SECURITIES AND EXCHANGE COMMISSION
Proxy Statement Pursuant to Section 14(a)
of the
Securities Exchange Act of 1934
(Amendment No. )
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¨Soliciting Material Pursuant to §240.14a-12 | | under § 240.14a-12 |
EXXON MOBIL CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check
the appropriate box)all boxes that apply):
x☒ | No fee required.required |
¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
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NOTICE OF 2016Notice of 2023 Annual Meeting and Proxy Statement | | |
ANNUAL MEETING | | |
AND PROXY STATEMENT | |   |
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| | | | April 13, 20162023 |
Dear Shareholder:
We invite you to attend the annual meeting of shareholders on Wednesday, May 25, 2016, at the Morton H. Meyerson Symphony Center, 2301 Flora Street, Dallas, Texas 75201. The meeting will begin31, 2023, beginning promptly at 9:30 a.m., Central Time. The annual meeting of shareholders will be a virtual meeting. This format will help provide for a safe experience for our shareholders, employees, and other members of the community, and provide broader access and participation in the meeting versus an in-person meeting. Shareholders will be able to attend, vote, and submit questions during the annual meeting from any remote location that has Internet connectivity. We believe this approach provides for equitable participation and enhances accessibility to the meeting. Online access will be available approximately 15 minutes prior to the annual meeting start time at www.virtualshareholdermeeting.com/XOM2023. Please see page 5 for detailed instructions for attending and participating in the annual meeting.
At the meeting, you will hear a report on our business and vote on the following items:
Election of directors;
Ratification of PricewaterhouseCoopers LLP as independent auditors;
| • | | Ratification of PricewaterhouseCoopers LLP as independent auditors; |
Advisory vote to approve executive compensation as required by law;
| • | | Advisory votes to approve executive compensation and future voting frequency; |
Eleven shareholder proposals contained in this proxy statement; and
| • | | Thirteen shareholder proposals contained in this proxy statement; and |
Other matters if properly raised.
| • | | Other matters if properly raised. |
Only shareholders of record on April 6, 2016,5, 2023, or their valid proxy holders may vote at the meeting. Attendance at the meeting is limitedWe are first mailing these proxy materials to shareholders of record on or their proxy holders and ExxonMobil guests. Only shareholders or their valid proxy holders may address the meeting.about April 13, 2023.
This booklet includes the formal notice of the meeting and proxy statement. The proxy statement tells you about the agenda, procedures, and rules of conduct for the meeting. It also describes how the Board operates, gives information about our director candidates, and provides information about the other items of business to be conducted at the meeting.
This year, we initiated the use of “Notice and Access” for delivery of proxy information to many shareholders, thereby capturing cost and environmental benefits. These shareholders will receive by mail aNotice Regarding the Availability of Proxy Materials on the Internet. The notice will also contain instructions on how to request paper copies of all proxy materials, if desired.
Financial information is provided separately in the booklet, 2015 Financial Statements and Supplemental Information, enclosed with2022 Annual Report that accompanies or precedes the proxy materials or is made available online to all shareholders.
Your vote is important to us.important. Even if you own only a few shares, we want your sharesvoice to be represented at the meeting.You can vote your shares by Internet, toll-free telephone call, or proxy card.
To attend the meeting in person, please follow the instructions on page 3. An audio webcast with slide presentation and a report on the meeting Apreliminary summary of 2023 Proxy Voting Results will be available at exxonmobil.com after the annual meeting of shareholders and will be filed on our website atexxonmobil.com.a Form 8-K within four business days of the meeting.
Sincerely,
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Jeffrey J. WoodburyCraig S. Morford Secretary | | Darren W. Woods Chairman of the Board |
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 | | | | Rex
Darren W. TillersonWoods Chairman of the Board, Chief Executive Officer, Exxon Mobil Corporation | | |
Secretary | | | |
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Dear Fellow Shareholders:
I would like to invite you to join the 2023 Exxon Mobil Corporation virtual annual shareholder meeting on May 31, 2023, beginning at 9:30 a.m. Central Time.
In 2022, the hard work and commitment of our people drove exceptional results. While our results benefited from a favorable market, our work to meet demand began years ago, well before the pandemic. We chose to invest counter-cyclically, leaning in when others leaned out. As a result, we made strong progress against our strategic priorities, including delivering industry-leading earnings, cash flows, and shareholder returns.
Our progress also included building and improving our advantaged portfolio, as we increased production to meet demand when people needed it the most, increased our refining throughput to record levels, and positioned the Company to bring the largest refining capacity expansion in North America on line in more than a decade.
At this year’s meeting, we’ll highlight this progress and share how we’re working to be a valued partner of choice as we continue to innovate and provide solutions that meet the growing needs of society reliably and affordably. This includes our landmark agreement that is expected to capture, transport, and store up to 2 million metric tons of CO2 per year on behalf of a large fertilizer manufacturer in Louisiana, and the start-up of one of North America’s largest advanced recycling facilities in Baytown, Texas. It also includes our plans to increase value-accretive investments in lower-emission initiatives to approximately $17 billion from 2022 through 2027 (a $2 billion increase over our prior plan), as we work to achieve our previously announced 2030 greenhouse gas emission-reduction plans, and advance our net-zero by 2050 ambition.
We are working to solve the “and” equation: delivering the energy and products society needs and lead industry in reducing greenhouse gas emissions.
On behalf of the ExxonMobil leadership team and Board of Directors, we would like to thank our employees who work tirelessly so that we can meet the world’s evolving needs and progress our plans to play a leading role in a thoughtful energy transition.
We look forward to sharing more with you at our annual shareholder meeting.
Thank you for investing in ExxonMobil.
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 | | | | Chairman
Joseph L. Hooley Board of the BoardDirectors, Lead Director, Exxon Mobil Corporation | | |
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Dear Fellow Shareholders:
As Independent Lead Director, I’m focused on ensuring that ExxonMobil’s Board delivers cohesive management oversight and that shareholders benefit from the full range of relevant skill sets and contributions of each Board member.
Our Board is composed of proven leaders who bring diverse experience in critically important areas, including energy, new technologies, climate science, business transformation, safety, risk management, investment stewardship, and capital allocation. In my first full year as Lead Director, it has been a privilege to work with such a diverse and talented group.
In 2022, ExxonMobil generated industry-leading total shareholder returns and met all of its annual strategic goals. The Company took the necessary steps to help meet society’s need for energy and products, while also delivering on its commitment to lower emissions. Its Low Carbon Solutions business is making exciting progress that will help the Company reduce its own emissions and grow opportunities to help others do the same. ExxonMobil entered 2023 with positive momentum, significant financial flexibility, and an even stronger platform for continued value-focused growth, performance, and innovation.
A key responsibility of the Board is to consider a wide range of scenarios and risks to ensure the Company is well-positioned to overcome challenges and capture opportunities to help achieve a lower-emissions future. This is the focus of the Board’s oversight in the development of the Company’s five-year plan. The plan continues to call for investments in high-return, low cost of supply, advantaged assets in the Upstream and the new Product Solutions business. It also includes a nearly 15 percent increase in investments aimed at emission reductions and accretive lower-emission initiatives. The Low Carbon Solutions business has tripled its organization size in the past year, leveraging the Company’s unique capabilities to advance an increasing number of opportunities with competitive returns in carbon capture and storage, hydrogen, and biofuels.
ExxonMobil’s balanced and disciplined strategy is working. Today, ExxonMobil leads its peers in earnings, cash flow, and returns, all while expanding lower-emission investments. Your Board is committed to building on this momentum while continuing direct interactions with investors in the year ahead.
It is a tremendous honor to serve on ExxonMobil’s Board, and I thank you for the trust you’ve placed in us and in ExxonMobil.
Table of ContentsTABLE OF CONTENTS
PROXY SUMMARY
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ITEM 1: Election of Directors The Board recommends you vote FOR each of the nominees. The Board of Directors has nominated the director candidates in this proxy statement, all of whom currently serve as ExxonMobil directors. All director nominees have stated they are willing to 2016 Annual Meetingserve, if elected. Personal information about each nominee and their extensive qualifications begins on Page 8. |
ExxonMobil Board of Director Nominees
ExxonMobil works each day to meet society’s needs for energy and the products essential to modern life, while planning to play a leading role in a thoughtful energy transition. The Company’s strategy is built on a unique combination of global scale, deep technology, innovation expertise, functional excellence, and world-class people. This strategy has built globally competitive businesses that lead the industry in absolute earnings and cash flow. The Board believes this strategy well-positions the Company for a range of future scenarios and reflects our intention to maximize long-term shareholder value throughout the energy transition.
The Board of Directors oversees the Company’s strategy and planning process, with each director bringing a range of skills and experiences that serve to strengthen Board deliberations and decision-making. Considering a variety of potential scenarios, the Board’s goal is to ensure the Company is well-positioned to execute its long-term strategy, which is designed to deliver profitable growth and significant shareholder returns.
In support of its governance, the Board reviews assumptions and sensitivities in testing projects and investments for resiliency. For example, the Board oversees the development of the Company’s plans through 2027. This five-year plan continues to call for high-return, low cost of supply, advantaged assets in the Upstream and the new Product Solutions business; it also includes significantly increasing investments in lower-emission initiatives to approximately $17 billion, including progressing advanced recycling, hydrogen, biofuels, and carbon capture and storage projects. The Board is actively involved in discussions on technology development and deployment. These discussions help guide the Company’s efforts to further reduce greenhouse gas emissions from its operated assets, and progress its plans to help others reduce their emissions from the manufacturing, power generation, and commercial transportation sectors.
The Board refreshment process is led by the Nominating and Governance Committee, which incorporates the perspectives of shareholders and external experts. This Committee seeks highly qualified Board candidates with diverse, relevant backgrounds. Important director competencies include experience in capital-intensive and cyclical industries, the energy transition, climate science, and technological research and development. In 2023, the Company added two new independent directors with proven experience in leading value-creation at industries likewise going through transitions.
The Board unanimously recommends you vote FOR
each of the ExxonMobil director candidates.
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| 2023 Proxy Statement | |  | | 1 | | |
Board Tenure
ExxonMobil added eight new independent directors since 2020 — more than 60 percent of the total current Board as of the date of this proxy statement. Average tenure for current non-employee directors is 3.5 years.
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| 62% |
of current directors have
joined the Board since 2020 |
Director Diversity
The Board believes diversity of thought, experience, and background is critical to good governance. Unique perspectives and experiences add value in working together as a collective body to represent the interests of all shareholders.
Broad Range of Business & Industry Experience
Directors bring a wide range of business experience, including climate expertise, industrial operations experience, investor perspectives, and experience in the oil and gas industry.
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| 23% |
of current directors have
experience in large-scale energy /
commodity businesses |
Additional information:
Director leadership & oversight...Page 20
Director qualifications & competencies...Page 22
Director tenure...Page 29
Strategy delivers industry-leading results in 2022
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Earnings increased to $56billion | | | | Dividend annual growth for 40consecutive years | | | | Cash flow from operations increased to $77billion |
Progress on greenhouse gas emission reductions1
ExxonMobil cut global operated methane emissions in half since 2016 and eliminated routine flaring in the Permian Basin operated assets in line with the World Bank’s Zero Routine Flaring Initiative.2
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| >50% | | >10% |
Reduction in corporate-wide methane intensity from operated assets | | Reduction in corporate-wide greenhouse gas (GHG) emissions intensity |
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2030 GHG emission-reduction plans3 - applies to Scope 1 and Scope 2 GHG emissions
from operated assets, versus 2016 levels:
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| 20-30% | | 40-50% |
Reduction in corporate-wide GHG emissions intensity | | Reduction in Upstream GHG emissions intensity |
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| 70-80% | | 60-70% |
Reduction in corporate-wide
methane intensity | | Reduction in corporate-wide
hydrocarbon flaring intensity |
2050 Net-zero Ambition for Operated Assets
With advances in technology and the support of clear and consistent government policies, we aim to achieve our Scope 1 and Scope 2 net-zero ambition Corporate-wide by 2050. To this end, we have taken a comprehensive approach to create emission-reduction roadmaps4 for our major operated assets. The roadmaps build on our 2030 emission-reduction plans and include reaching net-zero emissions in our unconventional Permian Basin operated assets by 2030.
Investing in Lower-Emission Opportunities
ExxonMobil plans to invest approximately $17 billion in value accretive, lower-emission initiatives from 2022 through 2027. Approximately 40 percent will be directed toward building the Company’s Low Carbon Solutions business to help customers reduce their GHG emissions through large-scale carbon capture and storage, hydrogen, and biofuels. These lower-emissions technologies are recognized as necessary solutions to help address climate change and closely align with ExxonMobil’s existing competitive advantages and core capabilities. The Company’s robust research and development process, continued evaluation of emerging technologies, and global collaborations will be key to identifying lower-emission opportunities and growing the Low Carbon Solutions business.
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| ~$17 Billion |
Allocated toward lower-emissions investments from 2022 through 2027 |
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2 | | | | | | 2023 Proxy Statement |
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ITEM 2: Ratification of Independent Auditors The Board recommends you vote FOR this proposal. |
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The ExxonMobil Audit Committee has appointed PricewaterhouseCoopers LLP (PwC) to audit ExxonMobil’s financial statements for 2023. | | | | | | Page 41 Additional information about the Audit Committee’s appointment of PwC
and PwC’s fees for
2021 and 2022 |
You are asked to ratify that appointment. | | | | |
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ITEM 3: Advisory Vote to Approve Executive Compensation ITEM 4: Frequency of Advisory Vote on Executive Compensation The Board recommends you vote FOR on Item 3 and FOROne-Year Frequency on Item 4. |
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ExxonMobil asks you to vote on non-binding resolutions to approve the compensation of the Named Executive Officers and on the future voting frequency of that advisory vote. | | | | | | Page 44 Additional information about ExxonMobil’s compensation
program
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ITEMS 5 through 17: Shareholder Proposals The Board recommends you vote AGAINST each of these proposals. |
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You will have the opportunity to vote on shareholder proposals submitted to ExxonMobil. | | | | | | Page 77 The text of these proposals, the proponents’ statements in support, and ExxonMobil’s responses |
| 1 | Based on Scope 1 and 2 emissions of ExxonMobil operated assets through 2022 (versus 2016). ExxonMobil’s reported emissions, reductions, and avoidance performance data are based on a combination of measured and estimated emissions data using reasonable efforts and collection methods. Calculations are based on industry standards and best practices, including guidance from the American Petroleum Institute (API) and Ipieca. There is uncertainty associated with the emissions, reductions, and avoidance performance data due to variation in the processes and operations, the availability of sufficient data, quality of those data and methodology used for measurement and estimation. Performance data may include rounding. Changes to the performance data may be reported as part of the company’s annual publications as new or updated data and/or emission methodologies become available. We are working to continuously improve our performance and methods to detect, measure and address greenhouse gas emissions. ExxonMobil works with industry, including API and Ipieca, to improve emission factors and methodologies, including measurements and estimates. |
| 2 | References to routine flaring herein are consistent with the World Bank’s Zero Routine Flaring Initiative/Global Gas Flaring Reduction Partnership’s (GGFRP) principle of routine flaring, and excludes safety and non-routine flaring. |
| 3 | ExxonMobil’s 2030 GHG emission reduction plans, corporate.exxonmobil.com/News/Newsroom/News-releases /2021/1201_ExxonMobil-announces-plans-to-2027-doubling-earnings-and-cash-flow-potential-reducing-emissions. |
| 4 | ExxonMobil’s Scope 1 and Scope 2 net-zero ambition is backed by a comprehensive approach centered on detailed emission-reduction roadmaps for our major operated assets. Roadmaps may be updated as needed to reflect technology, policy and other necessary developments, including the development and acquisition of major operated assets. |
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| 2023 Proxy Statement | | | | 3 | | |
GENERAL INFORMATION
Who May Vote
Shareholders of ExxonMobil, as recorded in our stock register on April 6, 2016,5, 2023, may vote at the meeting.meeting according to the instructions below.
How to Vote
You mayYour vote in person at the meeting or by proxy.is important. We recommend you vote by proxy even if you plan to attendparticipate in the meeting.virtual meeting. You can always change yourmay vote at the meeting.annual meeting according to the instructions below or by proxy.
Important Notice Regarding the AvailabilityIf your shares are held in your name, you can vote by proxy in one of Proxy Materials for the Shareholder Meeting to be held on May 25, 2016three convenient ways:
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 | | The 2016 Proxy Statement, 2015 Summary Annual Report, and 2015 Financial Statements are available atwww.edocumentview.com/xom. |
Notice and Access
This year we have elected to distribute proxy materials to many shareholders via the Internet under the Securities and Exchange Commission’s (SEC’s) “Notice and Access” rules, thereby capturing cost and environmental benefits. On or about April 13, 2016, we mailed a Notice Regarding the Availability of Proxy Materials (“Notice”) that contains information about our 2016 Annual Shareholders Meeting and instructions on how to view all proxy materials on the Internet. Also included are instructions on how to vote and how to request a paper or e-mail copy of the proxy materials.
Electronic Delivery of Proxy Statement and Annual Report Documents
For shareholders receiving proxy materials by mail, you can elect to receive an e-mail in the future that will provide electronic links to these documents. Opting to receive your proxy materials online will save the Company the cost of producing and mailing documents to your home or business, and will also give you an electronic link to the proxy voting site.
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| | Shareholders |
Online | | Telephone | | Mail |
Follow the instructions at investorvote.com/exxonmobil. You will need to have your
proxy card or Notice of Record:Internet Availability (Notice) in hand. | | Call toll-free
1-800-652-8683 or 1-781-575-2300 (outside the United States, Canada, and Puerto Rico), and follow the instructions.
You will need to have your proxy card or Notice in hand. | | Complete, sign, date, and return your proxy card in the enclosed envelope. If you receive a Notice and would like to vote on the Internet atwww.investorvote.com/exxonmobil, simply by mail, please follow the prompts for enrollinginstructions in the electronicNotice to obtain paper proxy delivery service. You may enroll in the electronic proxy delivery service at any time in the future by going directly towww.computershare.com/exxonmobil. You may also revoke an electronic delivery election at this site at any time.materials. |
Beneficial Shareholders:If you hold your shares in a brokerage account, you may also have the opportunity to receive copies of the proxy materials electronically. Please check the information provided in the proxy materials mailed to you by your bank or broker regarding the availability of this service.
How Proxies Work
ExxonMobil’s Board of Directors is asking for your proxy. Giving us your proxy means you authorize us to vote your shares at the meeting in the manner you direct.
If your shares are held in your name, you can vote by proxy in one of three convenient ways:
• | | Via Internet:Go towww.investorvote.com/exxonmobil and followdirect on the instructions. You will need to have your proxy card or Notice in hand. At this website, you can elect to access future proxy statements and annual reports via the Internet. |
By Telephone:Call toll-free 1-800-652-8683 or 1-781-575-2300 (outside the United States, Canada, and Puerto Rico), and follow the instructions. You will need to have your proxy card or Notice in hand.
In Writing:Complete, sign, date, and return your proxy card infrom the enclosed envelope. If you receive a Notice and would like to vote in writing, please follow the instructions in the Notice to obtain paper proxy materials.
Your proxy card covers all shares registered in your name and shares held in your Computershare Investment Plan account. If you own shares in the ExxonMobil Savings Plan for employees and retirees, your proxy card also covers those shares.Board of Directors.
If you give us your signed proxybut do not specify how to vote, we will vote your shares as follows:
FOR the election of our director candidates;
| • | | For the election of all director candidates nominated by the ExxonMobil Board; |
FOR ratification of the appointment of independent auditors;
| • | | For ratification of the appointment of independent auditors; |
FOR approval of the compensation of the Named Executive Officers; and
| • | | For approval of the compensation of the Named Executive Officers; |
AGAINST the shareholder proposals.
| • | | For one year as the frequency of future advisory votes on executive compensation; and |
| • | | As recommended by the Board with respect to shareholder proposals. |
If you hold shares through someone else, such as a stockbroker,brokerage firm, bank, or intermediary, you will receive materialmaterials from that firm asking how you want to vote. Check the voting form used by that firm to see if it offers Internetas most offer online or telephone voting.voting in addition to mail.
Attendance at the Annual Meeting
You have received this proxy statement because you are a shareholder as of the record date. Attendance at the
annual meeting through the website www.virtualshareholdermeeting.com/XOM2023 or any adjournment or postponement thereof will be limited to shareholders of the Company as of the close of business on the record date and to guests. You will not be able to attend the annual meeting in person at a physical location. Separate instructions for how to attend the annual meeting as a shareholder and have the ability to vote and/or submit a comment or question during the annual meeting are provided below for Registered Shareholders (those who hold shares through our transfer agent, Computershare, or participate in the Savings Plan) and Beneficial Shareholders (generally, those who hold shares through a bank or brokerage account).
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4 | | | | | | 2023 Proxy Statement |
Registered Shareholders must pre-register by 4:00 p.m. Central Time on May 24, 2023.
For Registered Shareholders who hold shares through our transfer agent, Computershare, or participate in the Savings Plan, you must request a 16-digit virtual meeting access (VMA) control number no later than 4:00 p.m. Central Time on Wednesday, May 24, 2023.
To request a VMA control number, please email Computershare at legalproxy@computershare.com with “VMA Request” in the subject line. Include your full name exactly as it appears on your account, and include a copy of your proxy card or Notice. Alternatively, if you received your voting instructions via email, you may forward or attach that email. The 15-digit voter control number on your proxy card, Notice, or email allows you to vote your shares prior to and during the meeting but does not provide access to the virtual meeting as a shareholder. You will receive an email response from Computershare within seven days of your request. The email response will include your VMA control number and instructions to attend the virtual meeting. Please check that you have received a response in advance of the meeting, as it may be possible that the email may be in your spam or junk folder.
As a reminder, requests for VMA control numbers must be received at legalproxy@computershare.com no later than 4:00 p.m. Central Time on May 24, 2023.
Beneficial Shareholders
For Beneficial Shareholders who hold their shares through an intermediary, such as a bank or brokerage firm, the 16-digit control number can be found on the Notice of Internet Availability (Notice), voting instruction form, or other instructions you receive from your bank, brokerage firm, or other intermediary. Beneficial Shareholders can use their 16-digit control number to log in to attend the meeting, submit questions, and vote during the meeting. Beneficial Shareholders who did not receive a 16-digit control number from their bank or brokerage firm who wish to attend the meeting should follow the instructions from their bank or brokerage firm, including any requirement to obtain a legal proxy. Most brokerage firms or banks allow a shareholder to obtain a legal proxy either online or by mail.
Attending as a Guest
Shareholders who do not pre-register for the virtual annual meeting (as specified above) or who do not have their 16-digit control number may still attend the meeting virtually as a guest by accessing the annual meeting website, www.virtualshareholdermeeting.com/XOM2023, beginning 15-minutes prior to the annual meeting’s scheduled start time and following the instructions provided to attend as a guest.
Guests at the virtual annual meeting will be able to listen to the meeting but will not be able to vote nor submit a comment or question during the annual meeting.
Submitting Questions and Voting at the Annual Meeting
Other than shareholders who attend as guests, all shareholders may submit questions and vote at the annual meeting by following the instructions that will be available on the annual meeting website. Even if you plan to attend the annual meeting, the Company recommends that you vote your shares in advance, so that your vote will be counted if you later decide not to attend the annual meeting. Please note the additional information below for Registered Shareholders on voting during the annual meeting.
Registered Shareholders can continue to vote their shares during the annual meeting by following the instructions that will be available on the annual meeting website and using the 15-digit voter control number displayed on your proxy card, Notice, or meeting materials email for the annual meeting. The 15-digit voter control number will not provide you access to the virtual annual meeting. For instructions on attending the annual meeting, please reference the section above titled “Attendance at the Annual Meeting.”
Submitting a Question Prior to the Annual Meeting
Shareholders may submit a comment or question prior to the annual meeting, beginning on May 1, 2023, by visiting
exxonmobil.com/investor and following the instructions on the website.
Questions received prior to or during the annual meeting will be answered as allotted time permits. In order to address as many topics as time permits, similar questions may be combined. In light of the number of business items on this year’s agenda and the need to conclude the annual meeting within a reasonable period of time, we cannot ensure that every shareholder who wishes to have a question or comment addressed during the annual meeting will be able to do so.
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| 2023 Proxy Statement | | | | 5 | | |
Virtual Meeting Technical Assistance
If you encounter technical difficulties accessing the virtual annual meeting, the meeting login page will include technical support line contact information. Technical support will be available beginning at 9:15 a.m. Central Time on May 31, 2023, and will remain available until the annual meeting has ended.
Important Notice Regarding the Availability of Proxy Materials for the Shareholders Meeting to be held on
May 31, 2023:
The 2023 Proxy Statement and 2022 Annual Report are available at www.edocumentview.com/xom.
Notice and Access
We distribute proxy materials to many shareholders via the Internet under the Securities and Exchange Commission’s (SEC) “Notice and Access” rules, thereby capturing cost and environmental benefits. On or about April 13, 2023, we mailed a Notice of Internet Availability of Proxy Materials (Notice) that contains information about our 2023 annual meeting of shareholders and instructions on how to view all proxy materials on the Internet. Also included are instructions on how to vote and how to request a paper or e-mail copy of the proxy materials.
Electronic Delivery of Proxy Statement and Annual Report Documents
For shareholders receiving proxy materials by mail, you can elect to receive an e-mail in the future that will provide electronic links to these documents. Opting to receive your proxy materials online will save the Company the cost of producing and mailing documents to you, and will also give you an electronic link to vote your proxy.
| • | | Registered Shareholders: You may enroll in the electronic proxy delivery service at any time by going to computershare.com/exxonmobil. You may also revoke an electronic delivery election at this site at any time. |
| • | | Beneficial Shareholders: If you hold your shares in a brokerage firm or bank account, you may also have the opportunity to receive copies of the proxy materials electronically. Please check the information provided in the proxy materials mailed to you by your bank, brokerage firm, or intermediary regarding the availability of this service. |
Voting Shares in the ExxonMobil Savings Plan
The Trustee of the ExxonMobil Savings Plan will vote Plan shares as participants direct. To the extentIf participants do not give instructions, the Trustee will vote shares as it thinks best. The proxy card serves to give voting instructions to the Trustee.
Revoking a Proxy for Registered Shareholders
You may revoke your proxy before it is voted at the meeting by:
Submitting a new proxy with a later date via a proxy card, the Internet, or by telephone;
| • | | Submitting a new proxy with a later date via a proxy card, online, by telephone, or by mail; |
Notifying ExxonMobil’s Secretary in writing before the meeting; or
| • | | Notifying ExxonMobil’s Secretary in writing before the meeting; or |
Voting in person at the meeting.
| • | | Voting during the meeting. |
Confidential Voting
Independent inspectors count the votes. Your individual vote is kept confidential from us unless otherwise required by law or special circumstances exist. For example, a copy of your proxy card will beis sent to us if you write comments on the card.
Quorum
In order to carry on the business of the meeting, we must have a quorum. This means at least a majority of the outstanding shares eligible to vote must be represented at the meeting, either by proxy or in person. Treasury shares, which are shares owned by ExxonMobil itself, are not voted and do not count for this purpose.
Votes Required
| • | | Election of Directors Proposal: Under ExxonMobil’s by-laws, in a non-contested election, a director nominee must receive a majority of votes cast in order to be elected to the Board of Directors. In a contested election (in which the number of nominees exceeds the number of directors to be elected), the plurality vote standard under New Jersey law applies. Under plurality voting, the director nominee with the most votes for a particular seat is elected for that seat. Abstentions and broker non-votes are not counted for purposes of the election of directors. |
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Election of Directors Proposal:A plurality of the votes cast is required for the election of directors. This means that the director nominee with the most votes for a particular seat is elected for that seat. Only votes FOR or WITHHELD count. Abstentions and broker non-votes are not counted for purposes of the election of directors. A broker non-vote occurs when a bank, broker, or other holder of record that is holding shares for a beneficial owner does not vote on a particular proposal because the record holder does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.If you own shares through a broker, you must give the broker instructions to vote your shares in the election of directors. Otherwise, your shares will not be voted.
| A broker non-vote occurs when a bank, broker, or other holder of record that is holding shares for a beneficial owner does not vote on a particular proposal because the record holder does not have discretionary voting power and has not received instructions from the beneficial owner. If you own shares through a brokerage firm, bank, or intermediary, you must give the brokerage firm, bank, or intermediary instructions to vote your shares in the election of directors. You provide those instructions to your brokerage firm, bank, or intermediary by voting according to the directions on your proxy card or Notice by mail, online, or telephone. If you do not give your brokerage firm, bank, or intermediary instructions on voting your shares, then your shares will not be voted for this proposal. |
Our Corporate Governance Guidelines, which can be found in the Corporate Governance section of our website atexxonmobil.com/guidelines, governance, state that all directors will stand for election at the annual meeting of shareholders. In any a non-contested election of directors, any director nominee who receives a greater number of votes WITHHELD fromAGAINST his or her election than votes FOR such election shall tender his or her resignation. Within 90 days after certification of the election results, the Board of Directors will decide, through a process
managed by the Board AffairsNominating and Governance Committee and excluding the nominee in question, whether to accept the resignation. Absent a compelling reason for the director to remain on the Board, the Board shall accept the resignation. The Board will promptly disclose its decision and, if applicable, the reasons for rejecting the tendered resignation on Form 8-K filed with the Securities and Exchange Commission (SEC).Commission.
Other Proposals:| • | | Other Proposals:Approval of the ratification of the appointment of independent auditors, the advisory vote to approve executive compensation, and the shareholder proposals require the favorable vote of a majority of votes cast. Only votes FOR or AGAINST these proposals count. |
Approval of the frequency of the advisory vote on executive compensation requires the favorable vote of a majority of votes cast. Onlycast unless none of the frequency choices receives a majority, in which case the choice that receives the plurality of votes FOR or AGAINST these proposals count.
Abstentions count for quorum purposes, but not for voting. Broker non-votes count as votes FOR the ratification of the appointment of independent auditors but do not count for voting on any of the other proposals.
Annual Meeting Admission
Only shareholders or their proxy holders and ExxonMobil guests may attend the meeting.For safety and security reasons, cameras, smartphones, recording equipment, electronic devices, computers, large bags, briefcases, packages, and firearms or other weapons will not be permitted in the building.In addition, each shareholder and ExxonMobil guest will be asked to present valid government-issued picture identification, such as a driver’s license, before being admitted to the meeting.
For registered shareholders, an admission ticket is the upper part of your proxy card or the full Notice. Please bring the admission ticket with you to the meeting.
If your shares are held in the name of your broker, bank, or other nominee, you must bring to the meeting an account statement or letter from the nominee indicating that you beneficially owned the shares on April 6, 2016, the record date for voting. You may receive an admission ticket in advance by sending a written request with proof of ownership to the address listed on the next page under Contact Information.
Shareholders who do not present admission tickets at the meeting will be admitted only upon verification of ownership at the admission counter.
Audio Webcast of the Annual Meeting
You are invited to visit our website atexxonmobil.com to hear the audio webcast with slide presentation at 9:30 a.m., Central Time, on Wednesday, May 25, 2016. An archived copy of this audio webcast will be available on our website for one year.
Conduct of the Meeting
The Chairman has broad responsibility and legal authority to conduct the annual meeting in an orderly and timely manner. This authority includes establishing rules for shareholders who wish to address the virtual meeting. Only shareholders or their valid proxy holders may address the meeting. CopiesA copy of these rules will be available at the virtual meeting. The Chairman may also exercise broad discretion in recognizing shareholders who wish to speakshareholders’ comments or questions and in determining the extent of discussion on each item of business. In light of the number of business items on this year’s agenda and the need to conclude the meeting within a reasonable period of time, we cannot ensure that every shareholder who wishes to speak on an item of businesshave a question or comment addressed during the meeting will be able to do so.
Dialogue can usuallyalso be better accomplishedfacilitated with interested parties outside the meeting and, for this purpose, we have provided a method on our website atexxonmobil.com/directors for raising issues and contacting thenon-employee directors either in writing either by mail or electronically. The Chairman may also rely on applicable law regarding disruptions or disorderly conduct to ensure that the meeting is conducted in a manner that is fair to all shareholders. Shareholders makingwho wish to make comments during the meeting mustshould do so in English so thatwriting. Shareholders may send their comments prior to the majority of shareholders present can understand what is being said.
Contact Information
If you have questions or need more information about the annual meeting, write to Mr. Jeffrey J. Woodbury, Secretary, Exxon Mobil Corporation, 5959 Las Colinas Boulevard, Irving, TX 75039-2298. Alternatively, call us at 1-972-444-1157 or send a fax to 1-972-444-1505.
For information about shares registered in your name or your Computershare Investment Plan account, call ExxonMobil Shareholder Services at 1-800-252-1800 or 1-781-575-2058 (outside the United States, Canada, and Puerto Rico), or access your account via the website atwww.computershare.com/exxonmobil. We also invite you to visit ExxonMobil’s website atexxonmobil.com. Investor information can be found atexxonmobil.com/investor.
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Contact Information If you have questions or need more information about the annual meeting, write to Mr. Craig S. Morford, Secretary, Exxon Mobil Corporation, 22777 Springwoods Village Parkway, Spring, TX 77389. Alternatively, send an email to shareholderrelations@exxonmobil.com. For information about shares registered in your name or your Computershare Investment Plan account, call ExxonMobil Shareholder Services at 1-800-252-1800 or 1-781-575-2058 (outside the United States, Canada, and Puerto Rico), or access your account via the website at computershare.com/exxonmobil. We also invite you to visit ExxonMobil’s website, where investor information can be found at exxonmobil.com/investor. Shareholders may submit a comment or question in advance of the annual meeting beginning on May 1, 2023, by following the instructions on the website. Website materials are not part of this proxy solicitation. |
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| 2023 Proxy Statement | | | | 7 | | |
BOARD OF DIRECTORS
Item 1 – Election of Directors
Our Board of Directors has general oversight responsibility for ExxonMobil’s affairs pursuant to New Jersey’s General Corporation Law and ExxonMobil’s Restated Certificate of Incorporation and by-laws. In exercising its fiduciary duties, the Board represents and acts on behalf of ExxonMobil’s shareholders and is committed to strong corporate governance, as reflected through its policies and practices. The Board of Directors has nominated the director candidates named on the following pages. All of our nominees currently serve as ExxonMobil directors.
All director nominees have stated they are willing to serve if elected and have consented to be named in this proxy solicitation.statement. If a nominee becomes unavailable before the election, your proxy authorizes the people named as proxies to vote for a replacement nominee if the Board names one. In any event, the Board size at the time of the meeting will equal the number of nominees nominated by the Board, and there will be no vacancy at the time of the meeting.
BOARD OF DIRECTORSThe Board unanimously recommends you vote FOR each of the following candidates:
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Michael J. Angelakis |
Independent director Director since 2021 Age 58 Committees: Audit; Executive; Finance (Chair) | | Expertise provided to the Board: Mr. Angelakis’ financial experience, highlighted by his executive leadership position (CFO) transforming Comcast while navigating the financial crisis of 2008, helps the Board to better understand financial risk and opportunities facing ExxonMobil. In addition to his extensive business career, Mr. Angelakis’ experience as Chairman of the Federal Reserve Bank of Philadelphia provides a vital perspective to the challenges ExxonMobil faces related to policy risk. Qualifications: Atairos Group   • Chair & CEO (2015 to present) Comcast Corporation   • Vice Chairman & CFO (2011 to 2015) • Executive Vice President & CFO (2007 to 2011) Providence Equity Partners • Managing Director and member of the Management and Investment Committees (1999 to 2007) Current public company directorships:  Bowlero Corporation (December 2021 to present; Chair of the Nominating and Corporate Governance Committee) Clarivate Plc (December 2021 to present) TriNet Group, Inc. (February 2017 to present; member of the Nominating and Corporate Governance and Compensation committees) Previous public company directorships in last five years: Groupon, Inc. (April 2016 to May 2021) Hewlett Packard Enterprise Company (November 2015 to April 2020) Other board experience:  Chairman of The Federal Reserve Bank of Philadelphia (2016 to 2018) and Deputy Chairman and board member (2012 to 2016) |
Attributes and Skills: |
| | Financial expertise and portfolio management |
| | Public policy / regulatory experience |
| | Risk management / investment stewardship experience |
| | Public company board governance experience |
| | Operation experience in capital-intensive industry |
| | Global business experience |
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Susan K. Avery |
Independent director Director since 2017 Age 73 Committees: Environment, Safety and Public Policy (Chair); Nominating and Governance | | Expertise provided to the Board: Dr. Avery brings extensive experience as an atmospheric scientist and engineer. Her work at the University of Colorado-Boulder and Woods Hole Oceanographic Institution puts her at the leading edge of climate research, including the evolving field of earth system science. This unique perspective helps the Board better understand the technological opportunities available in low carbon solutions as well as providing effective oversight to the climate-related risks facing ExxonMobil. Qualifications: Woods Hole Oceanographic Institution   • President & Director (2008 to 2015) University of Colorado-Boulder • Interim dean of the graduate school and vice chancellor for research, interim provost, and executive vice chancellor for academic affairs (2004 to 2008) Current public company directorships: None Previous public company directorships in last five years: None Government / scientific research experience: Past member of the United Nations Scientific Advisory Board and the National Research Council Global Change Research Program Advisory Committee Science, engineering, and research: Advisory committee memberships held or recently held include the American Institute of Physics Board (Treasurer); NASA; NOAA; National Science Foundation; Lawrence Berkeley National Laboratory; National Park System; Independent Advisory Committee on Applied Climate Risk; Center for Southern Hemisphere Ocean Research; and Japan Agency for Marine-Earth Science and Technology Scientific and environment affiliations: University Corporation for Atmospheric Research (Chair); American Geophysical Union; American Meteorological Society (fellow); American Association for the Advancement of Science (fellow); and IEEE (fellow) |
Attributes and Skills: |
| | Public policy / regulatory experience |
| | Relevant scientific / technology experience |
| | Low carbon solutions technology and safety experience |
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| 2023 Proxy Statement | | | | 9 | | |
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Angela F. Braly |
Independent director Director since 2016 Age 61 Committees: Compensation (Chair); Environment, Safety and Public Policy | | Expertise provided to the Board: Ms. Braly’s experience successfully leading WellPoint through the regulatory changes stemming from the Affordable Care Act helps the Board to better understand the risks and opportunities in industries that are challenged by government-led transformation. Her continued work in public policy and governance experience on the Board of Procter & Gamble, a 100,000+ employee company, further helps the Board navigate public policy issues that arise at a global public company. Qualifications: WellPoint, Inc. (formerly known as Anthem, Inc. and now known as Elevance Health, Inc.)  • Chair (2010 to 2012) • President, CEO (2007 to 2012) • Executive Vice President, General Counsel, and Chief Public Affairs Officer (2005 to 2007) Blue Cross Blue Shield of Missouri • CEO (2003 to 2005) Current public company directorships: Brookfield Asset Management Inc. (now Brookfield Corporation) (May 2015 to present; Audit Committee member) The Procter & Gamble Company (December 2009 to present; Chair of the Governance & Public Responsibility Committee and Audit Committee member) Previous public company directorships in last five years: Lowe’s Companies, Inc. (November 2013 to July 2021) Business and public policy affiliations: Blue Cross Blue Shield Association (former Director); Business Council (former member); Business Roundtable (former member); Harvard Advisory Council on Health Care Policy (former member); Indiana Economic Development Corporation (former Director); and The Policy Circle (Co-Founder, Director, and Secretary) |
Attributes and Skills: |
| | Public policy / regulatory experience |
| | Public company board governance experience |
| | Current / former CEO of large public company |
| | Financial expertise and portfolio management |
| | Risk management / investment stewardship experience |
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Gregory J. Goff |
Independent director Director since 2021 Age 66 Committees: Audit; Executive; Finance | | Expertise provided to the Board: Mr. Goff brings significant industry experience in the areas of exploration and production, marketing and logistics, refining, trading, and lower carbon solutions, including renewable fuels, from his leadership roles at ConocoPhillips and Andeavor. This deep understanding of operational processes at scale helps the Board refine its long-term strategies while providing effective oversight of management. Mr. Goff’s extensive transaction experience, in addition to his unique understanding of the regulatory risks related to the industry, provides a vital perspective to the ExxonMobil Board. Qualifications: Marathon Petroleum Corporation  • Executive Vice Chairman (2018 to 2019) Andeavor • Chair (2014 to 2018) • President & CEO (2010 to 2018) ConocoPhillips • Over his 30-year career at ConocoPhillips, Mr. Goff held multiple roles in the areas of Exploration and Production, Downstream, and served as Senior Vice President of Commercial from 2008 to 2010. Current public company directorships: Avient Corporation (October 2011 to present; Chair of the Environmental, Health and Safety Committee, Governance Committee member) Previous public company directorships in last five years: Andeavor (May 2010 to October 2018) Andeavor Logistics LP (April 2011 to October 2018) Marathon Petroleum Corporation (October 2018 to December 2019) MPLX LP (October 2018 to December 2019) Enbridge Inc. (February 2020 to June 2021) Other board experience: American Fuel & Petrochemical Manufacturers (Chair 2015 to 2017) |
Attributes and Skills: |
| | Leadership experience in large-scale energy / commodity business |
| | Public company board governance experience |
| | Current / former CEO of large public company |
| | Global business experience |
| | Public policy / regulatory experience |
| | Low carbon solutions technology and safety experience |
| | Financial expertise and portfolio management |
| | Operation experience in capital-intensive industry |
| | Risk management / investment stewardship experience |
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| 2023 Proxy Statement | | | | 11 | | |
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John D. Harris II |
Independent director Director since 2023 Age 61 Committees: Audit; Compensation | | Expertise provided to the Board: Mr. Harris brings to the Board a global perspective, as well as strategic, functional, and operational skills with a focus on customer success. He is a committed innovator and leader with a deep understanding of business transformation. Mr. Harris’ CEO and functional experience includes competencies in talent management, culture development, and strategic planning. Qualifications: Raytheon Technologies Corporation (1983 to 2020) • CEO, Raytheon International, Inc. (2013 to 2020) • Mr. Harris held various leadership positions, including serving as General Manager of Raytheon’s Intelligence, Information and Services business, President of Raytheon Technical Services Company, Vice President of Operations and Contracts for Raytheon’s Electronic Systems business, Vice President of Contracts for Raytheon’s government and defense businesses, Vice President of Contracts and Supply Chain for Raytheon Company, and Vice President of Business Development for Raytheon Company. Current public company directorships: Flex Ltd. (November 2020 to present; Compensation & People Committee member) Cisco Systems, Inc. (June 2021 to present; member of Audit and Compensation & Management Development Committees) Kyndryl Holdings, Inc. (September 2021 to present; Nominating & Corporate Governance Committee member) Previous public company directorships in last five years: None Other affiliations: Redwood Library and Athenaeum (Board member); McLaren Racing (Advisory Team member) |
Attributes and Skills: |
| | Public policy / regulatory experience |
| | Global business experience |
| | Operation experience in capital-intensive industry |
| | Relevant scientific / technology experience |
| | Risk management / investment stewardship experience |
| | Financial expertise and portfolio management |
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Kaisa H. Hietala |
Independent director Director since 2021 Age 52 Committees: Audit; Finance | | Expertise provided to the Board: Ms. Hietala brings a breadth of industry experience, having led the transformation of an oil and gas company into one of the world’s largest producers of renewable diesel. In addition to her vast industry experience, Ms. Hietala’s academic background in geophysics helps the Board to better understand both the risks and opportunities ExxonMobil faces in its low carbon solutions technologies. Qualifications: Neste Corporation • Executive Vice President of Renewable Products and member of the Executive Committee (2014 to 2019) • Over her 20-year career at Neste Corporation, Ms. Hietala served in various roles, from exploration and production and crude trading to leading the strategic review that resulted in the Renewable Products segment. Current public company directorships: Rio Tinto Group (March 2023 to present) Smurfit Kappa Group Plc (October 2020 to present; Senior Independent Director as of 2022; member of the Audit and Sustainability Committees) Previous public company directorships in last five years: Kemira Oyj (March 2016 to March 2021) Other board experience: Chair of Tracegrow Oy (2019 to present) Sustainability and academic affiliations: New Sustainability Oy (partner); Supervisory Board of Oulu University (member); Susformation Oy (Founder); and Sustainability Hub Advisory Board of Aalto University (former member) |
Attributes and Skills: |
| | Global business experience |
| | Relevant scientific / technology experience |
| | Risk management / investment stewardship experience |
| | Low carbon solutions technology and safety experience |
| | Operation experience in capital-intensive industry |
| | Leadership experience in large-scale energy / commodity business |
| | Financial expertise and portfolio management |
| | Public company board governance experience |
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| 2023 Proxy Statement | | | | 13 | | |
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Joseph L. Hooley |
Lead Independent director Director since 2020 Age 66 Committees: Compensation; Executive; Nominating and Governance (Chair) | | Expertise provided to the Board: Mr. Hooley has extensive experience with institutional investors having overseen the servicing of over $35 trillion of assets as well as the stewardship of over $4 trillion in capital as Chair and CEO at State Street. Mr. Hooley successfully transformed State Street in multiple ways, including driving a technological transformation, globalization of the business and investment portfolio, and navigating the post-financial crisis of 2008. Mr. Hooley’s unique background helps the Board better understand investors’ perspectives on risk and ensures those perspectives are incorporated into Board discussions with management on important strategic decisions. Qualifications: State Street • Chair (2011 to 2019) • CEO (2010 to 2018) • President & COO (2008 to 2014) • Executive Vice President and Head of Investor Services Division (2002 to 2008) • Vice Chairman and Global Business Experience Head of Investment Servicing and Investment Research and Trading (2006) Boston Financial Data Services • President & CEO (1990 to 2000) National Financial Data Services • President & CEO (1988 to 1990) Current public company directorships: Aptiv PLC (January 2020 to present; Chair of the Compensation and Human Resources Committee; Audit Committee member) Previous public company directorships in last five years: State Street Corporation (October 2009 to December 2019) Other board experience: Liberty Mutual Insurance (2019 to present) |
Attributes and Skills: |
| | Current / former CEO of large public company |
| | Public company board governance experience |
| | Financial expertise and portfolio management |
| | Risk management / investment stewardship experience |
| | Global business experience |
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Steven A. Kandarian |
Independent director Director since 2018 Age 71 Committees: Compensation; Nominating and Governance | | Expertise provided to the Board: Mr. Kandarian’s 14 years of senior executive leadership experience at MetLife, where he led a significant transformation following the implementation of Dodd-Frank, brings a viewpoint vital to the Board when developing the long-term strategic plan and overseeing capital allocation across the portfolio. His former positions as CEO and CIO of a global large-cap insurance business, in addition to his previous work as a Federal regulator, provide the Board with critical insights related to geopolitical risks, government engagement, and risk management. Qualifications: MetLife, Inc. • President & CEO (2011 to 2019) • Chair (2012 to 2019) • Chief Investment Officer (2005 to 2011) Pension Benefit Guaranty Corporation • Executive Director (2001 to 2004) Current public company directorships: Jackson Financial Inc. (February 2021 to present; Non-executive Chair; Chair of the Nominating & Governance Committee, Compensation Committee member) Previous public company directorships in last five years: AECOM (March 2019 to February 2021; Lead Independent Director; Chair of the Compensation Committee; member of the Audit Committee) MetLife (May 2011 to April 2019) Other board experience: Director of Neuberger Berman (2015 to present) Business and cultural affiliations: The University of California, Berkeley, School of Law and Ceres ESG certification (recipient); Business Council (member); Business Roundtable (former member); Financial Services Forum (former member); Partnership for New York City (former Director); Institute of International Finance (former Director and Chair, Insurance Regulatory Committee); and the Lincoln Center for the Performing Arts (former Director) Scientific and research affiliations: Damon Runyon Cancer Research Foundation (Director) |
Attributes and Skills: |
| | Risk management / investment stewardship experience |
| | Financial expertise and portfolio management |
| | Current / former CEO of large public company |
| | Public company board governance experience |
| | Global business experience |
| | Public policy / regulatory experience |
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| 2023 Proxy Statement | | | | 15 | | |
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Alexander A. Karsner |
Independent director Director since 2021 Age 56 Committees: Environment, Safety and Public Policy; Nominating and Governance | | Expertise provided to the Board: Mr. Karsner’s energy policy and diplomacy experience, in addition to his background in commercializing breakthrough energy technologies, provides the Board with important perspectives on geopolitical risks and investment opportunities for profitably managing the energy transition. Mr. Karsner’s public service as U.S. Assistant Secretary of Energy, a senior regulatory official, and a principal U.S. negotiator to the UN Framework Convention on Climate Change, contributes an in-depth understanding of U.S. and international energy policy. His energy sector experience, including energy infrastructure development in emerging markets, helps the Board better understand public- and private-sector considerations when executing strategy. Qualifications: X (formerly Google X) Alphabet’s Moonshot Factory • Senior Strategist (2013 to present) Emerson Collective • Managing Partner (2016 to 2019) Hudson Private Equity • Senior Advisor (2009 to 2014) Vantage Point Venture Capital • Senior Advisor, Venture Partner (2009 to 2014) Department of Energy • U.S. Assistant Secretary (2006 to 2008) Current public company directorships: Applied Materials, Inc. (September 2008 to present; member of the Corporate Governance & Nominating and Human Resources & Compensation Committees) Previous public company directorships in last five years: Broadscale Acquisition Corp. (February 2021 to January 2023) Business and public policy experience: Council on Foreign Relations Working Group on Energy Transition (co-chair), and U.S.-India and U.S.-China Track II diplomatic climate bi-laterals; National Petroleum Council (former member); Energy Futures Initiative; Trilateral Commission (member); Gas Technology Institute (former Director); Argonne National Laboratory (former Director) Sustainability, scientific and academic affiliations: Rice University Institute for Material Science (Director); Conservation International (Director); Elemental Labs (Founder, Chairman); National Marine Sanctuary Foundation (Trustee Emeritus); Aspen Institute Clean Energy Forum (Founder); American Academy of Arts & Sciences Accelerating Climate Action Commission (member); Stanford University Precourt Institute for Energy (member, Board of Advisors); Hoover Institution Shultz-Stephenson Energy Task Force (member); Stanford Natural Capital Project (Advisory Board); MIT Media Lab (Advisory Board)
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Attributes and Skills: |
| | Risk management / investment stewardship experience |
| | Public policy / regulatory experience |
| | Relevant scientific / technology experience |
| | Low carbon solutions technology and safety experience |
| | Financial expertise and portfolio management |
| | Global business experience |
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Lawrence W. Kellner |
Independent director Director since 2023 Age 64 Committees: Environment, Safety and Public Policy; Nominating and Governance | | Expertise provided to the Board: Mr. Kellner brings extensive experience in a highly regulated and capital-intensive industry, having served as CEO, COO, and Chair of Continental Airlines. Mr. Kellner’s deep operational understanding and executive leadership help the Board understand how best to develop a long-term strategy for a capital-intensive industry. Qualifications: Emerald Creek Group, LLC • President (2010 to present) Continental Airlines, Inc. • Chairman & CEO (2004 to 2009) • President & COO (2003 to 2004) • President (2001 to 2003) Current public company directorships: The Boeing Company (October 2011 to present; Independent Chair December 2019 to present; member of the Aerospace Safety and Governance & Public Policy Committees) Previous public company directorships in last five years: Marriott International, Inc. (July 2002 to May 2022; Lead Independent Director from 2013 to 2022) Sabre Corporation (August 2013 to April 2020; Chair of the Board from August 2013 to January 2020) |
Attributes and Skills: |
| | Current / former CEO of large public company |
| | Public company board governance experience |
| | Risk management / investment stewardship experience |
| | Public policy / regulatory experience |
| | Global business experience |
| | Operation experience in capital-intensive industry |
| | Financial expertise and portfolio management |
| | Low carbon solutions technology and safety experience |
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| 2023 Proxy Statement | | | | 17 | | |
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Jeffrey W. Ubben |
Independent director Director since 2021 Age 61 Committees: Environment, Safety and Public Policy; Finance | | Expertise provided to the Board: Having served on over 20 public company boards, Mr. Ubben brings a long history of successfully challenging and working alongside boards and management teams to grow value for shareholders. His expertise in return-driven, environmental and socially active investing, including his unique knowledge and experience investing in the energy transition, helps the Board make better strategic and investing decisions around low carbon solutions, including carbon capture and hydrogen technologies. Qualifications: Inclusive Capital Partners, L.P. • Founder, Portfolio Manager and Managing Partner (2020 to present) • Inclusive Capital Partners is focused on increasing shareholder value and promoting sound environmental, social, and governance practices ValueAct Capital Management, L.P. • Founder & CEO (2000 to 2020) • CIO (2000 to 2017) Blum Capital Partners, L.P. • Managing Partner (1995 to 2000) Fidelity Investments • Served in various positions including Portfolio Manager and Research Analyst (1987 to 1995) Current public company directorships: Vistry Group Plc (March 2023 to present) Enviva Inc. (June 2020 to present) Previous public company directorships in last five years: Fertiglobe Plc (November 2021 to March 2023) AppHarvest, Inc. (May 2019 to March 2022) Nikola Corporation (September 2019 to February 2022; Chair of the Nominating and Corporate Governance Committee) The AES Corporation (January 2018 to March 2021) Twenty-First Century Fox, Inc. (November 2015 to April 2018) Other affiliations: World Wildlife Fund (Board member); E.O. Wilson Biodiversity Foundation (Board member); The Redford Center (Board member); and Duke University (Board member) |
Attributes and Skills: |
| | Financial expertise and portfolio management |
| | Risk management / investment stewardship experience |
| | Relevant scientific / technology experience |
| | Low carbon solutions technology and safety experience |
| | Public company board governance experience |
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Darren W. Woods |
Chairman of the Board, Chief Executive Officer Director since 2016 Age 58 Committees: Executive (Chair); Finance | | Expertise provided to the Board: Mr. Woods brings more than 30 years of global industry experience managing highly sophisticated, safety-critical operations and has held a number of senior leadership roles in multiple international business units prior to being promoted to CEO. His in-depth understanding of Company operations, knowledge of global business, markets, and strategy, and experience leading transformational change, helps the Board to better understand and navigate the complex issues associated with transforming a multi-dimensional, capital intensive, commodity business through a thoughtful, long-term energy transition. Qualifications: ExxonMobil (1992 to present) • Chair & CEO (2017 to present) • President (2016 to present) • Vice President, and President, ExxonMobil Refining & Supply Company (2012 to 2014) Current public company directorships: None Previous public company directorships in last five years: None Business affiliations: Business Roundtable (member); American Petroleum Institute (former Chair); Business Council (member); Center for Strategic and International Studies (Trustee); Oil and Gas Climate Initiative; and National Petroleum Council (Chair) |
Attributes and Skills: |
| | Current / former CEO of large public company |
| | Global business experience |
| | Leadership experience in large-scale energy / commodity business |
| | Operation experience in capital-intensive industry |
| | Public company board governance experience |
| | Public policy / regulatory experience |
| | Low carbon solutions technology and safety experience |
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| | Financial expertise and portfolio management | | |
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| | Risk management / investment stewardship experience | | |
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| 2023 Proxy Statement | | | | 19 | | |
CORPORATE GOVERNANCE
Overview
The Board of Directors and its committees perform a number of functions for ExxonMobil and its shareholders, including:
Overseeing the management of the Company on your behalf, including oversight of risk management;
| • | | Overseeing the management of the Company on your behalf, including oversight of risk management; |
Reviewing ExxonMobil’s long-term strategic plans;
| • | | Reviewing ExxonMobil’s long-term strategic plans; |
Exercising direct decision-making authority in key areas, such as declaring dividends;
| • | | Exercising direct decision-making authority in key areas, such as declaring dividends; |
Selecting the CEO and evaluating the CEO’s performance; and
| • | | Selecting the Chief Executive Officer (CEO) and reviewing the CEO’s performance; |
Reviewing development and succession plans for ExxonMobil’s top executives.
