Global Advisors GmbH, State Street Global Advisors Ireland Limited, and State Street Global Advisors Trust Company. The Schedule 13G reports sole voting power for no shares of common stock, shared voting power for 24,362,349 shares of common stock, sole dispositive power for no shares of common stock and shared dispositive power for 26,680,953 shares of common stock.

SECURITIES OWNERSHIP OF OFFICERS AND DIRECTORS

This table lists the beneficial ownership of our common stock as of February 15, 2021, by all directors and nominees, the executive officers named in the Summary Compensation Table, and by all of our directors and executive officers as a group. Together these individuals beneficially own less than one percent of our common stock.

18 PHILLIPS 66 PROXY STATEMENT 2021

BENEFICIAL OWNERSHIP OF PHILLIPS 66 SECURITIES

	NUMBER OF SHARES OR UNITS
NAME OF BENEFICIAL OWNER	SHARES BENEFICIALLY OWNED	RESTRICTED OR DEFERRED STOCK UNITS⁽¹⁾	OPTIONS EXERCISABLE WITHIN 60 DAYS⁽²⁾
Mr. Garland	532,974	109,885	1,111,733
Mr. Herman	39,760	75,762	169,866
Ms. Johnson	77,416	26,787	193,333
Mr. Mitchell	49,047	39,777	172,599
Mr. Roberts	11,367	29,491	122,166
Mr. Adams	12,984	--	--
Ms. Bushman	--	4,305	--
Ms. Davis	3,646	--	--
Mr. Holley	77	5,775	--
Mr. Lowe	40,000	30,403	--
Mr. McGraw⁽³⁾	873	52,122	--
Ms. Ramos	--	12,773	--
Mr. Tilton	5,900	30,403	--
Ms. Tschinkel	51,757	9,303	--
Dr. Whittington	2,500	30,403	--
Directors and Executive Officers as a Group (17 Persons)	858,259	488,437	1,882,529

⁽¹⁾

Includes RSUs or deferred stock units that may be voted or sold only upon passage of time.

⁽²⁾

Includes beneficial ownership of shares of common stock which may be acquired within 60 days of February 15, 2021, through stock options awarded under compensation plans.

⁽³⁾

Includes 373 shares for which Mr. McGraw disclaims beneficial ownership. These shares are held in a foundation and in various trusts for which Mr. McGraw serves on the board or as trustee, as applicable.

PHILLIPS 66 PROXY STATEMENT 2021 19

CORPORATE RESPONSIBILITY

At Phillips 66, we believe that we succeed together as a team, leveraging our diverse experiences and thoughts in an environment that thrives on collaboration. We embrace engagement as an important tenet of good governance, and value the views of our shareholders and other stakeholders. We believe that positive dialogue builds informed relationships that promote transparency and accountability. Although our Lead Director or other members of the Board are available to participate in meetings with shareholders as appropriate, management has the principal responsibility for shareholder communication.

SHAREHOLDER ENGAGEMENT

For several years, Phillips 66 has conducted a formal shareholder outreach program to listen to investor perspectives on our business strategy; corporate governance; executive compensation programs; environmental, social and governance (“ESG”); and other matters that are important to our investors. Information and feedback received through our engagement activities are shared with our executive leadership team and the Board of Directors, which help inform their decisions and oversight, respectively. In 2020, we engaged with representatives of many of our top institutional shareholders and discussed the energy transition and our sustainability efforts; board composition, refreshment and tenure; inclusion and diversity; our response to COVID-19; and executive compensation. Our year-round focus on investor engagement is described below:

April to June

Meet with shareholders about annual meeting matters, including any management and shareholder proposals

July to September

Plan engagements, topics for discussion and any changes for upcoming year; assess feedback and share with Board

January to March

Complete meetings, review feedback and share with management, discuss any proposals with proponents

October to December

Meet with shareholders, modify meeting content based on early feedback, and identify areas of interest or concern

This year, we heard that our investors are interested in, and supportive of, our Board refreshment efforts, as well as our work towards setting targets for greenhouse gas emissions reductions. We also heard that investors are interested in additional disclosures on human capital management and our efforts to declassify our Board. We are committed to continued shareholder engagement. Highlights of some of the actions we have taken in response to our engagements over the last several years are shown below:

2015

2016

2017

2018

2019

2020

2021

Adopted proxy access bylaw

Sought shareholder approval of declassification

Refreshed sustainability information on website

Added two new independent directors

Sought shareholder approval of declassification

Expanded sustainability disclosures from website to report

Committed to diverse director candidate pools

Sought shareholder approval of declassification

Initial TCFD*-informed sustainability report

Added new independent director

Incorporated TCFD* and SASB* into sustainability report

Added two new independent directors

Enhanced lobbying disclosures

Seeking shareholder approval of declassification

Published Human Capital Management Report

*TCFD is the Task Force on Climate-Related Financial Disclosures and SASB is the Sustainability Accounting Standards Board.

