Marathon Petroleum Case Study
Marathon dramatically outperformed its U.S. refining peers after reviewing its structure and operating performance
Like Phillips 66 today, Marathon urgently needed an ambitious new strategy
In the mid-2010s, Marathon Petroleum (NYSE: MPC) doubled down on a conglomerate model by retaining its retail operation.
Shareholder returns lagged peers from 2017 to 2019 on inconsistent execution, leading to an unprecedented valuation discount vs. its peers.
Marathon leadership moved decisively to create a more focused organization and strengthen governance
Marathon’s shareholder-focused Board recognized the need for improvement, welcomed investor advice and carried out a series of crucial changes that we recommended:
- Added a new independent director in consultation with Elliott to boost oversight and accountability
- Transitioned to new executive leadership
- Reduced operating costs by more than $1 billion across the business, while also improving commercial performance and expanding profit margins
- Sold Speedway retail operations, generating $17 billion in net cash proceeds and supporting a best-in-class capital return program and investment grade balance sheet
Elliott’s engagement helped to drive long-term outperformance and dramatically boost shareholder returns
Marathon has excelled since it took bold actions to improve operations and governance, resulting in a ~150% relative share-price outperformance versus its peers Phillips 66 (NYSE: PSX) and Valero Energy (NYSE: VLO). Elliott’s experience with Marathon makes us confident that Phillips 66 has a breakthrough opportunity ahead of it. Over a five-year span ending on 2/10/25, a dollar invested in Phillips 66 would have yielded $1.69, vs. $3.30 for a dollar invested in Marathon.1
1Bloomberg as of February 10, 2025
Source: Bloomberg as of February 7, 2025.
Marathon has regained its credibility with Wall Street