| • | | Reviewing development and succession plans for ExxonMobil’s top executives; and |
| • | | Gathering insights and sharing perspectives from shareholders during engagements and other communications. |
The Board has adopted Corporate Governance Guidelines that govern the structure and functioning of the Board and set out the Board’s position on a number of governance issues. A copy of our current Corporate Governance Guidelines is posted on our website atexxonmobil.com/guidelinesgovernanceguidelines.
All ExxonMobil directors stand for election at the annual meeting. Non-employee directors cannot stand for election after they have reached age 72, unless the Board makes an exception on a case-by-case basis. Employee directors resign from the Board when they are no longer employed by ExxonMobil.
Risk Oversight
Risk oversight is the responsibility of theThe full Board of Directors.Directors provides oversight of key risks to ExxonMobil’s business. The Board throughout the year participates in reviews with management on the Company’s business, including identified risk factors. As a whole, the Board reviews include litigation and other legal matters; political contributions, budget, and policy; lobbying costs; developments in climate science and policy; the Outlook for Energy, Outlook, which projects world energy supply and demand to 2040;2050; the Advancing Climate Solutions report; stewardship of business performance; and long-term strategic plans. The Board receives updates and reviews from both internal ExxonMobil and external experts on issues of importance to the Company.
The Board, and/orincluding the Environment, Safety and Public Issues and ContributionsPolicy Committee, visitperiodically visits an ExxonMobil operation each year.operations site. These visits allowenable the directors to better understand local issuesobserve and to discussprovide input on safety, operating practices, environmental performance, technology, products, industry and corporate standards, and community involvement associatedengagement.
The Board oversees a broad spectrum of interrelated risks with the Company’s business.assistance from its committees. This integrated risk management approach facilitates recognition and oversight of important risk interdependencies.
In addition, existing committees help the Board carry out its responsibility for risk oversight by focusing on specific key areas of risk:
The Audit Committee oversees risks associated with financial and accounting matters, including compliance with legal and regulatory requirements and the Company’s financial reporting and internal control systems;
TheNominating and Governance Committee oversees Board Affairs Committee oversees risks associated withstructure and matters of corporate governance, including board structureBoard evaluation and succession planning;
director refreshment. It also coordinates identification of external experts to address the Board and sets the criteria for shareholder engagement with directors.The Compensation Committee helps reviews executive compensation, which is designed to promote accountability to maximize shareholder value over the long term while effectively managing longer-term risks, including those related to the energy transition. The Committee also assesses each element of the compensation program to ensure that
these do not create any material adverse risks to the
Company’s compensation policiesCompany and
practicesdo not encourage
executives to take risks that may not be aligned with shareholders’ long-term
focus, support the retentioninterests.Environment, Safety and development of executive talent, and discourage excessive risk taking;
The Public Issues and ContributionsPolicy Committee oversees operational risks such as those relating to employee and community safety, health, environmental performance, including actions taken to address climate-related risks, and security matters;matters. The Committee also reviews and
provides advice on objectives, policies, and programs related to lobbying activities and political and other contributions.
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The Finance Committee oversees risk associated with financial instruments, reviews the Company’s capital structure/capital allocation, and its financial policies, practices, and strategies,strategies.
Each Board committee has the authority in its sole discretion to retain and capital structure.
oversee the work of such outside advisors as it deems appropriate and to approve the fees and expenses of such advisors. The Board receives regular updates from the committees and believes this structure is best suited for overseeing risk.
Board Leadership Structure
The Board believes that the decision as to who should serve as Chairman and/or CEO is the proper responsibility of the Board. The Board retains authority to amend the By-Lawsby-laws to separate the positions of Chairman and CEO at any time and will carefully considerregularly considers the pros and cons of such separation or combination. At the present time, the Board believes the interests of all shareholders are best served through a leadership model with a combined Chairman/CEO position and an independent Presiding Director.Lead Director selected by and from the independent directors.
The current CEO possesses an in-depth knowledge of the Company; its integrated, multinational operations; the evolving energy industry supply and demand;demand fundamentals; and the array of challenges to be faced.and opportunities presented by the energy transition. This knowledge was gained through more than 4030 years of successful experience in progressively more senior positions, including domestic and international responsibilities.
The Board believes that these experiences and other insights put the CEO in the best position to provide broad leadership for the Board as it considers strategy and as it exercises its fiduciary responsibilities to shareholders. Further, the Board has demonstrated its commitment and ability to provide independent oversight of management.
The Board is comprised entirelysolely of independent directors exceptother than the CEO, and President, and 100 percent of the Audit, Compensation, Board Affairs,Nominating and Governance, and Environment, Safety and Public Issues and ContributionsPolicy Committee members are independent. Each independent director has access to the CEO and other Company executives on request; mayand employees, and is empowered to call meetings of the independent directors;directors and may request agenda topics to be added or dealt withaddressed in more detail at meetings of the full Board or an appropriate Board committee.
In addition, after considering evolving governance practices and shareholder input regarding Board independence, the Board established the role of Presiding Director. The Board believes the PresidingLead Director can provideprovides effective independent Board leadership. J.S. Fishman Joseph L. Hooley serves as PresidingLead Director and is expected to remain in the position at least through the annual meeting of shareholders. In accordance
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The Lead Director’s authority, under the Corporate Governance Guidelines, includes: | | The Lead Director also serves as Chair of the Nominating and Governance Committee with authority that includes: |
• Calling, chairing, and setting the agenda for executive sessions of the non-employee directors; • Providing feedback to the Chairman; • Chairing meetings of the Board in the
absence of the Chairman; • Reviewing and approving the schedule and agenda for all Board meetings and reviewing
associated materials distributed to the
directors, in consultation with the Chairman; • Advising the Chairman on the quality,
quantity, and timeliness of information flow; • Reviewing committee meeting schedules; • Engaging with shareholders, as appropriate; and • Leading the annual performance evaluation
of the Board. | | • Establishing the criteria for director engagement with shareholders; • Providing comments and suggestions to the Board on Board committee structure, operations, member qualification, and member appointment; • Overseeing independent director succession planning, remuneration, requests for additions to board memberships, and resignations; • Establishing and maintaining procedures for interested parties to communicate with non-employee directors; • Considering Board governance practices and procedures, including any changes to governance guidelines; and • Providing oversight of the performance and effectiveness of the evaluation process for the Board and its committees. |
In addition, the Lead Director, working together with the Compensation Committee, oversees the annual evaluation of the CEO, the communication of resulting feedback to the CEO, and the review of CEO succession plans. |
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| 2023 Proxy Statement | | | | 21 | | |
Board and Committee Self-Evaluations
Each year, the Board and each of the Board committees conduct a comprehensive evaluation of their performance and effectiveness and solicit feedback for enhancement and improvement. The Lead Director, as Chair of the Nominating and Governance Committee, oversees the Board evaluation process and will periodically engage outside counsel to bring a third-party perspective to the process.
As part of the Board’s robust assessment, the Lead Director or outside counsel, as applicable, will ask each director for suggestions to improve Board and Board committee effectiveness and feedback on a range of issues, including Board leadership, culture, purpose, and strategy; Board composition and structure; individual director performance; quality of deliberations and communication with management; and oversight of risk management. The Board reviews and discusses the specific duties prescribed infeedback during an evaluation session facilitated by the Lead Director, providing an opportunity for Directors to identify areas for improvement.
Director feedback emphasized the need for continued focus on strategic oversight, including the development and deployment of solutions to support a lower-emissions future while helping meet society’s need for energy and products, as well as the development of the Company’s next generation of leaders.
Director Qualifications
ExxonMobil’s Corporate Governance Guidelines the Presiding Director chairs and approves the agenda for executive sessions of the independent directors, which are held several times per year, normally coincident with meetings of the Board and without the CEO or other management present; chairs meetings of the Board in the absence of the Chairman; and works closely with the Chairman in developing Board agendas, topics, schedules, and in reviewing materials provided to the directors.
Director Qualifications
The Board has adopted guidelines outliningoutline the qualifications sought when considering non-employee director candidates. These guidelines are published on our website atexxonmobil.com/directorguidelines.The Corporate Governance Guidelines state in part:
In part,“ExxonMobil recognizes the guidelines describestrength and effectiveness of the necessary experiencesBoard reflects the balance, experience, and diversity of the individual directors; their commitment; and importantly, the ability of directors to work effectively as a group in carrying out their responsibilities. ExxonMobil seeks candidates with diverse backgrounds who possess knowledge and skills expectedin areas of importance to the Corporation.”
Within the scope of the Corporate Governance Guidelines, we seek director candidates as follows:
“Candidates for non-employee director of Exxon Mobil Corporation should be individuals who have achieved prominence in their fields, with experience and demonstrated expertise in managing large, relatively complex organizations, and/or, in a professional or scientific capacity, be accustomed to dealing with complex situations, preferably those with worldwide scope.”
The key qualifications the Board seeks across its membership to achieve a balance of diversity and experiences important to the Corporation include: financial expertise; experience as the CEO of a significant company or organization or as a next-level executive with responsibilities for global operations; experience managing large, complex organizations; experience on one or more boards of significant public or non-profit organizations; and expertise resulting from significant academic, scientific, or research activities. The Board also seeks diversity of life experiences and backgrounds, as well asincluding gender and race/ethnic diversity.diversity, with a focus on the key director competencies described in more detail in the “Competencies and Relevance” matrix below.
The table below describes the particular experience, qualifications, attributes, and skillsAdditional considerations for director candidates include: a substantial majority of each director nominee that led the Board must meet independence standards as described in the Corporate Governance Guidelines; all candidates must be free from any relationship with management or the Corporation that would interfere with the exercise of independent judgment; candidates should be committed to conclude that such person should serve as a directorrepresenting the interests of all shareholders and not any particular constituency; and the Company.Board must include members who satisfy legal and stock exchange requirements for certain Board committees.
All directors are expected to adhere to the Company’s policies and procedures, including the Conflict of Interest Policy and Ethics Policy. See the Code of Ethics and Business Conduct section below for additional information.
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M.J. Boskin | | • | 2023 Proxy Statement |
The Board is comprised of directors with an effective mix of backgrounds, knowledge, and skills that the Board considers relevant and beneficial in fulfilling its oversight role. The chart below provides a summary of the competencies of the current ExxonMobil Board and explains why these are important.
ExxonMobil Board competencies and Director qualifications
Public finance, tax, budget, and macroeconomic policy experience as Senior Fellow at the Hoover Institution and the T.M. Friedman Professor of Economics at Stanford University |
| • | | Financial expertise
Current / former CEO of large public company
An understanding of the complexities inherent in running a large public company provides a unique perspective that helps the Board independently oversee the Company’s management, long-term strategic planning, shareholder value creation, human capital management, risk oversight, governance, and shareholder engagement. |
| • | | Government/research
Global business experience as Chairman
Leadership experience in a multinational business that operates across diverse and evolving political conditions, economic systems, and cultures provides valuable perspectives for oversight of the President’s Council of Economic Advisorsrisks and an Associate atopportunities within the National Bureau of Economic ResearchCompany’s extensive global business and operations. |
| • | | Experience advising
Operation experience in capital-intensive industry
Leadership experience in a business with capital-intensive industrial operations, involving complex engineering and long-lived assets, provides critical insight for assessing the federal government, heads of state, finance ministries,risks and central banks aroundopportunities that face the worldCompany in its long-term capital deployment decisions and for overseeing its financial and operational performance. |
| • | | Board
Leadership experience as Directorin large-scale energy / commodity business
Understanding the unique challenges of Oracle,large-scale energy or other cyclical or commodity businesses provides critical insight for assessing Company strategies, challenges, and as former Director of Shinsei Bankopportunities in operations, risks, and Vodafone Group (both prior to 2011)business transitions. |
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Financial expertise and portfolio management
Expertise in finance, accounting, financial reporting, and portfolio management is essential to the Board’s oversight of the Company’s capital allocation, risk management strategies, and internal financial controls and procedures. |
P. Brabeck-Letmathe
Risk management / investment stewardship experience
Experience managing a broad array of enterprise risks and stewarding investor capital through varied and challenging market conditions, business cycles, and business transitions provides critical expertise to better develop and oversee execution of the Company’s long-term strategies. |
Public policy / regulatory experience
Deep understanding of public policy and regulatory matters relevant to the Company’s businesses and global reach assists the Board in developing its long-term strategies by incorporating current and potential changes in public policy and regulation. |
• | | Global
Public company board governance experience
Current or prior service as a Chair, Lead Director, Committee Chair, or other significant leadership position on the board of other public companies provides governance experience essential to ensure that the Board continues to maintain the right balance of skills and attributes needed to address the Company’s current and evolving risks and opportunities and to ensure that the Board is focusing on appropriate matters and functioning as Chairman of Nestléan effective and cohesive independent oversight body. |
| • | | Board experience at Nestlé and L’Oréal, and as former Director of Alcon and Roche Holding (both prior to 2011), and Credit Suisse Group |
| • | | Experience with worldwide leadership of strategic business groups |
| • | | Financial expertise |
| • | | Affiliation with leading business associations (Hong Kong/Europe Business Council and Foundation Board of the World Economic Forum) |
| • | | Recipient of awards, including “La Orden Mexicana del Aguila Azteca,” the Schumpeter Prize for outstanding contribution in economics, and the Austrian Cross of Honour for service to the Republic of Austria |
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A.F. Braly
Relevant scientific / technology experience
Experience applying science and technology, including climate science, to large-scale challenges and investments in new and emerging technologies relevant to the Company’s businesses and scale provides sound guidance as the Company navigates the complex challenges of helping society meet the world’s energy needs and reduce carbon emissions. |
Low carbon solutions technology and safety experience
Experience in environmental and safety operations, including lower carbon technologies, strengthens the Board’s oversight of the Company’s current and future business operations and promotes long-term sustainability. |
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| 2023 Proxy Statement | | • | | Leadership and business experience as former Chairman, President and Chief Executive Officer of WellPoint (now Anthem), a health insurance company |
| •23 | | Board experience as Director of Brookfield Asset Management, Lowe’s, and Procter & Gamble, and as former Director of WellPoint |
| • | | Affiliation with leading business and public policy associations (graduate member of the Business Council, former member of the Business Roundtable and Harvard Advisory Council on Health Care Policy; former Director of the Blue Cross Blue Shield Association) |
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U.M. Burns | | • | | Global leadership position as Chairman and Chief Executive Officer of Xerox Corporation |
| • | | Board experience at Xerox, American Express, and as former Director of Boston Scientific (prior to 2011) |
| • | | Financial expertise |
| • | | Leadership positions as Vice Chair of the President’s Export Council and as founding Board Director of Change the Equation to improve education in the United States in science, technology, engineering, and math |
| • | | Affiliation with numerous community, educational, and non-profit organizations including FIRST (For Inspiration and Recognition of Science and Technology), National Academy Foundation, MIT, and the U.S. Olympic Committee |
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Director & key qualifications | |  | | | |
L.R. Faulkner | | • | | Leadership | | | |  | | | |  | | | |  | | | |  | | | |  | | | |  | | | |  |
Michael J. Angelakis Mr. Angelakis’ financial experience, highlighted by his executive leadership position (CFO) transforming Comcast while navigating the financial crisis of 2008, helps the Board to better understand financial risk and opportunities facing ExxonMobil. In addition to his extensive business career, Mr. Angelakis’ experience as President EmeritusChairman of The Universitythe Federal Reserve Bank of Texas at Austin and former President of Houston Endowment |
| •Philadelphia provides a vital perspective to the challenges ExxonMobil faces related to policy risk. | | Financial expertise |
| • | | Academic/administration | |  | | | |  | | | |  | | | |  | | | |  | | | | | | | |  | | | | | | | | |
Susan K. Avery Dr. Avery brings extensive experience as an atmospheric scientist and engineer. Her work at major universities including the University of IllinoisColorado-Boulder and Harvard University |
| •Woods Hole Oceanographic Institution puts her at the leading edge of climate research, including the evolving field of earth system science. This unique perspective helps the Board better understand the technological opportunities available in low carbon solutions as well as providing effective oversight to the climate-related risks facing ExxonMobil. | | Expertise in chemistry, electrochemistry, and materials |
| • | | Board experience as former Director of Guaranty Financial Group (prior to 2011) and Temple-Inland |
| • | | Recognition by the American Academy of Arts and Sciences and leadership of the National Mathematics Advisory Panel |
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J.S. Fishman | | • | | Global leadership position as Executive Chairman and former Chief Executive Officer of The Travelers Companies |
| • | | Board experience at The Travelers Companies, and as former Director of Nuveen Investments and Platinum Underwriters Holdings Ltd. (both prior to 2011), and The Carlyle Group |
| • | | Affiliation with a | | | | | | | | | | | | | | | | | | | |  | | | |  |
Angela F. Braly Ms. Braly’s experience successfully leading academic institution as a member ofWellPoint through the regulatory changes stemming from the Affordable Care Act helps the Board to better understand the risks and opportunities in industries that are challenged by government-led transformation. Her continued work in public policy and governance experience on the Board of TrusteesProcter & Gamble, a 100,000+ employee company, further helps the Board navigate public policy issues that arise at a global public company. | |  | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ursula M. Burns (not standing for re-election) Ms. Burns has deep expertise running a large, complex global corporation. As CEO of Xerox, Ms. Burns successfully led its transformation from a printing business to a tech-forward document management business. This, along with her extensive engineering and operational background, provides a critical perspective to the Board when developing its long-term strategy. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gregory J. Goff Mr. Goff brings significant industry experience in the areas of exploration and production, marketing and logistics, refining, trading, and lower carbon solutions, including renewable fuels, from his leadership roles at ConocoPhillips and Andeavor. This deep understanding of operational processes at scale helps the Board refine its long-term strategies while providing effective oversight of management. Mr. Goff’s extensive transaction experience, in addition to his unique understanding of the University of Pennsylvania |
| •regulatory risks related to the industry, provides a vital perspective to the ExxonMobil Board. | | Affiliation with leading business associations (the Business Council and the American Insurance Association) |
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H.H. Fore | | • | | Global leadership position as Chairman and Chief Executive Officer of Holsman International |
| • | | Government service (former Administrator of the U.S. Agency for International Development and Director of U.S. Foreign Assistance; former Under Secretary of State for Management, the Chief Operating Officer for the Department of State; and former Director of the U.S. Mint) |
| • | | Board experience as Director of General Mills and Theravance Biopharma, and as former Director of Dexter Corporation and HSB Group (both prior to 2011) |
| • | | Leadership positions as global Co-Chair of Asia Society and global Co-Chair of WomenCorporateDirectors, and as Trustee of the Aspen Institute and the Center for Strategic and International Studies |
| • | | Affiliation as a Director with leading humanitarian associations (the Committee Encouraging Corporate Philanthropy and the Center for Global Development) |
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K.C. Frazier | | • | | Global leadership position as Chairman, President, and Chief Executive Officer of Merck |
| • | | Board experience at Merck and at non-profit organizations |
| • | | Affiliation with leading legal, business, and public policy associations (the President’s Export Council, the American Law Institute, the Business Council, and Pharmaceutical Research and Manufacturers of America) |
| • | | Recipient of award for extraordinary achievement in pro bono and public service |
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D.R. Oberhelman | | • | | Global leadership experience as Chairman and Chief Executive Officer of Caterpillar |
| • | | Financial expertise |
| • | | Board experience at Caterpillar, and as former Director of Ameren Corporation (prior to 2011), and Eli Lilly and Company |
| • | | Affiliation with leading business associations (Vice Chairman of the Business Council, Executive Committee member of the Business Roundtable, the Nature Conservancy’s Latin America Conservation Council, Wetlands America Trust, Board of Trustees for the Easter Seals Foundation of Central Illinois, and Chairman of the National Association of Manufacturers) | | | | |
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24 | | | | | | 2023 Proxy Statement |
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Director & key qualifications | | | | | |
S.J. Palmisano | | • | | Global business experience as former Chairman, President, and Chief Executive Officer of IBM |
| • | | Board experience as Director of American Express, and as former Director of Gannett Co. (prior to 2011) and IBM |
| • | | Affiliation | | | | | | | | | | | | | | | | | | | | | | | | |
John D. Harris II Mr. Harris brings to the Board a global perspective, as well as strategic, functional, and operational skills with leadinga focus on customer success. He is a committed innovator and leader with a deep understanding of business publictransformation. Mr. Harris’ CEO and functional experience includes competencies in talent management, culture development, and strategic planning. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Kaisa H. Hietala Ms. Hietala brings a breadth of industry experience, having led the transformation of an oil and gas company into one of the world’s largest producers of renewable diesel. In addition to her vast industry experience, Ms. Hietala’s academic background in geophysics helps the Board to better understand both the risks and opportunities ExxonMobil faces in its low carbon solutions technologies. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Joseph L. Hooley Mr. Hooley has extensive experience with institutional investors having overseen the servicing of over $35 trillion of assets as well as the stewardship of over $4 trillion in capital as Chair and CEO at State Street. Mr. Hooley successfully transformed State Street in multiple ways, including driving a technological transformation, globalization of the business and investment portfolio, and navigating the post-financial crisis of 2008. Mr. Hooley’s unique background helps the Board better understand investors’ perspectives on risk and ensures those perspectives are incorporated into Board discussions with management on important strategic decisions. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Steven A. Kandarian Mr. Kandarian’s 14 years of senior executive leadership experience at MetLife, where he led a significant transformation following the implementation of Dodd-Frank, brings a viewpoint vital to the Board when developing the long-term strategic plan and overseeing capital allocation across the portfolio. His former positions as CEO and CIO of a global large-cap insurance business, in addition to his previous work as a Federal regulator, provide the Board with critical insights related to geopolitical risks, government engagement, and risk management. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| 2023 Proxy Statement | | | | 25 | | |
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Director & key qualifications | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Alexander A. Karsner Mr. Karsner’s energy policy and research organizations (the Business Roundtable,diplomacy experience, in addition to his background in commercializing breakthrough energy technologies, provides the Executive CommitteeBoard with important perspectives on geopolitical risks and investment opportunities for profitably managing the energy transition. Mr. Karsner’s public service as U.S. Assistant Secretary of Energy, a senior regulatory official, and a principal U.S. negotiator to the UN Framework Convention on Climate Change, contributes an in-depth understanding of U.S. and international energy policy. His energy sector experience, including energy infrastructure development in emerging markets, helps the Board better understand public- and private-sector considerations when executing its strategy. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lawrence W. Kellner Mr. Kellner brings extensive experience in a highly regulated and capital-intensive industry, having served as CEO, COO, and Chair of Continental Airlines. Mr. Kellner’s deep operational understanding and executive leadership helps the Board understand how best to develop a long-term strategy for a capital-intensive industry. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Jeffrey W. Ubben Having served on over 20 public company boards, Mr. Ubben brings a long history of successfully challenging and working alongside boards and management teams to grow value for shareholders. His expertise in return-driven, environmental and socially active investing, including his unique knowledge and experience investing in the energy transition, helps the Board make better strategic and investing decisions around low carbon solutions, including carbon capture and hydrogen technologies. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Darren W. Woods Mr. Woods brings more than 30 years of global industry experience managing highly sophisticated, safety-critical operations and has held a number of senior leadership roles in multiple international business units prior to being promoted to CEO. His in-depth understanding of Company operations, knowledge of global business, markets and strategy, and experience leading transformational change, helps the Board to better understand and navigate the complex issues associated with transforming a multi-dimensional, capital intensive, commodity business through a thoughtful, long-term energy transition. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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26 | | | | | | 2023 Proxy Statement |
Diversity of experiences and backgrounds, including gender and race/ethnicity, is also an important consideration for Board members. The charts below reflect the diversity of the current Board.
Strong Board Gender and Racial/Ethnic Diversity
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Director Independence ExxonMobil’s Corporate Governance Guidelines require that a substantial majority of the CouncilBoard consists of independent directors. In general, these Guidelines require that an independent director must have no material relationship with ExxonMobil, directly or indirectly, except as a director. The Board determines independence on Competitiveness, and the Center for Global Enterprise) |
| •basis of the standards specified by the New York Stock Exchange (NYSE), the additional standards referenced in our | | Awarded honorary fellowship from the London Business School, Honorary Degree of Doctor of Humane Letters from Johns Hopkins University and Rensselaer Polytechnic Institute, and the French Legion of Honor |
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S.S Reinemund | | • | | Global business experience as former Chairman, President, and Chief Executive Officer of PepsiCo |
| • | | Leadership position as Executive in Residence and former Dean of Business at Wake Forest University |
| • | | Academic experience as Professor of Leadership and Strategy at Wake Forest University |
| • | | Board experience as Director of Marriott and Walmart, and as former Director of Johnson & Johnson and PepsiCo (both prior to 2011), and American Express |
| • | | Affiliation with leading charitable and business associations (U.S. Naval Academy Foundation, National Minority Supplier Development Council, and National Advisory Board of the Salvation Army) |
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R.W. Tillerson | | • | | Global business position as Chairman and Chief Executive Officer of ExxonMobil since January 2006 with demonstrated leadership skills resulting from a career of more than 40 years involving positions of increasing responsibility with the Company’s domestic and international business operations |
| • | | Affiliation with leading business and public policy associations (the Executive Committee of the American Petroleum Institute, the Center for Strategic and International Studies, the National Petroleum Council, the Business Council, the Business Roundtable, the Business Council for International Understanding, and the Emergency Committee for American Trade) |
| • | | Leadership as a former President of the Boy Scouts of America, Vice Chairman of the Ford’s Theatre Society, and a former Director of the United Negro College Fund |
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W.C. Weldon | | • | | Global business experience as former Chairman and CEO of Johnson & Johnson |
| • | | Board experience as Director of CVS Caremark, JPMorgan Chase, and as former Director of Chubb and Johnson & Johnson |
| • | | Leadership positions as Director of US–China Business Council and Trustee of Quinnipiac University |
| • | | Affiliation with leading business associations (past Vice Chairman of the Business Council, the Business Roundtable, past Chairman of the CEO Roundtable on Cancer, Healthcare Leadership Council, and past Chairman of Pharmaceutical Research and Manufacturers of America) |
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D.W. Woods | | • | | Global business experience as President of ExxonMobil since January 2016 and Senior Vice President since 2014, with demonstrated leadership skills resulting from a career of more than 23 years involving positions of increasing responsibility with the Company’s domestic and international business operations within ExxonMobil Refining & Supply Company, ExxonMobil Chemical Company and Exxon Company International |
| • | | Board experience as former Director of Imperial Oil Ltd. |
Director Independence
Our Corporate Governance Guidelines require that a substantial majority of the Board consist of independent directors. In general, the Guidelines require that an independent director must have no material relationship with ExxonMobil, directly or indirectly, except as a director. The Board determines independence on the basis of the standards specified by the New York Stock Exchange (NYSE), the additional standards referenced in our Corporate Governance Guidelines, and other facts and circumstances the Board considers relevant.
Under ExxonMobil’s Corporate Governance Guidelines, a director will not be independent if a reportable “related person transaction” exists with respect to that director or a member of the director’s family for the current or most recently completed fiscal year. See the Guidelines for Review of Related Person Transactions posted on the Corporate Governance section of our website and described in more detail under Related Person Transactions and Procedures on pages 14 to 15.below.
The Board has reviewed relevant relationships between ExxonMobil and each non-employee director and director nominee to determine compliance with the NYSE standards and ExxonMobil’s additional standards. The Board has also evaluated whether there are any other facts or circumstances that might impair a director’s independence. Based on that review, the Board has determined that all ExxonMobil non-employee directors and nominees are independent. The Board has also determined that each member of the Audit, Board Affairs,Nominating and Governance, Compensation, and Environment, Safety and Public Issues and ContributionsPolicy Committees (see membership table on page 10)34) is independent.independentbased on both applicable NYSE standards and the Company’s independence standards for each of these committees. The Company’s standards for each committee are included in their respective charters and posted on our website at exxonmobil.com/governance.
In recommending that each director and nominee be found independent, the Board AffairsNominating and Governance Committee reviewed the followingidentified no transactions, relationships, or arrangements. All matters described below fall withinarrangements that required consideration under the NYSE and ExxonMobil independence standards.standards described above.
Director Nomination Process and Board Succession
As noted in the committee information that follows, the Nominating and Governance Committee is responsible for identifying and evaluating director candidates. The description below sets forth the process through which the Committee identifies potential nominees to the Board and evaluates their qualifications.
Candidate Recommendations
The Nominating and Governance Committee seeks new candidates in several ways:
| • | | Engagement of an executive search firm. The firm brings forward potential director candidates for the Committee to consider and helps research candidates identified by the Committee. |
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| 2023 Proxy Statement | | | | 27 | | |
| • | | Recommendations made by the non-employee directors. These recommendations are developed based on the directors’ own knowledge and experience in a variety of fields and on the research conducted by ExxonMobil staff at the Committee’s direction. |
| • | | Recommendations made by employee directors, shareholders, and others. |
All recommendations, regardless of the source, are evaluated on the same basis against the criteria contained in the Corporate Governance Guidelines. The Committee has also instructed its executive search firm to include diversity as part of the candidate search criteria.
Shareholders may send recommendations for director candidates to the Corporate Secretary at the address given under Contact Information on page 7. A submission recommending a candidate should include:
| • | | Sufficient biographical information to enable the Committee to evaluate the candidate in light of provisions of the Corporate Governance Guidelines on non-employee director qualifications; |
| • | | Information concerning any relationship between the candidate and the recommending shareholder; and |
| • | | Material indicating the willingness of the candidate to serve if nominated and elected. |
The procedures by which shareholders may recommend nominees have not changed materially since last year’s proxy statement.
Assessment and Nomination
Once potential nominees are identified, the Nominating and Governance Committee assesses each candidate’s overall qualifications for nomination to the Board relative to an assessment of the Company’s future direction. In evaluating prospective directors, the Committee considers various factors including:
| • | | ExxonMobil’s Corporate Governance Guidelines, including provisions on non-employee director qualifications; |
| • | | ExxonMobil’s strategy, risk profile, and current Board composition; |
| • | | Independence, perspectives, objectivity, reasoning, and judgment of the candidate; and |
ExxonMobil seeks to have a diverse Board representing a range of backgrounds, knowledge, and skills relevant to the Company’s business and the needs of the Board, and as part of the search process, considers highly qualified candidates, including women and minorities. The Committee does not use quotas, but considers diversity along with the other requirements of the Corporate Governance Guidelines provisions on non-employee director qualifications when evaluating potential new directors. The resulting diversity of experience, skills, gender, and race/ethnicity on the ExxonMobil Board serves as a testament to this robust process.
If the Nominating and Governance Committee determines to advance a candidate in the nomination process, the Committee puts the candidate forward for consideration by the full Board.
Since our last annual meeting of shareholders, the Committee continued its director succession planning, using the process described above and taking into account, among other factors, shareholders’ interest in board refreshment and specifically in adding directors with oil and natural gas industry, energy and business transition, capital allocation, and finance expertise. Mr. Harris and Mr. Kellner were recommended by our executive search firm and joined the Board in January 2023.
Director Re-Nomination
The Nominating and Governance Committee also oversees the re-nomination process. In considering whether to re-nominate a director for re-election at our annual meeting, the Committee reviews each director, considering such factors as:
| • | | Attendance and participation at Board and committee meetings; |
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28 | | | | | | 2023 Proxy Statement |
| • | | Skills, experience, and personal attributes; |
| • | | Continued contribution to the Board’s effectiveness; |
| • | | Results from the annual Board and committee self-assessments; |
| • | | Shareholder feedback, including the support received at our annual meeting of shareholders; and |
Board Tenure
The Board does not impose tenure limits on its directors, other than a mandatory retirement age of 75 and the requirement to stand for election annually. Given the complexity and breadth of our business and its long-term investment horizons, the Board considers longevity of service and experience of great value. The Board also believes that its director compensation approach, which limits the vesting of restricted shares until retirement, closely aligns directors with the interests of long-term shareholders.
All ExxonMobil directors stand for election at the annual meeting. Non-employee directors cannot stand for election after they have reached age 75, unless the Board makes an exception on a case-by-case basis.
Restricted shares received by non-employee directors are subject to forfeiture if the non-employee director leaves the Board early, i.e., before the retirement age of 75. Employee directors resign from the Board when they are no longer employed by ExxonMobil.
As of April 1, 2023, the average tenure of ExxonMobil’s non-employee directors is 3.5 years, below the average of Standard & Poor’s (S&P) 500 companies of 7.8 years (per 2022 Spencer Stuart Board Index). More than sixty percent of current ExxonMobil directors have joined the Board since 2020.
2022 Shareholder Vote Response
At last year’s annual shareholder meeting, our shareholders voted to receive more information about our resiliency modeling under the International Energy Agency’s Net Zero Emissions by 2050 (IEA NZE) scenario, through a majority vote in favor of shareholder proposal Item 8 – Report on Scenario Analysis. That shareholder proposal sought an audited report assessing how applying the assumptions of the IEA NZE pathway would affect the assumptions, costs, estimates, and valuations underlying our financial statements, including those related to long-term commodity and carbon prices, remaining asset lives, future asset retirement obligations, capital expenditures, and impairments.
In January 2022, we published a resiliency analysis in our Advancing Climate Solutions 2022 Progress Report, using the IEA NZE scenario assumptions, showing how our business could change under this aggressive decarbonization pathway. In the second half of 2022, Board members, senior management, and subject matter experts engaged with our shareholders to better understand their request for additional information on this scenario analysis. We also had additional engagement with the proponent, including participation by members of the Board.
Although there is a range of perspectives across our over 3 million shareholders, interest coalesced around certain key items. With input and oversight from our Board, in December 2022, we responded by updating our Advancing Climate Solutions 2023 Progress Report (ACS) with enhanced content and expanded disclosures reflecting the proposal and shareholder input. Since publishing the 2023 ACS, we have hosted several investor webcasts and engaged directly with investors on the expanded content, with positive feedback. The proponent attended one of these calls in February 2023.
Below is a summary of the investor input we received regarding our IEA NZE scenario analysis and the enhancements we provided in our most recent ACS report.
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Name2023 Proxy Statement | | Matters Considered |
P. Brabeck-Letmathe | | Ordinary course business with Nestlé (purchases of food and nutrition products) |
U.M. Burns29 | | Ordinary course business with Xerox (purchases of business process, IT, and document and benefit plan services) |
| | |
J.S. Fishman | |
Key items heard from
shareholders | | Ordinary course business with Travelers (purchases of insurance products; sales of ExxonMobil commercial paper and term notes)How we responded in our 2023 ACS disclosure |
K.C. FrazierWe should provide more information on assumptions used in our 2022 ACS IEA NZE modeling. | | Ordinary course business with Merck (purchases of pharmaceuticals; sales of chemicals• We explicitly detailed the IEA NZE assumptions that we used to inform demand and oils)pricing in our IEA NZE modeling and analysis. • See ACS Page 30. |
D.R. OberhelmanWe should provide more context around the effects the IEA NZE assumptions could have on our 2022 ACS IEA NZE modeling of financial statement estimates of operating cash flow and capital expenditures. | | Ordinary course• Our IEA NZE-modeled operating cash flow disclosures in our ACS have been designed to show more scale and the potential growth or contraction over time for key elements of our portfolio under this scenario. • Similarly, modeled effects on capital expenditures were enhanced to provide greater transparency by business to 2050. • See ACS Page 31. |
We should provide greater detail on the potential impact of the IEA NZE scenario on remaining asset lives, asset retirement obligations (AROs), and asset-use optionality. | | • The ACS includes a discussion of why we believe our disclosure of future cash flow and capital expenditures under the IEA NZE scenario is a valuable, industry-leading disclosure. It also provides a clearer view of the resiliency and enterprise value of our portfolio, expertise, and the opportunities we could have under such an aggressive scenario. We believe this disclosure is more useful to investors versus narrowly focusing on remaining asset lives and hypothetical noncash accounting measures such as AROs that are dependent on asset-specific assumptions and technology and policy developments not provided by the IEA NZE scenario. • We did, however, expand our disclosure to discuss why we believe our existing assets are generally resilient in the energy transition, and in the IEA NZE scenario. ¡ Due to superior performance attributes and generally lower greenhouse gas intensity versus alternatives, the demand for chemicals is robust, even in the IEA NZE scenario. ¡ Business resiliency of our refineries was exemplified with Caterpillar (purchasesour disclosure describing that more than 75 percent of license rights, equipmentour refining capacity is co-located with chemical manufacturing capacity in large, integrated sites that have the flexibility to shift toward biofuels and repair services; saleschemical feedstocks as demand for conventional road transport fuels declines, thereby extending their useful lives. In addition to repurposing select assets, consistent with our strategy, less advantaged, non-integrated refineries could be converted to terminals (again extending their useful lives) or sold. ¡ Additionally, we note that a substantial majority of lubricants)our proved reserves are expected to have been produced by 2050. For proved reserves projected to be produced beyond 2050, the majority of development costs will have been incurred before 2050. • Providing further asset-specific public disclosure regarding remaining useful lives, retirement costs, and potential proved reserves in an IEA NZE scenario could imply a higher degree of certainty than exists. It also could provide competitively sensitive information on how we might make adjustments to our portfolio. • See ACS Pages 18 and 30-37.
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We should provide more detail about the independent third-party audit of our IEA NZE modeling in the ACS. | | • Details of the audit performed by Wood Mackenzie are disclosed in the ACS, including that the IEA NZE assumptions are accurately reflected in our modeling and that the output of the model is a reasonable representation of the portfolio mix as defined by the model inputs. • The independent audit statement issued by Wood Mackenzie is now disclosed as part of our ACS publication. • See ACS Page 33 for a link to the quality assurance audit statement from Wood Mackenzie.
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30 | | | | | | 2023 Proxy Statement |
| | |
| |
Key items heard from
shareholders | | How we responded in our 2023 ACS disclosure |
We should provide long-term carbon pricing and commodity pricing assumptions for both the IEA NZE scenario and for our assumed greenhouse gas pricing in places where we operate and invest. | | • We now disclose, for both advanced and emerging economies, our assumed greenhouse gas emissions pricing used where we operate and invest through 2050. This is done in context with similar carbon pricing from World Bank and IEA WEO STEPS. • We now disclose the carbon pricing assumptions included in the published IEA NZE scenario which were used to inform our IEA NZE resiliency analysis. • Further, we now publish commodity pricing projections for Brent oil and Henry Hub natural gas under the IEA NZE and a range of third-party analyses, including FACTS Global Energy Group, Wood Mackenzie, IHS Markit, Rystad Energy, and S&P Global Commodity Insights. Additionally, we state that, for the mid- to longer-term,our prices, which are based on the fundamentals projected in our Outlook for Energy, are in the range of these third-party projections published by reputable organizations with significant industry expertise. • See ACS Pages 30, 37, and 41. |
The full ACS is available at corporate.exxonmobil.com/climate-solutions/advancing-climate-solutions-progress-report.
Also included in the ACS, in response to shareholder feedback, is greater detail regarding our methane emissions measurement and reduction efforts. Through 2022, we have achieved more than 50 percent reduction of methane emissions intensity from operated assets, and reduced operated absolute methane emissions by 50 percent, since 2016. Our methane reporting framework has enabled the development of consistent and comparable data, which along with growing field observations, has guided our mitigation efforts. Our ACS also describes how we continue to expand the volume of natural gas production that is independently certified for methane emissions management by the non-profit organization, MiQ.
Our ongoing response to shareholder perspectives is an important aspect of the continuous improvement of our governance. With the oversight and participation of our Board, we will continue an active outreach program to gather feedback that helps shape the information we publicly share.