20 PHILLIPS 66 PROXY STATEMENT 2021

CORPORATE RESPONSIBILITY

HUMAN CAPITAL MANAGEMENT

Our Board recognizes the importance of our human capital practices in creating value and supporting our vision. Our ability to attract, retain and develop talented employees, and create a workplace where they can innovate and thrive, is an integral part of our competitive strategy to drive long-term value and mitigate risk.

To that end, our Board routinely engages with senior leadership on matters such as talent pipeline, turnover, workplace culture, and inclusion and diversity. Results of employee surveys and metrics on talent and diversity initiatives are reviewed by the Board on a regular basis. This oversight responsibility sits with the full Board. In addition, certain human capital metrics have been and continue to be measured, reviewed and managed as part of our compensation program and are discussed by the Compensation Committee in its regular meetings. The table below provides an overview of certain of our human capital practices. More information regarding our human capital practices can be found in our Human Capital Management Report on our website at www.phillips66.com.

Corporate Culture and Employee Engagement		*Inclusion and Diversity*
Our culture is built on our values of safety, honor and commitment. After learning how our employees experience our culture, we developed a set of behaviors called “Our Energy in Action.”		We value inclusion and diversity (I&D) — concepts that are interdependent and equally important. They are essential to who we are, what we believe and how we do business.
· Work for the Greater Good: We embrace our values as a common bond. Living our values earns us the confidence of our business partners, communities and co-workers. · Create an Environment of Trust: We depend on each other to do our jobs. Trusting each other makes us more productive and agile. · Seek Different Perspectives: We create space for possibilities. Championing inclusion enables us to innovate and thrive. · Achieve Excellence: We challenge ourselves and never settle. Continuing to improve ensures we deliver extraordinary performance. · Employee Engagement Survey: We conduct biennial confidential employee engagement surveys to gather employee perspectives on their experience working at Phillips 66. Results are available to all employees and are made available to our Board. Management analyzes findings to identify progress on previous recommendations and areas of continued opportunity.		· Commitment to Diversity: We foster a culture of inclusion because in its absence, diversity cannot thrive. We enhance representation through attraction and retention, and promote environments free of biases where all employees feel valued, respected and belonging. · Executive Inclusion and Diversity Council (I&D Council): an advisory group committed to building an inclusive and diverse workplace. Established in 2019, the I&D Council sets the strategic vision from the top and throughout our organization for I&D efforts that drive innovation and enhance business outcomes. · Employee Resource Groups (ERGs): Designed to be forums for sharing ideas and raising awareness around identity and belonging, our nine ERGs have over 50 chapters throughout the Company. · Inclusive Benefits: We offer various benefits to eligible employees and their families including parental leave; adoption assistance; flex time; family, personal, military & disability leave; gender transition support; and natural disaster financial support.
*Health, Safety and Wellness*		*Talent Retention and Development*
We are proud to be one of the energy industry’s safest and most reliable companies. We also inspire life-long healthy choices, educating and supporting employees through fitness programs and services.		We regularly provide opportunities for employees to deepen expertise and further enhance foundational skills like communication and team building. We are also building our pipeline of talent through recruiting diverse internship classes.
· Safety Performance: Our safety culture, comprehensive HSE policies, management systems and the commitment of employees and contractors who		· Attracting and Retaining the Best People: We recognize that executing our corporate strategy depends on the talents of our high-performing

PHILLIPS 66 PROXY STATEMENT 2021 21

CORPORATE RESPONSIBILITY

work for us resulted in a total recordable incident rate (TRR) of 0.11 in 2020, which is 30 times lower than the overall U.S. manufacturing average in 2019.