ExxonMobil’s consistent responsiveness to shareholder perspectives
| * | See exxonmobil.com/news/newsroom/news-releases for May 23, 2018 release of 2020 emissions reduction plans; December 14, 2020 release of 2025 emissions reduction plans; December 1, 2021 release of 2030 emissions reduction plans; December 6, 2021 release of net zero by 2030 emissions plan for Permian Basin unconventional operations; and January 18, 2022 release of Scope 1 and Scope 2 net zero ambition for operated assets by 2050. |
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| 2023 Proxy Statement | | | | 31 | | |
Shareholder Engagement in 2022
The Board and management believe ongoing engagement with our shareholders is vitally important and understand the importance of understanding shareholders’ perspectives, keeping shareholders informed about the business, and addressing shareholders’ areas of interest. The Board and management welcome and value input from all shareholders.
| | | | |
Engaged with: • Institutional Investors • Retail Shareholders • Pension Funds • Religious Organizations • Nongovernmental Organizations • Proxy Advisory Firms • Environmental, Social, and Governance (ESG) Rating Firms • Industry Thought Leaders | | Engaged through: • Individual and Group Investor Meetings • Investor Day • Quarterly Earnings Calls • Investor Conferences • Spotlight Events • Annual Shareholder Meeting • Shareholder Webcasts • Stakeholder Outreach | | Engagements include: • Non-employee Directors • Chairman / CEO / Management Committee • Senior Management • Subject Matter Experts • Other Employees |
| ESG Engagements: 88% Increase since 2017 |
| | | | |
Engaged with shareholders representing: | | Information shared through: |
~ 1.7 billion shares ~ 42% of total outstanding shares and ~ 69% of institutional shareholdings | | • SEC Filings • Press Releases • Annual Report • Company Website • Energy Factor Website • Investing in People supplement | | • Advancing Climate Solutions report • Sustainability Report • Perspectives Blog • Lobbying Report • Climate Lobbying Report |
Insights into the Boardroom
ExxonMobil’s diverse, highly qualified Board represents a range of backgrounds, knowledge, and skills relevant to the Company’s business and the Board’s needs. The Company added eight new non-employee directors since 2020 – more than 60 percent of the total current Board. Average tenure for current non-employee directors is 3.5 years. Almost 40 percent of the current Board is female and/or racially/ethnically diverse.
The Board expanded from 11 to 13 directors in 2023 by adding two new independent directors. The new directors provide deep experience as executives of large public, complex, capital-intensive global companies that successfully navigated significant industry transitions. Each new director participates in comprehensive onboarding sessions with senior leaders designed to accelerate the learning curve, with reviews covering a wide range of topics, including overviews of the Company’s major business lines, practices, risk framework, energy outlook, technology, and capital allocation, as well as applicable legal and regulatory requirements, and ethics and other policies.
The ExxonMobil Board is actively engaged and committed to overseeing the Company’s efforts to grow long-term shareholder value by executing its strategy and plans to play a leading role in a thoughtful energy transition. The Board provides oversight for the Company’s key risks and opportunities and regularly reviews a variety of important issues through a process that involves briefings with subject matter experts from inside and outside the Company. Topics include climate change, technology, operating strategies, business and corporate planning, current events, research and development, shareholder engagements, and Company performance.
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32 | | | | | | 2023 Proxy Statement |
The Board provides oversight and guidance on the Company’s five-year plan. This plan is expected to double earnings and cash flow potential by 2027 versus 2019 and supports investments in high-return, low cost of supply opportunities in the Upstream and Product Solutions businesses; in 2023, ExxonMobil expects to invest $23-$25 billion to help increase supply to meet global demand while also delivering $9 billion in structural cost savings by year end versus 2019. See Exhibit A for information on future earnings and cash flow potential and structural cost savings. The plan allocates approximately $17 billion from 2022 through 2027 to reduce the Company’s own greenhouse gas emissions and grow its Low Carbon Solutions business, which is focused on accretive third-party, lower-emissions opportunities in carbon capture and storage, hydrogen, and biofuels. The plan also expands the share-repurchase program to up to $50 billion through 2024, including $15 billion of repurchases made in 2022.
Each year, the Board reviews and approves the corporate goals and objectives which form the framework for the organization to deliver on its commitments. Progress is discussed throughout the year in various Board and Committee reviews. Assessment of accomplishments versus these plan goals and objectives forms the basis for pay deliberations. In addition, the CEO reviews with the Board progress on executive development and succession planning for senior-level positions, and organizational health. The Board also reviews the Company’s efforts to support the health and safety of its workforce, as well as the Company’s efforts in investing in globally diverse talent.
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The Nominating and Governance Committee has established and oversees procedures for shareholders and other interested persons to send written or electronic communications to individual directors, including the Lead Director, Board committees, or the non-employee directors as a group. •Written Communications: Written correspondence should be addressed to the director or directors at the address given under Contact Information on page 7. •Electronic Communications: You may send a message to individual non-employee directors, Board committees, or the non-employee directors as a group by using the form provided for that purpose on our website at exxonmobil.com/directors. All communications are recorded by an ExxonMobil Assistant Secretary or designated staff member and forwarded to the appropriate director or directors or otherwise handled as the Committee has directed. |
Code of Ethics and Business Conduct
The Board maintains policies and procedures (referred to in this proxy statement as the Code) that represent both the code of ethics for the principal executive officer, principal financial officer, and principal accounting officer under SEC rules, and the code of business conduct and ethics for directors, officers, and employees under NYSE listing standards. The Code applies to all directors, officers, and employees and is at the core of the Company’s foundational policies. The Code includes a Conflicts of Interest Policy under which directors, officers, and employees are expected to avoid any actual or apparent conflict between their own personal interests and the interests of the Corporation. The Code also includes an Ethics Policy under which directors, officers, and employees are expected to observe the highest ethical standards of integrity in the conduct of the Company’s business. Each year, directors, officers, and employees are required to certify that they have read the Code and remain in compliance with its requirements. The Code is posted on the ExxonMobil website at exxonmobil.com/code. The Code is also included as an exhibit to our Annual Report on Form 10-K. Any amendment of the Code will be posted promptly on ExxonMobil’s website.
The Corporation maintains procedures for administering and reviewing potential issues under the Code, including procedures that allow employees to make complaints without identifying themselves unless otherwise required by law. The Corporation also conducts periodic mandatory business practice training sessions.
The Nominating and Governance Committee will initially review any suspected violation of the Code involving an executive officer or director and will report its findings to the Board. The Board does not envision that any waiver of the Code will be granted. Should such a waiver occur, it will be promptly disclosed on ExxonMobil’s website.
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| 2023 Proxy Statement | | | | 33 | | |
Board Meetings and Committees; Annual Meeting Attendance
The Board met 11nine times in 2015.2022. ExxonMobil’s incumbent directors, on average, attended approximately 9298 percent of Board and committee meetings during 2015.2022. No director attended lessfewer than 75 percent of such meetings. ExxonMobil’s non-employee directors held sixseven executive sessions in 2015.
2022, chaired by the independent Lead Director. As specified in our Corporate Governance Guidelines, it is ExxonMobil’s policy that directors should make every effort to attend the annual meeting of shareholders. All incumbent directors attended last year’sthe 2022 annual meeting except Mr. Brabeck-Letmathe.of shareholders on May 25, 2022.
Board Committees
The Board appoints committees to help carry out its duties. Board committees work on key issues in greater detail than would be possible at full Board meetings. Only non-employee directors may serve on the Audit, Compensation, Board Affairs,Nominating and Governance, and Environment, Safety and Public Issues and ContributionsPolicy Committees. Each committee has a written charter. The charters are posted on the Corporate Governance section of our website atexxonmobil.com/governance.
The tabletables below showsshow the current membership of each Board committee and the number of meetings each committee held in 2015.2022.
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| Director | | Audit | | Compensation | | Board
Affairs | | Finance | | Public Issues
and Contributions | | Executive(1) |
M.J. Boskin | | | | • | | | | | | • | | • |
P. Brabeck-Letmathe | | • | | | | | | • | | | | |
U.M. Burns | | • | | | | | | • | | | | |
L.R. Faulkner | | C | | | | | | • | | | | • |
J.S. Fishman | | | | • | | | | | | • | | |
H.H. Fore | | | | | | • | | | | • | | |
K.C. Frazier | | | | | | C | | | | • | | |
D.R. Oberhelman | | • | | | | | | • | | | | |
S.J. Palmisano | | | | C | | • | | | | | | • |
S.S Reinemund | | | | | | • | | | | C | | • |
R.W. Tillerson | | | | | | | | C | | | | C |
W.C. Weldon | | | | • | | • | | | | | | |
2015 Meetings | | 11 | | 7 | | 7 | | 2 | | 5 | | 0 |
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| Director | | Audit | | Compensation | | Nominating and Governance | | Finance | | Environment, Safety
and Public Policy | | Executive(1) | | |
M.J. Angelakis | | · | | | | | | 
| | | | · | | |
S.K. Avery | | | | | | · | | | | 
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A.F. Braly | | | |
| | | | | | · | | | | |
U.M. Burns | |
| | | | | | · | | | | · | | |
G.J. Goff | | · | | | | | | · | | | | · | | |
J.D. Harris II | | · | | · | | | | | | | | | | |
K.H. Hietala | | · | | | | | | · | | | | | | |
J.L. Hooley | | | | · | |
| | | | | | · | | |
S.A. Kandarian | | | | · | | · | | | | | | | | |
A.A. Karsner | | | | | | · | | | | · | | | | |
L.W. Kellner | | | | | | · | | | | · | | | | |
J.W. Ubben | | | | | | | | · | | · | | | | |
D.W. Woods | | | | | | | | · | | | |
| | |
C = Chair •· = Member (1) Other directors serve as alternate members on a rotational basis.basis
Below is additional information about each Board committee.Meetings in 2022:
Board Affairs
Nominating and Governance Committee
The Board AffairsNominating and Governance Committee, chaired by the independent Lead Director, serves as ExxonMobil’s nominating and corporate governance committee. The Committee recommends director candidates, reviews non-employee director compensation, and reviews other corporate governance practices, including the Corporate Governance Guidelines. The Committee also reviews any issue involving an executive officer or director under ExxonMobil’s Code of Ethics and Business Conduct and administers ExxonMobil’s Related Person Transaction Guidelines.
The Committee has adopted Guidelines for the Selection of Non-Employee Directors that describe the qualifications the Committee looks for in director candidates. These Selection Guidelines, as well as the Committee’s charter, are posted on the Corporate Governance section of our website, and are described in more detail below and in the section titled Director Qualifications on pages 6 to 8.
A substantial majority of the Board must meet the independence standards described in the Corporate Governance Guidelines, and all candidates must be free from any relationship with management or the Corporation that would interfere with the exercise of independent judgment. Candidates should be committed to representing the interests of all shareholders and not any particular constituency. The Board must include members with the particular experience required for service on key Board committees, as described in the committee charters.
The Guidelines for the Selection of Non-Employee Directors state:
“ExxonMobil recognizes the strength and effectiveness of the Board reflect the balance, experience, and diversity of the individual directors; their commitment; and importantly, the ability of directors to work effectively as a group in carrying out their responsibilities. ExxonMobil seeks candidates with diverse backgrounds who possess knowledge and skills in areas of importance to the Corporation.”
In addition to seeking a diverse set of business or academic experiences, the Committee seeks a mix of nominees whose perspectives reflect diverse life experiences and backgrounds, as well as gender and ethnic diversity. The Committee does not use quotas but considers diversity along with the other requirements of the Selection Guidelines when evaluating potential new directors. The Committee has also instructed its executive search firm to include diversity as part of the candidate search criteria.
The Committee identifies director candidates primarily through recommendations made by the non-employee directors. These recommendations are developed based on the directors’ own knowledge and experience in a variety of fields, and research conducted by ExxonMobil staff at the Committee’s direction. The Committee has also engaged an executive search firm to help the Committee identify new director candidates. The firm identifies potential director candidates for the Committee to consider and helps research candidates identified by the Committee. Additionally, the Committee considers recommendations made by employee directors, shareholders, and others. All recommendations, regardless of the source, are evaluated on the same basis against the criteria contained in the Selection Guidelines.
The recommendation of Ms. Braly was made by incumbent directors and the executive search firm.
Shareholders may send recommendations for director candidates to the Secretary at the address given under Contact Information on page 4. A submission recommending a candidate shouldIts responsibilities include:
Sufficient biographical information to allow the Committee to evaluate the candidate in light of the Selection Guidelines;
| • | | Recommendations on director candidates and reviewing requests for participation on other boards; |
Information concerning any relationship between the candidate and the shareholder recommending the candidate; and
| • | | Maintaining procedures for director engagement with shareholders; |
Material indicating the willingness of the candidate to serve if nominated and elected. | | | | | | |
34 | | | | | | 2023 Proxy Statement |
The procedures by which shareholders may recommend nominees have not changed materially since last year’s proxy statement.
| • | | Providing comments and suggestions to the Board on committee structure and committee assignments; |
| • | | Reviewing corporate governance practices, including the Corporate Governance Guidelines; |
| • | | Reviewing any issue involving an executive officer or director under the Code; and |
| • | | Administering ExxonMobil’s Related Person Transaction Guidelines. |
The Committee also administers provisions of the Corporate Governance Guidelines that require a director to tender a resignation when there is a substantial change in the director’s circumstances. The Committee reviews the relevant facts to determine whether the director’s continued service would be appropriate and makes a recommendation to the Board.
Another responsibility of the Committee is to review and make recommendations to the Board regarding the compensation of the non-employee directors. The Committee uses an independent consultant, Pearl Meyer & Partners, LLC (Pearl Meyer), to provide information on current developments and practices in director compensation. Pearl Meyer & Partners is the same consultant retained by the Compensation Committee to advise on executive compensation, but performs no other work for ExxonMobil.
The Corporate Governance Guidelines describe the qualifications the Committee looks for in director candidates. These Corporate Governance Guidelines, as well as the Committee’s charter, are posted on the Corporate Governance section of our website.
Audit Committee
The Audit Committee oversees accounting and internal control matters. Its responsibilities include oversight of:
Management’s conduct of the Corporation’s financial reporting process;
| • | | Management’s conduct of the Corporation’s financial reporting process; |
The integrity of the financial statements and other financial information provided by the Corporation to the SEC and the public;
| • | | The integrity of the financial statements and other financial information provided by the Corporation to the SEC and the public; |
The Corporation’s system of internal accounting and financial controls;
| • | | The Corporation’s system of internal accounting and financial controls; |
The Corporation’s compliance with legal and regulatory requirements;
| • | | The Corporation’s compliance with legal and regulatory requirements; |
The performance of the Corporation’s internal audit function;
| • | | The performance of the Corporation’s internal audit function; |
The independent auditors’ qualifications, performance, and independence; and
| • | | The independent auditors’ qualifications, performance, and independence; and |
The annual independent audit of the Corporation’s financial statements.
| • | | The annual independent audit of the Corporation’s financial statements. |
The Committee has direct authority and responsibility to appoint (subject to shareholder ratification), compensate, retain, and oversee the independent auditors.
The Committee also prepares the report that SEC rules require be included in the Corporation’s annual proxy statement. ThisThe report isbegins on pages 23 to 24.page 41.
The Audit Committee has adopted specific policies and procedures for pre-approving fees paid to the independent auditors. Under the Audit Committee’s approach, an annual program of work is approved each October for the following categories of services: Audit, Audit-Related, and Tax. Additional engagements may be brought forward from time to time for pre-approval by the Audit Committee. Pre-approvals apply to engagements within a category of service, and cannot be transferred between categories. If fees might otherwise exceed pre-approved amounts for any category of permissible services, the incremental amounts must be reviewed and pre-approved prior to commitment. The complete text of the Audit Committee’s pre-approval policies and procedures, as well as the Committee’s charter, is posted on the Corporate Governance section of ExxonMobil’s website.
The Board has determined that all members of the Committee are financially literate within the meaning of the NYSE standards, and that Mr. Brabeck-Letmathe, Ms. Burns, Dr. Faulkner, and Mr. Oberhelmana majority are “audit committee financial experts” as defined in the SEC rules.rules, including Ms. Burns as the Audit Committee Chair.
Compensation Committee
The Compensation Committee is comprised exclusively of non-employee, independent directors, and oversees compensation for ExxonMobil’s senior executives including(including salary, bonus, and equity awards; and,performance share awards), as well as succession planning for key executive positions. The Committee’s charter is available on the Corporate Governance section of our website.
During 2015, the
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| 2023 Proxy Statement | | | | 35 | | |
The Committee took the following actions:
Reviewed and approved the corporate goals and objectives relevant to the compensation of the CEO.
| • | | Reviewed with the Board and approved the corporate goals and objectives; |
Reviewed the Corporation’s business results and progress on strategic plans during the year with ExxonMobil’s CEO and other senior executives.
| • | | Reviewed the Corporation’s business results and progress toward strategic objectives during the year with ExxonMobil’s CEO and other senior executives; |
Evaluated the results of the 2015 advisory vote on executive compensation.
| • | | Reviewed the individual performance and contributions of the CEO and other senior executives; |
Assessed each element of the Company’s compensation program and practices, and confirmed that these do not create any material adverse risks for the Company. The key design features of the compensation program that discourage inappropriate risk taking are described in detail in this proxy statement (see pages 37 and 41 to 43).
| • | | Discussed the Company’s executive compensation program design with its independent consultant; |
Discussed the Company’s executive compensation program with its independent consultant.
| • | | Considered feedback from shareholder engagements and the results of the 2022 advisory vote on executive compensation; |
Established the aggregate annual ceilings for the 2015 short-term and long-term incentive award programs taking into account input received from the CEO and other senior executives.
| • | | Deliberated pay decisions based on an assessment of progress toward strategic objectives, business results, individual performance, and the results of annual benchmarking, taking into account experience in position; |
Approved the salary program for 2016.
| • | | Established the aggregate annual ceiling for the 2022 long-term incentive award program and bonus program; |
Reviewed the performance and contributions of, and granted incentive awards and salary for the CEO. The CEO does not participate in or provide input on decisions regarding his own compensation.
| • | | Assessed each element of the Company’s compensation program and practices, and confirmed that these do not create any material adverse risks for the Company. The key design features of the compensation program that discourage executives from taking inappropriate risk are described in detail in this proxy statement (see pages 47, 64, and 65); |
Reviewed the individual performance and contributions of, and granted individual incentive awards and set salaries for other senior executives based on recommendations to the Committee by the CEO.
| • | | Reviewed with the Board progress on executive development and succession planning for senior-level positions and organizational health with input from the CEO; and |
Reviewed progress on executive development and succession planning for senior level positions with input from the CEO.
| • | | Reviewed with the Board the Company’s efforts in investing in globally diverse talent. |
The Committee does not delegate its responsibilities with respect to ExxonMobil’s executive officers and other senior executives (currently 27 positions).executives. For other employees, the Committee delegates authority to determine individual salaries and incentive awards to a committee consisting of the Chairman the President, and the Senior Vice Presidents of the Corporation.Management Committee. That committee’s actions are subject to a salary budget and aggregate annual ceilings on short-term and long-term incentive awards established by the Compensation Committee.
For more information on the compensation decisions made by the Committee for 2015,2022, refer to the Compensation Discussion and Analysis (CD&A) beginning on page 28.45.
The Compensation Committee’s report is available on page 26.44.
The Compensation Committee utilizes the expertise of an external independent consultant, Pearl Meyer & Partners.Meyer. At the direction of the Committee, Pearl Meyer & Partners:Meyer:
Attends Committee meetings;
| • | | Attends Committee meetings; |
Informs the Committee regarding general trends in executive compensation across industries;
| • | | Informs the Committee regarding general trends in executive compensation across industries; |
Prepares the analysis of comparator company compensation used by the Committee; and
| • | | Prepares the analysis of comparator company compensation used by the Committee; and |
Participates in the Committee’s deliberations regarding compensation for Named Executive Officers.
| • | | Participates in the Committee’s deliberations regarding compensation for Named Executive Officers. |
In addition, at the direction of the Chair of the Board AffairsNominating and Governance Committee, Pearl Meyer & Partners provides an annual survey of non-employee director compensation for use by that Committee.
The Compensation Committee is solely and directly responsible for the appointment, compensation, and oversight of the consultant. The Committee considers factors that could affect Pearl Meyer & Partners’Meyer’s independence, including that the consultant provides no other services for ExxonMobil other than its engagement by the Committee and the Board AffairsNominating and Governance Committee as described above. Based on this review, the Committee has determined the consultant’s work for the Committee to be free from conflicts of interest.
Finance Committee
The Finance Committee reviews ExxonMobil’s capital structure/capital allocation, and its financial policies, practices, and strategies including ourwhich may include the following: the Corporation’s financial outlook and capital structure, dividends,plan, including
| | | | | | |
36 | | | | | | 2023 Proxy Statement |
significant capital appropriations, shareholder distribution policies and share purchase program.practices, insurance and pension programs, and significant acquisitions and divestitures. The Committee also authorizes the issuance and early retirement of corporate debt subject to limits set by the Board. The Committee’s charter is available on the Corporate Governance section of our website.
Environment, Safety and Public Issues and ContributionsPolicy Committee
The Environment, Safety and Public Issues and ContributionsPolicy Committee reviewsassists the effectiveness ofBoard in overseeing the Corporation’s policies, programs,positions and practices with respect toregarding safety, security, health, and the environment (including but not limited to climate, emissions, and social issues.sustainability) and other public policy issues relevant to the Corporation. The Committee hears reports from operating units on safety and environmental activities, and alsoalong with the full Board periodically visits operating sites to observe and comment on current operating practices. In addition, the Committee reviewsprovides oversight on the levelCorporation’s overall contributions strategies, objectives, and policies through an annual review of ExxonMobil’s support for education and other public service programs,contributions, including the Company’sCorporation’s contributions to the ExxonMobil Foundation. The Foundation works to improveand the qualityCorporation engage in a range of philanthropic activities that advance education, with a focus on math and science in the United States at all levels, with special emphasis on mathStates; promote women as catalysts for economic development; combat malaria; and science. The Foundation also supports the Company’ssupport other cultural and public service giving.initiatives. The Committee’s charter is available on the Corporate Governance section of our website.
Executive Committee
The Executive Committee has broad power to act on behalf of the Board. In practice, the Committee meets only when it is impractical to call a meeting of the full Board.
Shareholder EngagementDIRECTOR COMPENSATION
We believe ongoing engagement with our shareholders is vitally important. ExxonMobil understands the importance of keeping shareholders informed about our business and issues of concern. The Company does so through a variety of means, including publications we issue throughout the year; our website (including thePerspectives blog); the annual shareholders meeting; webcasts including our annual executiveDirector compensation and governance webcast during which any shareholder can submit comments or questions; and through direct interface. We welcome and value input from all shareholders, and such input is taken seriously by the Company.elements are designed to:
The Board Affairs Committee has approved and implemented procedures for shareholders and other interested persons to send written or electronic communications to individual directors, including the Presiding Director, Board committees, or the non-employee directors as a group.
Written Communications: Written correspondence should be addressed to the director or directors in care of the Secretary at the address given under Contact Information on page 4.
| • | | Electronic Communications:You may send e-mailEnsure alignment with long-term shareholder interests; |
| • | | Ensure the Company can attract and retain outstanding director candidates who meet the selection criteria outlined in the Corporate Governance Guidelines, which can be found on the Corporate Governance section of our website; |
| • | | Recognize the substantial time commitment necessary to individual non-employee directors, Board committees, oroversee the non-employee directors as a group by usingaffairs of the form provided for that purpose on our website atexxonmobil.com/directors.Corporation; and |
| • | | Support the independence of thought and action expected of directors. |
Non-employee director compensation levels are reviewed by the Nominating and Governance Committee each year, and resulting recommendations are presented to the full Board for approval. The Committee uses an independent consultant, Pearl Meyer, to provide information on current developments and practices in director compensation. Pearl Meyer is the same consultant retained by the Compensation Committee to advise on executive compensation, but performs no other work for ExxonMobil.
ExxonMobil employees receive no additional pay for serving as directors.
Non-employee directors receive compensation consisting of cash and equity in the form of restricted stock. Non-employee directors are also reimbursed for reasonable expenses incurred to attend Board meetings or other functions relating to their responsibilities as a director of Exxon Mobil Corporation.
The annual cash retainer for non-employee directors is $110,000 per year. The Chairs of the Audit and Compensation Committees receive an additional $10,000 per year. The Lead Director receives an additional $50,000 per year.
A significant portion of director compensation is granted in the form of restricted stock; this aligns director interests with the interests of our long-term shareholders. The annual restricted stock award grant for incumbent non-employee directors is 2,500 shares. A new non-employee director receives a one-time grant of 8,000 shares of restricted stock upon first being elected to the Board.
While on the Board, the non-employee director receives the same cash dividends on restricted shares as a holder of regular common stock, but the shares remain unvested and, thus, cannot be sold or pledged. The restricted shares are subject to forfeiture if the non-employee director leaves the Board early, i.e., before the retirement age of 75, as specified for non-employee directors.
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| 2023 Proxy Statement | | | | 37 | | |
Current and former non-employee directors of Exxon Mobil Corporation are eligible to participate in the ExxonMobil Foundation’s Educational Matching Gift Programs under the same terms as the Corporation’s U.S. employees.
Additional instructions and proceduresNon-Employee Director Compensation for communicating2022
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Name | | Fees
Earned
or Paid
in Cash ($) | | | Stock
Awards
($)(a) | | | Option
Awards ($) | | Non-Equity
Incentive Plan
Compensation ($) | | Change in
Pension Value and Nonqualified Deferred
Compensation Earnings ($) | | Other
Compensation ($)(b) | | Total ($) | |
| | | | | | | |
M.J. Angelakis | | | 110,000 | | | | 156,006 | | | 0 | | 0 | | 0 | | 254 | | | 266,260 | |
| | | | | | | |
S.K. Avery | | | 110,000 | | | | 156,006 | | | 0 | | 0 | | 0 | | 254 | | | 266,260 | |
| | | | | | | |
A.F. Braly | | | 120,000 | | | | 156,006 | | | 0 | | 0 | | 0 | | 254 | | | 276,260 | |
| | | | | | | |
U.M. Burns | | | 120,000 | | | | 156,006 | | | 0 | | 0 | | 0 | | 254 | | | 276,260 | |
| | | | | | | |
K.C. Frazier(c) | | | 64,176 | | | | 156,006 | | | 0 | | 0 | | 0 | | 105 | | | 220,287 | |
| | | | | | | |
G.J. Goff | | | 110,000 | | | | 156,006 | | | 0 | | 0 | | 0 | | 254 | | | 266,260 | |
| | | | | | | |
K.H. Hietala | | | 110,000 | | | | 156,006 | | | 0 | | 0 | | 0 | | 254 | | | 266,260 | |
| | | | | | | |
J.L. Hooley | | | 139,945 | | | | 156,006 | | | 0 | | 0 | | 0 | | 254 | | | 296,205 | |
| | | | | | | |
S.A. Kandarian | | | 110,000 | | | | 156,006 | | | 0 | | 0 | | 0 | | 254 | | | 266,260 | |
| | | | | | | |
A.A. Karsner | | | 110,000 | | | | 156,006 | | | 0 | | 0 | | 0 | | 254 | | | 266,260 | |
| | | | | | | |
J.W. Ubben | | | 110,000 | | | | 156,006 | | | 0 | | 0 | | 0 | | 254 | | | 266,260 | |
| (a) | In accordance with SEC rules, the valuation of stock awards in this table represents fair value on the date of grant. Dividends on stock awards are not shown in the table because those amounts are factored into the grant date fair value. |
Each director in office at that time received an annual grant of 2,500 restricted shares in January 2022. The valuation of these awards is based on a market price of $62.40 on the date of grant.
At year-end 2022, the aggregate number of restricted shares held by each director was as follows:
| | | | |
Name | | Restricted Shares (#) | | |
| | |
M.J. Angelakis | | 10,500 | | |
| | |
S.K. Avery | | 20,500 | | |
| | |
A.F. Braly | | 23,000 | | |
| | |
U.M. Burns | | 33,000 | | |
| | |
G.J. Goff | | 10,500 | | |
| | |
K.H. Hietala | | 10,500 | | |
| | |
J.L. Hooley | | 13,000 | | |
| | |
S.A. Kandarian | | 18,000 | | |
| | |
A.A. Karsner | | 10,500 | | |
| | |
J.W. Ubben | | 10,500 | | |
| (b) | The amount shown for each director is the cost of travel accident insurance covering death, dismemberment, or loss of sight, speech, or hearing under a policy purchased by the Corporation with a maximum benefit of $500,000 per individual. |
| (c) | Mr. Frazier left the Board on May 25, 2022. |
The non-employee directors do not receive any additional payments or benefits as a result of leaving the Board or death except as described above. The non-employee directors are posted on the Corporate Governance section of our website atexxonmobil.com/proceduresdircom.
Code of Ethics and Business Conduct
The Board maintains policies and procedures (which we refernot entitled to any payments or benefits resulting from a change in this proxy statement as the “Code”) that represent both the code of ethics for the principal executive officer, principal financial officer, and principal accounting officer under SEC rules, and the code of business conduct and ethics for directors, officers, and employees under NYSE listing standards. The Code applies to all directors, officers, and employees. The Code includes a Conflicts of Interest Policy under which directors, officers, and employees are expected to avoid any actual or apparent conflict between their own personal interests and the interestscontrol of the Corporation.
The Code is posted
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38 | | | | | | 2023 Proxy Statement |
CERTAIN BENEFICIAL OWNERS
Based on our review of ownership reports filed with the SEC, the firms listed below are the only beneficial owners of more than 5 percent of ExxonMobil’s outstanding common stock as of December 31, 2022.
| | | | |
| | | |
Name and Address of Beneficial Owner | | Aggregate Beneficial
Ownership in Shares(1) | | Percent of
Outstanding Shares(1) |
The Vanguard Group(2) 100 Vanguard Blvd. Malvern, PA 19355 | | 368,671,214 | | 9.0% |
BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 | | 292,132,859 | | 7.1% |
State Street Corporation(4) One Lincoln Street Boston, MA 02111 | | 223,630,483 | | 5.4% |
| (1) | The Company is permitted to rely on the information set forth in these filings and has no reason to believe that the information is incomplete or inaccurate or that the beneficial owner should have filed an amended report and did not. |
| (2) | Based solely on a Schedule 13G/A filed with the Securities and Exchange Commission on February 9, 2023, The Vanguard Group reported it had shared voting power with respect to 5,540,016 shares, sole dispositive power with respect to 351,790,054 shares, and shared dispositive power with respect to 16,881,160 shares as of December 31, 2022. |
| (3) | Based solely on a Schedule 13G/A filed with the Securities and Exchange Commission on January 31, 2023, BlackRock, Inc. reported that it had sole voting power with respect to 271,623,684 shares, and sole dispositive power with respect to 292,132,859 shares as of December 31, 2022. |
| (4) | Based solely on a Schedule 13G/A filed with the Securities and Exchange Commission on February 6, 2023, State Street Corporation reported that it had shared voting power with respect to 212,600,158 shares, and shared dispositive power with respect to 223,237,162 shares as of December 31, 2022. |
DIRECTOR AND EXECUTIVE OFFICER STOCK OWNERSHIP
These tables show the number of ExxonMobil website atexxonmobil.com/code. The Code is also included as an exhibitcommon shares each executive named in the Summary Compensation Table on page 68 and each non-employee director or director nominee owned on February 28, 2023. In these tables, ownership means the right to ourAnnual Report on Form 10-K. Any amendmentdirect the voting or the sale of shares, even if those rights are shared with someone else. None of these individuals owns more than 0.03 percent of the Code will be posted promptly on our website.outstanding shares.
The Corporation maintains procedures for administering
| | | | | | |
| | | |
| Named Executive Officer | | Shares Owned(1) | | | Shares Covered by Exercisable Options |
| | |
D.W. Woods | | | 210,173(2) | | | 0 |
| | |
K.A. Mikells | | | 10,050(3) | | | 0 |
| | |
N.A. Chapman | | | 151,536(4) | | | 0 |
| | |
J.P. Williams, Jr. | | | 151,384 | | | 0 |
| | |
K.T. McKee | | | 79,447(5) | | | 0 |
| (1) | Does not include unvested restricted stock units, which do not carry voting rights prior to the issuance of shares on settlement of the awards. |
| (2) | Includes 757 shares held by spouse. |
| (3) | Includes 8,350 shares owned together with spouse through family trusts and related entities. |
| (4) | Includes 61,728 shares jointly owned with spouse. |
| (5) | Includes 8,030 shares held by spouse. |
| | | | | | |
| 2023 Proxy Statement | | | | 39 | | |
| | | | | |
| |
Non-Employee Director | | Shares Owned |
| |
M.J. Angelakis | | | | 53,792 | (1) |
| |
S.K. Avery | | | | 23,000 | |
| |
A.F. Braly | | | | 27,575 | (2) |
| |
U.M. Burns | | | | 35,706 | |
| |
G.J. Goff | | | | 23,462 | (3) |
| |
J.D. Harris II | | | | 8,250 | (4) |
| |
K.H. Hietala | | | | 13,000 | |
| |
J.L. Hooley | | | | 15,500 | |
| |
S.A. Kandarian | | | | 20,500 | |
| |
A.A. Karsner | | | | 30,000 | |
| |
L.W. Kellner | | | | 8,000 | (5) |
| |
J.W. Ubben | | | | 1,190,000 | (6) |
| (1) | Includes 20,000 shares jointly owned with spouse. Also includes 20,792 shares in a charitable family trust for which Mr. Angelakis serves as co-trustee. |
| (2) | Includes 1,175 shares owned by spouse and 900 shares held in trusts for family members for which Ms. Braly serves as co-trustee. |
| (3) | Includes 10,041 shares jointly owned with spouse. Also includes 421 shares held in trusts for family members for which Mr. Goff serves as co-trustee. |
| (4) | Mr. Harris joined the Board in January 2023 and received a one-time grant of 8,000 shares on that date; includes 250 shares jointly owned with spouse. |
| (5) | Mr. Kellner joined the Board in January 2023, and received a one-time grant of 8,000 shares on that date. |
| (6) | Includes shares held by certain funds managed by Inclusive Capital Partners, L.P. Mr. Ubben is Founder, Portfolio Manager, and Managing Partner of Inclusive Capital Partners, L.P. Mr. Ubben disclaims beneficial ownership of the reported securities except to the extent of his pecuniary interest therein. |
On February 28, 2023, ExxonMobil’s incumbent directors and reviewing potential issues under the Code, including procedures that allow employees to make complaints without identifying themselves. The Corporation also conducts periodic mandatory business practice training sessions,executive officers (23 people) together owned 2,276,298 shares of ExxonMobil stock and requires regular employees and non-employee directors to make annual compliance certifications.
The Board Affairs Committee will initially review any suspected violationzero shares covered by exercisable options, representing less than 0.06 percent of the Code involving an executive officer or director and will report its findings to the Board. The Board does not envision that any waiver of the Code will be granted. Should such a waiver occur, it will be promptly disclosed on our website.outstanding shares.
Related Person Transactions and Procedures
In accordance with SEC rules, ExxonMobil maintains Guidelines for Review of Related Person Transactions.Transactions (Related Person Transaction Guidelines). These Guidelinesguidelines are available on the Corporate Governance section of our website.
In accordance with the Related Person Transaction Guidelines, allAll executive officers, directors, and director nominees are required to identify, to the best of their knowledge after reasonable inquiry, business and financial affiliations involving themselves or their immediate family members that could reasonably be expected to give rise to a reportable related person transaction. Covered persons must also advise the Secretary of the Corporation promptly of any change in the information provided, and will be asked periodically to review and reaffirm their information.
For the above purposes, “immediate family member” includes a person’s spouse, parents, siblings, children, in-laws, and step-relatives.
Based on this information, we review the Company’s own records are reviewed and make follow-up inquiries are made as may be necessary to identify potentially reportable transactions. A report summarizing such transactions and including a reasonable level of detail is then provided to the Board AffairsNominating and Governance Committee. The Committee oversees the Related Person Transaction Guidelines generally and reviews specific items to assess materiality.
In assessing materiality for this purpose, information willand make a recommendation to the Board as to whether an identified transaction is required to be considered material if,reported and/or should be ratified or approved. The Board shall only approve or ratify a transaction that is deemed to be in lightthe best interests of all circumstances, there is a substantial likelihood a reasonable investor would consider the information important in deciding whether to buy or sell ExxonMobil stock or in deciding how to vote shares of ExxonMobil stock.Corporation. A director will abstain from the decision on any transactions involving that director or his or her immediate family members.
Under SEC rules, certain transactions are deemed not to involve a material interest (including transactions in which the amount involved in any 12-month period is less than $120,000 and transactions with entities where a related person’s interest is limited to serviceinterests solely as a non-employee director). In addition, based on a consideration of ExxonMobil’s facts and circumstances, the Committee will presume that the following transactions do not involve a material interest for purposes of reporting under SEC rules:and do not require further ratification or approval:
| • | | Transactions in the ordinary course of business with an entity for which a related person serves as an executive officer,provided:provided: (1) the affected director or executive officerperson did not participate in the decision on the part of |
| ExxonMobil to enter into such transactions; and (2) the amount involved in any related category of transactions in a 12-month periodyear is less than 12 percent of the entity’s gross revenues.revenues; |
• | | | | | | |
40 | | | | | | 2023 Proxy Statement |
| • | | Grants or membership payments in the ordinary course of business to non-profitnonprofit organizations,provided:provided: (1) the affected director or executive officerperson did not participate in the decision on the part of ExxonMobil to make such payments; and (2) the amount of general purpose grants in a 12-month periodyear is less than 12 percent of the recipient’s gross revenues.revenues; |
Payments under ExxonMobil plans and arrangements that are available generally to U.S. salaried employees (including contributions under the ExxonMobil Foundation’s Educational and Cultural Matching Gift Programs and payments to providers under ExxonMobil health care plans).
| • | | Payments under ExxonMobil plans and arrangements that are available generally to U.S. salaried employees; and |
| • | | Employment by ExxonMobil of a family member of an executive officer,provided the executive officer does not participate in decisions regarding the hiring, performance evaluation, or compensation of the family member. |
Transactions or relationships not covered by the above standards will be assessed by the Nominating and Governance Committee on the basis of the specific facts and circumstances.
TheUnless otherwise noted, the following disclosures are made as of February 24, 2016,21, 2023, which is the date of the most recent Board AffairsNominating and Governance Committee review of potential related person transactions.
ExxonMobil and its affiliates have about 73,500 regularmore than 62,000 employees around the world, and employees related by birth or marriage may be found at all levels of the organization. ExxonMobil employees do not receive preferential treatment by reason of being related to an executive officer, and executive officers do not participate in hiring, performance evaluation, or compensation decisions for family members. ExxonMobil’s employment guidelines state, “Relatives of Company employees may be employed on a non-preferential basis. However, an employee should not be employed by or assigned to work under the direct supervision of a relative, or to report to a supervisor who in turn reports to a relative of the employee.”
Several current ExxonMobil executive officers and retirees who served as executive officers in 2022 have family members alsowho are employed by the Corporation or its affiliates: M.W. Albers (Senior Vice President) has a daughter employed by ExxonMobil Global Services Company; R.N. Schleckser (Vice Presidentaffiliates and Treasurer) has a brother employed by ExxonMobil Refining & Supply Company; S.M. Greenlee (Vice President) has a son employed by ExxonMobil Development Company; and J.J. Woodbury (Vice President – Investor Relations and Secretary) has a son employed by XTO Energy Inc. In each case, the total value of the family member’swhose current annualized compensation (including benefits) exceeds the SEC disclosure threshold for disclosure. However, consistentof $120,000: L.D. DuCharme (President – ExxonMobil Technology and Engineering Company) has a spouse employed by ExxonMobil Upstream Company; L.M. Mallon (President – ExxonMobil Upstream Company) has a son employed by ExxonMobil Upstream Company; K.T. McKee (President – ExxonMobil Product Solutions Company) has a spouse employed by ExxonMobil Product Solutions Company; and D.L. Talley (Vice President – Corporate Strategic Planning) has a brother employed by ExxonMobil Global Projects Company. Each employee mentioned above received total cash compensation in 2022 between $120,000 and $785,000. Pay earned was comparable to that of employees in similar positions. Employees are eligible to participate in benefit programs on the same basis as other eligible employees. Consistent with ExxonMobil’s Related Person Transaction Guidelines, we doguidelines described above, these relationships are not consider any of the relationships noted aboveconsidered to be material within the meaning of the related person transaction disclosure rules.
The Board AffairsNominating and Governance Committee also reviewedidentified no transactions, relationships, or arrangements involving ExxonMobil’s ordinary course business with companies for which non- employeenon-employee directors or their immediate family members serve as executive officers. The Committee determined that in accordance with the categorical standards described above, none of those matters representcould reasonably be expected to give rise to a reportable related person transactions.transaction under the SEC rules or ExxonMobil standards described above. See Director Independence on page 9.27.
The Committee also determined that no related person transactions occurred during the year involving any of the investors who have reported ownership of more than 5 percent or more of ExxonMobil’s outstanding common stock. See “CertainCertain Beneficial Owners”Owners on page 22.39.
We areExxonMobil is not aware of any related person transactions required to be reported under applicable SEC rules since the beginning of the last fiscal year where our policies and procedures did not require review, or where such policies and procedures were not followed.
The Corporation’s Related Person Transaction Guidelines are intended to assist the Corporation in complying with its disclosure obligations under SEC rules. These procedures are in addition to, not in lieu of, the Corporation’s Code of Ethics and Business Conduct.
ITEM 1 – ELECTION OF DIRECTORS
The Board of Directors has nominated the director candidates named on the following pages. Personal information on each of our nominees, including public company directorships during the past five years, is provided. All of our nominees currently serve as ExxonMobil directors, except for Ms. Braly, who has been nominated by the Board for first election as a director at the annual meeting.
All director nominees have stated they are willing to serve if elected. If a nominee becomes unavailable before the election, your proxy authorizes the people named as proxies to vote for a replacement nominee if the Board names one. Alternatively, the Board may reduce its size to equal the number of remaining nominees.
The Board recommends you vote FOR each of the following candidates:
| | |
|
Michael J. Boskin
Age 70
Director since 1996
| | Principal Occupation: T.M. Friedman Professor of Economics and Senior Fellow, Hoover Institution, Stanford University
Business Experience: Dr. Boskin is also a Research Associate, National Bureau of Economic Research. He is Chief Executive Officer and President of Boskin & Co., an economic consulting company.
Current Public Company Directorships: Oracle (April 1994–Present)
Past Public Company Directorships: None
|
|
Peter Brabeck-Letmathe
Age 71
Director since 2010
| | Principal Occupation: Chairman of the Board, Nestlé
Business Experience: Mr. Brabeck-Letmathe was elected Chairman of Nestlé in 2005, Chief Executive Officer in 1997, and relinquished the role of CEO in 2008. He also served as Vice Chairman, Executive Vice President, and Senior Vice President of Nestlé.
Current Public Company Directorships: Nestlé (June 1997–Present); L’Oréal (June 1997–Present)
Past Public Company Directorships: Credit Suisse Group (May 1997–May 2014)
|
|
Angela F. Braly
Age 54
Director nominee
| | Principal Occupation:Former Chairman, President and Chief Executive Officer of WellPoint (now Anthem), a health insurance company
Business Experience:Ms. Braly served as Chairman of WellPoint from 2010 to 2012; President and Chief Executive Officer from 2007 to 2012. She served as Executive Vice President, General Counsel, and Chief Public Affairs Officer of WellPoint from 2005 to 2007, and President and Chief Executive Officer of Blue Cross Blue Shield of Missouri from 2003 to 2005.
Current Public Company Directorships: Brookfield Asset Management (May 2015–Present); Lowe’s (November 2013–Present); Procter & Gamble (December 2009–Present)
Past Public Company Directorships: WellPoint (June 2007–August 2012)
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|
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|
Ursula M. Burns
Age 57
Director since 2012
| | Principal Occupation:Chairman of the Board and Chief Executive Officer, Xerox Corporation
Business Experience:Ms. Burns was elected Chairman of Xerox in 2010, Chief Executive Officer in 2009, and President in 2007. She also served as Senior Vice President, Corporate Strategic Services; and Senior Vice President and President, Document Systems and Solutions Group, and Business Group Operations, at Xerox.
Current Public Company Directorships:Xerox (April 2007–Present); American Express (January 2004–Present)
Past Public Company Directorships:None
|
|
Larry R. Faulkner
Age 71
Director since 2008
| | Principal Occupation:President Emeritus, The University of Texas at Austin
Business Experience:Dr. Faulkner served as President of Houston Endowment from 2006 to 2012 and as President of The University of Texas at Austin from 1998 to 2006. He served on the chemistry faculties of The University of Texas, the University of Illinois, and Harvard University. At the University of Illinois, he also held a number of positions in academic administration including Provost and Vice Chancellor for Academic Affairs.
Current Public Company Directorships:None
Past Public Company Directorships:Temple-Inland (August 2005–February 2012)
|
|
Jay S. Fishman
Age 63
Director since 2010
Presiding Director since 2013
| | Principal Occupation: Executive Chairman of the Board, The Travelers Companies
Business Experience: Mr. Fishman was elected Chairman of The Travelers Companies in 2005, and Chief Executive Officer in 2004 upon the merger of The St. Paul Companies and Travelers Property Casualty Corporation. He relinquished the role of Chief Executive Officer in 2015. From 2001 to 2004, he was Chairman, Chief Executive Officer, and President of The St. Paul Companies.
Current Public Company Directorships: Travelers (October 2001–Present)
Past Public Company Directorships: The Carlyle Group (May 2012–October 2015)
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Henrietta H. Fore
Age 67
Director since 2012
| | Principal Occupation:Chairman of the Board and Chief Executive Officer, Holsman International
Business Experience:Ms. Fore has served as Chairman and Chief Executive Officer of Holsman International since 2009. She served as the Administrator of the U.S. Agency for International Development and Director of U.S. Foreign Assistance from 2007 to 2009. She also served as Under Secretary of State for Management, the Chief Operating Officer for the Department of State, from 2005 to 2007.
Current Public Company Directorships:General Mills (June 2014–Present); Theravance Biopharma (June 2014–Present)
Past Public Company Directorships:Theravance (October 2010–May 2014)
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Kenneth C. Frazier
Age 61
Director since 2009
| | Principal Occupation:Chairman of the Board, President, and Chief Executive Officer, Merck & Co.
Business Experience:Mr. Frazier was elected Chairman and Chief Executive Officer of Merck in 2011, and President in 2010. He was elected Executive Vice President and President, Global Human Health, at Merck in 2007; and Executive Vice President and General Counsel in 2006. He served as Senior Vice President and General Counsel at Merck from 1999 to 2006.
Current Public Company Directorships:Merck (January 2011–Present)
Past Public Company Directorships:None
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Douglas R. Oberhelman
Age 63
Director since 2015
| | Principal Occupation: Chairman and Chief Executive Officer, Caterpillar Inc.
Business Experience: Mr. Oberhelman was elected Chairman and Chief Executive Officer of Caterpillar in 2010. He was elected Group President of Caterpillar in 2002; and Vice President, Engine Products Division in 1998. He also served as Vice President and Chief Financial Officer of Caterpillar from 1995 to 1998.
Current Public Company Directorships: Caterpillar (July 2010–Present)
Past Public Company Directorships: Eli Lilly and Company (December 2008–February 2015)
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Samuel J. Palmisano
Age 64
Director since 2006
| | Principal Occupation:Former Chairman of the Board, IBM
Business Experience:Mr. Palmisano was elected Chairman, President, and Chief Executive Officer of IBM in 2003 and relinquished these roles in 2012. Mr. Palmisano also served as President, Senior Vice President, and Group Executive for IBM’s Enterprise Systems Group, IBM Global Services, and IBM’s Personal Systems Group.
Current Public Company Directorships:American Express (March 2013– Present)
Past Public Company Directorships:IBM (July 2000–September 2012)
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Steven S Reinemund
Age 68
Director since 2007
| | Principal Occupation:Executive in Residence, Wake Forest University
Business Experience:Mr. Reinemund served as Dean of Business, Wake Forest University 2008 to 2014; Executive Chairman of the Board of PepsiCo from 2006 to 2007, and retired in 2007; was elected Chief Executive Officer and Chairman of the Board in 2001; President and Chief Operating Officer in 1999; and Director in 1996. He was elected President and CEO of Frito-Lay in 1992 and Pizza Hut in 1986.
Current Public Company Directorships:Marriott (April 2007–Present); Walmart (June 2010–Present)
Past Public Company Directorships:American Express (April 2007–May 2015)
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Rex W. Tillerson
Age 64
Chairman and CEO
since 2006
Director since 2004
| | Principal Occupation:Chairman of the Board and Chief Executive Officer, Exxon Mobil Corporation
Business Experience:Mr. Tillerson was elected Chairman and Chief Executive Officer of ExxonMobil in 2006; President and Director in 2004; and Senior Vice President in 2001. Mr. Tillerson has held a variety of management positions in domestic and foreign operations since joining the Exxon organization in 1975, including President, Exxon Yemen Inc. and Esso Exploration and Production Khorat Inc.; Vice President, Exxon Ventures (CIS) Inc.; President, Exxon Neftegas Limited; and Executive Vice President, ExxonMobil Development Company.
Current Public Company Directorships:None
Past Public Company Directorships:None
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William C. Weldon
Age 67
Director since 2013
| | Principal Occupation:Former Chairman of the Board, Johnson & Johnson
Business Experience:Mr. Weldon was elected Chairman and Chief Executive Officer of Johnson & Johnson in 2002, and relinquished the roles of CEO and Chairman in 2012. He also served as Vice Chairman from 2001 to 2002 and as Worldwide Chairman, Pharmaceuticals Group, from 1998 to 2001.
Current Public Company Directorships:CVS Caremark (March 2013–Present); JPMorgan Chase (March 2005–Present)
Past Public Company Directorships:Chubb (May 2013–January 2016); Johnson & Johnson (February 2001–December 2012)
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Darren W. Woods
Age 51
Director since 2016
| | Principal Occupation: President, Exxon Mobil Corporation
Business Experience: Mr. Woods was elected President and Director of Exxon Mobil Corporation effective January 1, 2016; Senior Vice President in 2014; and Vice President, and President, ExxonMobil Refining & Supply Company in 2012. Mr. Woods has held a number of domestic and international assignments for ExxonMobil Refining & Supply Company, ExxonMobil Chemical Company and Exxon Company International since joining the Exxon organization in 1992, including Vice President of Supply and Transportation; Director of Refining for Europe, Africa and the Middle East for ExxonMobil Refining & Supply Company; and Vice President of ExxonMobil Chemical Company.
Current Public Company Directorships: None
Past Public Company Directorships: Imperial Oil Ltd. (April 2013–July 2014)
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DIRECTOR COMPENSATION
Director compensation elements are designed to:
Ensure alignment with long-term shareholder interests;
Ensure the Company can attract and retain outstanding director candidates who meet the selection criteria outlined in the Guidelines for Selection of Non-Employee Directors, which can be found on the Corporate Governance section of our website;
Recognize the substantial time commitments necessary to oversee the affairs of the Corporation; and
Support the independence of thought and action expected of directors.
Non-employee director compensation levels are reviewed by the Board Affairs Committee each year, and resulting recommendations are presented to the full Board for approval. The Committee uses an independent consultant, Pearl Meyer & Partners, to provide information on current developments and practices in director compensation. Pearl Meyer & Partners is the same consultant retained by the Compensation Committee to advise on executive compensation, but performs no other work for ExxonMobil.
ExxonMobil employees receive no additional pay for serving as directors.
Non-employee directors receive compensation consisting of cash and equity in the form of restricted stock. Non- employee directors are also reimbursed for reasonable expenses incurred to attend Board meetings or other functions relating to their responsibilities as a director of Exxon Mobil Corporation.
The annual cash retainer for non-employee directors in 2015 was $110,000 per year. Chairs of the Audit and Compensation Committees and the Presiding Director receive an additional $10,000 per year.
A significant portion of director compensation is granted in the form of restricted stock to align director interests with the interests of our long-term shareholders. The annual restricted stock award grant for incumbent non-employee directors is 2,500 shares. A new non-employee director receives a one-time grant of 8,000 shares of restricted stock upon first being elected to the Board.
While on the Board, the non-employee director receives the same cash dividends on restricted shares as a holder of regular common stock, but the shares remain unvested and thus cannot be sold. The restricted shares are subject to forfeiture if the non-employee director leaves the Board early, i.e., before the retirement age of 72, as specified for non-employee directors.
Current and former non-employee directors of Exxon Mobil Corporation are eligible to participate in the ExxonMobil Foundation’s Educational and Cultural Matching Gift Programs under the same terms as the Corporation’s U.S. employees.
Director Compensation for 2015
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Fees
Earned
or Paid
in Cash
($) | | | Stock
Awards
($)(a) | | | Option
Awards
($) | | | Non-Equity
Incentive Plan
Compensation
($) | | | Change in
Pension Value
and
Nonqualified Deferred
Compensation
Earnings ($) | | | Other Compensation
($)(b) | | | Total ($) | |
M.J. Boskin | | | 110,000 | | | | 231,075 | | | | 0 | | | | 0 | | | | 0 | | | | 340 | | | | 341,415 | |
P. Brabeck-Letmathe | | | 110,000 | | | | 231,075 | | | | 0 | | | | 0 | | | | 0 | | | | 340 | | | | 341,415 | |
U.M. Burns | | | 110,000 | | | | 231,075 | | | | 0 | | | | 0 | | | | 0 | | | | 340 | | | | 341,415 | |
L.R. Faulkner | | | 120,000 | | | | 231,075 | | | | 0 | | | | 0 | | | | 0 | | | | 340 | | | | 351,415 | |
J.S. Fishman | | | 120,000 | | | | 231,075 | | | | 0 | | | | 0 | | | | 0 | | | | 340 | | | | 351,415 | |
H.H. Fore | | | 110,000 | | | | 231,075 | | | | 0 | | | | 0 | | | | 0 | | | | 340 | | | | 341,415 | |
K.C. Frazier | | | 110,000 | | | | 231,075 | | | | 0 | | | | 0 | | | | 0 | | | | 340 | | | | 341,415 | |
W.W. George (ret.) | | | 44,726 | | | | 231,075 | | | | 0 | | | | 0 | | | | 0 | | | | 142 | | | | 275,943 | |
D.R. Oberhelman | | | 65,274 | | | | 682,640 | | | | 0 | | | | 0 | | | | 0 | | | | 193 | | | | 748,107 | |
S.J. Palmisano | | | 120,000 | | | | 231,075 | | | | 0 | | | | 0 | | | | 0 | | | | 340 | | | | 351,415 | |
S.S Reinemund | | | 110,000 | | | | 231,075 | | | | 0 | | | | 0 | | | | 0 | | | | 340 | | | | 341,415 | |
W.C. Weldon | | | 110,000 | | | | 231,075 | | | | 0 | | | | 0 | | | | 0 | | | | 340 | | | | 341,415 | |
(a) | In accordance with SEC rules, the valuation of stock awards in this table represents fair value on the date of grant. Dividends on stock awards are not shown in the table because those amounts are factored into the grant date fair value. |
Each director (other than Mr. Oberhelman, who joined the Board in May 2015) received an annual grant of 2,500 restricted shares in January 2015. The valuation of these awards is based on a market price of $92.43 on the date of grant.
Mr. Oberhelman received a one-time grant of 8,000 restricted shares upon first being elected to the Board in May 2015. The valuation of this award is based on the market price of $85.33 on the date of the grant.
At year-end 2015, the aggregate number of restricted shares held by each director was as follows:
| | | | |
Name | | Restricted Shares
(#) | |
M.J. Boskin
| | | 64,300 | |
P. Brabeck-Letmathe
| | | 20,500 | |
U.M. Burns
| | | 15,500 | |
L.R. Faulkner
| | | 25,500 | |
J.S. Fishman
| | | 20,500 | |
H.H. Fore
| | | 15,500 | |
K.C. Frazier
| | | 23,000 | |
D.R. Oberhelman
| | | 8,000 | |
S.J. Palmisano
| | | 32,000 | |
S.S Reinemund
| | | 28,000 | |
W.C. Weldon
| | | 13,000 | |
(b) | The amount shown for each director is the cost of travel accident insurance covering death, dismemberment, or loss of sight, speech, or hearing under a policy purchased by the Corporation with a maximum benefit of $500,000 per individual. |
The non-employee directors are not entitled to any additional payments or benefits as a result of leaving the Board or death except as described above. The non-employee directors are not entitled to any payments or benefits resulting from a change in control of the Corporation.
CERTAIN BENEFICIAL OWNERS
Based on our review of ownership reports filed with the SEC, the firms listed below are the only beneficial owners of more than 5 percent of ExxonMobil’s outstanding common stock as of December 31, 2015.
| | | | | | | | |
Name and Address of Beneficial Owner | | Shares Owned | | | Percent of Class | |
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | | | 261,953,264 | | | | 6.3 | % |
BlackRock Inc. 55 East 52nd Street New York, NY 10055 | | | 242,628,716 | | | | 5.8 | % |
DIRECTOR AND EXECUTIVE OFFICER STOCK OWNERSHIP
These tables show the number of ExxonMobil common shares each executive named in the Summary Compensation Table on page 47 and each non-employee director or director nominee owned on February 29, 2016. In these tables, ownership means the right to direct the voting or the sale of shares, even if those rights are shared with someone else. None of these individuals owns more than 0.05 percent of the outstanding shares.
| | | | | | | | |
| Named Executive Officer | | Shares Owned(1) | | | Shares Covered by
Exercisable Options | |
R.W. Tillerson | | | 1,809,121 | | | | 0 | |
M.W. Albers | | | 443,023 | | | | 0 | |
M.J. Dolan | | | 555,611 | (2) | | | 0 | |
A.P. Swiger | | | 502,093 | | | | 0 | |
D.W. Woods | | | 82,247 | | | | 0 | |
(1) | Does not include unvested restricted stock units, which do not carry voting rights prior to the issuance of shares on settlement of the awards. |
(2) | Includes 137,093 shares jointly owned with spouse. |
| | | | |
Non-Employee Director/Nominee | | Shares Owned | |
M.J. Boskin
| | | 66,800 | |
P. Brabeck-Letmathe
| | | 23,000 | |
A.F. Braly
| | | 0 | |
U.M. Burns
| | | 18,206 | |
L.R. Faulkner
| | | 28,000 | |
J.S. Fishman
| | | 23,000 | |
H.H. Fore
| | | 42,500 | |
K.C. Frazier
| | | 25,500 | |
D.R. Oberhelman
| | | 10,500 | |
S.J. Palmisano
| | | 34,500 | |
S.S Reinemund
| | | 41,725 | (1) |
W.C. Weldon
| | | 16,580 | |
(1) | Includes 1,100 shares held in family trust of which spouse is a trustee. |
On February 29, 2016, ExxonMobil’s incumbent directors and executive officers (32 people) together owned 5,960,281 shares of ExxonMobil stock and zero shares covered by exercisable options, representing about 0.14 percent of the outstanding shares.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934 requires our executive officers and directors to file reports of their ownership and changes in ownership of ExxonMobil stock on Forms 3, 4, and 5 with the SEC. We are not aware of any unfiled or late reports for 2015.
AUDIT COMMITTEE REPORT
The primary function of ourthe Audit Committee is oversight of the Corporation’s financial reporting process, public financial reports, internal accounting and financial controls, and the independent audit of the annual consolidated financial statements. OurThe Committee acts under a charter which can be found on the ExxonMobil website atexxonmobil.com/auditcharter. We review theauditcommitteecharter. The adequacy of the charter is reviewed at least annually. All members of our membersthe Audit Committee are independent directors, and all are audit committee financial experts under SEC rules. We held 11the Committee met 10 times in 2022. In these meetings, in 2015 at which, as discussed in more detail below, weit had extensive reports and discussions with the independent auditors, internal auditors, and members of management.
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| 2023 Proxy Statement | | | | 41 | | |
In performing ourits oversight function, wethe Committee reviewed and discussed the consolidated financial statements with management and PricewaterhouseCoopers LLP (PwC), the independent auditors. Management and PwC indicated that the Corporation’s consolidated financial statements were fairly stated in accordance with generally accepted accounting principles. WeThe Committee discussed significant accounting policies applied by the Corporation in its financial statements, as well as alternative treatments. WeIt also discussed with PwC matters covered by Public Company Accounting Oversight Board (PCAOB) standards and the Commission, including PCAOB AS 161301 Communication with Audit Committees. In addition, wethe Committee reviewed and discussed management’s report on internal control over financial reporting and the related audits performed by PwC, which confirmed the effectiveness of the Corporation’s internal control over financial reporting.
WeThe Audit Committee also reviewed the written disclosure and the letter from PwC required by the PCAOB rules regarding PwC’s communications with the Audit Committee concerning independence, and has discussed with PwC its independence from the Corporation and management, including the communications PwC is required to provide us under applicable PCAOB rules. Wemanagement. The Committee considered the non-audit services provided by PwC to the Corporation, and concluded that the auditors’ independence has been maintained.
WeThe Committee discussed with the Corporation’s internal auditors and PwC the overall scope and plans for their respective audits. Weaudits; furthermore, it met regularly with the internal auditors and PwC, at each meeting, both with and without management present. Discussions included the results of their examinations, their evaluations of the Corporation’s internal controls, and the overall quality of the Corporation’s financial reporting.
We discussedThe Audit Committee met with the Corporation’s management to discuss the comprehensive, long-standing risk management and compliance processes of the Corporation, and reviewed several topics of interest. The Committee also reviewed the Company’s cybersecurity assurance program including mitigations for evolving risk areas and external maturity assessment results.
Based on the reviews and discussions referred to above, in reliance on management and PwC, and subject to the limitations of ourits role described below, wethe Audit Committee recommended to the Board, and the Board approved, the inclusion of the audited financial statements in the Corporation’sAnnual Report on Form 10-K for the year ended December 31, 2015,2022, for filing with the SEC.
We have also appointed PwC to audit the Corporation’s financial statements for 2016, subject to shareholder ratification of that appointment.
In carrying out ourits responsibilities, we lookthe Audit Committee looks to management and the independent auditors. Management is responsible for the preparation and fair presentation of the Corporation’s financial statements and for maintaining effective internal control. Management is also responsible for assessing and maintaining the effectiveness of internal control over the financial reporting process in compliance with Sarbanes-Oxley Section 404 requirements. The independent auditors are responsible for auditing the Corporation’s annual financial statements, and expressing an opinion as to whether the statements are fairly stated in conformity with generally accepted accounting principles. In addition, the independent auditors are responsible for auditing the Corporation’s internal control over financial reporting and for expressing an opinion on the effectiveness of internal control over financial reporting. The independent auditors perform their responsibilities in accordance with the standards of the PCAOB. OurAudit Committee members are not professionally engaged in the practice of accounting or auditing, and are not experts under the Securities Act of 1933 in either of those fields or in auditor independence.
The Audit Committee has also appointed PwC to audit the Corporation’s financial statements for 2023, subject to shareholder ratification of that appointment. The Committee, along with the other members of the Board, management, the Controller, and the General Auditor, annually evaluates PwC’s qualifications, performance and independence, including the performance of the lead audit partner, in deciding whether to retain PwC. That evaluation includes consideration of:
| • | | PwC’s quality control, including any material issues identified by that quality control or a governmental/professional authority along with PwC’s plan to deal with any such issues; |
| • | | All relationships between PwC and ExxonMobil covered by the PCAOB; |
| • | | PwC’s expertise in the global oil and gas industry; and |
| • | | The quality of PwC’s audit plans. |
The Committee believes that PwC’s tenure as ExxonMobil’s independent registered public accounting firm is a benefit to audit quality given PwC’s experience with ExxonMobil and knowledge of the business, as well as the effectiveness of their audit plans, which build on that established knowledge.
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42 | | | | | | 2023 Proxy Statement |
Based on its annual evaluation of PwC’s qualifications, performance, and independence, as well as frequent private meetings with the lead partner, the Audit Committee believes that the continued retention of PwC as ExxonMobil’s independent registered public accounting firm is in the best interest of the Corporation and its stockholders.
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Larry R. Faulkner,Ursula M. Burns, Chair
| | Peter Brabeck-LetmatheJohn D. Harris II |
Ursula M. Burns
Michael J. Angelakis | | Douglas R. OberhelmanKaisa H. Hietala |
| Gregory J. Goff | | |
ITEMItem 2 – RATIFICATION OF INDEPENDENT AUDITORSRatification of Independent Auditors
The Audit Committee has appointed PricewaterhouseCoopers LLP (PwC) to audit ExxonMobil’s financial statements for 2016.2023. We are asking you to ratify that appointment.
Total Fees
The total fees for PwC professional services rendered to ExxonMobil for the year ended December 31, 2015,2022, were $34.4$41.9 million, an increase of $1.2$1.0 million from 2014.2021. The Audit Committee reviewed and pre-approved all services in accordance with the service pre-approval policies and procedures, which can be found on the ExxonMobil website atexxonmobil.com/pre-approval.pre-approval. The Audit Committee did not use the “de minimis” exception to pre-approval that is available under SEC rules. The following table summarizes the fees, which are described in more detail below.
| | | | | | | | |
| | | 2015 | | | 2014 | |
| | | (millions of dollars) | |
Audit Fees | | | 27.9 | | | | 27.3 | |
Audit-Related Fees | | | 5.7 | | | | 5.1 | |
Tax Fees | | | 0.8 | | | | 0.8 | |
All Other Fees | | | — | | | | — | |
| | | | | | | | |
Total | | | 34.4 | | | | 33.2 | |
| | | | | | | | | | |
| | | 2022 | | 2021 |
| | | (millions of dollars) |
Audit Fees | | | | 35.4 | | | | | 34.1 | |
Audit-Related Fees | | | | 5.8 | | | | | 5.8 | |
Tax Fees | | | | 0.7 | | | | | 1.0 | |
All Other Fees | | | | — | | | | | — | |
| | | | | | | | | | |
| | |
Total | | | | 41.9 | | | | | 40.9 | |
Audit Fees
The aggregate fees for PwC professional services rendered for the annual audits of ExxonMobil’s financial statements for the year ended December 31, 2015,2022, and for the reviews of the financial statements included in our quarterly reports on Form 10-Q for that year, were $27.9$35.4 million (versus $27.3$34.1 million for 2014)2021).
Audit-Related Fees
The aggregate fees for PwC Audit-Related services rendered to ExxonMobil for the year ended December 31, 2015,2022, were $5.7$5.8 million (versus $5.1$5.8 million in 2014)for 2021). TheseAudit-related services were mainly related to asset dispositions, benefit plan audits and other attestation procedures related to cost certifications.procedures.
Tax Fees
The aggregate fees for PwC Tax services rendered to ExxonMobil for the year ended December 31, 2015,2022, were $0.8$0.7 million (versus $0.8$1.0 million for 2014)2021). These services arewere mainly related to assisting various ExxonMobil affiliates with the preparation of local tax filings and related services.
All Other Fees
The aggregate fees for PwC services rendered to ExxonMobil, other than the services described above under “Audit Fees,” “Audit-Related Fees,” and “Tax Fees,” for the year ended December 31, 2015,2022, were zero (also zero in 2014)for 2021).
We believe PwC is well qualified to perform this work. A PwC representative will be at the annual meeting to answer appropriate questions and to make a statement if desired.
The Audit Committee recommends you vote FOR this proposal.
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| 2023 Proxy Statement | | | | 43 | | |
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis with management of the Corporation. Based on that review and discussion, we recommended to the Board that the Compensation Discussion and Analysis be included in the Corporation’s proxy statement for the 20162023 annual meeting of shareholders, and also incorporated by reference in the Corporation’sAnnual Report on Form 10-Kfor the year ended December 31, 2015.2022.
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Samuel J. Palmisano,Angela F. Braly, Chair | | Michael J. BoskinJoseph L. Hooley |
Jay S. FishmanJohn D. Harris II | | William C. WeldonSteven A. Kandarian |
ITEMItem 3 – ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATIONAdvisory Vote to Approve Executive Compensation
At the meeting, shareholders will be asked to vote on a non-binding resolution to approve the compensation of the Named Executive Officers (NEOs), listed in the Summary Compensation Table.
ExxonMobil’s business model is reflectiveWhen casting your vote, we encourage you to consider the detailed information in the Compensation Discussion and Analysis beginning on page 45.
The Board supports the overall design of a capital-intensive industry requiring long investment lead times and a significant focus on risk management. The structure of ourthe compensation program, fully supports this business model and alignson the interests of our executives with those of our long-term shareholders. This is particularly relevant givenbasis that the current state of the industry.program:
ExxonMobil conducts business in a volatile commodity price environment and positions itself to achieve industry-leading returns regardless of industry conditions.
| • | | Is aligned with the Company’s business model and shareholder returns over the long term; |
| • | | Delivers pay that is highly performance based and tied to company and individual performance; and |
| • | | Enables the Compensation Committee to leverage its experience and judgment to deliver market competitive pay. |
We continue to create value for our shareholders by confidentlylisten and prudently investing through the price cycle to meet long-term energy demand growth. Our integrated business enables us to optimize economic returns across the oil and gas value chain. The Corporation’s success requires a strong culture of performance, a long-term orientation, and constancy of purpose among senior executives, all of which are reinforced by the design of our compensation program.
Our compensation program is developed and approved by the Compensation Committee of the Board, which is comprised exclusively of non-employee directors.
Aligned with Shareholder Interests
A substantial portion of annual compensation is in the form ofrestricted stock or stock units with a grant level determined by the performance award matrix described on page 33. Half of the equity award vests in five years from grant date and the other half vests in 10 years from grant date or retirement, whichever is later. These stock holding requirements are not accelerated upon retirement. During these long restriction periods, which far exceed most companies across all industries, the equity award cannot be used as collateral for any purpose and is at risk of forfeiture for resignation or detrimental activity, even beyond retirement.
This design ensures that the majority of compensation and the shareholding net worth of senior executives are linkedrespond to the performance of ExxonMobil stockfeedback we receive from shareholders during our shareholder engagement process. In response, this disclosure builds on the enhancements introduced last year, focused on better illustrating the tie between business and resulting shareholder returns. The executives’ inability to monetize equity earlier ensures that they experience the impact of commodity price cycles much like our long-term shareholders, as described in more detail on page 36.
Theannual bonus also aligns the interests of executives with the priority of sustainable growth in shareholder value. The size of the bonus pool is determined by annual earningsindividual performance and the level of individual awards is determined by the performance award matrix described on page 33. Fifty percent of the payout of the annual bonus award is delayed based on the pace of Corporate earnings performance, as described on pages 34 and 39. The entire annual bonus is subjectpay decisions. Furthermore, operating metrics have been updated to recoupment (“clawback”).
Linked to Business Results
The performance award matrix described on page 33 illustrates that industry-leading performance over the investment lead times of the business is required in the following seven key areas to achieve a top performance category (quintile) bonus and long-term stock award: Safety and Operations Integrity, Return on Average Capital Employed, Total Shareholder Return, Free Cash Flow, Shareholder Distributions, Strategic Business Results, and Project Execution. Moreover, all 21 executive officers – including the CEO and other Named Executive Officers – are expected to perform at the highest level or they are replaced.
A combination of these seven key performance metrics reflects the overall relative performance of the Corporation, as demonstrated on pages 30 and 31. Furthermore, a requirement to demonstrate leadership in all seven key performance areas establishes a significant performance standard at grant (versus vest) that allows the Corporation to maintain its uniquely long vesting periods. The more traditional alternative with performance criteria at vest requires greater line of sight resulting in shorter vesting periods, which would not be aligned with ExxonMobil’s business model.
Supported by Sound Governance Practices
The compensation program excludes pay practices that the Compensation Committee believes are contrary to shareholder interests and do not encourage the highest performance standards. Specifically, our executives are“at-will” employees and do not have employment contracts, severance agreements, or change-in-control arrangements, as detailed on page 43.
Shareholder Engagement
The Compensation Committee has carefully considered shareholder feedback on executive compensation received through wide-ranging dialogue between management and numerous shareholders, many of whom have held ExxonMobil stock for over a decade. The Committee also evaluated the results of the 2015 advisory vote on executive compensation, in which 90.1 percent of votes cast were FOR the compensation of the Named Executive Officers, and discussedreflect the Company’s executive compensation program with its independent consultant.ongoing commitment to reducing emissions intensity.
On this basis, and in combination with a periodic assessment of alternate methods of granting compensation as outlined on pages 36 and 37, the Compensation Committee confirmed that the current compensation program best ensures an unwavering focus on the long-term performance of the business, which the Committee expects will continue generating strong operating and financial results for the benefit of the Company’s long-term shareholders.
The Committee respects all shareholder votes, both FOR and AGAINST the compensation program, and is committed to continued engagement between shareholders and the Company to fully understand the diverse viewpoints and discuss the important connections between ExxonMobil’s compensation program, business strategy, and long-term financial and operating performance.
Summary
ExxonMobil’s compensation program supports a business model that has weathered volatile commodity prices and industry business cycles for many years (see pages 30 and 31).
The compensation program sets ExxonMobil apart and has established a strong culture of performance, integrity, reliability, and consistency.
ExxonMobil is a proven leader in financial performance, project execution, and technology and has upheld its reputation as a safe, responsible, and reliable operator. Thanks to our strong track record, we remain the partner of choice for many resource owners.
It is our belief that ExxonMobil’s business model and supporting compensation program are effective in achieving the objectives of long-term shareholders. This is especially evident in the current commodity price environment, and we believe it will continue serving shareholders well through the full range of economic and industry business cycles.
For the reasons summarized above and discussed in more detail in this proxy statement, the Board recommends an advisory vote FOR the following resolution:
RESOLVED: That shareholders approve the compensation of the Named Executive Officers as disclosed pursuant to Item 402 of SEC Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, accompanying narrative, and narrative discussion on pages 28 to 56 ofadditional compensation disclosures included in this proxy statement.
Item 4 – Frequency of Advisory Vote on Executive Compensation
COMPENSATION DISCUSSION AND ANALYSISAt the meeting, shareholders will be asked to vote on a non-binding resolution as to whether future advisory votes on executive compensation, similar to the preceding resolution, should be held every one, two, or three years.
The Compensation DiscussionBoard remains committed to ensuring the Company’s executive compensation program aligns with its business model and Analysis (CD&A)shareholders’ interests. We have a long-standing philosophy that executive compensation should be based on long-term performance, aligned with the investment lead times and Executive Compensation Tables are organized as follows:risk profile of the business.
Consistent with our commitment to excellence in governance and responsiveness to shareholders, the Board recommends that future advisory votes on executive compensation be held every year but will follow the frequency that receives the plurality of votes cast by shareholders on this non-binding resolution.
Shareholders may vote for any of the three choices provided on the form of proxy (1, 2, or 3 years) or abstain from voting. The vote on this item is not a vote for or against the Board’s recommendation.
The Board recommends a vote FOR One-Year Frequency on this proposal.
EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS Executive Summary Letter to Shareholders 46 Shareholder Engagement 46 Why Vote "FOR" Say-on-Pay? 47 Strong Governance Practices 47 Compensation Design Approach to Executive Compensation 48 Overview 49 Accountability and Performance 50 Long-Term Award Program 52 Bonus Program 54 Salary Program 54 Determining Compensation Annual Benchmarking 55 2022 Business Performance 56 2022 Compensation Actions 58 Other Compensation Elements Retirement Plans 62 Share Utilization 63 Granting Practices 63 Tax Matters 63 Risk and Governance Stock Ownership 64 Forfeiture Provisions 64 Clawback Policy 64 Anti-Hedging Policy 64 Employment Arrangements 65 Change-in-Control 65 Definitions and Footnotes 66 EXECUTIVE COMPENSATION TABLES Summary Compensation Table 68 Grants of Plan-Based Awards 71 Outstanding Equity Awards 72 Stock Vested 73 Pension Benefits 73 Nonqualified Deferred Compensation 75 Other Compensation Elements 76 The Compensation Discussion and Analysis and Executive Compensation Tables outline ExxonMobil's executive compensation program and process for determining pay as it applies to the Named Executive Officers (NEOs). For 2022, Named Executive Officers were: Darren W. Woods Chairman and CEO Kathryn A. Mikells Senior Vice President and Chief Financial Officer Neil A. Chapman Senior Vice President Jack P. Williams, Jr. Senior Vice President Karen T. McKee President, ExxonMobil Product Solutions Company 2023 Proxy Statement 45
2015 Say-On-Pay
Say-On-Pay Results:90.1 percent “For”
We heard positive feedback from shareholders on:
| – | | Extensive shareholder engagement |
| – | | New disclosure on the 7 key performance metrics that determine the number of long-term stock awards at grant |
| – | | Long-term vesting as a unique design feature that requires stock holding through the commodity cycle |
| – | | Market orientation based on realizedandunrealized pay |
We also identified two improvement opportunities from our dialogue with shareholders:
| – | | Further clarify how, in our program, performance criteria at grant (versus vest) strengthen the linkage between performance and pay, and allow for longer vesting periods. The combination of performance criteria at grant and longer vesting results in alignment with shareholder interests in a way that exceeds more traditional performance shares |
| – | | Increase disclosure on how the performance award matrix determines the level of individual stockandbonus awards |
Key Messages
Why Vote “For” Say-On-Pay?
Solid business performance through the commodity cycle relative to industry peers (pages 30 and 31)
Compensation is based on significant performance differentiation (pages 32 and 33)
Program design includes extended risk profile and is aligned with the Company’s business model and the interests of long-term shareholders (pages 34, 36, and 37)
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How did we perform?2023 Proxy Statement | | > | | How do we link performance and pay?45 | | > | | How did we pay? | | > | | How do we manage risk? |
Industry-leading
EXECUTIVE SUMMARY LETTER TO SHAREHOLDERS Fellow Shareholders, As you consider your vote, we encourage you to review the information included in this disclosure. The Committee supports the design of the executive compensation program in that we believe it achieves the goal of maximizing long-term shareholder value and positions the Company for long-term success in a lower-emissions future. Your feedback is important. The Committee considers the results of the Say-on-Pay vote, together with feedback received through ongoing shareholder engagements as it reviews the effectiveness and competitiveness of the executive compensation program, taking into account business context and market practices. Business Perspective ExxonMobil's business involves large investments that create shareholder value over long periods of time, requiring executives to maintain a long-term view when making decisions across a wide range of business investments. The executive compensation program design reflects this and has proven to be adaptable to evolving strategic priorities. In 2022, the Company delivered exceptional business results across all performance across companiesdimensions. The work done over the past few years has laid the foundation for these results. Where others pulled back in the face of uncertainty and a historic slow-down, the Company moved forward, continuing to invest to help meet demand and position the Company for long-term success. While today's results clearly benefited from a favorable market, these actions coupled with active cost management, enabled the Company to realize the full benefit of current market conditions and deliver IOC 1-leading financial performance. Compensation Decisions Exceptional business results, including record Company earnings and strong stock price performance, are reflected in 2022 total direct compensation, up 80 percent versus 2021; 3-year average pay is within historic range. The evolution of pay during 2020–2022 demonstrates the oilstrength of our compensation program design: highly performance based, share-denominated, tied to business and gas industryindividual performance, resulting in a greater degree of similar scalevolatility versus benchmark company programs and complexity formedbetter aligned with the experience of our long-term shareholders. Shareholder Engagement Throughout 2022, management and independent directors engaged with shareholders, representing over two-thirds of outstanding institutionally held Say-on-Pay 2022 2021 2020 shares. We note strong support for the program with long restriction periods, Votes "For" 91% 89% 92% pay-for-performance, share-denominated basis, for compensation decisions made byand strong governance cited as key strengths, effectively tying executive pay to shareholder outcomes. You provided positive feedback on the disclosure enhancements we introduced last year. This disclosure reflects an ongoing commitment to and refinement of those enhancements: Transparency on how the Board holds management accountable to deliver business results and drive the Company's strategic objectives, including the Company's role in the energy transition; Detailed disclosure on the Committee's deliberations on performance as it ties to pay decisions; and Additional disclosure on Corporate ESG metrics and GHG emissions intensity reductions. On behalf of the Compensation Committee, in 2015I encourage you to vote "FOR" Item 3. Angela F. Braly Chair, Compensation Committee Exxon Mobil Corporation 2023 Proxy Statement 46
(1) Employees and contractors; includes XTO Energy Inc. data beginning in 2011. (2) Workforce safety data from participating American Petroleum Institute (API) companies; 2015 industry data not available at time of publication. (3) Competitor data estimated on a consistent basis with ExxonMobil and based on public information. For definitions and more information, see page 44 of theSummaryAnnual Report included with the 2016 Proxy Statement. (4) Cumulative (chart 3) and Annualized (chart 4) returns assuming dividends are reinvested when paid. (5) Chevron, Royal Dutch Shell, Total, and BP weighted by market capitalization; shareholder return data for Total available from 1992. (6) Annual data calculated as average of daily prices from U.S. Energy Information Administration (EIA).
For the following footnotes, competitor data estimated on a consistent basis with ExxonMobil and based on public information.
(7) BP excludes impact of GOM spill, TNK-BP divestment, and 2013 Rosneft investment. For definitions and more information, see page 45 of the Summary Annual Report included with the 2016 Proxy Statement. (8) Total shareholder distributions divided by market capitalization. Shareholder distributions consist of cash dividends and share buybacks. For more information, see page 45 of theSummary Annual Report included with the 2016 Proxy Statement. (9) More information on Strategic Business Results is included on page 45. (10) Total Capitalization defined as “Net Debt + Market Capitalization”; and Leverage defined as “Net Debt / Total Capitalization.”