· Technology to Create Community: We are using technology, including apps that allow employees to share information such as safety learnings and report near misses in real time. Our cloud-based solutions promote collaboration and teamwork, including a Parent’s Hub for our working parents and a Pandemic Prevention Control Team hub to keep our employees informed about COVID-19 safe practices.

· Employee Wellness: Our fitness centers offer a variety of services, including group classes, personal training, and fitness assessments, where members can focus on becoming healthier. We also provide on-site medical and dental at some of our locations, as well as an Employee Assistance Program to all employees.

organization. We are committed to attracting and retaining the best talent for our business.

· Investing in our People: We offer employees various opportunities for career growth, including on-demand professional development for employees through digital learning platforms; specialized training for employees in operator roles, engineering, sales and finance; “Lunch and Learn” sessions on a variety of topics and more.

· Leadership Development Programs: “Leading the Vision” and “Leading for Success” programs advance continuous coaching skills for our people leaders.

· Internships: We provide paid internships at every major U.S. job location, offering students opportunities to learn and play a role in our organization’s success. In 2020, we honored our intern commitments by pivoting to a virtual experience.

COMMUNITY INVOLVEMENT AND ENGAGEMENT

We are committed to creating value for our communities through economic development, philanthropy, volunteerism and advocacy, and by operating our business in a socially and environmentally responsible way. In 2020, much of our focus was on helping those impacted by COVID-19, as well as by hurricanes in the Gulf Coast and wildfires on the West Coast. We contributed $6 million to COVID-19 and natural disaster relief efforts across the U.S. and the U.K. Through our matching gift program, we contributed over $5 million to over 2,000 organizations supported by employees. Additionally, we awarded over $1.5 million in volunteer grants to over 600 organizations where our employees and their families volunteer.

The communities in which our assets are located and where our employees live are critical stakeholders. We consistently and regularly engage with our local communities and seek their feedback. Our refining operations have community advisory councils or panels that include both Company representatives and community members. Many panels include adjacent operations from our midstream and lubricants businesses. These panels meet at least quarterly with refinery management to provide feedback, discuss topics of local concern and share insights on plans and activities. Our pipeline business units have year-round community awareness, education and listening panels to stay connected with those involved with and living near our extensive pipeline network.

POLITICAL ACTIVITIES AND LOBBYING ACTIVITIES

We believe that engagement and good governance involves participating in political or public policy activities that advance the Company's goals, are consistent with Company values, and improve the communities where we work and live. A number of federal, state and local laws govern corporate involvement in such activities, and we maintain policies, procedures and programs to comply with these laws. Our policy, contributions and disclosures about our involvement in political or public policy activities are available on our website.

SUSTAINABILITY AND TRANSITION TO LOWER-CARBON FUTURE

We recognize the climate challenge and are making investments that advance a lower carbon future. We are focused on implementing sustainability practices today and are seeking solutions for tomorrow’s energy needs. We formed a new organization, Emerging Energy, within the Company to focus on a lower-carbon business platform. We are conducting research on energies of the future, including renewable fuels, organic photovoltaics, current and next generation batteries, and solid oxide fuel cells. In addition, we have a portfolio of renewable fuel projects in development that comply with low-carbon fuel standards. We are leveraging our existing infrastructure, supply network and capabilities to participate in lower carbon businesses. More information on the Company sustainability strategy and programs is available in our sustainability report on our website.

22 PHILLIPS 66 PROXY STATEMENT 2021

PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG

The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit the Company's financial statements. The Audit Committee has appointed Ernst & Young LLP to serve as the Company's independent registered public accounting firm for fiscal year 2021. Ernst & Young has acted as the Company's independent registered public accounting firm continuously since 2011.

The Audit Committee annually considers the independence of the Company’s independent auditors prior to the firm’s engagement, and periodically considers whether a regular rotation of the independent auditors is necessary to assure continuing independence. The Audit Committee and its Chair are directly involved in the selection of Ernst & Young’s lead engagement partner.

The Audit Committee and the Board of Directors believe that the continued retention of Ernst & Young is in the best interests of the Company and its shareholders. We are asking you to vote on a proposal to ratify the appointment of Ernst & Young.

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL TO RATIFY THE
APPOINTMENT OF ERNST & YOUNG LLP.

The submission of this matter for approval by shareholders is not legally required, but the Board and the Audit Committee believe it provides an opportunity for shareholders to vote on an important aspect of corporate governance. If the shareholders do not ratify the selection of Ernst & Young, the Audit Committee will reconsider the selection of that firm as the Company’s independent registered public accounting firm. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders.