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How did we perform?46 | | > |  | | How do we link performance and pay? | 2023 Proxy Statement |
WHY VOTE "FOR" SAY-ON-PAY? PROGRAM ALIGNED WITH BUSINESS MODEL AND SHAREHOLDER RETURNS Program adaptable to evolving strategic priorities through annual goal setting; includes positioning the Company for success in the energy transition Majority of total direct compensation delivered in performance shares; 76 percent of CEO total direct compensation 2 Share-denominated basis coupled with long restriction periods ensures alignment with shareholders over long term Restriction periods – longest in any industry – promote accountability to maximize shareholder value over the long term while effectively managing longer-term risks, including risks related to the energy transition PAY HIGHLY PERFORMANCE BASED AND TIED TO COMPANY PERFORMANCE Exceptional 2022 business results across all performance dimensions Delivered IOC 1-leading financial performance through advantaged asset investments, improved competitiveness, and active cost control Maintained industry-leading personnel safety performance 3 On track to achieve 2030 GHG emission-reduction plans 4 2022 bonus award reflective of record earnings; long-term award value increased year-over-year in line with strong increase in stock price performance COMPENSATION COMMITTEE APPROACH TO DELIVER MARKET COMPETITIVE PAY Deliberation on overall level of CEO pay considers progress toward strategic objectives, business results, individual performance, and competitiveness of pay given tenure in position 2021 CEO total direct compensation at 4th percentile relative to CEO compensation benchmark companies 2 10-year combined realized and unrealized pay (2012 to 2021) for CEO position at 1st percentile 2 The Committee anticipates a more competitive position in 2022 based on available data from benchmark companies SUPPORTED BY STRONG GOVERNANCE PRACTICES Key design features that discourage executives from taking inappropriate risk include: Extensive stock ownership No employment contracts Significant pay-at-risk No severance agreements Strong forfeiture provisions No change-in-control arrangements Clawback policy No guaranteed bonuses Anti-hedging policy No additional stock grants to balance losses in value Annual assessment of compensation design No accelerated vesting at retirement Independent compensation consultant 2023 Proxy Statement 47
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Design Objectives
CompensationCOMPENSATION DESIGN APPROACH TO EXECUTIVE COMPENSATION The decisions that our executives make and the risks they manage play out over multi-year time horizons. Executives are required to carefully consider current and future risks, such as those related to the energy transition, and to make decisions across a broad range of business investments that generate sustainable shareholder value over the long term. The Company's executive compensation program that rewardsdesign aligns executives' pay with the results of their decisions and the returns of our shareholders over the long term. The program is designed to drive long-term accountability, reward outstanding performance, promotes retention, and encouragespromote retention. DRIVE LONG-TERM ACCOUNTABILITY The Company's strategic objectives have been established to drive sustainable value while positioning the Company for long-term business decisions
success in a lower-emissions future. These objectives are translated into annual plan goals through a comprehensive process which incorporates Corporate and functional plans. Goals are incorporated in the corporate plan, which is reviewed and approved by the Board and provides the framework for the organization's commitments. REWARD OUTSTANDING PERFORMANCE Highly differentiated pay-for-performance is foundational to the Company's compensation program design. The extent to which executives achieve pre-established goals, assessed over near- and long-term time horizons, is a key differentiating factor in executive pay deliberations. Performance Differentiation
Overallevaluation directly impacts level of individual stockbase salary, bonus, and bonusperformance share award grantsgrant. PROMOTE RETENTION Long-term orientation also underpins how the Company develops talent. It begins with recruiting exceptional people, and continues with individually planned experiences and training, which leads to broad development and a deep understanding of our business across the business cycle. The compensation program is determined by the relative performance of the business
Each executive’s totaldesigned to attract and retain talent for a career through compensation that is market competitive, highly differentiated by individual performance, (chart 8, page 33)
Career Orientation
Effective leadership results from broad rangeand with long restriction periods that promote retention. For more information, see the Annual Report, Advancing Climate Solutions – 2023 Progress Report, Sustainability Report, and Investing in People supplement. 5 Joseph L. Hooley Lead Director Exxon Mobil Corporation The Company continues to be committed to creating sustainable solutions that improve quality of experienceslife and meet society's evolving needs, and has long-term strategic objectives to deliver industry leading emissions-intensity reductions in its own operations and solutions for hard-to-decarbonize sectors. The move to a lower-emissions future requires multiple solutions that can be implemented at scale to address some of the highest-emitting sectors of the economy. The Board recognizes that the Company, by leveraging its core capabilities, is uniquely positioned to play a leading role in the energy transition while retaining investment flexibility across a portfolio of evolving opportunities to maximize shareholder value. A business portfolio resilient to a cyclical commodity price environment and transitioning energy system, positions the business cycle
Company well to generate sustainable growth in shareholder value over the long term. The Company's long-term, interdependent strategic objectives have been established to position the Company for long-term success in a lower-emissions future. 2023 Proxy Statement 48
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48 | | CEO and other Named Executive Officers have career service with ExxonMobil ranging from 23 to more than 40 years | | | | 2023 Proxy Statement |
Focus
OVERVIEW Board reviews and approves Corporate goals and objectives annually, integrated into Company's plan cycle Goals are cascaded at each level, tailored for area of responsibility; annual assessment versus planned goals results in differentiated pay outcomes Named Executive Officers participate in the same broad-based programs as all other executives Performance shares for senior executives represent a higher percentage of total direct compensation, reflective of the impact of their decisions, and resulting in increased pay-at-risk Percent of Total Direct Compensation Intent Key Design Features Performance Shares Over 70 percent Link pay to returns of long-term shareholders Encourage long-term view through the commodity price cycle Granted in the form of stock units 50 percent vests in 5 years from grant date; 50 percent in 10 years Long restriction periods coupled with performance metrics applied at grant Significant portion of pay at risk of forfeiture for extended period of time Annual Bonus 10 to 20 percent Link pay to annual Company earnings performance Provide near-term performance payment Paid in year of grant Bonus award pool shifts in line with year-over-year earnings Individual award further determined by individual performance and pay grade Full award subject to clawback Base Salary 10 percent or less Provide competitive base pay Increase determined by individual performance, experience, and pay grade Ties directly to long-term benefits ANNUAL COMPENSATION BENCHMARKING | Page 55 Based on attracting1-year total direct compensation and retaining best talent available for10-year realized and unrealized pay analysis Target pay around the median, considering tenure in position, individual and business performance, and evaluated across a lifelong career
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| 2023 Proxy Statement | | Requires a compensation program that promotes retention bydelayingmajority of annual compensation and placing it at risk of forfeiture | | 49 | | |
Succession Planning
ACCOUNTABILITY AND PERFORMANCE Executive compensation program design aligned with business model and Continuitytalent development approach – long-term oriented, performance differentiated, and adaptable to evolving strategic priorities through goal setting. STRATEGIC OBJECTIVES The Company's long-term strategic objectives center around four key interdependent performance dimensions, reflective of Leadershipthe Company's priority focus areas. These objectives, fully integrated into the Company's plan cycle, provide the framework for the organization to deliver on its commitments. Strategic objectives have been established to drive sustainable growth in shareholder value while positioning the Company for long-term success in a lower-emissions future. Long-Term Strategic Objectives Operations Performance Deliver industry-leading performance in safety, emissions-intensity reductions, environmental performance, and reliability Financial Performance Deliver industry-leading earnings and cash flow growth Energy Transition Lead industry in hard-to-decarbonize GHG emissions reductions Business Portfolio Optimize existing business portfolio, resilient to a transitioning energy system PLAN GOALS The Company's strategic objectives are translated into annual plan goals through a comprehensive process that incorporates Corporate and functional plans. Plan goals are endorsed by the Board during its November meeting. A disciplined approach to establishing goals aligns executives to deliver on the Company's strategic objectives. The CEO is primarily responsible for executing the Company's long-term strategic objectives, as translated in annual plan goals. CEO goals and objectives are CEO supplemented with enterprise-wide initiatives. These include risk management, corporate reputation, talent management, research and technology, and management of major projects. Plan goals and objectives are cascaded throughout the organization, tailored to each Corporate Officers executive's area of responsibility. Goals and objectives are reviewed with senior management annually and reinforced through periodic stewardship reviews and the performance assessment process. Worldwide Leaders are held accountable to deliver on plan goals and objectives across all Executives performance dimensions within the context of the Company's strategic objectives. This sets a high performance threshold. Where faced with trade-offs across different priorities, these are discussed with senior management through monthly business reviews. DESIGN ADAPTABLE TO EVOLVING STRATEGIC PRIORITIES THROUGH INTEGRATION IN THE COMPANY'S PLAN PROCESS, CORPORATE GOALS & OBJECTIVES APPROVED BY THE BOARD 2023 Proxy Statement 50
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50 | | | | | | 2023 Proxy Statement |
Strong belief that executive talent should be developed and promoted from within
Continuity of leadership helps achieve critically important sustainable risk management
PERFORMANCE EVALUATION The Compensation Committee Decisionsevaluates accomplishments across all business performance dimensions within the context of the Company's long-term strategy. Financial and operating metrics further support the Committee's assessment. Results of the annual performance evaluation inform level of pay, including salary, bonus, and performance share award. For more details on pay deliberations for the CEO and members of the Management Committee, see pages 58 to 61. CEO The Compensation Committee evaluates the CEO's performance based on progress against plan goals and objectives, which are reflective of the Company's strategic objectives and supported by financial and operating metrics. The Company's strategic objectives are interdependent, with long-term success determined by delivery in each of the strategic objectives. As such, the Committee assigns equal weight to each of the four strategic objectives. Recognizing the complexity and significant uncertainty inherent in a transitioning energy system, the Committee maintains its focus on the energy transition objective and GHG emissions intensity metrics. Progress is discussed throughout the year in various Board and Committee reviews. Financial and operating metrics are assessed over near- and long-term time horizons, taking into account the broader business environment. See pages 56 to 57 for 2022 business performance. Corporate Officers The CEO reviews the performance of all other Corporate Officers, including members of the Management Committee, with the Board during the annual executive development review in October. Performance is evaluated based on accomplishments versus plan goals and objectives. In addition to this formal annual assessment, the Board evaluates the performance of all senior executives throughout the year during specific business reviews and Board meetings. The Compensation Committee also takes into account demonstrated leadership in sustaining sound business controls and a strong ethical and corporate governance environment. 2022 FOCUS AREAS Continued transparency on the Company's role in the energy transition, integrated in the Company's strategic objectives ESG metrics disclosure expanded to include Corporate GHG emissions intensity Detailed disclosure of Committee's evaluation of CEO and Management Committee performance DISCIPLINED APPROACH HOLDS EXECUTIVES ACCOUNTABLE FOR BUSINESS RESULTS AND PROGRESSING STRATEGIC OBJECTIVES, BALANCING SHORT- AND LONG-TERM ACTIVITIES 2023 Proxy Statement 51
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Industry-leading performance
LONG-TERM AWARD PROGRAM Performance shares represent over 70 percent of total direct compensation, and are intended to link executive pay to the returns of long-term shareholders and encourage a long-term view through the commodity price cycle. Performance shares vest 50 percent in 5 years and 50 percent in 10 years. For more information, see page 71. PROGRAM DESIGN BUSINESS MODEL ALIGNMENT SHAREHOLDER ALIGNMENT ACCOUNTABILITY Long investment lead times Majority of executive pay delivered in Restriction periods and risk of forfeiture and complex risk management performance shares, aligning realized pay drive focus on long-term shareholder landscape require long-term view level with returns of long-term shareholders value creation while managing risk LONGEST RESTRICTION PERIODS HIGHEST STANDARDS OF ABILITY TO RETAIN KEY TALENT IN ANY INDUSTRY PERFORMANCE Executives unable to monetize Applying performance metrics at Performance assessed against significant portion of pay, creating large grant enables restriction periods of pre-established goals and objectives, "buyout" hurdle 10 years results tie directly to award level LONG RESTRICTION PERIODS IN LINE WITH INVESTMENT LEAD TIMES AND RISK PROFILE Investment decisions in a capital-intensive industry and management of risk play out over time horizons often decades in length, through volatile commodity price cycles, requiring executives to maintain a long-term view when making decisions Long restriction periods ensure that a significant portion of pay reflects the outcome of these decisions and the experience of long-term shareholders An alternate formula-based program would require a shorter time horizon to set meaningful, credible targets. The Compensation Committee has analyzed the appropriateness of a shorter-term program and concluded that this could encourage short-term decision making, which is not aligned with the long investment lead times and the capital-intensive nature of the business requiredExample below shows project net cash flow of a typical ExxonMobil project and performance share program design. It illustrates that short-term vesting would occur prior to determination of project financial success or failure and that longer-term vesting better aligns with shareholder returns resulting from investment decisions 2023 Proxy Statement 52
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ExxonMobil conducts business in a cyclical commodity price environment and transitioning energy system. A business portfolio resilient to these market dynamics, positions the Company well to generate sustainable growth in shareholder value over the long term Longer restriction periods ensure executives hold shares across dynamic market conditions An alternate program with shorter-term target setting and vesting would enable executives to monetize and diversify realized pay at a much faster pace. This would decrease their exposure to these dynamic market conditions, contrary to the experience of our shareholders over the long-term SHARE-DENOMINATED BASIS ALIGNS AWARD VALUES WITH SHAREHOLDER OUTCOMES Uniquely long restriction periods result in a need to LONG-TERM AWARD – CEO POSITION apply performance metrics at grant, versus at vest DEGREE OF VOLATILITY VERSUS ALTERNATE PROGRAMS Performance share award grant levels are established ExxonMobil Compensation Benchmark Companies: 25 to 75 Percentile (dollars in millions) 50 Percentile based on pay grade and individual performance 25 The Compensation Committee does not adjust share grants to offset changes in share price, this results in 20 executives seeing a one-for-one change in compensation through share price 15 A share-denominated approach coupled with long 10 restriction periods defines the risk/reward profile of stock-based performance awards and results in a 5 greater degree of volatility versus alternate programs with dollar-denominated approach 0 2013 14 15 16 17 18 19 20 21 2022 2022 DECISIONS As in prior years, the Committee did not adjust share grants to offset changes in share price, thus maintaining strong alignment in the followingexperience of our executives and our long-term shareholders Changes in award grants for Named Executive Officers reflect individual performance and/or change in pay grade Long-term award value increased year-over-year in line with strong stock performance; $110.84 at 2022 grant, up from $62.82 in 2021, and $41.15 in 2020 STOCK OWNERSHIP It is ExxonMobil's policy that executives maintain significant stock ownership, with no accelerated vesting at retirement Long restriction periods result in stock ownership far exceeding ownership guidelines typical among other companies across industries. This aligns the interests of our executives with those of long-term shareholders and ensures focus on actions that create sustainable shareholder value over the long term Multiple of base salary Table depicts 2022 stock ownership, vested and Market-common stock ownership Min 6 – Max 12 unvested, as multiple of base salary ExxonMobil CEO 91 At retirement, assuming age 65, approximately Other NEOs 32 – 76 70 percent of unvested shares will be outstanding and continue to vest over a 10-year period 6 THROUGH LONG RESTRICTION PERIODS, EXXONMOBIL EXECUTIVES ARE INCENTIVIZED TO TAKE A LONG-TERM VIEW IN DECISION MAKING 2023 Proxy Statement 53
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BONUS PROGRAM Annual bonus program represents 10 to 20 percent of total direct compensation, and is intended to link executive pay to annual Company earnings performance. All executives globally, including Named Executive Officers, participate in the same bonus program. PROGRAM DESIGN Compensation Committee establishes the overall size ANNUAL BONUS AWARD – CEO POSITION of bonus program ("ceiling"), set as a percent change DEGREE OF VOLATILITY VERSUS ALTERNATE PROGRAMS from prior year bonus program 7 key areasExxonMobil Compensation Benchmark Companies: 25 to achieve a top quintile75 Percentile % change in bonus program = (% change in annual x (2/3) (dollars in millions) 50 Percentile earnings) 8 Percent change in bonus program is applied to the bonus award matrix that is used to determine individual grant levels based on pay grade and long-term stock award: Safetyindividual performance 6 Tie to year-over-year change in earnings coupled with individual performance defines the risk/reward profile 4 of the bonus program and Operations Integrity, ROCE, TSR, Free Cash Flow, Shareholder Distributions, Strategic Business Results,results in greater degree of volatility versus market practice 2 Bonus delivered in cash in year of grant Full bonus award subject to clawback, see page 64 0 2013 14 15 16 17 18 19 20 21 2022 2022 DECISIONS 2022 bonus program set at +95 percent versus 2021, in line with record earnings performance; individual awards for Named Executive Officers further reflect individual performance and/or change in pay grade CEO bonus $6.4 million, up from $3.1 million in 2021, and Project Execution
Experience$0 in 2020; 3-year average $3.2 million within historic range; 2022 bonus at 375 percent of 2022 base salary, in line with average of bonus program maximum of benchmark companies 8 SALARY PROGRAM Base salary represents 10 percent or less of total direct compensation, and
is intended to provide competitive base pay and directly affect the level of retirement benefits, as salary is included in benefit formulas. Named Executive Officers participate in the same salary program as all U.S.-dollar-paid professional employees. The overall size of the program is determined by annual benchmarking. Individual salary increases are the result of individual performance, experience, and changes to pay grade. 2022 DECISIONS The Compensation Committee granted 2023 salary increases to Named Executive Officers consistent with the salary program for all U.S.-dollar-paid professional employees Individual salary increases take into account individual performance, level of responsibility
are also key factorsand experience, and reflect market analysis and competitiveness at time of decision in
2022 54 2023 Proxy Statement | | | | | | |
54 | | | | | | 2023 Proxy Statement |
DETERMINING COMPENSATION ANNUAL BENCHMARKING COMPANY PERFORMANCE Assessing business performance is most relevant against companies of similar scale and complexity that operate within the same industry. These include BP, Chevron, Shell, and Total Energies. See page 57 for 2022 business results. COMPENSATION BENCHMARKING Evaluating level of pay is most relevant against other U.S. companies SCALE OF EXXONMOBIL VERSUS BENCHMARK COMPANIES 9 who pay in the same jurisdiction. (2022 revenue, dollars in billions) Criteria for selecting benchmark companies include: 400 ExxonMobil large scale and complexity; capital intensity; 350 international operations; and 300 proven sustainability over time. 250 Chevron Both ExxonMobil Upstream and ExxonMobil Product Solutions business Ford 200 General Motors segments, on a stand-alone basis, rank among other large benchmark Verizon companies based on revenue. 150 AT&T Pfizer Johnson & Johnson Compensation benchmark companies remained the same since 2017, 100 Procter & Gamble except for the addition of Raytheon Technologies in 2021 as successor, General Electric Raytheon Technologies by merger, to United Technologies. 50 Boeing IBM 0 PAY ORIENTATION In assessing the contributionsappropriateness of individual executives
Tallypay levels, the Committee considers scale and complexity, and tenure in position as relevant factors. The Compensation Committee focuses on a broad range around the median of compensation benchmark companies, evaluated across a range of stock price scenarios. This provides the ability to: Differentiate compensation based on experience and performance levels among executives; Minimize the potential for automatic ratcheting-up of compensation that could occur within a narrow target among benchmark companies; and Respond to changing business conditions. The Committee uses tally sheets for the CEO and pension modelingManagement Committee that provide detailed information, by pay element, and allow for assessment against publicly available data for similar positions at comparator companies
Benchmarkingcompensation benchmark companies. The Committee also uses an independent consultant to assist in this analysis as discussed in the Corporate Governance section, see page 35. COMPENSATION COMMITTEE CONDUCTS ANNUAL BENCHMARKING TO ASSESS MARKET COMPETITIVENESS OF EXECUTIVE PAY AND PROGRAM DESIGN 2023 Proxy Statement 55
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Evaluation
2022 BUSINESS PERFORMANCE Exceptional 2022 business results across all performance dimensions, positioned to capture the full benefit of levelcurrent market conditions. Delivering IOC1-leading financial performance through advantaged asset investments, improved competitiveness and active cost control while meeting society's energy needs and striving to play a leading role in a thoughtful energy transition. 2022 PROGRESS AND PERFORMANCE OPERATIONS Strategic Objective Deliver industry-leading performance PERFORMANCE Safety Maintained industry-leading personnel safety performance 3 Sustained decreasing trend in Tier 1 process safety events 3 Emissions, Progressed robust 2030 GHG Emissions Reduction Plans 4 Environmental Over 15% reduction in number of compensation requires comparison againstspills versus prior 3-year average 3, 10 Reliability Total capacity loss trend on plan 11 FINANCIAL Strategic Objective Deliver industry-leading earnings and cash flow growth PERFORMANCE Results Delivered IOC-leading financial results On pace to achieve $9 billion in structural cost savings 12 by year-end 2023 13 Maintained capex discipline 14; debt-to-capital ratio at 17%, consistent with strong AA rating Delivered $30 billion to shareholders through dividends and share repurchases ENERGY Strategic Objective Lead industry in hard-to-decarbonize GHG emissions reductions TRANSITION Results Developed detailed roadmaps in support of 2030 GHG Emissions Reduction Plans 4 and 2050 Net Zero Ambitions 15 A founding signatory to the Aiming for Zero Methane Emissions initiative 16 Investing ~$17 billion in lower-emission initiatives from 2022-2027, positioning for attractive returns from large potential addressable markets, and competitively advantaged products Capex flexibility to grow lower carbon initiatives spend as opportunity pipeline matures, technology advances, and markets and policies evolve BUSINESS Strategic Objective Optimize existing business portfolio, resilient to a transitioning energy system PORTFOLIO Upstream Prioritize resilient, high-return investments >90% of 2022-2027 capex for Oil and Flowing Gas projects delivers >10% return at $35/bbl17; all LNG investments generate >10% return at $6/Mbtu 17 Guyana: record production, 10% above design capacity; 10 additional discoveries Permian: record production with lower capital, reflecting continued improvements in capital efficiency; eliminated routine flaring in Permian operated assets 18 High-graded portfolio through investments and divestments Product Solutions Grow high-value products, improve portfolio value, achieve industry leadership in sustainability Consolidated industry-leading Downstream and Chemical businesses Delivered highest-ever contribution to earnings Record North American refinery throughput and highest globally since 2012 19 Investment portfolio delivers >30% return 20; expanded polypropylene capacity ~15% Started up one of North America's largest advanced plastic waste recycling facilities Fully funded 20 Kbd Strathcona renewable diesel project 21 Low Carbon Improve portfolio competitiveness and resilience Solutions Entered into largest-of-its-kind commercial agreement in Louisiana to capture, transport, and permanently store up to an expected 2 million metric tons of third-party CO2 emissions annually Grew investment portfolio, progressing signature foundational projects – e.g. Baytown, Blue Hydrogen, LaBarge CCS, and other U.S. companies that generally have large scaleadvantaged opportunities Overall return on portfolio of investments >10% from 2022-2027 22 Leading innovative research and complexity, capital intensity, international operations,technology development for CCS, hydrogen and proven sustainability over time
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AT&T56
| | Chevron | | | IBM | 2023 Proxy Statement |
2022 BUSINESS PERFORMANCE | FINANCIAL & OPERATING METRICS PERSONNEL SAFETY 3, 23 ENVIRONMENTAL 3, 10 LOST-TIME INCIDENT RATE (LTIR) SPILLS >1 BARREL (BBL) 2022 Focus Area ExxonMobil Workforce (number) Upstream Industry Benchmark Selected performance metrics tie 500 U.S. Refining and Chemical Industry Benchmark to Company's strategic objectives (incidents per 200,000 work hours) 400 Updated ESG metrics reflective of 0.16 Company's ongoing plans to reduce 0.14 300 GHG emissions intensity: 0.12 0.10 – Progress toward announced 2030 200 4 0.08 GHG emission-reduction plans 0.06 100 – Changed Upstream to Corporate 0.04 Operated GHG Emissions Intensity 0.02 0 0 2013 14 15 16 17 18 19 20 21 2022 2013 14 15 16 17 18 19 20 21 2022 GHG EMISSIONS 4, 24 CORPORATE-WIDE CORPORATE-WIDE CORPORATE-WIDE OPERATED GHG EMISSIONS INTENSITY OPERATED HYDROCARBON FLARING INTENSITY OPERATED METHANE EMISSIONS INTENSITY (T CO e/100 T) (m3/T) (T CH /100 T) 2 4 30 15 0.08 25 12 0.06 20 2030 GHG emission reduction plans 4 9 15 0.04 6 10 2030 GHG emission reduction plans 4 0.02 3 2030 GHG emission reduction plans 4 5 0 0 0.00 2016 17 18 19 20 21 2022 2016 17 18 19 20 21 2022 2016 17 18 19 20 21 2022 FINANCIAL RETURN ON AVERAGE CAPITAL EMPLOYED CASH FLOW FROM OPERATIONS TOTAL SHAREHOLDER RETURN (TSR) 26 (ROCE) 25 AND ASSET SALES (CFOAS) 25 (10-year average, percent) 10-Year Average 2022 10-Year Average 2022 12 (dollars in billions) (percent) 100 100 9 80 80 6 60 60 40 40 3 20 20 0 XOM Chevron Shell Total BP 0 XOM Chevron Shell Total BP 0 XOM Chevron Shell Total BP 2023 Proxy Statement 57
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| 2023 Proxy Statement | | Procter & Gamble |
Boeing
| | Ford Motor Company57 | | Johnson & Johnson | | United Technologies |
Caterpillar
| | General Electric | | Pfizer | | Verizon |
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Assessment
2022 COMPENSATION ACTIONS | CEO PAY DELIBERATIONS Mr. Woods is primarily responsible for executing the Company's long-term strategic objectives while progressing plan goals in support of these objectives. In 2022, the Company delivered exceptional business results across all performance dimensions. Under Mr. Woods' leadership, the Company maintained its commitment to advantaged long-term investments during the down-cycle and individualactively progressed structural cost savings. 12 This positioned the Company to capture upside as markets recovered and provides flexibility to consider growing investments in lower-carbon emissions initiatives as the opportunity pipeline matures, technology advances, and markets and policies evolve. The Committee noted strong business results in each performance requires comparison against companiesdimension: Operations: maintained industry-leading personnel safety performance 3; on track to achieve 2030 GHG emission-reduction plans4; recently formed Global Operations and Sustainability organization aimed at transforming personnel safety, process safety, and maintenance. Financial: IOC1-leading earnings and cash flow growth; earnings growth driven by strong portfolio investment returns, accretive volumes, and structural efficiencies 12; achieving debt-to-capital ratio consistent with a strong AA rating. Energy transition: completed detailed GHG emission-reduction roadmaps for major operated assets; investing ~$17 billion in lower-emission initiatives from 2022 to 2027, positioning for attractive returns from large potential addressable markets and competitively advantaged products. Business portfolio: best-in-industry investment portfolio, delivering high returns and short payouts, resilient to a transitioning energy system; aligned organizations with markets and key competitive variables. Strengthening ExxonMobil culture framework globally, over 25 percent of similar scalesupervisors trained through 2022; successfully initiated re-designed leadership learning program in support of We are ExxonMobil with over 30 percent of leaders trained by 2024; first company-wide employee survey, focus on understanding Company purpose and complexitystrategy, progress in fostering a productive and inclusive environment, and sustaining and improving our culture. In acknowledgement of these achievements, the Committee approved total direct compensation of $33.0 million. Consistent with our pay philosophy, a significant portion was delivered through performance shares with 5- and 10-year vesting periods. CEO COMPENSATION TOTAL DIRECT COMPENSATION REALIZED PAY Salary Bonus Stock-Based Awards Total Cash Vesting of Previous Awards (millions) (millions) $33.0 $18.3 95% variable $18.1 pay, at risk $10.0 $9.1 $3.7 2020 2021 2022 2020 2021 2022 Total Reported Pay % of Total Direct Compensation $15.6 $23.6 $35.9 37% 50% 55% 2022 total direct compensation up 80 percent versus 2021, reflective of record Company earnings and stock price performance; approximately 80 percent of increase due to stock price value, 20 percent due to Company earnings 3-year average total direct compensation at $20.4 million, within historic range 76 percent of CEO total direct compensation delivered in the same industry
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Chevron58
| | Royal Dutch Shell | | | Total | | BP |
| 2023 Proxy Statement |
Highest Performance Standards
Performance must be highCEO COMPENSATION BENCHMARKING 2 TOTAL DIRECT COMPENSATION 1-YEAR TOTAL DIRECT COMPENSATION 10-YEAR TOTAL DIRECT COMPENSATION (2021) (2021, 2011 to 2020) ExxonMobil Compensation Benchmark Companies 2021 2011-2020 Range 4th Percentile 1 2 3 4 5 6 7 8 9 10 11 XOM 13 1 2 3 4 5 6 7 8 9 10 11 XOM 13 (rank position) (rank position by 2021 compensation) Evolution of pay during 2020 to 2022 demonstrates strength of program design; highly performanced based, tied to business and individual performance, and resulting in allgreater degree of volatility versus compensation programs of benchmark companies 2021 partial recovery following 2020 bonus suspension and low value of long-term award, resulting in low market competitive position 2022 increase in line with exceptional business results, approximately 80 percent of increase tied to strong stock price performance, 20 percent tied to Company earnings; expected to result in strong market position REALIZED AND UNREALIZED PAY 10-YEAR COMBINED REALIZED AND UNREALIZED PAY 10-YEAR REALIZED PAY (2012 to 2021) (2012 to 2021) ExxonMobil Compensation Benchmark Companies ExxonMobil Compensation Benchmark Companies 1st Percentile 0th Percentile 1 2 3 4 5 6 7 key areas8 9 10 11 XOM 13 1 2 3 4 5 6 7 8 9 10 11 12 XOM (rank position) (rank position) Combined 10-year realized and unrealized pay normalizes for executive officers to receive an overall superior evaluation
different award types and restriction periods Relative position in 10-year realized versus realized/unrealized pay reflective of long restriction periods in program design 2023 Proxy Statement 59
| – | | Outstanding performance in one area will not cancel out poor performance in another |
Annual performance assessment through well-defined process, covering executive officers and more than 1,700 executives worldwide across multiple business lines and staff functions
Performance assessments are spread across 5 quintiles, each of which corresponds to an award level, widely differentiated between highest and lowest quintile
Chart 8 illustrates distribution of stock and bonus awards by individual performance category (quintile) and pay grade, with awards for quintiles 2 through 5 expressed as a percentage of the highest quintile target
All 21 executive officers are expected to perform at the highest level or they are replaced
If it is determined that another executive would make a stronger contribution than the current officer, a succession plan is implemented and the incumbent is reassigned or separated
Scale and Complexity
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How did we perform?2023 Proxy Statement | | > | | How do we link performance and pay?59 | | > | | How did we pay? | | > | | How do we manage risk? |
Programs applied consistently
2022 COMPENSATION ACTIONS | MANAGEMENT COMMITTEE KATHRYN A. MIKELLS, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER Ms. Mikells is responsible for all corporate finance departments, including financial planning and reporting, tax, treasurer's, and audit. Ms. Mikells also oversees strategic planning and investor relations. In 2022, Ms. Mikells provided strategic and executive oversight in the following areas: Salary Financial / Corporate Strategy: provided leadership in driving process and $1.1M systems transformation, consolidation, and simplification of end-to-end transactional processes; focused efforts on improving competitiveness of portfolio and active cost management; continued efforts to fortify balance sheet with debt-to-capital ratio at 17%, consistent with strong AA rating; delivered $30 billion to shareholders through dividends and share repurchases. $19.2M External engagement: strengthened shareholder engagement and understanding through increased access to Board, management, and IR; improved disclosures and other forums; institutional investment engagements exceeding key industry benchmark. Maintained strong emphasis on effectiveness of risk management framework 94% variable pay at risk with particular focus on signpost monitoring, health of key safeguards for highest risk areas and identification of emerging risks. In acknowledgement of these achievements, the Committee approved total direct compensation of $19.2 million. NEIL A. CHAPMAN, SENIOR VICE PRESIDENT Mr. Chapman is responsible for the past 14 yearsUpstream business and the enterprise-wide Technology and Engineering function. In 2022, Mr. Chapman provided strategic and executive oversight in the following areas: Operations: continued improvement in LTIR trend, additional emphasis on eliminating life altering accidents and fatalities; Upstream Scope 1 and 2 $ Salary 1.1M operated GHG emissions intensity decreased 25%, versus 2016. Financial: delivered record Upstream earnings, approximately $39 billion 27; on track to deliver $5 billion in structural efficiencies 12 by year-end 202313; over $4.5 billion in proceeds from divestments in 2022. Energy transition: completed detailed GHG emission-reduction roadmaps; 18 $17.5M eliminated routine flaring in Permian operated assets ; on track with 2030 net-zero Scope 1 and 2 plans for Permian unconventional operations; expanding carbon capture facilities in LaBarge, Wyoming, increasing annual CO2 capture capacity by approximately 1.2 million metric tons, in addition to the 6-7 million metric tons captured annually. Business portfolio: strengthening portfolio competitiveness, >90% of 94% variable pay at risk 2022-2027 capex for Oil and Flowing Gas projects delivering >10% return at $35/bbl17; all executives worldwide, includingLNG investments generate >10% return at $6/Mbtu 17; 10 additional discoveries in Guyana, increasing recoverable resources to nearly 11 Boeb; progressed global LNG growth strategy with P'nayang, Papua New Guinea, North Field East, and Qatar Gas Agreements; consolidated Technology and Engineering organization enabling improved portfolio prioritization. In acknowledgement of these achievements, the CEO
Bonus Program
Three performance factors determine the annual bonus and focus executives on sustainable growth in shareholder value:Committee approved total direct compensation of $17.5 million. 60 2023 Proxy Statement
1. | Size of annual bonus pool determined by a formula, aligned with change in annual earnings |
2. | Individual grant levels determined by business and individual performance (chart 8, page 33) |
3. | Half of annual bonus delayed until cumulative earnings per share (EPS) reach a specified level; EPS threshold at $6.50 in 2014/2015 |
2015 bonus represents 9 percent of CEO’s reported pay and is down 35 percent versus 2014, in line with change in earnings in 2015
Equity Program
Three design principles in combination result in performance and risk profiles aligned with the returns of long-term shareholders:
1. | Number of shares atgrantdetermined by business and individual performance (chart 8, page 33) |
2. | Value of shares atvestdetermined by share price at vest |
3. | Time betweengrant and vest aligned with investment lead times of the business |
Vesting periods for senior executives far exceed typical three-year vesting that is common across most industries
Stock awards vest 50 percent in 5 years from grant date and 50 percent in 10 years or retirement, whichever is later; these stock holding requirements are not accelerated upon retirement
Better aligns with time frames over which business decisions affect long-term shareholder value
Example – Stock Award Grant vs. Vest Period for CEO, assuming retirement in 2017
Performance criteria at grant allow ExxonMobil to have long vesting periods while maintaining a significant award performance basis
2015 stock award represents 67 percent of CEO’s reported pay; number of shares granted is consistent with 2014, reflective of ExxonMobil’s industry-leading performance in all 7 key areas over investment lead times of the business
(1) | The purpose of the two-thirds adjustment is to mitigate the impact of commodity price swings on short-term earnings performance. |
CEO Compensation
For definitions of the terms “Reported Pay,” “Realized Pay,” and “Unrealized Pay” as used in this Overview, as well as a list of our compensation benchmark companies, see Frequently Used Terms on page 38. (1) Interest rate changes: from 2.5% for 2012 to 3.5% for 2013; to 3.0% for 2014; to 2.75% for 2015. (2) In 2013, the change in pension value was negative (–$6.24 million), but under SEC reporting rules, a negative change in pension value must be shown in the Summary Compensation Table as zero. (3) Exercised last stock options granted in 2001 that would have expired in 2011. No stock options granted since 2001. (4) 2015 benchmark company data not available at time of publication.
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How did we perform?60 | | > | | | How do we link performance and pay? | | > | | How did we pay? | | > | | How do we manage risk?2023 Proxy Statement |
Long Vesting Periods
ExxonMobil’s vesting periods far exceed competitors, are strongly integrated with our business model, and are aligned with long-term shareholder interests
Resulting in extensive stock holding through the commodity cycle
Reflective of long investment lead times and well aligned with ExxonMobil’s business model
For both examples, and in both programs, 100 shares are granted each year from 2006 to 2016.
(1) ExxonMobil equity program: 50 percent of an annual grant of restricted stock or restricted stock units vests in 5 years and the other 50 percent vests in 10 years or retirement, whichever is later. (2) Hypothetical alternate formula-based program: percent of target shares that pay out depending on ExxonMobil’s relative three-year TSR rank versus our primary competitors: Chevron, Royal Dutch Shell, Total, and BP. TSR ranking has been determined by a Monte Carlo simulation that applies equal probability to each rank position. The Monte Carlo simulation method is consistent with U.S. GAAP accounting principles for valuing performance stock awards. Payout factors as follows: 200% of target if ranked 1; 150% of target if ranked 2; 75% of target if ranked 3; and 0% of target if ranked 4 or 5. (3) Annual data calculated as average of daily prices from U.S. Energy Information Administration (EIA).
Periodic Assessment
JACK P. WILLIAMS, JR., SENIOR VICE PRESIDENT Mr. Williams is responsible for the Product Solutions business and the enterprise-wide Global Projects function. In 2022, Mr. Williams provided strategic and executive oversight in the following areas: Operations: maintained industry-leading Downstream and Chemical LTIR performance, continued efforts to eliminate life altering incidents and fatalities; record North American refining throughput and highest globally since 201219; refining and chemicals businesses each operating in first quartile for greenhouse gas intensity. 28 Financial: delivered record $21.627 billion of Program Design
Theearnings from Energy, Chemical Salary and Specialty Products; on track to deliver $4 billion in structural efficiencies 12 $1.1M by year-end 2023.13 Energy transition: completed detailed GHG emission-reduction roadmaps; reached final investment decision on 20 Kbd Strathcona renewable diesel project 21; actively investing in 12 major projects to support ~10% reduction, versus 2016, in operated Scope 1 and 2 emissions intensity by 2030.29 $18.4M Business portfolio: consolidated industry-leading Downstream and Chemical businesses, >$700 million of value capture expected by year-end 2025; strengthened portfolio competitiveness with strategic projects delivering >30% returns 20; started up one of North America's largest advanced plastic waste recycling facilities capable of recycling >80 million pounds of plastic waste per year; reached agreement for sale of Billings, Trecate, and Sriracha 21 94% variable pay at risk refineries delivering >$1 billion of opex savings annually; Global Projects on track to deliver cost improvements >10%, resulting in value capture of $3.8 billion by 2027.30 In acknowledgement of these achievements, the Committee approved total direct compensation of $18.4 million. Angela F. Braly Chair, Compensation Committee periodically evaluates alternateExxon Mobil Corporation Our executives' pay is directly linked to the Company's commitment to drive sustainable growth in shareholder value while positioning the Company for long-term equity programs, includingsuccess in a methodology basedlower-emissions future, tackling head-on the challenge of strengthening energy supply security and creating solutions to support a lower-emissions future. The Company's 5-year plans reflect this commitment. In 2022, the Company delivered exceptional business results across all performance dimensions, amid significant organizational changes. Ongoing commitment to advantaged investments during the down-cycle and active cost management enabled the Company to realize the full benefit of current market conditions and deliver industry-leading results. You provided valuable input on three-year relative TSR
Charts 15the disclosure enhancements we introduced last year, which included greater detail on the performance dimensions and 16 demonstrate that such a program enables a faster payout schedule, not aligned with the Company’s business model nor the interests of long-term shareholders
In confirming the design of our long-term equity program,metrics the Compensation Committee took into consideration that:
| – | | Long-term equity programs in which performance criteria apply to the vest date require greater line of sight and thus shorter vesting periods |
| – | | Earlier payout schedules entail a leveraged formula that could focus executives on short-term results at the expense of long-term sustainable growth in shareholder value |
| – | | ExxonMobil executives see a one-for-one change in compensation through share price, aligned with the experience of the long-term shareholder |
| – | | After retirement, ExxonMobil senior executives continue to have grants unvested, which are at risk of forfeiture for 10 years, and cannot be used as collateral for any purpose |
A requirementassessed in its pay deliberations and greater transparency on the Company's role in the energy transition, a strategic objective on which the Committee continues to demonstrate leadershipplace focus. I look forward to our continued engagement and hope you will join the Board in all 7 key performance areas establishes a significant performance standard at grant which in turn allows ExxonMobil to maintain its uniquely long vesting periods
Sound Governance Practices
How our program encourages the highest performance standards:voting "FOR" Item 3. 2023 Proxy Statement 61
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| 2023 Proxy Statement | | Keeps executives focused on delivering industry-leading results over long periods of time, aligned with the Company’s business model |
ü | | Holds executives accountable for many years, extending well beyond retirement |
ü61 | | Aligns the financial gains or losses of each executive with the experience of long-term shareholders |
ü | | Supports retention and continuity of leadership by encouraging a career orientation |
How
OTHER COMPENSATION ELEMENTS RETIREMENT PLANS The Company's approach to talent development stems from the need to develop future leaders broadly and deeply given the complexity and long-term nature of the business. Retirement plans support the Company's talent management approach and are designed to attract and retain talent for a career. See our program discourages inappropriate risk taking:Investing in People supplement for more information. 5 Retirement plans include: Defined contribution plans, such as the Company's savings plans, that are attractive to new hires who can begin building an account balance immediately; and Defined benefit plans, such as the Company's pension plans, that help retain mid- and late-career employees until retirement age. These are viewed as primary vehicle for retirement planning. Retirement plans also strengthen commitment to high performance standards. Salary and bonus amounts that form the basis for these plans, are determined by individual performance. Named Executive Officers participate in the same savings and pension plans as all other U.S.-dollar-paid professional employees. Change-in-control is not a triggering event under any ExxonMobil benefit plan. Below are brief descriptions of the plans. See the Pension Benefits and Nonqualified Deferred Compensation sections on pages 73 to 75 for more details. Savings Plans Pension Plans Qualified ExxonMobil Savings Plan (EMSP) provides company- ExxonMobil Pension Plan (EMPP) provides a matching contribution of 7 percent of eligible salary if pension benefit when leaving the Company if age, employee contributes minimum 6 percent of salary service, and other provisions under the plan are met Subject to U.S. Internal Revenue Code limits on Subject to U.S. Internal Revenue Code limits on amount of pay taken into account and total amount compensation included and benefits paid of contributions Nonqualified Supplemental Savings Plan (SSP) provides Supplemental Pension Plan (SPP) provides continuation of Company-matching contribution pension benefits that cannot be paid from EMPP of 7 percent of eligible salary that would not otherwise due to U.S. Internal Revenue Code limits be made to the qualified Savings Plan due to IRS limitations Additional Payments Plan (APP) provides pension benefits tied to annual cash bonus Does not permit employee contributions 62 2023 Proxy Statement
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62 | | Extensive stock holding requirement through total compensation that is heavily weighted towards the equity program with long vesting periods | | | | 2023 Proxy Statement |
SHARE UTILIZATION The Compensation Committee establishes a ceiling for performance share awards on an annual basis. The overall number of shares underlying awards granted in 2022 represents dilution of 0.2 percent. This dilution results in a lower relative impact on earnings per share at time of grant versus compensation benchmark companies, and is 62 percent below the average of compensation benchmark companies, based on historical grant patterns. GRANTING PRACTICES The Compensation Committee grants annual incentive awards to the Company's senior executives at its regular November meeting. A committee comprised of ExxonMobil's CEO and Management Committee grants incentive awards to other eligible employees within the parameters of the bonus and performance share award ceilings approved by the Compensation Committee. This committee makes annual grants on a schedule aligned with the schedule of the Compensation Committee. The Committees may also grant awards as needed based on personnel developments within the parameters of the award ceilings approved by the Compensation Committee in November. The Company's compensation program does not include granting stock options. No stock options have been granted since 2001 and there are no plans to make such grants in the future. TAX MATTERS The Company does not provide tax assistance for either bonus or performance share awards. Starting in 2018, the U.S. Internal Revenue Code was amended so that annual compensation, including performance-based compensation, in excess of $1 million paid to the CEO, the Principal Financial Officer, and the other three most highly paid executives is not tax deductible by the Corporation, with an exception for compensation and benefits awarded or accrued prior to November 2017. Executives may not elect to defer any element of compensation. Nonqualified pension and other benefits have been designed in a manner intended to avoid additional taxes that could potentially be imposed on the recipients of such amounts by Section 409A of the U.S. Internal Revenue Code. This is achieved by setting the form and timing of distributions to eliminate executive and Company discretion. This section is based on the Company's interpretation of current U.S. tax laws. 2023 Proxy Statement 63
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| 2023 Proxy Statement | | Unvested stock awards and the delayed payout of half of the annual bonus are subject to forfeiture for resignation or detrimental activity, with no accelerated payout at retirement | | 63 | | |
RISK AND GOVERNANCE Executive Stock Ownership Long restriction periods on performance shares result in executives maintaining significant stock ownership during employment and for 10 years into retirement, the majority of which remain unvested Stock ownership far exceeds the typical standard ownership guideline of 6 times base salary Actual CEO stock ownership is 91 times salary resulting from 86 percent of unvested shares; similarly, stock ownership for other Named Executive Officers ranges from 32 to 76 times salary; at retirement the CEO and other Named Executive Officers will have approximately 70 percent of unvested shares outstanding that will vest over a 10-year period Average of all U.S.-dollar-paid executive officers is 54 times salary Significant Pay-at-Risk Uniquely long restriction periods on performance shares substantially increase the percentage of career compensation at risk well into retirement Unvested performance share awards cannot be used as collateral for any purpose Strong Forfeiture Provisions Unvested performance share awards are at risk of forfeiture in the event of early retirement and/or detrimental activity, even if such activity occurs or is discovered after retirement In the event of retirement prior to age 65 but after eligibility for early retirement (i.e., at least 55 years of age with at least 15 years of service), the Compensation Committee, in the case of an executive officer, must approve the retention of awards. Forfeiture provisions remain in place until an award has vested, including those that vest post retirement Clawback Policy In the event of a material negative restatement of ExxonMobil's reported financial or operating results, the Board is authorized to take actions as it deems necessary and appropriate, including the recoupment (clawback) of any bonus paid to an executive officer Policy reflects the Company's high ethical standards and strict compliance with accounting and other regulations applicable to public companies Anti-Hedging/ Derivative Policy Company policy prohibits all active executive, management, professional, or technical employees and directors from being a party to a derivative or similar financial instrument, including puts, calls, or other options, future or forward contracts, or equity swaps or collars, on ExxonMobil common stock or trading in the oil or gas futures markets Annual Assessment of Compensation Design Compensation Committee reviews the effectiveness and competitiveness of the compensation program design annually; this includes an assessment of alternate methodologies During this annual review, the Committee also considers the insights gained from extensive shareholder engagement throughout the year Independent Compensation Consultant Compensation Committee utilizes the expertise of an external independent consultant For more information, see page 36
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64 | | Strong bonus clawback policy | | | | 2023 Proxy Statement |
No Employment CEO and other Named Executive Officers are "at-will" employees and as such do not have Contracts employment contracts, severance agreements, or change-in-control arrangements with No Severance the Company Agreements Eliminates any real or perceived "safety net" with respect to job security and increases the risk and consequences to the individual for performance that does not meet the No Change-in-Control highest standards Arrangements No Guaranteed Bonus subject to year-on-year change in earnings performance; remains at risk Bonuses Demonstrated by bonus program suspension in 2020; no award granted No Additional Stock Compensation Committee sets the size of the performance share program and does not Grants to Balance support a practice of offsetting a loss or gain in the value of prior performance share grants Losses in Value by the value of current-year grants Such a practice would minimize the risk/reward profile of stock-based awards and undermine the long-term view that executives are expected to adopt No Accelerated Performance shares are not subject to acceleration, not even at retirement, except in the Vesting at Retirement case of death Unvested performance shares cannot be used as collateral for any purpose COMPENSATION PROGRAM UNDERPINNED BY STRONG GOVERNANCE PRACTICES THAT DISCOURAGE INAPPROPRIATE RISK TAKING 2023 Proxy Statement 65
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| 2023 Proxy Statement | | No employment contracts, severance agreements, or change-in-control arrangements |
ü | | Grant decisions based on share-denominated basis (versus price basis) reinforce risk/reward profile of our program |
ü65 | | No guaranteed bonuses or additional grants to balance changes in value of prior grants |
Our program is applied consistently to all executives, including the CEO
Shareholder Engagement and Prior Say-On-Pay Vote
Shareholder engagement strategy focuses on wide-ranging dialogue between numerous shareholders and management. For 2015, this included:
| – | | Individual conference calls on multiple occasions throughout the year with the Company’s largest shareholders; and, |
| – | | Webcast on May 14, 2015, available to all shareholders. |
These engagements provided an excellent opportunity to discuss alignment between performance and pay, as well as the Company’s long-standing philosophy that executive compensation should be based on long-term performance, aligned with the investment lead times of the business, as our Proxy materials demonstrate.
In assessing the executive compensation program, the Compensation Committee on multiple occasions:
| – | | Evaluated alternate methods of granting compensation; |
| – | | Carefully considered the results of the 2015 advisory vote on executive compensation and the insights gained from this extensive dialogue; and, |
| – | | Discussed this subject with its independent consultant. |
Based on this assessment, the Committee confirmed that the current compensation program best ensures an unwavering focus on the long-term performance of the business, which the Committee expects will continue generating strong operating and financial results for the benefit of the Company’s long-term shareholders.
The Committee respects all shareholder votes, both “For” and “Against” our compensation program, and is committed to continued engagement with shareholders to ensure a full understanding of diverse viewpoints.
Frequently Used Terms
FREQUENTLY USED TERMS Please also read the footnotes contained throughout this OverviewFootnotes on page 67 and the additional Frequently Used Terms in Exhibit A starting on page 109 for important information, including additional definitions and reconciliation of terms we usenon-GAAP measures. Performance Share Program is the terminology used to describe our long-term award program to better reflect the strong connection between performance and other important information.
pay. Compensation Benchmark Companies consist of AT&T, Boeing, Chevron, Ford, General Electric, General Motors, IBM, Johnson & Johnson, Pfizer, Procter & Gamble, Raytheon Technologies, and Verizon. These are the same companies noted in the 2022 Proxy Statement. Reported Payis Total Compensationtotal compensation as reported in the Summary Compensation Table, except for years 2006 to 2008, whereTable. Total Direct Compensation is compensation granted during the year, including salary, current year bonus, and the grant date fair value of restricted stock as provided under current SEC rules is used to put all years of compensation on the same basis.
performance shares. Realized Payis compensation actually received by the CEO during the year, including salary, currentcash bonus, payouts of previously granted Earnings Bonus Units (EBUs)earnings bonus units (EBU), net spread on stock option exercises, market value at vesting of previously granted stock-based awards, and All Other Compensation amounts realized during the year. It excludes unvested grants, change in pension value, and other amounts that will not actually be received until a future date. Amounts for compensation benchmark companies include salary, bonus, payouts of non-equity incentive plan compensation, and All Other Compensation as reported in the Summary Compensation Table, plus value realized on option exercise or stock vesting as reported in the Option Exercises and Stock Vested table. It excludes unvested grants, change in pension value, and other amounts that will not actually be received until a future date, as well as any retirement-related payouts from pension or nonqualified compensation plans.
Unrealized Payis calculated on a different basis fromthan the grant date fair value of awards used in the Summary Compensation Table. Unrealized Pay includes the value based on each compensation benchmark company’scompany's closing stock price at fiscal year-end 20142021 of unvested restricted stock awards; unvested long-term shareshare- and cash performancecash-performance awards, valued at target levels; and the “in"in the money”money" value of unexercised stock options (both vested and unvested). If a CEO retired during the period, outstanding equity is included assuming that unvested awards, as of the retirement date, continued to vest pursuant to the original terms of the award. Cash Flow from Operations and Asset Sales (CFOAS) is the sum of the net cash provided by operating activities and proceeds associated with sales of subsidiaries, property, plant and equipment, and sales and returns of investments from the Consolidated Statement of Cash Flows. For additional information, see Exhibit A starting on page 109. Return on Average Capital Employed (ROCE) for the Corporation is net income attributable to ExxonMobil excluding the after-tax cost of financing, divided by total corporate average capital employed. For this purpose, capital employed means the Corporation's net share of property, plant and equipment, and other assets less liabilities, excluding both short-term and long-term debt. For additional information, see Exhibit A starting on page 109. Total Shareholder Return (TSR) measures the change in value of an investment in stock over a specified period of time, assuming dividend reinvestment. TSR is subject to many different variables, including factors beyond the control of management. Share-denominated Approach: annual equity grant is based on a fixed number of shares; aligns award values with shareholder outcomes. ExxonMobil uses this approach; results in a greater degree of volatility than a dollar-denominated approach. Dollar-denominated Approach: annual equity grant is based on target dollar value with underlying units adjusted to achieve target value. Market common approach; results in less volatility than a share-denominated award. Corporate Officers refers to the Company's senior management team and includes, but is not limited to, the Corporation's "Executive Officers" as defined by SEC rules. The term includes persons who may be officers of affiliates, not of Exxon Mobil Corporation, and does not include all persons holding ExxonMobil officer titles. Stock Ownership includes vested shares, unvested restricted shares, and shares underlying unvested restricted stock units. Statements regarding plans, objectives, and other future events or conditions are forward-looking statements. See the "Cautionary Statement" included in Exhibit A starting on page 109 for important additional information about these statements, including factors that could cause actual results to differ materially.
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66 | | | | | | 2023 Proxy Statement |
FOOTNOTES 1 IOC peers: BP, Chevron, Shell, and TotalEnergies. 2 Total Direct Compensation, Benchmark Companiesconsist of AT&T, Boeing, Caterpillar, Chevron, Ford Motor Company, General Electric, IBM, Johnson & Johnson, Pfizer, Procter & Gamble, United Technologies,Realized Pay, and Verizon.Unrealized Pay are defined in the Frequently Used Terms on page 66. The Frequently Used Terms also identify the compensation benchmark companies. For consistency, CEO compensation versus compensation benchmark companies as discussed on pages 47 and 59 is based on compensation as disclosed in the Summary Compensation Table of the proxy statements as of AugustJuly 31, 2015.
Statements regarding future events2022. Benchmark company data for 2022 not available at time of publication. 3 Using the latest set of full-year 2022 performance data as of January 11, 2023. 4 ExxonMobil's 2030 plans are expected to result in a 20-30 percent reduction in corporate-wide greenhouse gas intensity, including reductions of 40-50 percent in upstream intensity, 70-80 percent in corporate-wide methane intensity, and 60-70 percent in corporate-wide flaring intensity. Based on Scope 1 and 2 emissions of ExxonMobil operated assets (versus 2016). ExxonMobil's reported emissions, reductions, and avoidance performance data are based on a combination of measured and estimated emissions data using reasonable efforts and collection methods. Calculations are based on industry standards and best practices, including guidance from the American Petroleum Institute (API) and Ipieca. There is uncertainty associated with emissions, reductions, and avoidance performance data due to variation in processes and operations, the availability of sufficient data, quality of those data and methodology used for measurement and estimation. Performance data may include rounding. Changes to performance data may be reported as part of the company's annual publications as new or conditionsupdated data and/or emission methodologies become available. We are forward-looking statements. Actual future results, including project plans, schedules,working to continuously improve our performance and results,methods to detect, measure, and address greenhouse gas emissions. 5 For more information, see the Annual Report included with ExxonMobil's 2023 Proxy Statement available on our website at exxonmobil.com/annualreport. See also Advancing Climate Solutions – 2023 Progress Report, Sustainability Report, and Investing in People supplement available at exxonmobil.com. These reports are for information only and are not incorporated as well aspart of the 2023 Proxy Statement. 6 Assumes no change to salary or award grant versus 2022, until age 65 retirement. 7 Bonus program is based on estimates of year-end earnings made in November of each year, such that payment can occur in that calendar year. The purpose of the two-thirds adjustment in the formula is to mitigate the impact of compensation incentives, could differ materially duecommodity price swings on short-term earnings performance. 8 Compensation Benchmark Comparator 2021 bonus maximum average 391 percent of salary. Maximum calculated for each benchmark company based on public information, resulting value divided by 2021 salary. 2022 data for benchmark companies not available at time of publication. 9 Benchmark companies are the same companies noted in the 2022 Proxy Statement. See Frequently Used Terms on page 66 for a full list of benchmark companies. Data represents the fiscal year ending in 2022. Excludes sales-based taxes and intersegment revenues. 10 Hydrocarbon, drilling fluid, and chemical spills greater than 1 barrel (bbl). 11 Capacity loss characterizes actual production levels versus the established demonstrated capacity of the operations. 12 See Exhibit A starting on page 109 for information on structural cost savings. 13 Versus 2019. 14 Capex in the range of $20-$25 billion per year from 2023-2027. 15 With advances in technology and the support of clear and consistent government policies, we aim to changes in oilachieve net-zero operated Scope 1 and gas prices2 GHG emissions by 2050. ExxonMobil's Scope 1 and 2 Net-Zero Ambition is backed by a comprehensive approach centered on detailed emission-reduction roadmaps for our major operated assets. Roadmaps may be updated as needed to reflect technology, policy, and other factors affecting our industry, technical or operating conditions,necessary developments including the development and other factors described in Item 1A “Risk Factors” in our most recent Form 10-K.acquisition of major operated assets. 16 Oil and Gas Climate Initiative Aiming for Zero, https://aimingforzero.ogci.com/ 17 Includes projects that bring on new volumes. Breakeven based on cost of supply to generate a minimum of 10-percent return on a money-forward basis. 18 References to oil-equivalent barrelsroutine flaring herein are consistent with the World Bank's Zero Routine Flaring Initiative/Global Gas Flaring Reduction Partnerships (GGFRP) principle of routine flaring, and other quantities of oilexcludes safety and gas herein include amounts not yet classified as proved reserves under SEC rules, but which we believe will ultimately be moved into the proved category and produced.
The term “project” can refer tonon-routine flaring. 19 On a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.
KEY ELEMENTS OF THE COMPENSATION PROGRAM
The Company’s executive compensation program consists of base salary, annual bonus, and long-term equity in the form of restricted stock or restricted stock units. The Company also provides retirement plans in the form of pension and savings plans.
The Compensation Committee determined that the following allocation of annual pay granted best supports the business model, as well as the values, principles, and objectives as described on pages 32 and 33. The actual allocation of these compensation elements can vary year-to-yearsite basis. 20 Return based on 2023 money-forward, remaining capex-weighted basis, for Product Solutions strategic projects (North America Polypropylene, Baytown Chemical Expansion, Singapore Resid Upgrade, China Chemical Complex, Beaumont light crude expansion, Fawley hydrotreater, Permian Crude Venture, and Strathcona renewable diesel) in 2027 at full capacity using 2010-2019 annual average margins. 21 Strathcona renewable diesel project final investment decision made January 2023. Reached agreement to sell interest in Esso Thailand, including the Sriracha Refinery, January 2023. 22 Current investment portfolio delivers >10% return on a capital-weighted basis under current and potential future government policies based on ExxonMobil projections. 23 ExxonMobil workforce: includes employees and contractors. Industry benchmark: International Association of Oil & Gas Producers (IOGP) safety performance indicators and American Fuel & Petrochemical Manufacturers (AFPM) Report of Occupational Injuries and Illnesses are the business.
Upstream and Downstream industry benchmarks, respectively. IOGP safety performance indicators data converted from incidents per 1,000,000 work hours to incidents per 200,000 work hours. 2022 industry data not available at time of publication. Performance data may include rounding. 24 Using the latest set of full-year performance data as of March 1, 2023. 25 Competitor data estimated on a consistent basis with ExxonMobil and based on public information. For definitions and more information, see Frequently Used Terms on page 66. See Financial Performance table below for data points. 26 Growth rate of an investor's holdings with reinvestment of dividends. For definition and more information, see Frequently Used Terms on page 66. See Financial Performance table below for data points. 27 Based on earnings excluding identified items. For additional details, see Exhibit A starting on page 109. 28 Based on Scope 1 and 2 emissions of ExxonMobil operated assets. Refining performance results based on ExxonMobil analysis of 2020 Solomon Associates' proprietary Carbon Emissions Index; Chemicals performance results based on ExxonMobil analysis of key competitors' publicly available information; annual data: 2016-2021. 29 Downstream and Chemical operated assets. 30 Since Global Projects formation in 2019. ROCE (%) CFOAS ($)* TSR (%) Financial Performance 10-yr avg 10-yr avg 2022 10-yr avg 2022 ExxonMobil 9.6 41.2 82.0 6.9 87.0 Chevron 6.9 30.0 52.2 9.6 58.1 Shell 6.0 46.6 67.7 3.7 36.2 TotalEnergies 6.2 28.6 49.0 8.0 35.0 BP 2.2 28.2 42.8 4.3 37.2 *dollars in billions
| | | | | | |
| 2023 Proxy Statement | | Percent of Annual Pay Granted* | | Objective |
Salary
67 | | 10 percent or less | | Provide a base level of income |
Annual Bonus
| | 10 to 20 percent | | Tie compensation to annual business performance |
Equity
| | Over 50 percent | | Achieve alignment with the interests of long-term shareholders |
| * | Annual Pay Granted for this purpose means total compensation shown in the Summary Compensation Table, minus Change in Pension Value and Nonqualified Deferred Compensation Earnings and All Other Compensation. |
Salary
Benchmarking determines the overall size of the salary program.
The level of annual salary is based on the executive’s individual performance, experience, and level of responsibility.
Salary decisions directly affect the level of retirement benefits since salary is included in retirement benefit formulas.
Annual Bonus
The Compensation Committee establishes the overall size of the annual bonus pool (“ceiling”) based on the annual percentage change in projected Corporate earnings, using the formula described on page 34. The program has been applied consistently for the last 14 years, including years in which earnings declined.
Individual bonus grants are determined by the performance award matrix on page 33, which differentiates award levels by individual performance and by pay grade. The performance award matrix is based on seven key financial and operating metrics.
The annual bonus is generally delivered as shown below.
| – | | Half of the annual bonus is delayed and paid out when a specified level of cumulative earnings per share (EPS) is achieved or in three years at a reduced level. This delayed payout feature further aligns the interests of executives with sustainable long-term growth in shareholder value. |
| – | | If the cumulative EPS threshold required for payout is not reached within three years, the EBU is reduced to an amount equal to the number of units times the actual cumulative EPS over the three-year period. This threshold ties the timing of the bonus payment to the rate of the Corporation’s future earnings and is therefore intentionally set at a level that is expected to be achieved within the three-year period. |
| – | | The delayed portion of the bonus is at risk of forfeiture (see page 43). |
| – | | The bonus award in its entirety is also subject to clawback (see page 43). |
Equity Awards
Equity-based compensation accounts for a substantial portion of annual pay granted, intended to align the personal financial interests of executives with the interests of long-term shareholders and to encourage along-term perspective.
Equity awards are granted in the form of restricted stock or restricted stock units (RSUs).
The performance award matrix on page 33 determines the size of individual equity awards and widely differentiates awards among eligible executives based on individual performance and pay grade.
• | | The Compensation Committee sets the size of the equity program and makes grant decisions on ashare-denominated basis rather than a price basis. The Committee does not support a practice of offsetting the loss or gain of prior equity grants by the value of current year grants, which would minimize the risk/reward profile of stock-based awards and undermine the long-term view that executives are expected to adopt. |
The Committee also compares the total value of long-term equity awards against the combined value of all forms of long-term awards by each compensation benchmark company through an annual benchmarking process (see pages 32 and 41).
No stock options have been granted since 2001 and there are no plans to make such grants in the future.
Vesting and Restriction Periods
Equity awards vest 50 percent in five years from grant date and 50 percent in 10 years or retirement, whichever is later.
Equity awards are not subject to acceleration, even at retirement, except in the case of death.
These vesting periods far exceed those applied by most companies across all industries and better align with the long time frames over which business decisions affect long-term shareholder value in our industry. For additional information on the benefits of long-term vesting, see page 36.
Unvested equity awards cannot be used as collateral for any purpose and are subject to forfeiture, even beyond retirement (see page 43).
Retirement Plans
Retirement plans include defined contribution plans, such as the Company’s savings plans, that are attractive to new hires as they can begin building an account balance immediately, and defined benefit plans, such as the Company’s pension plans, that are valuable in retaining mid- and late-career employees. The Named Executive Officers participate in the same savings and pension plans as other U.S. executives.
EXECUTIVE COMPENSATION TABLES SUMMARY COMPENSATION TABLE FOR 2022 Change in control is not a triggering event under anyPension Value and Nonqualified Non-Equity Deferred Stock Option Incentive Plan Compensation All Other Name and Salary Bonus Awards Awards Compensation Earnings Compensation Total Principal Position Year ($)1 ($)2 ($)3 ($) ($) ($)4 ($)5 ($) D.W. Woods 2022 1,703,000 6,382,000 24,939,000 0 0 2,506,363 378,868 35,909,231 Chairman and CEO 2021 1,615,000 3,142,000 13,505,225 0 0 5,137,153 173,110 23,572,488 2020 1,615,000 0 8,434,725 0 0 5,348,636 240,700 15,639,061 K.A. Mikells 2022 1,100, 000 4,376,000 13,744,160 0 0 701,823 91,842 20,013,825 Senior Vice President; CFO* 2021 437,500 1,932,000 11,257,116 0 0 178,518 81,568 13,886,702 N.A. Chapman 2022 1,100,000 4,035,000 12,369,744 0 0 3,566,197 113,653 21,184,594 Senior Vice President 2021 955,000 1,932,000 6,683,516 0 0 5,519,239 38,611 15,128,366 2020 955,000 0 3,941,691 0 0 3,377,567 82,090 8,356,348 J.P. Williams, Jr. 2022 1,100,000 4,206,000 13,056,952 0 0 3,764,611 94,331 22,221,894 Senior Vice President 2021 1,068,000 1,932,000 6,683,516 0 0 4,600,089 31,887 14,315,492 2020 1,044,667 0 3,501,440 0 0 3,334,733 68,468 7,949,308 K.T. McKee 2022 908,500 3,617,000 11,205,924 0 0 4,144,445 79,936 19,955,805 President, ExxonMobil benefit plan.
Savings Plans
Product Solutions* * Ms. Mikells joined the Company on August 9, 2021. Ms. McKee was appointed President, ExxonMobil Product Solutions Company April 1, 2022. TOTAL DIRECT COMPENSATION The qualified Savings Plan permits employees to make pre- or post-tax contributions and receive a Company-matching contribution of 7 percent of eligiblefollowing pro forma table displays total direct compensation, which includes salary, to the extent they contribute a minimum of 6 percent of salary. These contributions are subject to Internal Revenue Code limits on the amount of pay taken into account and the total amount of contributions. Qualified benefits are payable in a single lump sum or in partial withdrawals at any time after retirement.
The nonqualified Supplemental Savings Plan does not permit employee contributions but provides 7 percent of eligible pay to restore matching contributions that could not be made to the qualified plan due to Internal Revenue Code limits. The nonqualified savings plan balance is paid in a single lump sum six months after retirement.
Pension Plans
The pension plans (qualified and nonqualified) help to attract and retain employees at all levels of the Corporation until retirement age, consistent with the long-term nature of the Company’s business and its objective of promoting a long-term career.
The pension plans provide an annual benefit of 1.6 percent of final average pay per year of service, with an offset for Social Security benefits.
Pay for the purpose of pension calculations includes base salary and bonus, but does not include stock-based awards. Inclusion of the annual bonus in the pension formula further strengthens the performance basis of such bonuses.
Because pension benefits use final average pay applied to all years of service, the increase in pension values is greatest late in an employee’s career when compensation tends to be highest. This also enhances the retention of high-performing employees whose compensation typically increases as their job responsibilities expand.
The nonqualified Supplemental Pension Plan provides pension benefits to the extent annual salary exceeds the amount that can be considered in determining qualified pension benefits and to the extent other limits may apply to qualified benefits. Without the Supplemental Pension Plan, the retention power of the overall pension plan would be greatly reduced for employees earning more than that amount, since the increase in their pension values in mid- to late-career would be based on relatively flat final average pay.
The nonqualified Additional Payments Plan provides pension benefits with respect to the annual bonus, further supports retention and performance objectives, and reinforces the Compensation Committee’s practice of linking a greater proportion of compensation to business results for more senior-level executives.
For more information on the pension plans, see page 53.
KEY ADDITIONAL FEATURES OF THE COMPENSATION PROGRAM
Benchmarking Principles
Consistent with the Compensation Committee’s practice of using well-informed judgment to determine overall executive compensation, the Committee focuses on a broad orientation, generally a range around the median compensation of our benchmark companies, which provides the ability to:
| – | | Differentiate compensation based on experience and performance levels among executives; |
| – | | Minimize the potential for automatic ratcheting-up of compensation that could occur with a narrow target among benchmarked companies; |
| – | | Manage salaries based on a long-term career orientation; and |
| – | | Respond to changing business conditions. |
These benchmarking principles apply to salary, annual bonus, and long-term equity awards.
Whether an executive’s total compensation is near, substantially below, or above the median is a qualitative factorstock award value. In its pay deliberations, the Compensation Committee considers along with Company performance, individual performance, experience, and level of responsibility (see page 44).
The Compensation Committee uses an independent consultant to assist in this analysis as discussed in the Corporate Governance section on page 12.
For a list of thetotal direct compensation benchmark companies, see page 32.
Share Utilization
Each year, the Compensation Committee establishes a ceiling for long-term equity awards. The overall number of shares underlying awards granted in 2015 represents dilution of 0.2 percent. This dilution is more than 63 percent below the average of the companies benchmarked for compensation based on historical grant patterns. The effect is a lower relative impact on earnings per share at time of grant versus the compensation benchmark companies.
The Company has a long-established practice of purchasing shares in the open market and through negotiated transactions to offset the dilutive effect of shares issued under the equity program.
Granting Practices
The Compensation Committee grants incentive awards to the Company’s senior executives at its regular November meeting and does not do so by written consent. The Committee also made a bonus and equity award grant to Mr. Woods in December 2015 at the time of his election as President.
A committee comprised of ExxonMobil’s Chairman, President, and Senior Vice Presidents grants incentive awards to other eligible employees, within the parameters of the bonus and equity award ceilings approved by the Compensation Committee. The schedule of the Compensation Committee determines when this committee meets to make such grants.
The Compensation Committee does not award additional grants to offset any decline in value of prior grants. Additionally, a share-denominated grant basis ensures that the interests of executives are aligned with those of long-term shareholders (see page 40).
Stock Ownership
In order to further align the interests of our senior executives with the interests of long-term shareholders and to ensure they have a significant stake in the sustainable long-term success of the Corporation, it is ExxonMobil’s policy that executives hold significant amounts of restricted stock or restricted stock units for multiple years after retirement.
Equity awards cannot be used as collateral for any reason during the period of restriction, even during retirement.
With over 50 percent of total compensation awarded in long-term equity with long vesting periods, stock ownership of ExxonMobil executives far exceeds the ownership guidelines of most companies.
The table below shows stock ownership, including shares underlying RSUs, as a multiple of salary and the percentage of shares that are still subject to restrictions for the Named Executive Officers as well as the average for all current U.S.-dollar-paid executive officers as of year-end 2015.
| | | | | | | | |
| Name | | Dollar Value of Stock Ownership as a Multiple of Salary | | | Percent of Shares/Units Restricted | |
R.W. Tillerson | | | 64 | | | | 77 | |
D.W. Woods | | | 28 | | | | 89 | |
A.P. Swiger | | | 50 | | | | 73 | |
M.W. Albers | | | 46 | | | | 90 | |
M.J. Dolan | | | 53 | | | | 83 | |
All Other U.S.-Dollar-Paid Executive Officers (Average) | | | 29 | | | | 80 | |
Hedging Policy
Company policy prohibits all active employees, including executives, from entering into put or call options on ExxonMobil common stock or futures contracts on oil or gas.
Clawback Policy and Forfeiture Provisions
In the event of a material negative restatement of ExxonMobil’s reported financial or operating results, the Board is authorized to take actions as it deems necessaryexcludes the volatility that results from changes in pension value and appropriate, including the recoupment (clawback) of any bonus (cash or earnings bonus units) paid to an executive officer. This recoupment policy reflects the Company’s high ethical standards and strict compliance with accounting and other regulations applicable to public companies.
The delayed portion of the annual bonus and unvested long-term equity awards are at risk of forfeiture in case of early retirement and/or detrimental activity if an executive:
| – | | Leaves the Company before standard retirement time (defined as age 65 for U.S. employees). In the event of retirement prior to the age of 65 but after eligibility for early retirement (i.e., age 55 to 64), the Compensation Committee, in the case of an executive officer, must approve the retention of awards. |
| – | | Engages in activity that is detrimental to the Company, even if such activity occurs or is discovered after retirement. |
Employment Arrangements
• | | The CEO and other senior executives are “at-will” employees and as suchdo not have employment contracts, severance agreements, or change-in-control arrangements with the Company. |
This eliminates any real or perceived “safety net” with respect to job security and increases the risk and consequences to the individual of performance that does not meet the highest standards.
Tax Matters
The Company does not provide tax assistance for either bonus or equity awards.
The bonus and equity programs are structured with the intention to meet the requirements for deductibility as performance-based compensation under Section 162(m) of the Internal Revenue Code. This permits the Company to deduct certain compensation paid to the CEO and the other three most highly paid executives other than the Principal Financial Officer (PFO) if compensation is in excess of $1 million.
| – | | The material terms of performance goals under the bonus and equity programs were previously approved by shareholders and were established to meet tax regulations. In order to grant any incentive awards to the covered executives, the Corporation must achieve positive net income (earnings). If positive earnings are achieved, individual awards to these executives are subject to a maximum cap of 0.2 percent of earnings in the case of bonus awards, and 0.5 percent of earnings in the case of equity awards. Equity awards to the covered executives for purposes of Section 162(m) of the Internal Revenue Code are made only under the “performance stock” provisions of the 2003 Incentive Program, which include the shareholder-approved goal and cap. The Compensation Committee has no authority to amend or change the shareholder-approved goals. |
| – | | These terms do not represent the actual financial and operational goals the Company expects our senior executives to achieve. Actual award levels are determined based on the achievement of financial and operating goals as described on page 33 and are below the shareholder-approved caps. |
Salaries for senior executives may be set at levels that exceed the U.S. income tax law limitation on deductibility. The primary drivers for determining the amount and form of executive compensation are the retention and motivation of superior executive talent rather than the Internal Revenue Code.
Executives may not elect to defer any element of compensation prior to retirement.
Nonqualified pension and other benefits have been designed in a manner intended to avoid additional taxes that could potentially be imposed on the recipients of such amounts by Section 409A of the Internal Revenue Code. This is achieved by setting the form and timing of distributions to eliminate executive and Company discretion.
The above discussion of tax consequences is based on the Company’s interpretation of current U.S. tax laws.
COMPENSATION COMMITTEE 2015 DECISIONS
ExxonMobil’s business model is reflective of a capital-intensive industry requiring long investment lead times and a significant focus on risk management. The structure of our compensation program fully supports this business model and aligns the interests of our executives with long-term shareholders. This is particularly relevant given the current state of the industry.
ExxonMobil conducts business in a volatile commodity price environment and positions itself to achieve industry-leading returns regardless of industry conditions. We continue to create value for our shareholders by confidently and prudently investing through the price cycle to meet long-term energy demand growth. Our integrated business enables us to optimize economic returns across the oil and gas value chain. The Corporation’s success requires a strong culture of performance, a long-term orientation, and constancy of purpose among senior executives, all of which are reinforced by the design of our compensation program.
The Compensation Committee sets compensation for Named Executive Officers and senior executives consistent with the compensation design objectives and general principles outlined on pages 32 and 33.
Performance Measurements
The Compensation Committee assesses the CEO’s performance and documents the basis on which compensation decisions are made.
Similarly, the CEO reviews the performance of all other senior executives with the Board of Directors during the annual executive development review in October of each year. In additioncompensation. See pages 58 to this formal annual assessment, the Board also assesses the performance of all senior executives throughout the year during specific business reviews and Board Committee meetings.
Industry-leading performance across companies within the oil and gas industry of comparable scale and complexity and over investment lead times of the business is required in seven key performance areas to achieve a top quintile award (see page 33). While the seven key metrics are not assigned a specific weight, safety performance and return on average capital employed (ROCE) are given highest priority.
Executive Officers are expected to perform at the highest level, as detailed on page 33.
| – | | Outstanding performance in one area will not cancel out poor performance in another. |
| – | | A violation of the Company’s code of business conduct could result in elimination of an officer’s incentive award for the year, as well as termination of employment and/or cancellation of all previously granted awards that have not yet vested or been paid. |
The Committee also takes into account leadership in sustaining sound business controls and a strong ethical and corporate governance environment. Experience and level of responsibility are also considered in assessing the contributions of individual executives. Career service61 for Named Executive Officers ranges from 23 to more than 40 years. Their most recent responsibilities are outlined below.
details. Total Direct Salary Bonus Stock Awards Compensation Name Year ($)1 ($)2 ($)3 ($) D.W. Woods 2022 1,703,000 6,382,000 24,939,000 33,024,000 2021 1,615,000 3,142,000 13,505,225 18,262,225 2020 1,615,000 0 8,434,725 10,049,725 K.A. Mikells 2022 1,100,000 4,376,000 13,744,160 19,220,160 2021 437,500 1,932,000 6,683,516 9,053,016 N.A. Chapman 2022 1,100,000 4,035,000 12,369,744 17,504,744 2021 955,000 1,932,000 6,683,516 9,570,516 2020 955,000 0 3,941,691 4,896,691 J.P. Williams, Jr. 2022 1,100,000 4,206,000 13,056,952 18,362,952 2021 1,068,000 1,932,000 6,683,516 9,683,516 2020 1,044,667 0 3,501,440 4,546,107 K.T. McKee 2022 908,500 3,617,000 11,205,924 15,731,424 68 2023 Proxy Statement
| | | | | | |
Name68 | | Principal Position |
R.W. Tillerson | | – Chairman of the Board and CEO since 2006
– President and member of the Board since 2004, and President through 2015
– More information regarding his career history is on pages 8 and 19
|
D.W. Woods | | – President and member of the Board since January 1, 2016
– Senior Vice President in 2014 and 2015
– More information regarding his career history is on pages 8 and 20
|
A.P. Swiger | | – Principal Financial Officer (PFO) since 2013
– Senior Vice President since 2009
|
M.W. Albers | | – Senior Vice President since 2007
|
M.J. Dolan | | – Senior Vice President since 2008
2023 Proxy Statement |
Pay Awarded to Named Executive Officers
The Compensation Committee determined and approved the individual elements of compensation as well as total compensation for each Named Executive Officer as described below and shown in the tables beginning on page 47.
Within the context of the compensation program structure and performance assessment process described previously, the Committee aligned the value of 2015 compensation for the Named Executive Officers with the performance of the Company, individual performance, and compensation of benchmark companies.
Pages 30 and 31 illustrate ExxonMobil’s 2015 industry-leading performance against companies of similar scale and complexity in our industry in all seven key performance areas. Additionally, the Company has a diverse and balanced portfolio of high-quality operations, projects, and new opportunities across our Upstream, Downstream, and Chemical businesses.
Upstream
| – | | Added 1.4 billion oil-equivalent barrels of new resource and maintained a total resource base of 91 billion oil-equivalent barrels. |
| – | | Completed six major Upstream projects with working interest production capacity of almost 300 thousand oil-equivalent barrels per day, highlighted by two deepwater projects offshore West Africa and an expansion of the Kearl development in Canada. |
| – | | Made a significant oil discovery offshore Guyana, with additional exploration planned in 2016. |
Downstream
| – | | Achieved record sales of our industry-leading synthetic lubricants, includingMobil 1. |
| – | | Started up the Edmonton Rail Terminal, facilitating delivery of equity crude oil to ExxonMobil and industry refineries. |
| – | | Approved funding to expand the hydrocracker at our refinery in Rotterdam, Netherlands, utilizing proprietary hydrocracking technology to produce high-quality lube basestocks and ultra-low sulfur diesel to meet growing demand. |
Chemical
| – | | Invested $2.8 billion with selective investments in specialty business growth, advantaged feedstock capture, high-return efficiency projects, and low-cost capacity debottlenecks. |
| – | | Progressed construction on major expansions at our Texas facilities and on a new 230-thousand-tonnes-per-year specialty polymers project in Singapore. |
| – | | Progressed construction of a joint venture specialty elastomers facility in Saudi Arabia that will produce higher-margin synthetic rubber products. |
More details on ExxonMobil’s strategic business results and strategies are available in theSummary Annual Report included with the 2016 Proxy Statement.
The Compensation Committee also used tally sheets that show the individual elements of compensation and benefits, including retirement, to understand how decisions on each compensation element affect each Named Executive Officer’s total compensation.
The compensation allocation and a description of the changes in compensation in 2015 based on the Summary Compensation Table on page 47 are provided below. The method of determining the individual level of bonus and RSUs in 2015 is described on page 33.
| – | | The higher level of compensation for Mr. Tillerson as CEO versus the other Named Executive Officers reflects his greater level of responsibility including ultimate responsibility for the performance of the Corporation and oversight of the other senior executives. |
2015 Compensation for Named Executive Officers
Salary
��� | | Changes in salary from the prior year are consistent with the base salary program for all U.S. executives, taking into account desired market orientation, individual performance, increased individual experience, and level of responsibility. |
Bonus (Cash plus full value of EBU award)
The Compensation Committee established a ceiling for the 2015 bonus program of $131 million versus $207 million in 2014. The size of the bonus program compared to 2015 corporate earnings of $16.2 billion is 0.8 percent of earnings. The size of the bonus program is directly linked to Corporate earnings as described on page 39.
The cumulative EPS, or threshold, required for payout of the delayed portion (i.e., EBU) was $6.50 per unit in 2014/2015 and gradually increased since 2001 from $3.00 per unit.
The annual bonuses in 2015 were down 35 percent for Mr. Tillerson and approximately 25 percent for Messrs. Swiger, Albers, and Dolan due to an increase in their pay grade. Mr. Woods’ award reflected an increase in his pay grade and his election as President.
Equity Awards
The number of RSUs granted in 2015 was the same as in 2014 for Mr. Tillerson and is reflective of ExxonMobil’s industry-leading performance as described on pages 30 and 31. The grant level was increased for the other Named Executive Officers primarily to reflect their transition to higher pay grades as previously noted.
The grant date fair value of each underlying share was lower in 2015, in line with the lower stock price on the 2015 grant date compared to 2014.
Pension (Change in Pension Value)
The lower lump sum interest rate for 2015 (2.75 percent) versus 2014 (3 percent) is a contributing factor to the pension accruals. These values are estimates; the actual value will be determined at the time each individual retires from the Company.
A breakdown of the factors that determined the change in Mr. Tillerson’s pension in 2015 is in the narrative to the Summary Compensation Table on page 48.
All Other Compensation
This category comprises all other compensation as shown in the Summary Compensation Table and as explained in more detail on pages 49 and 50.
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table for 2015
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | | Salary ($) | | | Bonus ($) | | Stock Awards ($) | | | Option Awards ($) | | | Non- Equity
Incentive
Plan
Compen- sation ($) | | | Change in Pension Value and Nonqualified Deferred Compen- sation Earnings ($) | | | All Other Compen- sation ($) | | | Total ($) | |
R.W. Tillerson Chairman and CEO | |
| 2015
2014 2013 |
| |
| 3,047,000
2,867,000 2,717,000 |
| | 2,386,000
3,670,000 3,670,000 | |
| 18,288,000
21,420,000 21,254,625 |
| |
| 0
0 0 |
| |
| 0
0 0 |
| |
| 3,036,167
4,683,892 0 |
| |
| 540,291
455,420 496,704 |
| |
| 27,297,458
33,096,312 28,138,329 |
|
D.W. Woods President(1) | | | 2015 | | | | 736,667 | | | 1,219,000 | | | 7,241,492 | | | | 0 | | | | 0 | | | | 954,492 | | | | 143,221 | | | | 10,294,872 | |
A.P. Swiger Senior Vice President; PFO | |
| 2015
2014 2013 |
| |
| 1,228,750
1,142,500 1,052,500 |
| | 1,409,000
1,876,000 1,876,000 | |
| 8,648,192
8,644,160 8,577,422 |
| |
| 0
0 0 |
| |
| 0
0 0 |
| |
| 3,489,861
4,355,277 640,703 |
| |
| 126,559
116,619 112,596 |
| |
| 14,902,362
16,134,556 12,259,221 |
|
M.W. Albers Senior Vice President | |
| 2015
2014 2013 |
| |
| 1,232,500
1,162,500 1,092,500 |
| | 1,409,000
1,876,000 1,876,000 | |
| 8,648,192
8,644,160 8,577,422 |
| |
| 0
0 0 |
| |
| 0
0 0 |
| |
| 3,277,380
4,337,214 0 |
| |
| 129,265
135,215 111,791 |
| |
| 14,696,337
16,155,089 11,657,713 |
|
M.J. Dolan Senior Vice President | |
| 2015
2014 2013 |
| |
| 1,322,500
1,252,500 1,175,000 |
| | 1,635,000
2,168,000 2,168,000 | |
| 10,078,720
10,129,280 10,051,076 |
| |
| 0
0 0 |
| |
| 0
0 0 |
| |
| 1,565,725
2,360,606 395,472 |
| |
| 147,587
139,827 126,600 |
| |
| 14,749,532
16,050,213 13,916,148 |
|
(1) | Mr. Woods was Senior Vice President in 2015 and elected President of ExxonMobil and member of the Board of Directors effective January 1, 2016. |
Terms of Employment Agreements
ExxonMobil’s senior executives are “at-will” employees and do not have employment agreements.
Salary
1 Salary. Effective January 1, 2016,2023, the annual salary was increased for Mr. Tillerson to $3,167,000; and Mr. Woods to $1,000,000. Effective April 1, 2016, the annual salary was increased for$1,875,000; Ms. Mikells to $1,221,000; Mr. SwigerChapman to $1,300,000;$1,199,000; Mr. AlbersWilliams to $1,300,000;$1,210,000; and Mr. DolanMs. McKee to $1,400,000.
Refer to page 39 for$1,063,000. For more detailsdetail on the design of the salary program and pages 44 to 46 for more details ondeterminations made by the Compensation Committee 2015 decisions.
Salary is not deductible by the Corporation to the extent that it exceeds $1 million for any Named Executive Officer (other than the PFO).
Bonus
in 2022, see page 54. 2 Bonus. The 20152022 bonus was paid one-half in cash at the time of grant. The Company delays payment of the balance until cumulative earnings reach $6.50 per share. Delayed bonus amounts do not earn interest.
Refer to page 39 forFor more details on the design of the bonus program and pages 44 to 46 for more details ondeterminations made by the Compensation Committee 2015 decisions.
in 2022, see page 54. 3 Stock Awards
Awards. In accordance with disclosure regulations, the valuation of stock awards in this table represents the grant date fair value, which is equal to the number of RSUsperformance shares awarded times the grant price. GrantThe grant price is deemed to be the average of the high and low sale prices on the NYSE on the grant date: $81.28 ondate of grant. Grant Date Grant Price ($) November 30, 2022 110.84 November 23, 2021 62.82 November 24, 2015; $76.03 on December 9, 2015 (with respect to a supplemental2020 41.15 For Ms. Mikells, the amount in the Summary Compensation Table for 2021 also includes an initial one-time award made to Mr. Woodsof performance shares granted in connection with his election as President); $95.20her hiring by the Corporation on November 25, 2014; and $94.47 on November 26, 2013.
Refer to page 40 for more details onAugust 9, 2021; grant price was $57.17. The Total Direct Compensation pro forma table excludes the design of the equity program and pages 44 to 46 for more details on the Compensation Committee 2015 decisions.
Dividends or dividendone-time grant. Dividend equivalents paid on restricted stock or RSUperformance share awards are reflected in the grant date fair value and, therefore, are not shown in the table.
For more details on the design of the performance share program and determinations made by the Compensation Committee in 2022, see pages 52 to 53 and notes to the tables on pages 71 and 72. 4 Change in Pension Value and Nonqualified Deferred Compensation Earnings
Compensation. The amounts shown in this column in the Summary Compensation Table solely represent the positive change in pension value. SEC regulations do not allow for inclusion of negative pension amounts in the Summary Compensation Table. The Corporation’sCompany's nonqualified deferred compensation plan (Supplemental Savings Plan) does not permit accrual of above-market or preferential earnings.
Pension Value
The change in pension value shown in the table for 20152022 is the increase between year-end 20142021 and year-end 20152022 in the present value of each executive’sexecutive's pension benefits under the plans described in more detail beginning on page 53.
For each year end, the data reflect an annuity beginning at age 60 (or current age if over 60) equal to 1.6 percent of the participant’s covered compensation multiplied by years of service at year end. These values are converted to lump sums using the plan’s applicable interest rate and other factors as of each year.
| – | | For plan participants who had attained age 50 with at least 10 years of service before January 1, 2008 (including all Named Executive Officers except Mr. Woods), the lump sum interest rates for an employee who worked through the end of 2014 was 3 percent and through the end of 2015 was 2.75 percent. |
| – | | For other participants (including Mr. Woods), the plan specifies short-, medium- and long-term interest rate assumptions for this purpose. The lump sum interest rates for an employee who worked through the end of 2014 were 1.32 percent, 3.92 percent, and 5 percent, respectively, and through the end of 2015 were 1.69 percent, 4.08 percent, and 5.03 percent, respectively. |
For employees under age 60, these age-60 lump sums are discounted to present values based on the time difference between the individual’s age at year-end 2015 and age 60 (and at year-end 2014 and age 60) using the interest rates for financial reporting of pension obligations as of each year end. The discount rate for determining the present value of benefits was 4 percent as of year-end 2014 and 4.25 percent as of year-end 2015.
The difference between the two year-end amounts represents the annual increase in the value of the pension shown in the Summary Compensation Table.
For Mr. Tillerson, the change in pension value for 2015 represents a 4.6-percent increase in the present value of his pension benefits as shown in the Pension Benefits table on page 53.plans. The following table provides a breakdown of the underlying factors.
factors impacting the change in pension value for 2022. For a description of the pension plans and the present value calculation, see pages 62 and 74. D.W. Woods K.A. Mikells N.A. Chapman J.P. Williams, Jr. Factors $ % $ % $ % $ % Interest Rates -11,238,835 -35 -297,958 -167 -7,845,960 -30 -7,979,610 -33 Final Average Bonus 10,993,125 34 512,866 287 10,126,043 39 9,888,809 41 Final Average Salary 535,642 2 0 0 750,741 3 378,345 2 Age and Service 2,216,431 7 486,915 273 535,373 2 1,477,067 6 Change in Value 2,506,363 8 701,823 393 3,566,197 14 3,764,611 16 2023 Proxy Statement 69
| | | | | | |
| Factors | | Change in Pension
Value (Percent) | | Change in Present Value ($) | |
Lower Lump Sum Interest Rate | | 2.6 | | | 1,693,212 | |
Change in Final Average Bonus | | 0 | | | 0 | |
Change in Final Average Salary | | 2.3 | | | 1,536,996 | |
Age and Service | | –0.3 | | | –194,041 | |
Total | | 4.6 | | | 3,036,167 | |
| | | | | | |
| 2023 Proxy Statement | | | | 69 | | |
5 All Other Compensation
Compensation. The following table breaks down the amounts included in the All Other Compensation column of the Summary Compensation Table for 2015.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Life Insurance ($) | | | Savings Plan ($) | | | Personal
Security ($) | | | Personal Use of
Company | | | Financial
Planning ($) | | | Relocation ($) | | | Total ($) | |
| | | | | Aircraft ($) | | | Properties/Car ($) | | | | |
R.W. Tillerson | | | 96,054 | | | | 213,290 | | | | 122,675 | | | | 73,856 | | | | 23,726 | | | | 10,690 | | | | 0 | | | | 540,291 | |
D.W. Woods | | | 0 | | | | 51,567 | | | | 15,184 | | | | 0 | | | | 61 | | | | 9,363 | | | | 67,046 | | | | 143,221 | |
A.P. Swiger | | | 25,215 | | | | 86,013 | | | | 4,641 | | | | 0 | | | | 0 | | | | 10,690 | | | | 0 | | | | 126,559 | |
M.W. Albers | | | 25,319 | | | | 86,275 | | | | 961 | | | | 0 | | | | 6,020 | | | | 10,690 | | | | 0 | | | �� | 129,265 | |
M.J. Dolan | | | 41,712 | | | | 92,575 | | | | 1,757 | | | | 0 | | | | 853 | | | | 10,690 | | | | 0 | | | | 147,587 | |
2022. Personal Use Life Insurance
TheSavings Personal of Company offers senior executives term life insurance or a Company-paid death benefit. The Company eliminated this program for all newly eligible executives as of October 2007, but retained it for all current participants. All Named Executive OfficersFinancial Name Insurance ($) Plan ($) Security ($) Aircraft ($) Planning ($) Relocation ($) Total ($) D.W. Woods 0 119,210 88,971 158,286 12,401 0 378,868 K.A. Mikells 0 77,000 999 0 0 13,843 91,842 N.A. Chapman 34,465 77,000 2,188 0 0 0 113,653 J.P. Williams, Jr. 0 77,000 4,930 0 12,401 0 94,331 K.T. McKee 0 63,595 3,940 0 12,401 0 79,936 Life Insurance. Messrs. Woods and Williams, and Mmes. Mikells and McKee participate in the program except for Mr. Woods who participates only in the Company’sCompany's broad-based employee life insurance program.
Coverage under either optionprogram that provides coverage that equals 2 times base salary as an active employee. As permitted by disclosure regulations, the premium cost for a broad-based employee life insurance program is not required to be reported and therefore is excluded from this table. Mr. Chapman participates in the Company's senior executive term life insurance program that provides coverage of 4 times base salary until age 65 and a declining multiple thereafter until age 75, at which point the multiple remains at 2.5 times salary.
The Company eliminated this program for all newly eligible senior executives as of October 2007. For executives with senior executive term life insurance coverage, the premium cost in any year depends on overall financial and mortality experience under the group policy. For executives electing the death benefit, there is no cash cost until the executive dies, as benefits are paid directly by the Company.
The amount shown is based on Internal Revenue Code tables used to value the term cost of such coverage. This valuation is applied since the actual life insurance premium is a single payment for a large group of executives that does not represent the cost of insuring one specific individual; and because one of theindividual. Savings Plan. The Named Executive Officers has electedparticipate in the death benefit, the long-term cost of which is comparable to the insurance.
Savings Plan
same savings plan program as other U.S.-dollar-paid employees. The amount shown is the value of Company-matching contributions under ExxonMobil’sExxonMobil's tax-qualified savings plan and Company credits under the related nonqualified supplemental plan.
The Company matching contribution is 7 percent, which is consistent with the matching contribution for all employees participating in For a description of the savings plan.
The nonqualified supplemental plan, provides all affected employees with the 7-percent Company credit to which they would otherwise be entitled as a matching contribution under the qualified plan if not for limitations under the Internal Revenue Code.
see page 62. The value of the credits to the nonqualified supplemental plan is also disclosed in the Nonqualified Deferred Compensation table on page 55.
75. Personal Security
Security. The Company provides security for itsall employees, as appropriate based on an assessment of risk, which includes consideration of the employee’semployee's position and work location.
Personal security for employees is aligned with the intent of the Company's security program to help employees securely and safely conduct business. The Company does not consider any such security costs to be personal benefits since these costsbecause they arise from the nature of the employee’semployee's employment by the Company. However, the disclosure regulations require certain security costs to be reported as personal benefits.
The amountsbenefits for the CEO and other Named Executive Officers in the Summary Compensation Table. Due to the public profile of the CEO and Named Executive Officer roles and credible threat assessment, the following security services were provided and the associated costs shown in the table include the following types of security-related costs:table: security systems at executiveprimary residences; security services and personnel (at residences and/or during personal travel);travel, car and personal security driver; and Company communications equipment. Costs of securitydriver. Security costs related to travel for business purposes are not included.
The car provided for security reasons and used primarily for commuting is valued based on the annualized cost of the car plus maintenance and fuel. Reported costs for rental cars utilized due tofor security concernsreasons during personal travel are the actual incremental costs.
For security personnel employed by the Company, the cost is the actual incremental cost of expenses incurred by the security personnel. Total salary, wages, and benefits are not allocated because the Company already incurs these costs for business purposes.
For security contractors, the cost is the actual incremental cost of such contractors associated with the executive’sexecutive's personal time.
70 2023 Proxy Statement
| | | | | | |
70 | | | | | | 2023 Proxy Statement |
For Mr. Tillerson,Woods, the amount shown includes $84,310includes: – $16,152 for residential security; – $42,015 for security costs related to personal travel; and $27,013– $30,804 for the cost of histhe car provided for security reasons as described above. The remainder is forAircraft. Similarly, based on the same security costs relating to personal travel and other communications equipment to conduct business in a secure manner.
Aircraft
For security reasons,considerations, the Board requires the Chairman and CEO to use the Company aircraft for both business and personal travel. The Compensation CommitteeBoard considers these costs to be necessary security-related business expenses rather than perquisites, but perperquisites. Per the disclosure regulations, the incremental cost of aircraft usage for personal travel is reported.
Incremental cost for personal use of the aircraft is based on direct operating costs (fuel, airport fees, incremental pilot costs, etc.) and does not include capital costs of the aircraft since the Company already incurs these costs for business purposes.
Properties/Car
The Company owns or leases various venues for the purposecombined cost of business entertainment, including boxescar and season tickets to sporting events and recreation and conference retreat properties. When these venues are not in use for business entertainment, they may be available to executives and other personnel.
The table shows the incremental cost incurred for any personal use of these venues by the Named Executive Officers. Cost for this purpose is based solely on incremental operating costs (catering, transportation, incremental employee or contractor costs, etc.) and does not include annual or capital costs of these venues since the Company already incurs these costs for business purposes.
The amount shown also includes the incremental costaircraft for personal use due to security considerations, is at the 35th percentile of a Company car, which isbenchmark companies based on an assumed cost2021 data (2022 benchmark data not disclosed at time of $0.58 per mile. Driver personnel costs are not allocated because the Company already incurs these costs for business purposes.
publication). Financial Planning
Planning. The Company provides financial planning services to senior executives, which includesincluding tax preparation. This benefit is valued based on the actual charge for the services.
Relocation
The Company eliminated this benefit for all newly eligible senior executives as of January 2021. The Company continues to make a broad-based financial planning program available for all U.S.-dollar-paid employees. Relocation. The Company provides relocation assistance to all eligible employees on a consistent basis.
The amount shown for Mr. WoodsMs. Mikells represents $66,446$8,396 for relocation costs paid on her behalf or reimbursed to him or paid on his behalf,her, and $600$5,447 for tax paymentsreimbursement related to these relocation payments.
Grants GRANTS OF PLAN-BASED AWARDS FOR 2022 All Other All Other Estimated Estimated Stock Option Future Payouts Future Payouts Awards: Awards: Exercise Grant Date Under Non-Equity Under Equity Number of Plan-BasedNumber of or Base Fair Value Incentive Plan Awards for 2015
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Grant Date | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All
Other Stock Awards: Number of
Shares of Stock or Units (#) | | | All Other Option Awards: Number
of Securities Under- lying Options (#) | | | Exercise
or Base
Price of
Option Awards ($/Sh) | | | Grant
Date Fair
Value of
Stock and
Option
Awards
($) | |
| | | Thresh
-old ($) | | | Tar- get ($) | | | Maxi- mum ($) | | | Thresh -old (#) | | | Tar- get (#) | | | Maxi- mum (#) | | | | | |
R.W. Tillerson | | | 11/24/2015 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 225,000 | | | | 0 | | | | 0 | | | | 18,288,000 | |
D.W. Woods | |
| 11/24/2015
12/09/2015 |
| |
| 0
0 |
| |
| 0
0 |
| |
| 0
0 |
| |
| 0
0 |
| |
| 0
0 |
| |
| 0
0 |
| |
| 64,400
26,400 |
| |
| 0
0 |
| |
| 0
0 |
| |
| 5,234,432
2,007,060 |
|
A.P. Swiger | | | 11/24/2015 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 106,400 | | | | 0 | | | | 0 | | | | 8,648,192 | |
M.W. Albers | | | 11/24/2015 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 106,400 | | | | 0 | | | | 0 | | | | 8,648,192 | |
M.J. Dolan | | | 11/24/2015 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 124,000 | | | | 0 | | | | 0 | | | | 10,078,720 | |
Incentive Plan Awards Shares of Securities Price of of Stock and Stock or Underlying Option Option Threshold Target Maximum Threshold Target Maximum Units Options Awards Awards Name Grant Date ($) ($) ($) (#) (#) (#) (#) (#) ($/Sh) ($) D.W. Woods 11/30/2022 0 0 0 0 0 0 225,000 0 0 24,939,000 K.A. Mikells 11/30/2022 0 0 0 0 0 0 124,000 0 0 13,744,160 N.A. Chapman 11/30/2022 0 0 0 0 0 0 111,600 0 0 12,369,744 J.P. Williams, Jr. 11/30/2022 0 0 0 0 0 0 117,800 0 0 13,056,952 K.T. McKee 11/30/2022 0 0 0 0 0 0 101,100 0 0 11,205,924 In 2015, equity2022, performance share grants were made in the form of restricted stock units (RSUs).units. Each RSUstock unit represents one share of ExxonMobil common stock. RSUsPerformance shares granted to the Named Executive Officers may only be settled only in shares.stock. During the restricted period, for RSUs, the executive receives a cash payment on each RSUperformance share corresponding to the cash dividends paid on an outstanding share of ExxonMobil stock. Unlike common stock, performance shares of restrictedgranted in stock RSUsunits do not carry voting rights prior to settlement.
Restrictions The performance shares will be subject to restriction for 50 percent of the shares until 5 years after grant and Forfeiture Risk
For details regarding ExxonMobil’s restrictions and forfeiture provisions, see pages 40 and 43.
Grant Date
for the balance of the shares until 10 years after grant. The restricted periods may not be accelerated except in the case of death. The grant date of November 30, 2022, is the same as the date on which the Compensation Committee of the Board met to approve the annual awards. For details of grant date fair value, see page 48.
Outstanding Equity Awards at Fiscal Year-End for 201569. For more information on performance shares and details regarding ExxonMobil's restrictions and forfeiture provisions, see pages 52, 53, and 64. 2023 Proxy Statement 71
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Option Awards | | | Stock Awards | |
| | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | | Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#) | | | Option Exercise Price
($) | | | Option
Expiration Date | | | Number of
Shares or
Units of
Stock That
Have Not
Vested (#) | | | Market Value of
Shares or
Units of
Stock That
Have Not
Vested ($) | | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested (#) | | | Equity Incentive
Plan Awards: Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights That
Have Not Vested ($) | |
R.W. Tillerson | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | — | | | | 1,913,500 | | | | 149,157,325 | | | | 0 | | | | 0 | |
D.W. Woods | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | — | | | | 237,500 | | | | 18,513,125 | | | | 0 | | | | 0 | |
A.P. Swiger | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | — | | | | 575,750 | | | | 44,879,713 | | | | 0 | | | | 0 | |
M.W. Albers | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | — | | | | 661,150 | | | | 51,536,643 | | | | 0 | | | | 0 | |
M.J. Dolan | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | — | | | | 744,400 | | | | 58,025,980 | | | | 0 | | | | 0 | |
| | | | | | |
| 2023 Proxy Statement | | | | 71 | | |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2022 Option Awards Stock Awards (RestrictedEquity Equity Incentive Incentive Plan Awards: Equity Incentive Plan Awards: Market or Plan Awards: Number of Payout Value Number of Number Market Value Unearned of Unearned Number of Number of Securities of Shares of Shares Shares, Units Shares, Units Securities Securities Underlying or Units of or Units of or Other or Other Underlying Underlying Unexercised Option Stock and RSUs)
That Stock awardsThat Rights That Rights That Unexercised Unexercised Unearned Exercise Option Have Not Have Not Have Not Have Not Options (#) Options (#) Options Price Expiration Vested Vested Vested Vested Name Exercisable Unexercisable (#) ($) Date (#) ($) (#) ($) D.W. Woods 0 0 0 0—1,213,550 133,854,565 0 0 K.A. Mikells 0 0 0 0—310,400 34,237,120 0 0 N.A. Chapman 0 0 0 0—663,100 73,139,930 0 0 J.P. Williams, Jr. 0 0 0 0—637,850 70,354,855 0 0 K.T. McKee 0 0 0 0—282,600 31,170,780 0 0 Performance shares shown in the table above include both restricted stock and RSUs.restricted stock units. The market value is based on the 2022 year-end closing stock price of $110.30. This value has not been risk adjusted. Restricted stock awards have substantially the same terms as RSUs,restricted stock units, except that restricted stock awards includecarries voting rights.rights the same as common stock. Performance shares granted prior to 2020 included additional restriction on the 10-year portion such that vesting is delayed until retirement if later than 10 years. For more information regarding the terms of RSUs, see page 40.
For Mr. Woods,Ms. McKee, the table above also includes restricted stock and RSUs (29,400 restricted stock/RSUs)40,500 performance shares that were granted before heshe became a senioran executive officer, and are subject to a different vesting schedule than hisher current and more recent awards, but otherwise have the same terms as awards granted to other senior executives.executive officers. These remaining outstanding shares/unitsperformance shares vest in seven years from grant date.
| – | | Of the 29,400 restricted stock/RSUs, 7,350 are RSUs to be settled in cash. Cash-settled RSUs are used in certain jurisdictions due to local regulatory requirements and were granted to Mr. Woods during a period of service outside the U.S. |
For more information regarding the performance share program, see pages 52 and 53, and notes to the table on page 71. The following table below shows the dates on which the respective restricted periods for the stock awardsperformance shares shown in the previous table above expire, assuming the awards are not forfeited and the executive is living when the restrictions lapse.
Date Restrictions Lapse and Number of Performance Shares 2028 and Later, Including Beyond Name 2023 2024 2025 2026 2027 Retirement D.W. Woods 75,000 90,000 102,500 107,500 112,500 726,050 K.A. Mikells 0 0 0 93,200 62,000 155,200 N.A. Chapman 38,500 47,900 47,900 53,200 55,800 419,800 J.P. Williams, Jr. 38,500 42,550 42,550 53,200 58,900 402,150 K.T. McKee 12,400 30,050 37,950 30,600 50,550 121,050
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Date Restrictions Lapse and Number of Shares/Units | |
| | 2016 | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | 10 Years
or
Retirement,
Whichever
Occurs
Later | | | Retirement(1) | |
R.W. Tillerson | | | 112,500 | | | | 112,500 | | | | 112,500 | | | | 112,500 | | | | 112,500 | | | | 1,333,000 | | | | 18,000 | |
D.W. Woods | | | 7,350 | | | | 25,350 | | | | 31,950 | | | | 23,400 | | | | 45,400 | | | | 104,050 | | | | 0 | |
A.P. Swiger | | | 38,500 | | | | 42,000 | | | | 45,400 | | | | 45,400 | | | | 53,200 | | | | 351,250 | | | | 0 | |
M.W. Albers | | | 42,000 | | | | 45,400 | | | | 45,400 | | | | 45,400 | | | | 53,200 | | | | 429,750 | | | | 0 | |
M.J. Dolan | | | 45,400 | | | | 49,300 | | | | 53,200 | | | | 53,200 | | | | 62,000 | | | | 481,300 | | | | 0 | |
| (1) | Prior to 2002, restricted stock awards granted by the Corporation took the form of Career Shares that vest in a single installment at the beginning of the year following retirement. Career Shares reflected in the above table represent 18,000 shares for Mr. Tillerson. Career Shares have the same restrictions on transfer and potential for forfeiture as other restricted stock and RSU awards and have not been granted since 2002. | | | | |
72 | | | | | | 2023 Proxy Statement |
Option Exercises and Stock Vested for 2015
| | | | | | | | | | | | | | | | |
| Name | | Option Awards | | | Stock Awards | |
| | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares
Acquired on Vesting (#) | | | Value Realized on Vesting ($) | |
R.W. Tillerson | | | 0 | | | | 0 | | | | 112,500 | | | | 8,986,500 | |
D.W. Woods | | | 0 | | | | 0 | | | | 6,450 | | | | 526,578 | |
A.P. Swiger | | | 0 | | | | 0 | | | | 34,250 | | | | 2,735,890 | |
M.W. Albers | | | 0 | | | | 0 | | | | 38,500 | | | | 3,075,380 | |
M.J. Dolan | | | 0 | | | | 0 | | | | 42,000 | | | | 3,354,960 | |
OPTION EXERCISES AND STOCK VESTED FOR 2022 Option Awards Stock Awards/Restriction Lapse in 2015
Awards Number of Shares Value Realized Number of Shares Value Realized Name Acquired on Exercise (#) on Exercise ($) Acquired on Vesting (#) on Vesting ($) D.W. Woods 0 0 66,000 7,312,140 K.A. Mikells 0 0 0 0 N.A. Chapman 0 0 24,750 2,742,053 J.P. Williams, Jr. 0 0 25,750 2,852,843 K.T. McKee 0 0 9,650 1,092,091 In 2015,2022, restrictions lapsed on 50 percent of restricted stock unit (RSU)performance share awards that were granted in 2010.2017 for Messrs. Woods, Chapman, and Williams. For Mr. Woods,Ms. McKee, restrictions lapsed on 50 percent of cash-settled RSUperformance share awards that were granted in 2008. See notes to Outstanding Equity Awards at Fiscal Year-End for 2015 table for more information.