ERNST & YOUNG LLP FEES

Audit services of Ernst & Young for fiscal year 2020 included an audit of our consolidated financial statements, an audit of the effectiveness of the Company's internal control over financial reporting, and services related to periodic filings made with the SEC. Additionally, Ernst & Young provided certain other services as described below. In connection with the audit of the 2020 consolidated financial statements, we entered into an engagement agreement with Ernst & Young that set forth the terms by which Ernst & Young performed audit services for us.

The Audit Committee is responsible for negotiating the audit fee associated with its retention of Ernst & Young. Ernst & Young's fees for professional services totaled $12.7 million for 2020 and $14.5 million for 2019, which consisted of the following:

Fees (in millions)	2020	2019
Audit Fees⁽¹⁾	$11.4	$13.0
Audit-Related Fees⁽²⁾	1.0	1.2
Tax Fees⁽³⁾	0.1	0.1
All Other Fees	0.2	0.2
Total	$12.7	$14.5

⁽¹⁾

Fees for audit services related to the fiscal year consolidated audit, the audit of the effectiveness of internal controls over financial reporting, quarterly reviews, registration statements, comfort letters, statutory and regulatory audits and accounting consultations. Includes audit fees of Phillips 66 Partners LP of $0.9 million for 2020 and $1.3 million for 2019, which were approved by the Audit Committee of the General Partner of Phillips 66 Partners LP.

PHILLIPS 66 PROXY STATEMENT 2021 23

PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG

⁽²⁾

Fees for audit-related services related to audits in connection with proposed or consummated dispositions, benefit plan audits, other subsidiary audits, special reports, and accounting consultations.

⁽³⁾

Fees for tax services related to tax compliance services and tax planning and advisory services.

The Audit Committee has considered whether the non-audit services provided to Phillips 66 by Ernst & Young impaired the independence of Ernst & Young and concluded they did not.

The Audit Committee has adopted a pre-approval policy that provides guidelines for the audit, audit-related, tax and other non-audit services that Ernst & Young may provide to the Company. All of the fees in the table above were approved in accordance with this policy. The policy (a) identifies the guiding principles that the Audit Committee must consider in approving services to ensure that Ernst & Young's independence is not impaired; (b) describes the audit, audit-related, tax and other services that may be provided and the non-audit services that are prohibited; and (c) sets forth pre-approval requirements for all permitted services. Under the policy, the Audit Committee must pre-approve all services to be provided by Ernst & Young. The Audit Committee has delegated authority to approve permitted services to its Chair. Such approval must be reported to the entire Audit Committee at its next scheduled meeting.

One or more representatives of Ernst & Young are expected to be present at the Annual Meeting. The representatives will have an opportunity to make a statement if they desire and will be available to respond to appropriate questions from shareholders.

24 PHILLIPS 66 PROXY STATEMENT 2021

PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG

AUDIT AND FINANCE COMMITTEE REPORT

The Audit Committee assists the Board of Directors in fulfilling its responsibility to provide independent, objective oversight of the financial reporting functions and internal control systems of Phillips 66. The Audit Committee currently consists of five non-employee directors. The Board has determined that each member of the Audit Committee satisfies the requirements of the NYSE as to independence, financial literacy and expertise. The Board has further determined that each of Charles M. Holley, John E. Lowe, and Denise L. Ramos is an audit committee financial expert as defined by the SEC. The responsibilities of the Audit Committee are set forth in the written charter adopted by the Board of Directors, which is available in the “Investors” section of the Company's website under the caption “Corporate Governance.” One of the Audit Committee's primary responsibilities is to assist the Board in its oversight of the integrity of the Company's financial statements. The following report summarizes certain of the Audit Committee's activities in this regard for 2020.

Review with Management. The Audit Committee has reviewed and discussed with management the audited consolidated financial statements of Phillips 66 included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and management's assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2020, included therein.

Discussions with Independent Registered Public Accounting Firm. The Audit Committee has discussed with Ernst & Young LLP, independent registered public accounting firm for Phillips 66, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC. The Audit Committee has received the written disclosures and the letter from Ernst & Young required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the Audit Committee concerning independence, and has discussed with that firm its independence from Phillips 66.

Recommendation to the Phillips 66 Board of Directors. Based on its review and discussions noted above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements of Phillips 66 be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

AUDIT AND FINANCE COMMITTEE

John E. Lowe, Chairman

Julie L. Bushman

Charles M. Holley

Denise L. Ramos

Victoria J. Tschinkel

PHILLIPS 66 PROXY STATEMENT 2021 25

COMPENSATION DISCUSSION AND ANALYSIS

PROPOSAL 4: ADVISORY APPROVAL OF EXECUTIVE COMPENSATION

In accordance with Section 14A of the Securities Exchange Act of 1934, as amended, shareholders are being asked to vote on the following advisory (non-binding) resolution:

RESOLVED, that the shareholders approve the compensation of Phillips 66's Named Executive Officers (NEOs) as described in this Proxy Statement in the COMPENSATION DISCUSSION AND ANALYSIS section and in the EXECUTIVE COMPENSATION TABLES (together with the accompanying narrative disclosures).

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE ADVISORY APPROVAL OF THE
COMPENSATION OF THE COMPANY'S NAMED EXECUTIVE OFFICERS.

Approval of this proposal requires the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the proposal.

As required by SEC rules, Phillips 66 is providing shareholders with the opportunity to vote on an advisory resolution, commonly known as “Say-on-Pay,” considering approval of the compensation of its NEOs.

The Compensation Committee, which is responsible for the compensation of our CEO and Senior Officers (as defined in ROLE OF THE HUMAN RESOURCES AND COMPENSATION COMMITTEE), has overseen the development of compensation programs designed to attract, retain and motivate executives who enable us to achieve our strategic and financial goals. The COMPENSATION DISCUSSION AND ANALYSIS and the EXECUTIVE COMPENSATION TABLES, together with the accompanying narrative disclosures, allow you to view the trends in compensation and application of our compensation philosophies and practices for the years presented.

The Board of Directors believes that the Phillips 66 executive compensation programs align the interests of our executives with those of our shareholders. Our compensation programs are guided by the philosophy that the Company's ability to provide value is driven by superior individual performance. The Board believes that a company must offer competitive compensation to attract and retain experienced, talented and motivated employees. In addition, the Board believes employees in leadership roles within the organization are motivated to perform at their highest levels when performance-based pay represents a significant portion of their compensation. The Board believes that our philosophy and practices have resulted in executive compensation decisions that are aligned with Company and individual performance, are appropriate in value, and have benefited the Company and its shareholders.

Because your vote is advisory, it will not be binding upon the Board of Directors. Nevertheless, the Compensation Committee and the Board will consider the outcome of the vote when evaluating future executive compensation arrangements. However, votes for or against our compensation programs will not necessarily inform the Compensation Committee and the Board about which elements of those programs shareholders approve or disapprove. For this reason, the Board encourages shareholders to engage with us to allow the Compensation Committee to understand shareholders' views and consider that feedback when making decisions.

26 PHILLIPS 66 PROXY STATEMENT 2021

PROPOSAL 4: ADVISORY APPROVAL OF EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

COMPANY PERFORMANCE SUMMARY

Our performance results and strategic highlights are presented below. The compensation decisions reflected in this Compensation Discussion and Analysis (“CD&A”) demonstrate the Compensation Committee’s disciplined and rigorous application of the Phillips 66 compensation philosophy, program structure and performance standards relative to the 2020 performance of Phillips 66 and the named executive officers. Some of these results are not measures of financial performance under U.S. generally accepted accounting principles (GAAP), for which more information is available in Appendix B.