2015. The number of shares acquired on vesting is the gross number of shares to which the award relates. The value realized is the gross number of shares times the market price, which is the average of the high and low sale prices on the NYSE on the date that the restrictions lapse.
The net number of shares acquired (gross number of shares less shares withheld for taxes) are 65,306 for Mr. Tillerson; 19,882 for Mr. Swiger; 22,349 for Mr. Albers;are: D.W. Woods: 40,029 | N.A. Chapman: 15,010 | J.P. Williams, Jr.: 15,617 | K.T. McKee: 5,852 For more information regarding the performance share program, see pages 52 and 24,381 for Mr. Dolan. Mr. Woods received a cash payment on his vested award corresponding53, and notes to the gross number of underlying shares (valued at the average of the high and low sale prices on the NYSE on the date the restrictions lapse) minus withholding taxes.
Refer to the Equity Awards sectiontable on page 40 for71. PENSION BENEFITS FOR 2022 Number of Years Present Value of Payments During Credited Service (a) Accumulated Benefit Last Fiscal Year Name Plan Name (#) ($) ($) D.W. Woods ExxonMobil Pension Plan 30.34 1,686,255 0 ExxonMobil Supplemental Pension Plan 30.34 8,421,244 0 ExxonMobil Additional Payments Plan 30.34 24,908,302 0 K.A. Mikells ExxonMobil Pension Plan 1.40 77,086 (b) 0 ExxonMobil Supplemental Pension Plan 1.40 221,133 (b) 0 ExxonMobil Additional Payments Plan 1.40 582,122 (b) 0 N.A. Chapman ExxonMobil Pension Plan 38.34 2,364,363 0 ExxonMobil Supplemental Pension Plan 38.34 6,159,611 0 ExxonMobil Additional Payments Plan 38.34 20,945,374 0 J.P. Williams, Jr. ExxonMobil Pension Plan 35.70 2,135,973 0 ExxonMobil Supplemental Pension Plan 35.70 6,105,337 0 ExxonMobil Additional Payments Plan 35.70 19,404,599 0 K.T. McKee ExxonMobil Pension Plan 32.21 1,620,268 0 ExxonMobil Supplemental Pension Plan 32.21 2,704,922 0 ExxonMobil Additional Payments Plan 32.21 10,732,976 0 (a) Named Executive Officers have not received any additional information.
service credit. Actual service is reflected in the table. (b) Ms. Mikells automatically began participating in the pension plan upon employment and will be vested when she has five years of vesting service. In the event of termination prior to five years of service vesting, there is no benefit payable under the ExxonMobil Pension Benefits for 2015Plan, Supplemental Pension Plan or Additional Payments Plan. 2023 Proxy Statement 73
| | | | | | | | | | | | | | |
Name2023 Proxy Statement | | Plan Name | | Number of
Years Credited
Service
(#)
73 | | | Present Value of
Accumulated
Benefit
($)
| | | Payments
During Last
Fiscal Year
($)
| |
R.W. Tillerson
| | ExxonMobil Pension Plan
ExxonMobil Supplemental Pension Plan
ExxonMobil Additional Payments Plan
| |
| 40.58
40.58
40.58
|
| |
| 2,349,944
25,766,799
41,434,884
|
| |
| 0
0
0
|
|
D.W. Woods
| | ExxonMobil Pension Plan
ExxonMobil Supplemental Pension Plan
ExxonMobil Additional Payments Plan
| |
| 23.34
23.34
23.34
|
| |
| 914,354
1,527,013
4,029,200
| (a)
(b)
(b)
| |
| 0
0
0
|
|
A.P. Swiger
| | ExxonMobil Pension Plan
ExxonMobil Supplemental Pension Plan
ExxonMobil Additional Payments Plan
| |
| 37.33
37.33
37.33
|
| |
| 2,376,324
8,645,611
19,473,868
|
| |
| 0
0
0
|
|
M.W. Albers
| | ExxonMobil Pension Plan
ExxonMobil Supplemental Pension Plan
ExxonMobil Additional Payments Plan
| |
| 36.42
36.42
36.42
|
| |
| 2,266,038
8,458,808
19,654,191
|
| |
| 0
0
0
|
|
M.J. Dolan
| | ExxonMobil Pension Plan
ExxonMobil Supplemental Pension Plan
ExxonMobil Additional Payments Plan
| |
| 35.42
35.42
35.42
|
| |
| 2,123,505
8,834,427
20,604,516
|
| |
| 0
0
0
|
|
(a) | The Present Value of Accumulated Benefit figure for the ExxonMobil Pension Plan for Mr. Woods is calculated as if he were eligible for early retirement (i.e., at least 55 years of age with at least 15 years of service). Because Mr. Woods is not yet 55 years of age, he would not be eligible to receive a single-sum payment of his pension benefit if he were to terminate employment at year-end 2015; and, in such circumstance, any annuity benefit he elected to receive would be actuarially reduced. |
(b) | In the event of termination prior to early retirement eligibility, there is no benefit payable under the Supplemental Pension Plan or Additional Payments Plan. The Present Value of Accumulated Benefit figure for these plans for Mr. Woods is calculated as if he were eligible for early retirement, even though he is not eligible as of year-end 2015. |
Pension Plans
RetirementPENSION PLAN Defined benefit plans (qualified and nonqualified) provide an annual benefit of 1.6 percent of final average pay per year of service, with the qualified plan having an offset for Social Security benefits. SeeFor a description of the plans, see page 41 for a description.62. Below are the calculations and forms of payments for each plan:
| | | | |
Plan Name | | Calculation | | Forms of Payment |
Pension Plan
(qualified)
| | 1.6% x final average salary(1) x years credited service, less a social security offset | | Benefit available as a lump sum or in various annuity forms |
Supplemental Pension Plan
(nonqualified)
| | 1.6% x final average salary(1) x years credited service | | Paid in the form of an equivalent lump sum six months after retirement |
Additional Payments Plan
(nonqualified)
| | 1.6% x average annual bonus(2) x years credited service | | Paid in the form of an equivalent lump sum six months after retirement |
| (1) | Final average salary is the average of the highest 36 consecutive months in the 10 years of service prior to retirement. For the Pension Plan, final average salary included and benefits paid are subject to the limits on compensation ($265,000 for 2015, adjusted each year for inflation) and benefits prescribed by the Internal Revenue Code. For the Supplemental Pension Plan, final average salary is the amount that exceeds the Internal Revenue Code limit. |
| (2) | Average annual bonus is the average of the annual bonus for the three highest grants of the last five awarded prior to retirement (including the portion of the annual bonus that is paid at time of grant and the portion that is paid on a delayed basis as described on page 39). |
Present Value Pension Calculations
Plan Supplemental Pension Plan Additional Payments Plan Type Qualified Nonqualified Nonqualified Calculation 1.6% x final average salary 1 1.6% x final average salary 1 1.6% x average annual bonus 2 x years credited service, x years credited service x years credited service less a Social Security offset Form of Payment Benefit available as a lump sum Paid in the form of an equivalent Paid in the form of an equivalent or in various annuity forms lump sum six months after retirement lump sum six months after retirement 1 Average of the highest 36 consecutive months in the 10 years of service prior to retirement. For the Pension Plan, final average salary included and benefits paid are subject to the limits on compensation ($305,000 for 2022, adjusted each year for inflation) and benefits prescribed by the U.S. Internal Revenue Code. For the Supplemental Pension Plan, final average salary included and benefits paid are the amounts that exceed the U.S. Internal Revenue Code limits. 2 Average of the annual bonus for the three highest grants of the last five awarded prior to retirement. PRESENT VALUE PENSION CALCULATIONS The present value of accumulated benefits shown in the Pension Benefits table is determined by converting the annuity values earned as of year end to lump sum values payable at age 60 (or at the employee’semployee's actual age, if older) using the applicable mortality tables and interest rate that would apply to a participant who retiredrates. The value shown in the first quarterPension Benefits table is the accumulated benefit as of 2016.
For plan participants who had attained age 50 with at least 10 yearsyear-end 2022. The value shown in the Summary Compensation Table on page 68 represents the annual increase in the value of service before January 1, 2008 (including all Named Executive Officers except Mr. Woods), the applicablepension between year-end 2021 and 2022 or retirement date. The lump sum interest rate was 2.75rates used to calculate the accumulated benefits in the Pension Benefits table and Summary Compensation Table: For an employee who worked through the end of 2021 were 0.68 percent, 2.53 percent, and 3.09 percent, and through the end of 2022 were 4.14 percent, 4.94 percent, and 4.88 percent. For other participants (including Mr. Woods), the plan specifies short-, medium- and long-term interest rate assumptions for this purpose, which were 1.69 percent, 4.08 percent, 5.03 percent respectively.
The actual lump sum conversion factors that will apply when each executive retires may be different.
For executives who wereemployees not yet age 60, these age 60-lump sum values are discounted to present values based on the time difference between the individual's age at year-end 2022 and age 60 (and at year-end 2021 and age 60 for the year-over-year change in pension value in the Summary Compensation Table) using the interest rates for valuing financial reporting of pension obligations as of each year end. The discount rate for determining the present value of benefits was 3.00 percent as of year-end 20152021 and 5.60 percent as of each executive’s age-60 lump sumyear-end 2022. This is determined using a discount rate of 4.25 percent, the rate used for valuing pension obligations for purposesapplicable to all of the Corporation’s financial statements for 2015.
Effect of Early Termination or Death
The Named Executive Officers have not received any additional service credit. Actual service is reflected in the table on page 53.
AllOfficers. EFFECT OF EARLY RETIREMENT OR DEATH Generally, all three pension plans require completion of 15 years of service and attainment of age 55 to be eligible for early retirement. All Named Executive Officers have satisfied this requirement except for Mr. Woods who does not currently meet the age requirement.
Ms. Mikells. The early retirement benefit under the pension plans consists of an annuity benefit that is undiscounted for retirement ages of 60 years or over, with a discount of 5 percent for each year under age 60. In addition, the Social Security offset is waived for annuity payments scheduled to be paid prior to age 62. Finally, theThe benefit is eligible to be paid in the form of a lump sum.
Early retirement benefits are in some cases more valuable than the present value of the executive’s earned age-60 benefits. This is because the increase in lump sum value due to receiving benefits earlier and using a longer life expectancy are not fully offset, in the current interest rate environment, by the plan’s discount factor (5 percent per year) for early retirement annuities.
The table below shows the lump sum early retirement benefits under the plans for Messrs. Swiger and Albers as of year-end 2015. The lump sum early retirement benefits for Messrs. Tillerson and Dolan as of year-end 2015 are the amounts shown in the Pension Benefits table.
| | | | | | |
Name | | Plan Name | | Lump Sum Early
Retirement Benefit
($)
| |
A.P. Swiger
| | ExxonMobil Pension Plan | | | 2,291,065 | |
| | ExxonMobil Supplemental Pension Plan | | | 8,839,762 | |
| | ExxonMobil Additional Payments Plan | | | 19,655,707 | |
M.W. Albers
| | ExxonMobil Pension Plan | | | 2,234,932 | |
| | ExxonMobil Supplemental Pension Plan | | | 8,677,253 | |
| | ExxonMobil Additional Payments Plan | | | 19,977,883 | |
In the event of termination prior to early retirement eligibility, there is no benefit payable under the Supplemental Pension Plan or Additional Payments Plan, and the pension benefit payable from the ExxonMobil Pension Plan is actuarially discounted.
In the event of death after early retirement eligibility, the retirement benefit is payable to the
participant’sparticipant's beneficiary.
Prior to74 2023 Proxy Statement | | | | | | |
74 | | | | | | 2023 Proxy Statement |
The table below shows the lump sum early retirement eligibility, if a participant has at least 15benefits under the plans for Messrs. Woods, Chapman, Williams, and Ms. McKee as of year-end 2022. Lump Sum Early Name Plan Name Retirement Benefit ($) D.W. Woods ExxonMobil Pension Plan 1,772,982 ExxonMobil Supplemental Pension Plan 8,923,081 ExxonMobil Additional Payments Plan 25,901,881 N.A. Chapman ExxonMobil Pension Plan 2,364,362 ExxonMobil Supplemental Pension Plan 6,159,611 ExxonMobil Additional Payments Plan 20,945,374 J.P. Williams, Jr. ExxonMobil Pension Plan 2,179,856 ExxonMobil Supplemental Pension Plan 6,309,014 ExxonMobil Additional Payments Plan 19,723,178 K.T. McKee ExxonMobil Pension Plan 1,756,893 ExxonMobil Supplemental Pension Plan 2,941,966 ExxonMobil Additional Payments Plan 11,413,529 In the event of termination after 5 years of vesting service the actuarially determined present value of the benefit accruedand prior to death isretirement eligibility, the pension benefit payable to the participant’s beneficiary. Underfrom the qualified Pension Plan if a participant has less than 15 years of service at the time of death, the survivor benefit,is actuarially reduced and payable to the participant’s surviving spouse,as an annuity or lump sum; there is 50 percent of the actuarially discounted vested terminationno benefit payable under the qualified joint and survivor annuity option.
Nonqualified Deferred Compensation for 2015
| | | | | | | | | | | | | | | | | | | | |
| Name | | Executive
Contributions
in Last FY ($) | | | Registrant
Contributions
in Last FY ($) | | | Aggregate Earnings in Last FY ($) | | | Aggregate
Withdrawals/
Distributions(1) ($) | | | Aggregate Balance at Last FYE ($) | |
R.W. Tillerson | | | 0 | | | | 194,740 | | | | 55,232 | | | | 74,711 | | | | 1,981,903 | |
D.W. Woods | | | 0 | | | | 33,017 | | | | 5,874 | | | | 0 | | | | 226,598 | |
A.P. Swiger | | | 0 | | | | 67,463 | | | | 20,171 | | | | 20,098 | | | | 729,958 | |
M.W. Albers | | | 0 | | | | 67,725 | | | | 15,835 | | | | 21,351 | | | | 579,737 | |
M.J. Dolan | | | 0 | | | | 74,025 | | | | 22,466 | | | | 23,931 | | | | 810,870 | |
(1) | Represents a partial distribution of plan benefits for the payment of FICA taxes due. |
Supplemental Pension Plan or Additional Payments Plan unless the Plan Administrator approves as such. NONQUALIFIED DEFERRED COMPENSATION FOR 2022 Executive Registrant Aggregate Aggregate Aggregate Contributions Contributions Earnings Withdrawals/ Balance in Last FY in Last FY in Last FY Distributions at Last FYE Name ($) ($) ($) ($) ($) D.W. Woods 0 97,860 26,285 0 772,678 K.A. Mikells 0 55,650 1,058 0 63,125 N.A. Chapman 0 57,750 18,245 0 532,745 J.P. Williams, Jr. 0 55,650 18,926 0 550,786 K.T. McKee 0 42,245 8,071 34 248,586 The table above shows the value of the Company credits under ExxonMobil’sExxonMobil's nonqualified Supplemental Savings Plan.
The nonqualified savings planSupplemental Savings Plan provides employees with the 7-percent, Company-matching contribution to which they would otherwise be entitled under the qualified plan if not for limitations on covered compensation and total contributions under the U.S. Internal Revenue Code.
The rate at which the nonqualified savings planSupplemental Savings Plan account bears interest during the term of a participant’sparticipant's employment is 120 percent of the long-term Applicable Federal Rate.
For more information on the Supplemental Savings Plan, see page 62. The Company credits for 20152022 are also included in the Summary Compensation Table under the column labeled All Other Compensation. The aggregate balance at the last fiscal year end shown above includes amounts reported as Company contributions in the Summary Compensation Table of the current proxy statement and proxy statements from prior years as follows: $1,579,130 for Mr. Tillerson; $33,017 for Mr. Woods; $234,938 for Mr. Swiger; $292,250 for Mr. Albers; and $407,313 for Mr. Dolan.
Administrative Services for Retired Employee DirectorsD.W. Woods: $504,676 | K.A. Mikells: $62,067 | N.A. Chapman: $191,634 | J.P. Williams, Jr.: $204,051 | K.T. McKee: $42,245 2023 Proxy Statement 75
| | | | | | |
| 2023 Proxy Statement | | | | 75 | | |
The
OTHER COMPENSATION ELEMENTS Termination and Named Executive Officers are not entitled to any additional payments or benefits relating to Change-in-Control termination of employment other than the retirement benefits previously described Named Executive Officers do not have employment contracts, severance program, or any benefits or payments triggered by a change-in-control; see page 65 Administrative Company provides certain administrative support to retired employee directors,that generally involving,involves, but is not limited to, Services for Retired assistance with correspondence and travel arrangements relating to activities the retired directors are involved with that continue from their employment, such as board positions with nonprofit organizations. Given the nature of the support provided, a retired director’s spouse may also benefit from the support provided.
Employee Directors Retired employee directors are also allowed to use vacant office space at headquarters.
headquarters Aggregate incremental cost to provide these services is approximately $30,000 per year; amount represents compensation and benefit cost for support personnel allocated based on estimated time dedicated to providing this service and other miscellaneous office support costs It is not possible to estimate the future cost that may be incurred by the Company for providingto provide these services to Messrs. Tillerson andMr. Woods, who areis currently the only employee directors.
The aggregate incremental cost of providing these services to all current beneficiaries is approximately $125,000 per year. This amount represents the compensation and benefit cost for support personnel allocated based on their estimated time dedicated to providing this service, as well as other miscellaneous office support costs.
director Health Care Benefits
Executives and their families Named Executive Officers are eligible to participate in the Company’sCompany's health care programs including medical,(medical, dental, prescription drug, and vision care,care) on the same basis as all other U.S. employees. NoU.S.-dollar-paid employees; no special provisions apply.
apply Unused Vacation
U.S. salaried U.S.-dollar-paid employees are entitled to payment of salary for any accumulated but unused vacation days at retirement or other termination of employment. Payment for unused vacation is included in final paymentspayment of earned salary, if applicable.
Termination and Change in Control
ExxonMobil executive officers are not entitled to any additional payments or benefits relating to termination of employment other than the retirement benefits previously described.
Executives do not have employment contracts, a severance program, or any benefits or payments triggered by a change in control.
For more details on ExxonMobil’s forfeiture provisions and clawback policy, see page 43.
applicable Payments in the Event of Death
The only event that results in the acceleration of the vesting period for outstanding equity awards is death.
Also in the event of death, an executive’sV Executive's estate or beneficiaries would be entitled to receive the applicable pension death benefits as described on page 54,74, a distribution of the executive’sexecutive's savings plan balances, and payment of Company-provided life insurance or death benefits as described on page 49.70 At year-end 2015,2022, the amount of Company-providedCompany provided life insurance for each Named Executive Officer is as follows:
Name Life Insurance Benefit ($) D.W. Woods 3,406,000 K.A. Mikells 2,200,000 N.A. Chapman 4,400,000 J.P. Williams, Jr. 2,200,000 K.T. McKee 1,950,000 76 2023 Proxy Statement
| | |
Name | | Life Insurance Benefit ($) | |
R.W. Tillerson
| | 12,188,064 |
D.W. Woods76
| | 1,540,032 |
A.P. Swiger
| | 5,000,064 |
M.W. Albers
| | 5,000,064 |
M.J. Dolan
| | 5,360,0642023 Proxy Statement |
SHAREHOLDER PROPOSALS
We expect Items 45 through 1417 to be presented by shareholders at the annual meeting. Following SEC rules, other than minor formatting changes, we are reprinting the proposals and supporting statements as they were submitted to us. We take no responsibility for them. Upon oral or written request to the Secretary at the address listed under Contact Information on page 4,7, we will provide information about the sponsors’ shareholdings, as well as the names, addresses, and shareholdings of any co-sponsors.
The SEC’s shareholder proposal rules were designed to give shareholders access to directors, management, and fellow shareholders so their voices can be heard. We fully support shareholder engagement and advocacy. We consistently work to engage with all proponents each year. In addition, we have significantly expanded our efforts in shareholder engagement over the past several years. We also respect that our shareholders may have viewpoints and perspectives that differ from management and the Board, and we always consider their feedback.
Each year, the Board and management team spend a significant amount of time considering each shareholder proposal. We annually form a taskforce including subject matter experts; members of our Investor Relations, Public and Government Affairs, and Law functions; external advisors; and outside legal counsel to deliberate on each proposal to fully understand each request and determine whether the proposal would generate shareholder value and is in the best interest of the Company. We then spend time developing and reviewing potential responses to each of the proposals. Our CEO and Chief Financial Officer (CFO), individually, spend numerous hours evaluating and participating in those discussions and reviews. This taskforce and management make recommendations to the Board, which also carefully reviews and discusses each proposal. The Board’s and Company’s view is that the shareholder proposals below (10 of which call for additional reports beyond the Company’s already lengthy disclosures and fail to provide decision-useful disclosures) are not in the best interest of the Company and do not enhance shareholder value. To the contrary, the countless hours that the Board, CEO, CFO, management committee, and taskforce members spend discussing and deliberating each proposal detract from time that would have been better spent on other activities in support of the Company’s strategy to further generate shareholder value.
Unfortunately, there are some anti-oil and natural gas activists who use the SEC’s shareholder proposal process to further their own interests, which are often in conflict with the interests of many of the Company’s other shareholders.
These activist firms, by their own admission, prefer not to own fossil fuels stocks yet acquire a minimal ownership stake in the Company with the sole purpose of targeting campaigns and pressuring investors to support resolutions ultimately designed to eliminate oil and gas investments necessary to meet society’s needs. These campaigns can create a burden on our long-term shareholders, and undermine the advancement of constructive Environment, Social, and Governance (ESG) objectives. For instance, the founder of Follow This has previously stated, “We buy shares in order to work on our mission to stop climate change, not to make a financial profit.”1 He has also stated that his Scope 3 proposals are a “Trojan horse,”2 designed to eliminate fossil fuel investments and production. Of the 13 proposals below, several are put forth by anti-oil and gas activists.
We believe their activity is inconsistent with investors’ and fiduciaries’ goal of enhancing the economic value of their investments and advancing constructive ESG objectives. Forcing our company to stop oil and natural gas development would do nothing to reduce global demand. In fact, it would encourage less carbon-efficient, non-public, or less experienced operators, including those without our commitment to reducing greenhouse gas emissions, to step in to fill the supply void. Alternatively, reducing our production would cause reduced global supply before there are viable alternatives at scale. This would significantly drive up prices and hurt the global economy and broader society in ways that are not accounted for by anti-oil and gas activists. We are working to solve the “and” equation: delivering the energy and products society needs and lead industry in reducing greenhouse gas emissions.
Additionally, 10 of the shareholder proposals below seek some form of report. Several of these proposals for reports require us to assume a potential decarbonization pathway that virtually all observers agree society is not currently on. Significantly, even the authors at the International Energy Agency (IEA) have said society is not currently on the IEA Net Zero Emissions by 2050 pathway. The IEA states that “huge leaps in clean energy innovation” are required to reach net zero by 2050, and almost half of the reductions in 2050 would come from technologies that are currently at the demonstration or prototype phase. In heavy industry and long-distance transport, the share of emissions reductions from technologies that are still under development today is even higher.3
| | | | | | |
| 2023 Proxy Statement | | | | 77 | | |
ExxonMobil already publishes numerous reports that consider a range of future scenarios from respected third parties and our internal experts. These reports are responsive to shareholder interests and require considerable resources and time to produce on an annual basis, including reviews by subject matter experts, senior management, Board committees, and in several cases, the full Board. They include the Advancing Climate Solutions Progress Report, Sustainability Report, Outlook for Energy, Lobbying Report, Climate Lobbying Report, Political Action Committee Contributions Report, Investing in People supplement, and numerous other SEC filings, investor presentations, and public disclosures. Creating additional, and in many cases, duplicative reports, including reports based on a particular scenario that has little chance at this point of being realized, is a waste of Company resources and serves only to distract the Board, management, and employees from their important work.
We believe it is in the best interest of our shareholders to speak plainly about these proponents, their stated motives, and how their proposals can undermine constructive ESG objectives, which we lay out in our responses.
| 1 | See https://www.follow-this.org/how-it-works/ |
| 2 | See https://www.follow-this.org/how-to-get-big-oil-to-end-the-climate-crisis-mark-van-baal-tedxeindhoven/ |
| 3 | See https://iea.blob.core.windows.net/assets/7ebafc81-74ed-412b-9c60-5cc32c8396e4/NetZeroby2050-ARoadmapfortheGlobalEnergySector-SummaryforPolicyMakers_CORR.pdf |
The Board recommends you vote AGAINST Items 45 through 1417 for the reasons we give after each one.
ITEM 4Item 5 – INDEPENDENT CHAIRMANEstablish a New Board Committee on Decarbonization Risk
This proposal was submitted by the Ellen M. HigginsBahnsen Family Trust, 1959, 111 Commercial Street,520 Newport Center Drive, Suite 302, Portland, ME 04101,300, Newport Beach, California, 92660, the beneficial holderowner of 150 shares.1,310 shares for at least one year.
“RESOLVED:That the shareholdersBe It Resolved: Shareholders request the Board of Directors ofcharter a new Board Committee on Decarbonization Risk to evaluate ExxonMobil’s strategic vision and responses to calls for ExxonMobil to adopt as policy, and amend the bylaws as necessary, todecarbonization on activist-established timelines. The charter should require the Chaircommittee to engage in formal review and oversight of corporate strategy, above and beyond matters of legal compliance, to assess the Boardcompany’s responses to demands for such decarbonization schedules, including the potential impacts on the Company from flaws in activists’ climate models, the possibility that the U.S. will not force decarbonization according to such schedules, thus obviating ‘stranded asset’ calculations, the possibility that other countries will not adopt similar targets, thus making Company efforts meaningless, concerns about technological or economic infeasibility, and other relevant considerations.
Supporting Statement:
ExxonMobil has repeatedly stated its commitment to achieving net-zero carbon emissions by 2050. It does not appear from publicly available information, however, that ExxonMobil has fully considered the risk that decarbonization on activist schedules might entail. Claims about the need for decarbonization at all, but especially by some activist-generated date certain, are based on a long series of Directors, whenever possible,assumptions that are either counterfactual or insufficiently examined. For decades, for instance, claims have been made that action must be an independent member of the Board. This policytaken before some date, or it will be too late.1 If those claims were right, it’s too late for decarbonization to matter now, so we should be phased in forbuilding up economic resources to deal with climate change. If they are wrong, then the next CEO transition. Compliance withodds are high that current claims are also wrong. ExxonMobil’s decarbonization will be meaningless if other countries do not follow the same decarbonization schedules, and there is abundant evidence that they will not.2 The United States government has never mandated net-zero by statute or authorized regulatory action3, and is unlikely ever to do so; this policycontravenes the assumptions of ‘stranded asset’ analysis. If decarbonization is waived if no independent director is availableneither required nor technologically feasible, ExxonMobil will lose significant markets and willingrevenues to serve as Chair.
SUPPORTING STATEMENT:
We believe:private equity firms and (less clean-producing) state actors, thus harming shareholders while also harming the environment. These and all relevant considerations should be fully and objectively examined.
The role of the CEO and management is to run the company;
The role of the Board of Directors is to provide independent oversight of management and the CEO;
| 1 | https://nypost.com/2021/11/12/50-years-of-predictions-that-the-climate-apocalypse-is-nigh/ |
| 2 | https://www.theepochtimes.com/across-the-world-coal-power-is-back_4671888.html; |
https://www.realclearenergy.org/
articles/2022/06/03/india_and_china_coal_production_surging_by_700m_tons_per_year_thats_greater_than_all_us_coal
_output_835483.html https://www.breitbart.com/environment/2022/04/21/worlds-worst-polluter-china-increases-coal-production-by-three-hundred-million-tons/https://mishtalk.com/economics/global-net-zero-climate-change-targets-are-pie-in-the-sky
| 3 | https://www.npr.org/2022/06/30/1103595898/supreme-court-epa-climate-change” |
There is a potential conflict of interest for a CEO to be her/his own overseer while managing the business. | | | | | | |
78 | | | | | | 2023 Proxy Statement |
ExxonMobil’s CEO Rex Tillerson presently serves both as CEO and Chair of the Company’s Board of Directors. We believe the combination of these two roles in a single person weakens a corporation’s governance structure, which can harm shareholder value.
Chairing and overseeing the Board is a time intensive responsibility, and a separate Chair leaves the CEO free to manage the company and build effective business strategies.
As Intel’s former chair Andrew Grove stated, ‘The separation of the two jobs goes to the heart of the conception of a corporation. Is a company a sandbox for the CEO, or is the CEO an employee? If he’s an employee, he needs a boss, and that boss is the Board. The Chairman runs the Board. How can the CEO be his own boss?’
Numerous institutional investors recommend separation. For example, California’s Retirement System CalPERS’ Principles & Guidelines encourages separation, even with a lead director in place.
Shareholder resolutions urging separation of CEO and Chair averaged approximately 36% of votes in favor in 2014 and 30% in 2015, an indication of strong investor support.
Many companies have separate and/or independent Chairs. By 2014, 46.4% of the S&P 500 companies had boards that were not chaired by their CEO. An independent Chair is the prevailing practice in the United Kingdom and many international markets.
An independent Chair and vigorous Board can improve focus on important ethical and governance matters, strengthen accountability to shareowners and help forge long-term business strategies that best serve the interests of shareholders, consumers, employees and the company.
This resolution to ExxonMobil received 34% vote in favor last year.
To foster a simple transition, we propose this policy be phased in when Mr. Tillerson retires and the next CEO is chosen.
We urge a vote FOR this resolution.”
The Board carefully considered this proposal and recommends you vote AGAINST this proposalit for the following reasons:
The Board believes thatand several of its committees actively oversee the decision as to who should serve as Chairman and/or CEO is the proper responsibilitydevelopment of the Board. Directors possess considerable experienceCompany’s strategy, including all matters related to our decarbonization efforts. Forming a new committee solely for the narrow purpose of reviewing what the full Board and understand the unique challengesseveral of its committees already spend significant time and opportunities the Company faces,effort engaged in is unnecessary and are in the best position to evaluate the needs of the Company and how best to organize the capabilities of the directors and senior managers to meet those needs.redundant.
The Board carefully considers the prosstays well informed of risks and consopportunities relevant to strategic decisions through regular briefings on supply-and-demand metrics, impact of separating or combining the Chairmangeopolitical events, scientific and CEOtechnical research updates, public policy positions and whetheranalyses, signposts for the Chairmanship should be held by an independent director, whenever the circumstances require. The Board must retain the flexibility to determine the particular governance structure the Board believes will best serve the long-term interests of shareholders at the time and should not be compelled to take a particular position that may be contrary to its best judgment.
Empirical studies are inconclusive on the benefits of separating the Chairman and CEO roles, and recent third-party research suggests caution in adopting an inflexible, one-size-fits-all approach, which may explain why the approach remains a distinct minority position among U.S. companies. According to the2015 Spencer Stuart Board Index, only 29 percent of S&P 500 companies have a truly independent chairman, and only 4 percent have a policy that mandates the separationpace of the Chairman and CEO roles.
The Board is comprised entirely of independent directors except the CEO and President. Each independent director has accesstransition to the CEO and other Company executives on request; may call meetings of the independent directors; and may request agenda topics to be added or dealt with in more detail at meetings of the full Board or an appropriate Board committee.
At the present time, the Board believes that independent Board leadership is effectively provided by the Presiding Director, who:
Has the authority to call, chair, and determine the agenda for executive sessions of the non-employee directors and provide feedback to the Chairman;
Chairs Board meetings in the absence of the Chairman; and
In consultation with the Chairman, reviews schedules and agendas for Board meetings.
The Compensation Committee, comprised of independent directors, reviews the CEO’s performance and establishes his compensation, the result of which is reviewed with the full Board, absent the Chairman.
ITEM 5 – CLIMATE EXPERT ON BOARD
This proposal was submitted by the Province of St. Joseph of the Capuchin Order, 1015 North Ninth Street, Milwaukee, WI 53233, the beneficial owner of at least $2,000 in market value of the Company’s stock and lead proponent of a filing group.
“Climate change expertise at both management and board levels is critical to companies’ success in the energy industry because of significant environmental issues associated with their operations. These impact shareholders, lenders, host country governments and regulators, as well as affected communities. Companies’ ability to demonstrate policies and best practices reflecting internationally accepted environmental standards can lead either to successful business planning or difficulties in raising new capital and obtaining the necessary licenses from regulators.
We believe ExxonMobil’s Board of Directors would benefit by addressing the impact of climate change on its business at its most strategic level by electing to its Board independent specialists versed in all business aspects of climate change. Just one authoritative figure with acknowledged expertise and standing could perform a valuable role in ways that would enable the Board to more effectively address the environmental issues and risks inherent in its present business model regarding climate change. It would also help ensure that the highest levels of attention are focused on developing environmental standards for new projects. In comparison, banks which had inadequate expertise on their boards to deal with risks related to new financial instruments and transactions often paid a huge price with a major impact on shareholder value.
Since the Exxon Valdez incident, the public’s perception of ExxonMobil represents a company with questionable environmental practices. For years some shareholders concerned about ExxonMobil’s approach to climate change have asked to engage directly with members of its Board; consistently they have been denied this access to dialogue on matters of critical concern regarding climate change.
RESOLVED, shareholders request that, as elected board directors’ terms of office expire, the Exxon Mobil Corporation’s Board’s Nominating Committee nominate for Board election at least one candidate who:
has a high level of climate change expertise and experience in environmental matters relevant to hydrocarbon exploration and production, related risks, and alternative, renewablelower-emission energy sources, and
is widely recognized in the
businessprogress of our initiatives and
actions. The Board also assesses our management of, and response to, other external risk factors, including regulation, climate change, and the energy transition. The Environment, Safety and Public Policy Committee (ESPP) oversees operational and other risks that result from technology, policy, and regulatory changes, and regularly engages with senior management on climate matters and our environmental
communities as such, as reasonably determined by ExxonMobil’sapproach and performance.The full Board and
will qualify, subject its various committees, in line with their oversight responsibilities, also review and approve ExxonMobil’s strategy and our annual and medium-term operating plan. Importantly, our strategy leverages the same competitive advantages and core competencies to exceptionsaddress both our heritage businesses and our new Low Carbon Solutions business. This approach allows us to allocate our resources in extraordinary circumstances explicitly specifiedline with market demands and policy developments, and pace our investments in lower-emissions initiatives with value-accretive opportunities as those develop. The full Board carefully considered the concerns raised by the board, as an independent director.*
* a director shall not be considered ‘independent’ if, during the last three years, she or he –
was, orproponent with their endorsement of our strategy that is affiliated with a company that was an advisor or consultantrobust to the Company;
was employed by or had a personal service contract(s) with the Company or its senior management;
was affiliated with a company or non-profit entity that received the greater of $2 million or 2% of its gross annual revenues from the Company;
had a business relationship with the Company worth at least $100,000 annually;
has been employed by a public company at which an executive officer of the Company serves as a director;
had a relationship of the sorts described herein with any affiliate of the Company; and
was a spouse, parent, child, sibling or in-law of any person described above.”
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil’s current process, as reflected in itsGuidelines for the Selection of Non-Employee Directors, requires director candidates to have a breadth of experience and demonstrated expertise in managing large, relatively complex organizations and be accustomed to dealing with complex situations with worldwide scope.
The Board must possess the capabilities to address the full range of business risks, from financial to social to environmental, including climate risk. In doing so, the Board leverages subject matter experts, both internally and externally, to share the latest science, analysis, and insights.
Because each director must possess a breadth of expertise and experience, setting aside a seat for an environmental specialist or other single-issue candidate who lacks other important attributes would, in our view, not be in the best interests of the Company or its shareholders because it would dilute the breadth needed by all directors to make informed decisions for the Company. Board members have fiduciary duties to the Company’s shareholders which require them to be informed on multiple issues and work together with other Board members to make decisions on a collaborative basis.
The Board is comprised of members with the credentials, proficiencies, and experience that enable the Board to effectively address climate-related issues. Board members hold nine science and engineering degrees and have relevant experience and leadership in a range of environmental matters, suchscenarios, from “business as water, alternative energies, energy conservation, global climate issueusual” to “full decarbonization” and at any point in between.
Further, after discussion and dialogue with ExxonMobil management, and environmental innovation. Further, the Board has accessexercised its oversight in endorsing our five-year plans through 2027, which prioritize high-return, low cost of supply assets, and support efforts to environmentalreduce emissions in our own operations and climate expertise via periodic briefings by Company professionals whoseto help others reduce theirs. Our capital plan allocates $17 billion for investments in lower-emission investments, including in our Low Carbon Solutions business, which is expected to generate competitive returns for shareholders.
In speaking with the proponent, we understand the primary expertiseconcern is disclosure of risks we could face if we over-invest in energy-transition opportunities, either without policy or ahead of it. The Board recognizes that there is risk in pursuing or foregoing investment opportunities – whether in the areabase business or in new areas; thus, investment decisions are informed by a whole host of environmental managementconsiderations to test for resiliency. The “decarbonization risk” outlined by the proponent is one of many risks already incorporated into the rigorous risk oversight framework and stewardship. This includes sharing external perspectives onprocesses overseen by the status of science, researchBoard and development,the relevant Committees, and public policy.also well disclosed in Company materials. Therefore, the Board recommends a vote against this proposal.
The Company’s core value to ‘Protect Tomorrow, Today’ serves as a foundation for sound environmental management. OurOperations Integrity Management System is an effective and proven framework that aligns our environmental priorities with our business objectives, and has brought about improved environmental performance for many years.
ITEMItem 6 — HIRE AN INVESTMENT BANK– Reduce Executive Stock Holding Period
This proposal was submitted by Kenneth Steiner, 14 Stoner Ave.,Avenue, 2M, Great Neck, NYNew York 11021, the beneficial owner of at least 500 shares.shares for at least three years.
“[XOM: Rule 14a-8 Proposal December 30, 2015]6 – Executives to Retain Significant Stock
Proposal [6] – Hire an investment bank
Shareholders recommendurge that our company hireexecutive pay committee adopt a policy requiring senior executives to retain 50% of stock acquired through equity pay programs until reaching normal retirement age and to report to shareholders regarding the policy in our Company’s next annual meeting proxy. For the purpose of this policy, normal retirement age would be an investment bankage of at least 60 and be determined by our executive pay committee.
This single unified policy shall prohibit hedging transactions for shares subject to explorethis policy which are not sales but reduce the salerisk of our company. This would include a sale by dividing the company into major pieces to facilitate such a sale.
I believe the sale of XOM would release significantly more valueloss to the shareholders thanexecutive. Otherwise our directors might be able to avoid the impact of this proposal.
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This policy shall supplement any other share ownership requirements that have been established for senior executives, and should be implemented without violating current share price. Ourcompany contractual obligations or the terms of any current pay or benefit plan. The Board is encouraged to obtain waivers of any current pay or benefit plan for senior executives that might delay implementation of this proposal.
Requiring senior executives to hold a significant portion of stock was trading above $100 in 2014 and it went below $75 in 2015.obtained through executive pay plans would focus our executives on our company’s long-term success. A Conference Board Task Force report stated that hold-to-retirement requirements give executives ‘an ever-growing incentive to focus on long-term stock price performance.’
Hire an investment bankPlease vote yes:
Executives to Retain Significant Stock – Proposal [6]6”
The Board carefully considered this proposal and recommends you vote AGAINST this proposalit for the following reasons:
ExxonMobil pursues business strategies that maximize long-term shareholder value. The Company also manages its assets and business segments with a focus on profitability to ensure that acceptable financial performance is achieved. This asset management discipline includes consideringBoard fully recognizes the saleimportance of assets or businesses when such divestments yield the highest value for shareholders. This financial discipline has ledtying executive compensation to the saleCompany’s long-term success. However, this proposal is unnecessary as ExxonMobil’s executive compensation program is already designed with that clear goal in mind. Through its design, stock ownership for senior executives far exceeds the requirements of this proposal. We attempted to engage the proponent and explain that this proposal would result in a reduction of stock ownership into retirement, but he declined to speak with us.
ExxonMobil’s long-term incentive program represents more than 70 percent of total direct compensation for senior executives and takes the form of performance shares subject to some of the longest restriction periods in the Fortune 100. Half of the performance shares vest five years from grant date, while the remaining half vest 10 years from grant date. Vesting is not accelerated at retirement; rather, vesting continues up to 10 years after a senior executive retires and awards remain at risk of forfeiture while unvested.
Of Executive Officers who retired from ExxonMobil January 1, 2020, through January 1, 2023, the average age of appointment in position was 52 and average age of retirement was 62. The chart below shows vesting of awards granted over $45 billionthis timeframe. The grey bar represents each year that an award is granted. The light and dark blue bars reflect the 50 percent of assetsawards that vest in five and businesses10 years, respectively, from grant date.
As demonstrated in the chart, upon retirement at age 62, 26 percent of awards granted over this timeframe have vested, whereas 74 percent remains unvested and will vest over the pastnext 10 years. This stock holding far exceeds the requirements stated in the shareholder proposal.
On an ongoing basis, ExxonMobil considers a wide rangeIn addition, retaining 50 percent of strategies and business structures,awards only until retirement, as a fundamental responsibilitystated in this proposal, would in fact result in accelerated vesting — thus undermining the intent of the Corporation’s management.program and misaligning the interests of our senior executives with those of our long-term investors. Our senior executives have a significant percentage of their wealth represented in shares, and their interests are well aligned with that of shareholders well into retirement.
Since
Furthermore, our policies already prohibit hedging awards granted under the Exxon-Mobil merger,program.
The Board believes this proposal is unnecessary. Strong forfeiture and hedging policies are already in place. Adopting the Company has returned $357 billionproposed vesting schedule would result in a shortening of senior executive award retention, which would be detrimental to shareholders through dividends and share purchases, which is greater than the market capitalization of 496intent of the S&P 500 companies. This has been done inprogram and shareholder interests. As such, the Board recommends a sustainable manner without having to dismantle the Company or undermine its business model, and has rewarded long-term shareholders with returns in excess of the S&P 500.vote against this proposal.
ITEM
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Item 7 – PROXY ACCESS BYLAWAdditional Carbon Capture and Storage and Emissions Report
This proposal was submitted by Steve Milloy, 12309 Briarbush Lane, Potomac, Maryland 20854, the beneficial owner of 100 shares for at least three years.
“Carbon Capture and Storage Report Card
Resolved:
Shareholders request that, beginning in 2023, ExxonMobil report annually to shareholders, omitting any confidential business information, the net amount of carbon dioxide (CO2) stored underground as a result of the company’s enhanced oil recovery (EOR) activities, including:
| 1. | The total amount (in tons) of captured CO2 stored underground during EOR for the year; |
| 2. | The total amount of oil (in barrels) produced through CO2-based EOR for the year; and |
| 3. | The difference (in tons) between the CO2 stored underground during EOR and the expected CO2 emissions produced by the burning of the oil produced by EOR, as calculated using EPA greenhouse gas equivalencies (i.e., 0.43 tons of CO2 per barrel of oil, https://www.epa.gov/energy/greenhouse-gases-equivalencies-calculator -calculations-and-references) or other reasonable means. |
Supporting Statement:
ExxonMobil stated on November 6, 2022: ‘ExxonMobil is counting on its long track record in carbon capture for use in enhanced oil recovery to underpin its ambitions for permanent geologic sequestration of greenhouse gases... It’s a well-proven technology that we’ve been doing for many years. We actually account for 40% globally of man-made carbon dioxide that’s being captured.’ https://www.upstreamonline.com/energy-transition/exxonmobil-sees -enhanced-oil-recovery-expertise-as-learning-path-for-climate-action/2-1-1274460
But it’s not at all clear that CO2 capture for EOR results in a net storage of CO2. After all, the produced oil will be burned by consumers and the amount of CO2 emitted thereby may in fact be greater than the amount of CO2 stored. See, e.g., https://junkscience.com/2016/03/no-co2-used-to-produce-oil-does-not-store-co2/
In the event that more CO2 is emitted as a result of EOR than is stored, it would be false and misleading to imply that EOR reduces CO2 in the atmosphere.
Such false and misleading information could make the company subject to government enforcement actions, other lawsuits and reputational harm that would adversely affect shareholder value.
Shareholders have the right to know whether the company is making claims about carbon capture that are not supported by the facts.”
The Board carefully considered this proposal and recommends you vote AGAINST it for the following reasons:
This is one of 10 new reports requested by proponents at this annual shareholder meeting.
The proposal appears to be based on an incomplete understanding of our widespread and well-funded efforts to advance carbon capture and storage technology, and the effectiveness of these initiatives. It also does not recognize that we currently provide extensive information on our annual carbon capture and storage metrics in our Advancing Climate Solutions Progress Report and other communications.
ExxonMobil has more than 30 years of experience capturing and storing CO2, and has cumulatively captured more anthropogenic CO2 than any other company. As mentioned to this proponent, we have an equity share of about one-fifth of the world’s carbon capture capacity at about 9 million metric tons per year, which is equivalent to approximately 2 million gasoline-powered passenger vehicles per year.1 Since formally launching our Low Carbon Solutions business in early 2021, we have significantly grown our pipeline of emission-reduction opportunities, including opportunities in carbon capture and storage.
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For example, our LaBarge facility has the capacity to capture up to 7 million metric tons of CO2 a year, the largest of any industrial facility in the world; furthermore, we have plans underway to expand this facility by up to 1.2 million more metric tons per year beginning in 2025. In addition, we continue to evaluate and progress potential future projects around the world. The carbon capture and storage component of our announced blue hydrogen facility at Baytown has the potential to transport and store up to 10 million metric tons of CO2 per year, more than doubling ExxonMobil’s current carbon capture capacity. It would be our initial contribution to a broad, cross-industry effort to establish a Houston carbon capture and storage hub with an initial goal of about 50 million metric tons of CO2 per year by 2030 and 100 million metric tons by 2040.
To reduce global emissions, existing oil and gas demand needs to be addressed with production techniques that enable the lowest greenhouse gas (GHG) emission intensity. The proponent is implying that there is no emissions benefit associated with the use of CO2 injection for enhanced oil recovery (EOR) production, citing an article from 2016 that does not account for full life cycle analysis. Contrary to that view, CO2-EOR is broadly recognized for its economic and GHG benefits through the use of a closed loop CO2 injection system. On a life cycle basis, which includes global oil market impacts, 63 percent of all CO2 stored through EOR is a net reduction in CO2 emissions. Compared to conventional oil, every barrel of CO2-EOR oil emits 37 percent less CO2.2 The United States government also recognizes the importance of carbon capture and storage for EOR application and recently implemented the Inflation Reduction Act that provides an expansion of the Internal Revenue Code Section 45Q CCS-EOR tax incentives. It is anticipated that these incentives will be critical to the United States achieving its near-term GHG emission reduction plans, in support of its net-zero ambition.
We plan to invest approximately $17 billion from 2022 through 2027 on initiatives to lower GHG emissions. These include investments to reduce the emissions intensity of our operated assets and investments that will help others reduce their emissions. We are open to investing even more should additional commercially viable opportunities materialize. Our commitment to help society reduce emissions includes: 1) measuring, monitoring, and managing reductions of our emissions; 2) providing lower emission-intensive products that help customers increasingly reduce their own emissions; and 3) advancing commercialization of emission-reduction and emission-storage technologies.