Operating Excellence	Top Performance	Industry leading and Company-best performance for personal and process safety metrics – combined Total Recordable Rate of 0.11, combined Lost Workday Case Rate of 0.02 and Tier 1 Process Safety Event Rate of 0.02.
	34% Improved	Lowest number of Agency Reportable Environment Events in Company history – 34% improved versus 2019 performance.
	Digital Innovation	Advanced digital innovation efforts across Refining, Midstream, and Marketing and Specialties segments.
	Record Production	Produced record ethylene and polyethylene volumes through our joint venture, Chevron Phillips Chemical Company.
Growth	+900,000 BPD	Completed Gray Oak Pipeline which runs 845 miles from the Permian and Eagle Ford to the Texas Gulf Coast and has capacity to transport 900,000 BPD.
	+300,000 BPD	Added two new 150,000 BPD fractionators at our Sweeny Hub, bringing the site’s total fractionation capacity to 400,000 BPD – quadrupling our output.
	Emerging Energy	Established Emerging Energy organization dedicated to commercializing renewable, lower-carbon technologies for a sustainable future.
	+50,000 BPD	Announced plans for Rodeo Renewed – projected production of 50,000 BPD of renewable diesel with >30% forecasted returns – which will reconfigure our San Francisco Refinery into one of the largest renewable transportation fuels production facilities in the world.
Returns	$2.1 B Cash Flow	Generated $2.1 B operating cash flow, demonstrating the strength of our diversified portfolio despite the unprecedented demand decrease.
	$1.2 billion	On target to achieve AdvantEdge66 program value targets, sustain self-funding status, and initiate next phase of digital transformation.
	Product Placement	Expanded retail presence through addition of 95 sites to our West Coast joint venture; upgraded 1,257 sites globally.
Distributions	Preserved Liquidity	Reduced costs by over $500 million and suspended share repurchases in March 2020 to manage and preserve liquidity.
	$1.6 B	Maintained competitive dividend – distributions to shareholders through dividends totaled $1.6 billion in 2020.
	(-33%) 2020 TSR	Total Shareholder Return (TSR) since 2012 of 178%, which outperformed our peers but underperformed the S&P 100. TSR for 2020 was (-33.2%).
High- Performing Organization	Inclusion & Diversity	Strengthened commitment and accelerated efforts to advance Inclusion and Diversity in light of the social unrest events during 2020.
High- Performing Organization	Community Response	Our employees volunteered over 52,000 hours and Phillips 66 provided $32 million in financial support to our communities.

PHILLIPS 66 PROXY STATEMENT 2021 27

COMPENSATION DISCUSSION AND ANALYSIS

COVID-19 Response

COVID-19 has had significant, far-reaching impacts on the global economy and its citizens. Our top priority has been the health and safety of our Company, our employees and their families, and the communities in which we live and work. Highlights of our efforts are presented below:

Our People

ü No Company-wide reductions in workforce, furloughs, or salary or benefit reductions

ü Provide personal protective equipment (e.g., masks, sanitizer, etc.)

ü Require temperature checks, face coverings in common areas and pre-screening questionnaire for employees working onsite

ü Reconfigured site and work areas to ensure social distancing

ü In-house medical services provide guidance and lead contact tracing protocols

Our
Communities

ü Continued to provide energy as an essential business to our communities

ü Contributed $6 million to COVID-19 and natural disaster relief efforts across the U.S. and U.K.

ü Delivered 18,000 pieces of personal protective equipment to front-line workers

ü Honored our commitment to host virtual internship program and provide university and dependent scholarships

Our Business
Operations

ü Exceeded $500 million in cost reductions and cut capital spending by more than $700 million

ü Suspended share repurchases in March 2020

ü Added debt with repayment flexibility, positioning us to navigate uncertain environment

ü Operated safely and reliably, providing critical energy products to our customers

No Change to Compensation Programs Related to COVID-19

This year tested the resilience and effectiveness of our compensation program design and targets, particularly in a challenging economic environment. As the year progressed, the Compensation Committee monitored the Company’s performance relative to the originally approved targets and determined that the programs were functioning as intended and no adjustments were warranted. Specifically, we are pleased to highlight that we did not:

Make any one-time special awards

Change or modify the targets or metrics for the 2020 Variable Cash Incentive Program

Change or modify the terms, conditions, targets or metrics for any in-process long-term incentive compensation programs

The payouts for our 2020 VCIP and Performance Share Program 2018 – 2020 described in this CD&A were based on the Company’s performance relative to the originally approved metrics with no adjustments.

EXECUTIVE COMPENSATION PROGRAM SUMMARY

Since our inception in 2012, our strategy is unchanged and we have operated with clear objectives − enable our high-performing workforce to execute our corporate strategy efficiently and effectively, while remaining vigilant and focused on safety and operating excellence, in order to deliver profitable growth, enhance returns, and provide a secure, competitive and growing dividend.

We operate in a volatile industry and the events of 2020, including the COVID-19 pandemic, social unrest and natural disasters, challenged the resiliency of our diversified portfolio, our strategy and our employees. Through our

28 PHILLIPS 66 PROXY STATEMENT 2021

COMPENSATION DISCUSSION AND ANALYSIS

disciplined approach to capital management, we took measures to secure additional liquidity and reduce our controllable costs.

Our Named Executive Officers (“NEOs”) for 2020 were:

Name	Title
Greg Garland	Chairman and Chief Executive Officer
Kevin Mitchell	Executive Vice President, Finance and Chief Financial Officer
Robert Herman	Executive Vice President, Refining
Paula Johnson	Executive Vice President, Legal and Government Affairs, General Counsel and Corporate Secretary
Tim Roberts	Executive Vice President, Midstream

Compensation and Benefits Philosophy and Guiding Principles

Our Compensation and Benefits Philosophy and Guiding Principles form the foundation upon which our compensation and benefits programs are developed in alignment with our corporate vision, strategy and values. The Compensation Committee regularly reviews our Compensation Philosophy and Guiding Principles. Our programs are designed to attract, retain, develop and reward a high-performing workforce to successfully execute our corporate strategy. Embedded in our talent management strategy is the longstanding commitment to equal opportunity in all aspects of employment.

Our programs drive the actions and behaviors of our employees, consistent with shareholder value creation, prudent risk-taking and a long-term perspective.

Our programs form a critical part of the Company’s employment relationship, which also includes challenging and rewarding work, growth and career development opportunities and being part of a leading company with a unique, inclusive culture and diverse workforce.

Our programs have a pay for performance focus – payouts are differentiated based on performance relative to targets and peers.

Our programs target reasonable, affordable and competitive compensation and benefits, aligned with market median levels.

Our programs are fair and equitable, irrespective of gender, race or other personal characteristics.

Executive Compensation Best Practices

Our executive compensation structure delivers a significant portion of compensation tied to the achievement of annual and long-term goals that promote shareholder value creation.

We emphasize Phillips 66 stock ownership by requiring stock ownership levels for our executives.

We limit executive perquisites to items that serve a reasonable business purpose and are common among our peer group.

We regularly engage with shareholders on executive compensation.

We provide executives the same group benefit programs as we provide other employees, on substantially the same terms.

PHILLIPS 66 PROXY STATEMENT 2021 29

COMPENSATION DISCUSSION AND ANALYSIS

New Executive Compensation Developments For 2021

We have enhanced our annual incentive program to increase the weighting of our Environment metric from 5% to 15% to include two new metrics: Low Carbon Priorities and Greenhouse Gas Priorities.

We reduced 2021 total target pay for our Chairman and CEO by approximately 5%.

Compensation Programs

The following table summarizes the principal elements of our executive compensation program and the performance drivers of each element.

KEY ELEMENTS OF PAY	DELIVERED VIA	TARGET AMOUNT	PERFORMANCE DRIVERS (AND WEIGHTINGS)
Base Salary	Cash	Benchmarked to compensation peer group median; adjusted for experience, responsibility, performance and potential	Annual fixed cash compensation to attract and retain NEOs
Annual Incentive	Variable Cash Incentive Program (VCIP)	Percentage of base salary benchmarked to peer group	Adjusted EBITDA (40%) Operating Excellence (35%) Adjusted Controllable Costs (15%) High-Performing Organization (10%) Individual Modifier (+/- 50% of target)
Long-Term Incentives (LTI)	Performance Share Program (PSP)⁽¹⁾ (3-year performance period) 50% of LTI Target	Percentage of base salary benchmarked to peer group	Absolute ROCE (25%) Relative ROCE (25%) Relative TSR (50%)
	Stock Option Program⁽²⁾ 25% of LTI Target		Long-term stock price appreciation
	Restricted Stock Unit (RSU) Program 25% of LTI Target		Long-term stock price appreciation

⁽¹⁾

Beginning with the PSP 2020-2022, the performance drivers and weightings are Absolute ROCE (50%) and Relative TSR (50%).

⁽²⁾

The Compensation Committee believes that stock options are inherently performance-based, as options have no initial value and grantees only realize benefits if the value of our stock increases after the date of grant. This practice is intended to ensure that the interests of our NEOs are aligned with those of our shareholders.

Compensation Mix Puts Significant Pay at Risk

Consistent with our philosophy that executive compensation should be linked to Company performance and directly aligned with shareholder value creation, a significant portion of NEO compensation is at risk and based on performance metrics tied to our corporate strategy. "At risk" means there is no guarantee that the target value of the awards will be realized. Based on its evaluation of performance, the Compensation Committee has authority to reduce, and even award nothing for, the performance-based payouts and individual performance adjustments under each of the VCIP and PSP. Stock options can expire with zero value if the Company stock price does not appreciate above the grant date price over the 10-year term of the options. RSUs may lose value depending on stock price performance. Therefore, for NEOs to earn and sustain competitive compensation, the Company must meet its strategic objectives, perform well relative to peers, and deliver market-competitive returns to shareholders. Further detail on the alignment of compensation and shareholder outcomes is described in CEO PAY ALIGNED WITH COMPANY PERFORMANCE.

CEO target compensation mix is 91% at risk and 74% performance-based. The average target mix for the other NEOs is 84% at risk and 69% performance-based. Further, LTI awards make up 76% of the CEO and 69% of other NEOs target compensation mix. For both the CEO and other NEOs, target mix percentages are commensurate with their levels of responsibility. Further detail on these programs is provided in EXECUTIVE COMPENSATION PROGRAM DETAILS.

30 PHILLIPS 66 PROXY STATEMENT 2021

COMPENSATION DISCUSSION AND ANALYSIS

The target mix of the compensation program elements for the CEO and other NEOs is shown below. The charts outline the relative size, in percentage terms, of each element of target compensation.

CEO Target Mix

Other NEOs Target Mix

PIE CHART

Aligned with Best Practices

The following best practices are reflected in our executive compensation programs:

WE DO ...
ü	Target the majority of NEO compensation to be performance-based
ü	Link NEO compensation to shareholder value creation by having a significant portion of compensation at risk
ü	Apply multiple performance metrics aligned with our corporate strategy to measure our performance
ü	Cap maximum payouts under our VCIP and PSP
ü	Employ a "double trigger" for severance benefits and equity awards under our Key Employee Change in Control Severance Plan (CICSP)
ü	Include absolute and relative metrics in our LTI programs
ü	Maintain stock ownership guidelines for executives -- CEO 6x base salary; other NEOs 3-5x base salary
ü	Balance, monitor and manage compensation risk through regular assessments and robust clawback provisions
ü	Have extended vesting periods on stock awards, with a minimum one-year vesting period required for stock and stock option awards
ü	Maintain a fully independent Compensation Committee
ü	Retain an independent compensation consultant
ü	Hold a Say-on-Pay vote annually and consider shareholder feedback in the design of our compensation programs
WE DO NOT ...
û		Provide excise tax gross-ups to our NEOs under our CICSP
û		Reprice stock options without shareholder approval
û		Price stock options below grant date fair market value
û		Allow share recycling for stock options
û		Include evergreen provisions in our active equity plans
û		Allow hedging or pledging of Phillips 66 stock
û		Pay dividends during the performance period on unearned PSPs
û		Allow transfer of equity awards (except in the case of death)
û		Provide separate supplemental executive retirement benefits for individual NEOs

PHILLIPS 66 PROXY STATEMENT 2021 31

COMPENSATION DISCUSSION AND ANALYSIS

û	Maintain individual change-in-control agreements
û	Have an employment agreement with the CEO
û	Provide excessive perquisites

EXECUTIVE COMPENSATION PROGRAM DETAILS

Base Salary

Base salary is designed to provide a competitive and fixed rate of pay recognizing employees' different levels of responsibility and performance. As the majority of our NEO compensation is performance-based and tied to long-term programs, base salary represents a less significant component of total compensation. In setting each NEO's base salary, the Compensation Committee considers factors including, but not limited to, the responsibility level for the position held, market data from the compensation peer group for comparable roles, experience and expertise, individual performance and business results.

Below is a summary of the annualized base salary for each NEO for 2020. Because these amounts reflect each NEO's annualized salary as of the dates indicated, this information may vary from the information provided in the SUMMARY COMPENSATION TABLE, which reflects actual base salary earnings in 2020, including the effect of salary changes during the year.

Name	Salary as of 1/1/2020 ($)	Salary as of 12/31/2020 ($)
Greg Garland	1,675,008	1,675,008	⁽¹⁾
Kevin Mitchell	867,000	903,432
Robert Herman	850,008

SEC Form DEF 14A filed by Phillips 66