The additional disclosures requested by the proponent are unwarranted as CO2-EOR is broadly recognized for its greenhouse gas benefits and the disclosures requested would provide no meaningful insight into our efforts to reduce our emissions intensity and assist customers in doing the same. As shareholders already have access to extensive and rigorous reporting on the effectiveness of our decarbonization efforts, the Board recommends a vote against this proposal.
| 1 | Nine million metric tons of CO2 emissions is equivalent to approximately 2 million gasoline-powered passenger vehicles driven for one year, according to the U.S. EPA greenhouse gas equivalencies calculator. Passenger vehicles are defined as two-axle, four-tire vehicles, including passenger cars, vans, pickup trucks, and sport/utility vehicles. https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator. |
| 2 | “CO2 EOR represents a win-win strategy for beneficial use of industrially-sourced CO2. From an economic standpoint, CO2 EOR is a highly effective tool for re-invigorating oil production from mature fields that might otherwise be abandoned. From an environmental standpoint, it represents a practical way to recycle and utilize CO2 while reducing overall atmospheric CO2 emissions.” |
| https://cdn.catf.us/wp-content/uploads/2019/06/21093723/CATF_EOR_LCA_Factsheet_2019.pdf |
https://netl.doe.gov/research/coal/energy-systems/gasification/gasifipedia/eor
See also https://iea.blob.core.windows.net/assets/bf99f0f1-f4e2-43d8-b123-309c1af66555/Storing_CO2_through_Enhanced_Oil_Recovery.pdf; Global CCS capacity: Global CCS Institute, Global Status of CCS 2021, p. 14. ExxonMobil CCS capacity: ExxonMobil estimates.
Item 8 – Additional Direct Methane Measurement
This proposal was submitted by Sisters of St. Francis Charitable Trust, 3390 Windsor Avenue, Dubuque, Iowa 52001, the beneficial owner of shares with a market value exceeding $2,000 for at least three years, and lead proponent of a filing group.
“Direct Methane Measurement
Whereas, methane is at least 80 times more potent as a greenhouse gas than carbon dioxide over a 20-year period. The Environmental Protection Agency (EPA) reports that 32% of U.S. methane emissions from human activities comes from natural gas and petroleum systems.1 According to the United Nations Environment Programme (UNEP), cutting methane is the strongest lever we have to slow climate change over the next 25 years.2
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The EPA methodology used to estimate methane emissions underestimates and fails to capture many major leaks, which waste a valuable product worth over $2 billion per year. Studies have found actual emissions to be 50 to 100% higher than reported emissions.3 In certain basins, emissions are more than 10 times industry-disclosed figures.2 Therefore, oil and gas industry Scope 1 emissions may be significantly higher than currently reported. Methane emissions estimates improve when direct measurement methodologies are used, when emissions are identified by source type and at a site or facility level, and then reconciled, as shown by the Oil and Gas Methane Partnership 2.0 (OGMP).4
The U.S. joined the Global Methane Pledge in 2021, committing to use best available inventory methodologies to quantify methane emissions. The same year, investors managing more than $6 trillion supported strong federal methane regulations. Companies responsible for approximately 30% of global natural gas production, including bp, Shell, TotalEnergies, Occidental, and ConocoPhillips, have joined the OGMP, a multi-stakeholder initiative launched by UNEP committed to improving methane data quality and consistency.5 Companies that do not adequately manage methane emissions risk their reputation and license to operate.
ExxonMobil has committed to reduce methane emissions in alignment with the Global Methane Pledge by deploying best practices and advanced technologies, including satellite, aerial, and ground-sensor networks.6 The Company supports strong measurement, reporting and verification standards. It participates in various international methane coalitions and contributes to research to improve methane quantification.7 However, it has not taken the critical step to reduce investor concerns by reporting on its methane emission measurements.
Resolved, shareholders request that ExxonMobil issue a report analyzing the reliability of its methane emission disclosures. The report should:
| • | | Be made public, omit proprietary information, and be prepared expeditiously at reasonable cost; and |
| • | | Summarize the outcome of efforts to directly measure methane emissions, using recognized frameworks such as OGMP; and whether those outcomes suggest a need to alter the Company’s actions to achieve its climate targets. |
Supporting Statement:
At management’s discretion, we recommend that the report:
| • | | Describe the types of source- and site-level measurements used; |
| • | | Describe any material difference between its own or third-party direct measurement results and Company’s reported methane emissions; |
| • | | Describe plans to validate emissions estimates and disclosure through third-party audit or evaluation; and |
| • | | Describe plans to improve emission estimates over time, consistent with frameworks such as OGMP. |
| 1 | https://www.epa.gov/ghgemissions/overview-greenhouse-gases |
| 2 | https://www.ccacoalition.org/sites/default/files/press/GMA%20Press%20Release%20FINAL.pdf |
| 3 | https://www.seas.harvard.edu/news/2021/03/oil-and-natural-gas-production-emit-more-methane-previously-thought, https://www.nature.com/articles/s41467-021-25017-4 |
| 4 | https://business.edf.org/files/Investors-Guide-to-the-OGMP_09.17.21_FINAL.pdf |
| 5 | http://ogmpartnership.com/partners |
| 6 | https://corporate.exxonmobil.com/climate-solutions/advancing-climate-solutions#:~:text=Net%2Dzero%20ambition,Scope%202%20greenhouse%20gas%20emissions” |
The Board carefully considered this proposal and recommends you vote AGAINST it for the following reasons:
This is one of 10 new reports requested by proponents at this annual shareholder meeting.
ExxonMobil agrees that reducing methane emissions is one of the most effective ways to help reduce the risks associated with climate change in the near term, and we have made significant progress, both to reduce methane emissions and to improve the robust disclosures already provided. However, the proposal neglects to acknowledge the important work we are doing on these fronts and suggests initiatives that are duplicative to what we are already doing, which would be unnecessary. The Board therefore recommends that shareholders vote against this proposal.
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ExxonMobil is a leader in advocating for strong measurement, reporting, and verification standards, and we have publicly reported methane emissions on an annual basis since 2014. This data is based on internationally recognized methodologies and compiled every year by determining emissions by source at each operated asset across the Company. As discussed with the proponent, since receiving this proposal, we published our Advancing Climate Solutions 2023 Progress Report, which includes our methane emissions data and describes efforts to continuously improve the reliability of our methane reporting as part of broader efforts to reduce greenhouse gas emissions in support of a lower emissions future.
Our reporting framework has enabled the development of consistent and comparable data, which, along with growing field observations, has guided our mitigation efforts. We are focused on emissions mitigation and the transition to observation-based emission quantification of potential non-routine sources. This is why we continue to develop and deploy enhanced technologies to ensure rapid detection, mitigation, and quantification of these non-routine sources at our operated assets.
Since 2019, we have voluntarily used airplane-based surveys as enhanced leak detection in the Permian Basin. Additionally, we are installing state-of-the-art technology across our 1.8 million-acre Permian position to continuously monitor and detect methane leaks by integrating data from ground sensors, aerial flyovers, and satellite images. We have already begun 24/7 monitoring of certain ground sources in the field, and we expect the entire system to be fully operational by 2025.
Lloyd’s Register Quality Assurance has provided their independent limited level of assurance that the 2021 ExxonMobil greenhouse gas emissions inventory meets ISO 14064-3 expectations. The assurance engagement covered ExxonMobil’s GHG Inventory for CY2021 and Oil & Gas Climate Initiative (OGCI) Metrics for CY2021, including absolute and intensity metrics for greenhouse gas emissions, methane emissions, and flaring emissions for operated assets based on IPCC AR6.
Furthermore, we aim to continually improve emission estimates over time by applying the best available technology and protocols, and support utilizing frameworks similar to the Oil and Gas Methane Partnership 2.0 (OGMP 2.0).
However, significant challenges remain with us joining, and using the framework established by, OGMP 2.0. Quantification technologies are still emerging and do not currently provide consistent, repeatable results at the site/point-source level. In many countries where we have operations, there are significant access and security issues, as well as a limited number of providers to support measurement and quantification technologies. In addition, the framework requires the execution of a memorandum of understanding that we believe poses onerous legal obligations, including a requirement for us to indemnify the United Nations. We are continuing to collaborate with the United Nations Environment Programme (UNEP) and OGMP 2.0 leadership and to improve the quality of methane emissions reporting.
We are in regular contact with third-party groups who monitor methane emissions. We are not aware of any third-party direct measurement results that are materially different than our reported methane emissions. If any material methane source from our operations is identified in the future, we would take steps to confirm the data and address the issue.
As described in the Advancing Climate Solutions 2023 Progress Report, we have long participated in industry and academic consortiums to advance the scientific understanding and quality of methane measurement, calculation, and models. To that end, we recently joined the Gas Technology Institute-led Project Veritas with 30 other leading organizations to develop and implement a standardized, science-based, technology-neutral, measurement-informed approach to reporting methane emissions.
Additionally, we are actively progressing the elimination of many sources of methane emissions as part of our commitment to OGCI’s Aiming for Zero Methane Emissions Initiative. We are working to eliminate all natural gas driven pneumatic devices by 2025 in our key U.S. unconventional operated assets and to accelerate the phase-out of these devices across all of our global operated assets where technically feasible. Also, we eliminated routine flaring in our Permian Basin operated assets at year-end 2022 and plan to eliminate routine flaring across our global operated upstream assets by 2030 in line with the World Bank Zero Routine Flaring Initiative.
In summary, given the significant progress we are making to reduce methane emissions and the robust disclosures already provided, the Board believes that this proposal is duplicative and, therefore, unnecessary. As such, the Board recommends that shareholders vote against this proposal.
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For more information, visit our website: corporate.exxonmobil.com/Climate-Solutions/Methane.
Item 9 – Establish a Scope 3 Target and Reduce Hydrocarbon Sales
This proposal was submitted by Follow This, Anthony Fokkerweg 61, 1059 CP Amsterdam, Netherlands, the beneficial owner of 37 shares for at least three years, and lead proponent of a filing group.
“Shareholder proposal at the 2023 AGM of ExxonMobil Corporation (‘the Company’)
Filed by Follow This
WHEREAS: The world has declared to drive down greenhouse gas (GHG) emissions this decade, the energy transition presents great opportunities for an integrated energy multinational.
RESOLVED: Shareholders request the Company to set a medium-term reduction target covering the greenhouse gas (GHG) emissions of the use of its energy products (Scope 3) consistent with the goal of the Paris Climate Agreement: to limit global warming to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C.
The strategy for how to achieve this target is entirely up to the board.
You have our support.
SUPPORTING STATEMENT:
We believe that ExxonMobil could lead and thrive in the energy transition by meeting the increasing demand for energy services while reducing GHG emissions to levels consistent with the global intergovernmental consensus specified by the Paris Accord.
Setting a Paris-aligned medium-term target covering Scope 3 is paramount, because the medium-term is decisive for the Company and the Paris Accord and because Scope 3 accounts for around 90% of total Scope 1, 2 and 3 emissions.1,2
ExxonMobil is one of the few oil majors that has not set Scope 3 targets (at the time of filing this proposal).
Therefore, this proposal supports ExxonMobil to set a Paris-aligned medium-term target covering Scope 3.
We, the shareholders, understand this support to be our fiduciary duty to secure the long-term interest of the Company and to protect all our assets in the global economy from devastating climate change; limiting global warming is essential to risk management and responsible stewardship of the economy.
Backing from investors determined to achieve Paris remains strong; in 2022, 28% of shareholders in ExxonMobil and up to 39% of shareholders in other oil majors voted in favour of Follow This climate resolutions requesting Paris-aligned targets.3
The current energy crisis and the climate crisis can be addressed simultaneously by investing the windfall profits from high oil and gas prices in other energy sources.4 Diversification of the energy supply would foster energy security by reducing dependency on oil and gas fields tied up in geo-political conflict and reduce emissions to address the climate crisis simultaneously.
Changes in demand are as critical as changes in supply, but customers can only change sufficiently when key system players like ExxonMobil offer alternative energy sources at scale.5 By investing in alternatives, a global integrated energy company like ExxonMobil could decrease emissions without ultimately shrinking business.
It is in the Company’s and its shareholders’ best interest to pursue the opportunities the energy transition presents; this will also pre-empt risks of losing access to capital markets, policy interventions, litigation, liability for the costs of climate change, disruptive innovation, and stranded assets.6
You have our support.
Sources: www.follow-this.org/ExxonMobil-resolution-2023-sources/”
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The Board carefully considered this proposal and recommends you vote AGAINST it for the following reasons:
The Board takes an active role in overseeing ExxonMobil’s approach to climate change and agrees with the proponent that we can be, and are in fact working to be, a leader in the energy transition. As described in our Advancing Climate Solutions 2023 Progress Report, we have increased investments by nearly 15 percent to approximately $17 billion from 2022 through 2027 to advance a number of initiatives to reduce greenhouse gas emissions in our own operations and help others reduce their emissions. We believe setting Scope 3 targets can have significant unintended consequences for society, and therefore we recommend a vote against this proposal.
In making this recommendation against the proposal, we note the following:
| 1) | The proposal does not acknowledge our significant work and commitment to reduce our emissions and aid our customers in doing the same, including those emissions arising from energy-intensive industries. |
| 2) | The proponent is an anti-oil and gas activist group using environmental, social, and governance objectives to diminish the important role ExxonMobil plays in the energy industry. |
The group’s founder openly admitted in a TED Talk, which is available on its website, that its shareholder proposals use alignment with the Paris Climate Agreement 1.5°C as a “Trojan horse”1 to force companies to eliminate oil and natural gas investments. Forcing investment decisions based on this scenario, before the technology and policies exist, would have clear consequences for energy security, consumer pricing, and standards of living for people in the U.S. and around the world by creating supply shortages that drive prices up and harm vulnerable populations. The proposal does nothing to further shareholder interests.
| 3) | This “Trojan horse” proposal speaks to a Scope 3 emissions framework that, when applied at a company level, has flaws, not just in its calculations but in the misguided insights those calculations offer (e.g., double counting of emissions). We believe applying Scope 3 targets to companies will have significant, unintended consequences for society. |
As we discussed with the proponent, calculating Scope 3 emissions at a macro level can provide useful insights into sources of emissions and opportunities for an economy to improve. However, applying Scope 3 targets to an oil and gas company incentivizes asset divestments or reduced production of products that society needs. In the first case, the greenhouse gas emissions still occur but are no longer attributable to the original asset owner. This does not reduce global emissions and may, depending on the capabilities and commitments of the new owner, increase overall emissions. In the second case, where operations are discontinued, the need for that energy remains. Consumers are forced to make do with less energy, pay significantly more for their energy, or, depending on availability, turn to alternative, higher-emitting sources like coal.
Another flaw of company-specific Scope 3 targets is that it disincentivizes companies from providing products that help society reduce emissions by displacing higher-emitting alternatives. For example, the natural gas we produce can reduce global emissions by about 60 percent on a life-cycle intensity basis when it displaces coal. However, in producing more natural gas for society to burn less coal, our Company’s calculated Scope 3 emissions go up. This is a clear disincentive for helping society reduce emissions.
Likewise, Scope 3 does not allow for a net number when arriving at its calculations. As a consequence, no emissions benefit is given to a company like ours that is engaged in the critical work of helping customers remove and safely store carbon emissions that would otherwise wind up in the atmosphere.
Make no mistake, we are committed to reducing greenhouse gas emissions, which is why we’re taking a full life-cycle approach that uses intensity metrics and allows for a more meaningful view of our progress and contributions to society across products and industries. To demonstrate this approach, we have modeled and disclosed our expected lifecycle emission reductions by 2030 (a 6 percent reduction in intensity and an 18 percent reduction in absolute emissions versus 2016).
In our view, this proposal reflects the proponent’s underlying objective to reduce the supply of oil and natural gas at a time in the energy transition when there is no viable alternative at scale. It is overly prescriptive and incorrectly applies a metric that is intended to measure society’s progress in reducing emissions to an individual company. Scope 3 targets are the wrong basis for evaluating a company’s progress in supporting the goals of the Paris Agreement and
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meeting the needs of society. For these reasons, the Board supports the Company’s life-cycle approach toward reducing greenhouse gas emissions and rejects using Scope 3 targets as put forth by the proponent. We recommend a vote against this proposal.
| 1 | https://www.follow-this.org/how-to-get-big-oil-to-end-the-climate-crisis-mark-van-baal-tedxeindhoven/ |
Item 10 – Additional Report on Worst-case Spill and Response Plans
This proposal was submitted by Mercy Investment Services, Inc., 2039 North Geyer Road, St. Louis, Missouri 63131, the beneficial owner of shares with a market value exceeding $2,000 for at least three years, and lead proponent of a filing group.
“WHEREAS:
ExxonMobil operates one of the largest oil plays discovered in the past decade, offshore of the South American country Guyana. After discovering oil in 2015, development proceeded rapidly. Production began in 2019,1 with capacity expected to exceed one million bpd by 2030.2
CEO Darren Woods admitted ExxonMobil is exceeding design capacity for production in two offshore projects in Guyana.3 Production in one project has reached 150,000 bpd, clearly above its listed peak production safety threshold of 120,000 bpd4, raising concerns among observers.5 A former director of Guyana’s environmental protection agency called this ‘unheard of’ and stated ExxonMobil is ‘without a conscience and ruthlessly taking advantage of an abysmal EPA and weak Government’ in Guyana.6 Other safety concerns include gas compressor failures resulting in fines exceeding US$10 million.7
Caribbean countries rely on tourism and fishing industries to support their economies,8 yet ExxonMobil’s Environmental Impact Assessment (EIA) characterizes residual risk to employment as minor and assumes that a large oil spill is unlikely.9
The BP Macondo oil spill released millions of barrels of oil into the Gulf of Mexico over 87 days and created a 57,500 square mile oil slick, exemplifying the risks of deep-water drilling.10 BP stock plummeted 52% over two months.11 Robert Bea, an expert on the Macondo spill, warns ExxonMobil shows ‘ignorance of risk management fundamentals’ in its Guyana operations and mirrors overconfidence preceding the Macondo disaster.12 The most severe spill scenario in ExxonMobil’s EIA accounts for only a 30-day spill.13
President of Esso Exploration and Guyana Limited, Alistair Routledge, has stated ‘there is no limit’ to what ExxonMobil would do in response to an oil spill.14 ExxonMobil’s responsibility and potential liability are of concern to investors.
RESOLVED:
Shareholders request that the Company issue a report evaluating the economic, human, and environmental impacts of a worst-case oil spill from its operations offshore of Guyana. The report should be prepared at reasonable expense, omit proprietary or privileged information, and clarify the extent of the Company’s cleanup response commitments given the potential for severe impact on Caribbean economies.
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Supporting Statement:
A ‘worst-case’ should use adverse assumptions such as an extended duration of an uncontrolled release similar to the BP spill, severe weather conditions, increased flow including risks from operating beyond the production thresholds in the EIA, and potential harm to marine ecosystems and public health.
| 1 | https://corporate.exxonmobil.com/news/newsroom/news-releases/2022/0211_exxonmobil-starts-production-at- guyanas-second-offshore-development. |
| 2 | https://newsroom.gy/2022/10/26/with-new-discoveries-oil-production-to-exceed-1-million-barrels-per-day-by-2030/; |
| 3 | https://www.fool.com/earnings/call-transcripts/2022/10/28/exxonmobil-xom-q3-2022-earnings-call-transcript/ |
| 5 | https://www.kaieteurnewsonline.com/2022/11/01/exxonmobil-ruthlessly-taking-advantage-of-slack-govt-abysmal-epa-by-violating-safe-production-limits-dr-adams/ |
| 6 | https://www.kaieteurnewsonline.com/2022/11/01/exxonmobil-ruthlessly-taking-advantage-of-slack-govt-abysmal-epa-by-violating-safe-production-limits-dr-adams/ |
| 7 | https://demerarawaves.com/2022/07/26/exxonmobil-racks-up-us10-million-flaring-fine-installs-new-flash-gas-compressor-increases-liza-destinys-daily-output/ |
| 8 | https://www.fao.org/3/ax904e/ax904e.pdf |
| 9 | Payara EIA, Volume I, p. 1,002. |
| 10 | https://www.britannica.com/event/Deepwater-Horizon-oil-spill;See also, https://www.epa.gov/enforcement/ deepwater-horizon-bp-gulf-mexico-oil-spill#:~:text=4%20million%20barrels%20of%20oil,be%20responsible%20for% 20the%20spill. |
| 11 | https://money.cnn.com/2010/06/24/news/companies/BP_stock_price/index.htm |
| 12 | https://www.theguardian.com/environment/2021/aug/17/exxon-oil-drilling-guyana-disaster-risk |
| 13 | Payara EIA Volume I, p. 839 |
| 14 | Newsroom Interview, https://www.facebook.com/watch/?v=1758505224495143” |
The Board carefully considered this proposal and recommends you vote AGAINST it for the following reasons:
This is one of 10 new reports requested by proponents at this annual shareholder meeting.
The information requested by the proposal is already publicly available in published reports prepared by the Company and credible third-party experts, as mentioned to this proponent during our engagement. This includes multiple Environmental Impact Assessments (EIAs), the Oil Spill Response Plan for Guyana Operations (OSRP), and other publications and filings that are available on our website and the website of the Guyana Environmental Protection Agency (EPA) as part of the legally required permitting process. This proposal is therefore redundant and unnecessary.
ExxonMobil is determined to be a good corporate citizen wherever it operates worldwide. Before any exploration activities were carried out in Guyana, we developed detailed emergency preparedness and response plans, including the OSRP. The plans indicate that we are prepared and able to handle possible oil spills in the region. These plans are continuously updated as our project scope in Guyana expands, and they include detailed models showing a wide variety of potential scenarios, including our response plan under those scenarios.
These scenarios include releases of different types of hydrocarbons, with several being applicable for spills at the shorebase(s) and on vessels in the Demerara River estuary (e.g., from a supply vessel) or in the Atlantic Ocean (e.g., from a well, drillship, supply vessel, tanker, or floating production, storage, and offloading vessel). Each ExxonMobil facility and business unit has access to readily available trained responders, including regional response teams, to provide rapid tactical support. These scenarios also consider the latest technology advancements. Since the Macondo incident, the oil and gas industry and their partners have developed a world-wide network of equipment that was not available in 2010, most notably the capping stacks. Through its multiple subscriptions to oil spill response companies, in the case of an incident, ExxonMobil Guyana would activate the resources needed to bring a capping stack into Guyana, and mobilize it and related resources to the well site in record time.
We also want to clear up any misunderstanding of engineering terminology. When we indicate an asset is producing “above design capacity,” we simply mean that the volume is above the investment basis, meaning its performance is exceeding expectations. The actual volume that is safe to produce is well above the design capacity. It in no way indicates that the asset is producing at an unsafe level. After production begins, we regularly look for opportunities to increase production beyond initial EIA estimates while remaining within safe operational limits. We take safety very seriously at all our sites. Last, we safely replaced a gas compressor, working closely with the Government of Guyana, and agreed in advance to pay an associated fee. The proponent mischaracterizes this fee as a fine.
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Given the comprehensive materials that are publicly available on our website, including our preparedness plan and the EIAs related to our Guyana operations, creating an additional report as requested by this proposal would place an unnecessary administrative burden on ExxonMobil, be wasteful of the Company’s time and resources, and therefore is not in the best interests of shareholders. For the reasons stated above, the Board recommends a vote against this proposal.
Item 11 – GHG Reporting on Adjusted Basis
This proposal was submitted by Andrew Behar, 2020 Milvia St., Suite 500, Berkeley, California 94704, the beneficial owner 40 shares for at least three years, and lead proponent of a filing group.
“WHEREAS: The economic risks associated with climate change exist in the real world rather than on company balance sheets. Transferring emissions from one company to another may reduce balance sheet emissions but does not mitigate company or stakeholder exposure to climate risk or contribute to the goal of limiting global temperature rise to 1.5 degrees Celsius. In the aggregate, upstream oil and gas assets are moving from operators with stronger climate commitments to operators with weaker climate targets and disclosures.1
The Glasgow Financial Alliance for Net Zero states that ‘divestment of carbon-intensive assets can be ineffective and even lead to real-world increases in emissions.’2 As such, these divestments should not be counted as emissions reductions.
To accurately account for greenhouse gas (GHG) emissions reductions, the Greenhouse Gas Protocol provides that companies should recalculate base year emissions in the event of a ‘transfer of ownership or control of emissions-generating activities.’3 Oil and gas industry association IPIECA similarly recommends ‘adjustments to the base year emissions’ to account for asset divestiture, to avoid giving the appearance of ‘increases or decreases in emissions, when in fact. . . emissions would merely be transferred from one company to another.’4
Since 2016, ExxonMobil reports absolute Scope 1 and 2 emissions reductions of roughly 10% on both equity and operated bases.5 However, between 2017 and 2021, ExxonMobil sold more assets than any other American oil and gas company except Chevron, ranking fourth globally among sellers.6 It is unclear how ExxonMobil accounts for these divestitures in its emissions reporting. Therefore, shareholders cannot determine whether ExxonMobil’s reported GHG reductions are the result of operational improvements or of transferring emissions off its books.
In contrast, peer company Devon Energy recalculates its baseline when asset divestitures or investments result in ‘a change to its emissions baseline of 5% or higher’ to ensure accuracy and comparability of emissions reporting.7 Devon notes that this ‘recalculation methodology affirms our commitment to structurally drive down emissions, rather than divesting assets as a means to achieve our ambitious emissions reduction targets.’8 Investors deserve the same transparency from ExxonMobil.
RESOLVED: Shareholders request that ExxonMobil, at reasonable cost and omitting proprietary information, disclose a recalculated emissions baseline that excludes the aggregated GHG emissions from material asset divestitures occurring since 2016, the year ExxonMobil uses to baseline its emissions.
SUPPORTING STATEMENT: Proponents recommend disclosing, at management’s discretion:
| • | | The emissions associated with ExxonMobil’s material asset divestments since 2016; |
| • | | What portion, if any, of ExxonMobil’s current emissions reduction targets relies on accounting for asset transfers as emissions reductions; |
| • | | A base year emissions recalculation policy establishing a threshold for future recalculations related to divestitures. |
| 1 | https://business.edf.org/files/Transferred-Emissions-How-Oil-Gas-MA-Hamper-Energy-Transition.pdf p. 4 |
| 2 | https://assets.bbhub.io/company/sites/63/2021/11/GFANZ-Progress-Report.pdf p. 52 |
| 3 | https://ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf p. 35 |
| 4 | https://www.ipieca.org/resources/good-practice/petroleum-industry-guidelines-for-reporting-greenhouse-gas- emissions-2nd-edition/ p. 39 |
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| 5 | https://corporate.exxonmobil.com/-/media/global/files/advancing-climate-solutions-progress-report/2022-july- update/exxonmobil-advancing-climate-solutions-2022-progress-report.pdf?la=en&hash= 3A2B299463CE50DCDD6A9595E49AC3030CFF4350 |
| 6 | https://business.edf.org/files/Transferred-Emissions-How-Oil-Gas-MA-Hamper-Energy-Transition.pdf p. 22 |
| 7 | https://dvnweb.azureedge.net/assets/documents/Sustainability/DVN_2022_SustainabilityReport.pdf p. 20 |
The Board carefully considered this proposal and recommends you vote AGAINST it for the following reasons:
This is one of 10 new reports requested by proponents at this annual shareholder meeting.
The Board agrees with the proponent that greenhouse gas metrics and calculation methods should incentivize actions to address emissions. We also acknowledge that the proponent is aligned with our long-held position that divesting assets to manipulate company-specific absolute emissions is not a constructive way to reduce global emissions. We make divestment decisions to maximize value and improve competitiveness, not to manage emissions.
Divesting assets to reduce emissions and meet an emissions target does not reduce global emissions and could result in potentially higher emissions depending on the capabilities of the acquiring company. Similarly, an individual company reducing oil and natural gas investments required to meet global demand does not reduce emissions; rather, it shifts the investments needed to meet demand and resulting emissions to other, potentially less capable, companies. That is why we commit to reducing emissions intensity. We believe that society’s demand for oil and natural gas should be met by producers with the lowest-emissions intensity for the resource types required to meet that demand.
Further, we believe that a company’s size, reflected in absolute emissions, should not be used to evaluate a company’s commitment to improving global emissions. To offset reduced industry capacity and meet growing demand, we are planning to increase oil and natural gas production and refining throughput while reducing the emissions of our operations, resulting in a lower emissions intensity. Focusing exclusively on absolute emissions would discourage this and lead to further supply shortages and higher prices – disproportionately increasing the burden on low-income families.
We advocate for economy-wide, comprehensive emissions measurement using a life-cycle approach and emissions intensity.
The proponent correctly states that we do not adjust for divestments. As we have discussed with the proponent, we also do not adjust for acquisitions or added capacity. This is consistent with a majority of the industry, and aligns with the U.S. EPA Greenhouse Gas Reporting Program (GHGRP) regulations. The proponent’s request to recalculate the baseline to remove divested assets would be inconsistent with the GHGRP regulatory requirements and reporting practices for reserves and financial data.
Consistent with regulatory requirements, through 2022 and using a baseline year of 2016 for Scope 1 and Scope 2 emissions from operated assets, we have disclosed that the Company has achieved a greater than 10 percent reduction in its greenhouse gas emissions intensity and approximately a 15 percent reduction in absolute emissions. For the same period, methane emissions intensity from operated assets is down more than 50 percent and by 50 percent on an absolute basis. Informed by detailed emission-reduction roadmaps for major operated assets, the Company is making significant progress toward its greenhouse gas emission-reduction plans, including meeting our 2025 emission intensity reduction goals four years early.1 The Company also has announced that, with advances in technology and clear and consistent government policies, it aims to achieve net-zero operated Scope 1 and 2 greenhouse gas emissions by 2050.
In addition, we notified the SEC of our view that this proposal, together with the proposal from Anna Marie Lyles (Item 14 below), misuses the shareholder proposal process by violating the clear intent of the SEC’s one-proposal limitation given that both proposals originate with persons directly affiliated with As You Sow. This proponent is the CEO of As You Sow, and Ms. Lyles serves as board member and treasurer of As You Sow. As You Sow is an organization with a history of activism against the oil and natural gas industry. This includes working with 350.org and EarthJustice to promote “keep it in the ground” efforts.2,3
For these reasons, the Board recommends a vote against this proposal, as it narrowly focuses on divestments and doesn’t address the broader measurement issue associated with continuing to responsibly meet society’s needs while
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reducing emissions. In addition, it would lead to a reporting basis that is inconsistent with the majority of industry. It also fails to recognize the Company’s disclosures and clear actions to achieve its emission-reduction plans, and the progress that is being made to achieve them.
| 1 | corporate.exxonmobil.com/news/newsroom/news-releases/2021/1201_exxonmobil-announces-plans-to-2027-doubling-earnings-and-cash-flow-potential-reducing-emissions; exxonmobil.com/advancingclimatesolutions, page 88. |
| 2 | As You Sow is listed under the heading “Allies” on 350.org’s website. 350.org describes itself as, “an international movement of ordinary people working to end the age of fossil fuels and build a world of community-led renewable energy for all.” 350.org’s aims include, “No new fossil fuel projects anywhere,” “Stop[ping] and ban[ning] all oil, coal and gas projects from being built…” and, “Cut[ting] off the social license and financing for fossil fuel companies – divest, desponsor and defund.” (Sources: https://350.org/allies/ and https://350.org/about/). |
| 3 | As You Sow has previously worked with EarthJustice in filing complaints with the SEC against energy companies. (Source: https://www.upi.com/Energy-News/2014/05/07/Maryland-LNG-terminal-draws-fire/4981399470232/). EarthJustice describes the aims of its work to include: “End the extraction and burning of fossil fuels…blocking new fossil fuel infrastructure, and more.” (Source: https://earthjustice.org/our_work). Its strategies include, “…work[ing] to halt investments in massive new gas plants…and we compel utilities to consider clean energy and energy efficiency alternatives.” (Source: https://earthjustice.org/our_work/oil-coal-gas). |
| EarthJustice has also engaged in several legal campaigns that involved Exxon. (Source: https://earthjustice.org/blog/2017-may/taking-exxon-to-court-to-protect-clean-air-and-winning-big). |
Item 12 – Report on Asset Retirement Obligations Under IEA NZE Scenario
This proposal was submitted by Legal & General Investment Management America, Inc., 71 S. Wacker Drive, Suite 800, Chicago Illinois 60606, the beneficial owner of 1,082,666 shares for at least one year, and lead proponent of a filing group.
“Report on the Impact of the Energy Transition on Asset Retirement Obligations
Last year 51% of ExxonMobil shareholders supported a proposal asking for an audited report on how the International Energy Agency Net Zero by 2050 pathway (IEA NZE) would affect the assumptions, costs, estimates, and valuations underlying its financial statements, including Asset Retirement Obligations (AROs). Despite the majority vote, investors continue to lack the requisite transparency to assess the financial impact associated with the energy transition and the potential for accelerated remediation and closure obligations.
Oil and gas companies are legally required to decommission long-lived tangible assets at the end of their useful lives. However, given uncertainty around lives of assets in midstream and downstream segments (e.g., refineries, pipelines, and wells), most oil and gas companies have only recognized upstream AROs (presented on a discounted basis). For example, ExxonMobil has generally not recognized the relevant liabilities or disclosed estimated costs for downstream and chemical facilities, maintaining that ‘these sites have indeterminate lives based on plans for continued operations and as such, the fair value of the conditional legal obligations cannot be measured, since it is impossible to estimate the future settlement dates of such obligations.’1
As companies are not disclosing estimated undiscounted costs or discount rates used and/or the payment schedule of those obligations, investors also have limited insight into the estimates and assumptions that underpin reported AROs, making it difficult for them to analyze the impact of the energy transition on these obligations and to formulate their own risk-adjusted values. However, peers such as bp2have disclosed the estimated undiscounted ARO [‘decommissioning’] amounts and estimated timing thereof. Shell3 has also noted that some previously unrecognized AROs [‘decommissioning and restoration’ provisions] would have to be recognized, given the energy transition. Ideally, corporate disclosures would include discount rates, asset types, the range of potential settlement dates and probabilities associated with those dates given potential accelerated timing of the energy transition.
Resolved: Shareholders request that the Board provide an audited report estimating the quantitative impacts of the IEA NZE scenario on all asset retirement obligations. The report should disclose, as the Board deems appropriate, the estimated undiscounted costs to settle, in aggregate, related upstream and downstream AROs, and separately, identify both recognized and unrecognized amounts, as applicable. The Board should publish the report by February 2024 at reasonable cost and omitting proprietary information. Alternately this information could be disclosed in the 2023 consolidated financial statements.
Supporting statement: The Proponent recommends the report be supported with reasonable assurance from an independent auditor. In the Board and management’s discretion we recommend such report also disclose
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quantitative key assumptions used to estimate the AROs and whether, based on known information, it is reasonably possible that assumptions and estimates will change in the near term.
| 1 | Exxon Mobil Corporation Form 10-K for the fiscal year ended December 31, 2021, p. 86. https://www.sec.gov/Archives/edgar/data/34088/000003408822000011/xom-20211231.htm |
| 2 | bp Annual Report and Form 20-F 2021, p. 191. https://www.sec.gov/Archives/edgar/data/0000313807/000031380722000012/bp-20211231.htm |
| 3 | Shell plc Form 20-F, 2021, p. 222, 245 and 256. https://www.sec.gov/Archives/edgar/data/1306965/000130696522000012/shel-20211231.htm” |
The Board carefully considered this proposal and recommends you vote AGAINST it for the following reasons:
This is one of 10 new reports requested by proponents at this annual shareholder meeting.
ExxonMobil’s Advancing Climate Solutions 2023 Progress Report, discussed with this proponent, contains a detailed account of our most recent resiliency modeling and expands disclosures on this topic in direct response to previous requests from shareholders. As a result, the proponent’s request for this narrow, prescriptive additional disclosure is unnecessary.
It is not reasonable to require us to arbitrarily establish asset retirement obligations for assets with indeterminate lives, contrary to our International Energy Agency Net Zero Emissions by 2050 (IEA NZE) scenario analysis. The proposal seeks to replace our thoughtful, data-based approach to the analysis with the proponent’s expectations for the energy transition or with strategies that peers are pursuing to shrink or exit businesses. We believe this is inappropriate, is not reflective of how we expect to manage our assets as the energy transition progresses, and would result in misleading disclosure. This would not serve the interests of our shareholders.
For background, our most recent resiliency modeling, which was subject to a quality-assurance audit by an independent third-party, describes our approach to scenario analysis and the robustness of our business and assets through an aggressive energy transition scenario. As requested by the prior proposal, it was conducted using the assumptions provided by the IEA NZE scenario. It is important to note that the IEA acknowledges that society is not on an IEA NZE pathway, and that the IEA NZE scenario assumes unprecedented energy efficiency gains, innovation and technology transfer, lower-emission investments, and globally coordinated greenhouse gas reduction policy by governments. Further, under that scenario, oil and natural gas remain an important part of the supply mix at least through 2050.
The Advancing Climate Solutions 2023 Progress Report makes clear that assets with a low cost of supply, like those in our portfolio, will be needed to meet society’s needs. In particular, assets with shorter production cycles, such as unconventional developments in the Permian Basin, and a lower cost of supply, like deepwater production in Guyana, would continue to attract capital and generate competitive returns under a multitude of different scenarios, including the IEA NZE scenario. The future value and flexibility of individual assets in our portfolio vary based on their type, location, and other characteristics that respond differently to global and regional economic signals, technology evolution, commodity prices, government policies, and many other variables. As a result, the life span of many of our refineries and chemical plants is indeterminate. Market conditions as described in the IEA NZE scenario do not necessarily make an individual asset obsolete.
As with any business, we incur retirement obligations for certain assets, and to the extent the timing of these can be reasonably estimated, we record on our balance sheet the fair value of those obligations on a discounted basis. Asset retirement obligations for other types of assets, such as refineries and chemical plants, cannot be reasonably estimated because they have indeterminate life spans, based on plans for continued operations. Those assets, by design, provide greater optionality and lend themselves to the possibility of other use.
More than 75 percent of our refining and chemical manufacturing capacity is co-located in large, integrated sites that have the flexibility to shift product yield to best meet society’s evolving needs. As demand for conventional road transport fuels declines, select assets can be repurposed to manufacture high-value products including chemicals, lubricants, and lower-emission fuels. Less-advantaged, non-integrated refineries could be converted to terminals or sold. Under the IEA NZE scenario, the market for chemical products continues to grow, in part supported by their greenhouse gas benefits and lower cost compared to alternatives. Further, we are investing in technologies and
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capabilities to change our product mix as market demand changes. We continue to improve our portfolio, focusing investments on those major assets in advantaged locations, including locations with low cost of supply and with sound, comprehensive carbon policy.
Our investments in North America, China, and Singapore will help meet demand for products with lower life-cycle emissions, and the flexibility of our sites will allow us to change as society’s needs evolve. This is consistent with our strategy and the flexibility we have to repurpose assets in a changing market environment. It would therefore be premature and inappropriate to assume specific asset-life limitations even under the IEA NZE scenario.
To be clear, our recently updated resiliency disclosures, which were made in response to shareholder feedback, describe the flexibility we have to change the product mix in our integrated, petrochemical assets to extend their useful lives as the energy transition evolves.
The Board recommends that shareholders vote against this proposal.
Item 13 – Report on Plastics Under SCS Scenario
This proposal was submitted by Meyer Memorial Trust (S), 2020 Milvia St., Suite 500, Berkeley, California 94704, the beneficial owner of 11,225 shares for at least one year.
“WHEREAS: Plastics, with a lifecycle social cost at least ten times higher than its market price, actively threatens the world’s oceans, wildlife, and public health.1 Concern about the growing scale and impact of global plastic pollution has elevated the issue to crisis levels.2 Of particular concern are single-use plastics (SUPs)3 which make up the largest component of the 11 million metric tons of plastic ending up in waterways annually.4 Without drastic action, this amount could triple by 2040.5
In response to the plastic pollution crisis, countries and major packaging brands are beginning to drive reductions in virgin plastic use.6,7
Several studies demonstrate that a significant absolute reduction in virgin plastic demand is critical to curbing the flow of plastic into oceans.8 One of the most robust reduction pathways is presented in the widely-respected report, Breaking the Plastic Wave, which found that plastic leakage into the ocean can be feasibly reduced by 80% under its System Change Scenario (SCS), which is based on a significant absolute reduction of virgin SUPs.9,10
BP has recognized the potential disruption that global SUP reductions could have on the oil industry in its 2019 Outlook, where it found a global SUP ban by 2040 would reduce oil demand growth by 60%.11
The future under the SCS – one built on recycled plastics and circular business models – looks drastically different than today’s linear take-make-waste production model. Several implications of the SCS, including a one-third absolute demand reduction (mostly of virgin SUPs) and immediate reduction of new investment in virgin production, are at odds with Exxon’s planned investments.12
Exxon was recently identified as the largest global producer of SUP-bound polymers (5.9 million metric tons in 2019, an estimated 50% of its total polymer production) and exposed for lobbying against plastic pollution laws.13,14 While Exxon states it is acting to ‘address plastic waste,’ it fails to meaningfully address the potential for regulatory restrictions and/or significant disruption in demand for virgin plastic, both of which could result in stranded assets.15,16
RESOLVED: Shareholders request the Board issue an audited report addressing, at reasonable cost and omitting proprietary information, whether and how a significant reduction in virgin plastic demand, as set forth in Breaking the Plastic Wave’s System Change Scenario for reducing ocean plastic pollution, would affect the Company’s financial position and assumptions underlying its financial statements.
SUPPORTING STATEMENT: Proponents recommend that, at Board discretion, the report include:
| • | | Quantification (in tons and/or as a percentage of the total) of the Company’s polymer production for SUP markets; |
| • | | A summary or list of the Company’s existing and planned investments that may be materially impacted by the SCS; |
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| 2023 Proxy Statement | | | | 93 | | |
| • | | Plans or goals to shift Exxon’s business model from virgin to recycled plastics and use of recycling technologies that are cost-effective, process and energy efficient, and environmentally sound. |
| 1 | https://wwfint.awsassets.panda.org/downloads/wwf_pctsee_report_english.pdf |
| 2 | https://www.unep.org/resources/pollution-solution-global-assessment-marine-litter-and-plastic-pollution |
| 3 | https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019L0904&from=EN#page=8 |
| 4 | https://www.minderoo.org/plastic-waste-makers-index/findings/executive-summary/ |
| 5 | https://www.nationalgeographic.com/science/article/plastic-trash-in-seas-will-nearly-triple-by-2040-if-nothing-done |
| 6 | https://www.pbs.org/newshour/science/bold-single-use-plastic-ban-kicks-europes-plastic-purge-into-high-gear |
| 7 | https://www.unilever.com/news/press-releases/2019/unilever-announces-ambitious-new-commitments-for-a-waste-free-world.html |
| 8 | https://www.theguardian.com/environment/2021/jul/01/call-for-global-treaty-to-end-production-of-virgin-plastic-by-2040 |
| 9 | https://www.pewtrusts.org/-/media/assets/2020/07/breakingtheplasticwave_report.pdf |
| 10 | https://www.science.org/doi/full/10.1126/science.aba9475 |
| 11 | https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/energy-outlook/
bp-energy-outlook-2019.pdf#page=18 |
| 12 | https://www.bloomberg.com/news/articles/2019-06-13/exxon-sabic-greenlight-new-texas-plant-to-process-shale-output?
sref=TtrRgti9 |
| 13 | https://www.minderoo.org/plastic-waste-makers-index/data/flows/#/sankey/global/10 |
| 14 | https://gizmodo.com/we-now-know-how-exxon-secretly-fights-crackdowns-on-pla-1847220288 |
| 15 | https://corporate.exxonmobil.com/Sustainability/Sustainability-Report/Environment/Plastic-waste-management#Addressingplasticwaste |
| 16 | https://www.forbes.com/sites/scottcarpenter/2020/09/05/why-the-oil-industrys-400-billion-bet-on-plastics-could- backfire/?sh=6e099bd843fe” |
The Board carefully considered this proposal and recommends you vote AGAINST it for the following reasons:
This is one of 10 new reports requested by proponents at this annual shareholder meeting.
We are concerned about plastic waste in the environment and are actively working to address this issue as detailed in our Sustainability Report, Advancing Climate Solutions Progress Report, and other communications. As mentioned in the introductory paragraphs of the Shareholder Proposal section of this proxy statement, creating another report with a focus on a single remote scenario does not provide decision-useful information to our shareholders. This is why we recommend a vote against this proposal.
As conveyed to this proponent, solutions to all types of municipal solid waste, including plastic waste, require significant enhancements in waste management infrastructure, particularly in rapidly growing economies. These solutions can and should be implemented without depriving society of the countless benefits plastics provide. The proponent has wrongly concluded that developing solutions to the plastic waste challenge requires the elimination or reduced use of plastics, thereby using a flawed scenario to support a flawed conclusion.
ExxonMobil agrees with many statements in the “Breaking the Plastic Wave” report, for example, that waste collection infrastructure should be developed and that plastic waste recycling rates should be increased worldwide. However, the report incorrectly developed two key assumptions, which result in plastic demand growth conclusions well below projections from industry and the International Energy Agency Net Zero Emissions by 2050 scenario. The report’s System Change Scenario substitutes plastics with paper-based or compostable materials without sufficient assessment of the scalability of these alternatives and of potential unintended consequences of such substitution, including driving higher greenhouse gas emissions. Additionally, the scenario understates the potential of recycling, particularly advanced recycling. The report’s failure to properly ground its assumptions undermine the utility of the report in developing solutions to address the plastic waste challenge.
As described in our publications, plastics play an important role in both facilitating modern life and supporting decarbonization efforts. As a result, our efforts are focused on enabling these significant societal benefits and addressing plastic waste. We have a comprehensive approach including: developing plastic products that society can more easily recycle; expanding our advanced recycling capability that broadens the range of plastics that can be recycled; and supporting improvements in plastic waste recovery. Our efforts include:
| • | | Responsible Manufacturing. We have established systems to responsibly manage the manufacture of plastics, including a global standard across all of our resin-handling operations with the objective of zero pellet loss to the environment. As a result, we have had zero reportable plastic pellet losses to the environment from our resin-handling facilities since 2018.1 |
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| • | | Advanced Recycling Solutions. Our advanced recycling solutions convert a broad range of plastic waste into raw materials that can be used to make new, virgin-quality plastics and other valuable products. To date, we have processed nearly 14 million pounds of plastic waste with our ExxtendTM technology for advanced recycling in Baytown, Texas, and we recently expanded the facility’s capacity to approximately 80 million pounds of plastic waste per year, making it one of North America’s largest advanced recycling facilities. We are evaluating the use of this technology at our facilities in other U.S. locations, Belgium, Canada, and the Netherlands. We are also collaborating with third parties on advanced recycling projects in France, Malaysia, Indonesia, and Singapore. By year-end 2026, we hope to build about 1 billion pounds of annual advanced recycling capacity. |
| To make advanced recycling even more effective, in 2020, we formed Cyclyx International, a joint venture with Agilyx Corporation. Together, we are developing innovative solutions for aggregating and pre-processing large volumes of plastic waste that can be recycled into valuable products. We are investing in Cyclyx’s first-of-its-kind $100 million plastic waste processing facility in Houston, Texas, which, upon startup in 2024, will provide feed for plastics recyclers, including ExxonMobil. |
| • | | Collaborations to Increase Plastic Recycling. At the same time, we collaborate with others across the value chain to increase plastic waste collection and meet growing customer demand for certified circular products. Cyclyx and ExxonMobil are founding members of the Houston Recycling Collaboration, which brings together industry and government to increase access to plastic recycling. In addition, we are a founding member of the Alliance to End Plastic Waste, a global collaboration effort focused on increasing collection and sorting of plastic waste. In California, we are collaborating with TenCate Grass and Cyclyx to recycle artificial turf used in football fields – a material that might have otherwise gone to landfill. ExxonMobil has made initial sales of certified circular plastics to customers across multiple regions for use in food-safe plastic packaging, such as Sealed Air and Ahold Delhaize, Berry Global, and Amcor. |
The Board considered the proponent’s views as well as the vital role both durable and non-durable, or single-use, plastics play in modern life in reducing greenhouse gas emissions and in the energy transition. All of these factors influence our investment decisions as a Company and why we believe context to the discussion is necessary:
| • | | Plastics help make modern life possible with their superior performance, affordability, and life-cycle sustainability benefits versus alternative materials as a group.2 In any hospital, kitchen, daycare center, science lab, airplane, or automobile, there are abundant examples of essential plastic products. |
| • | | Plastics play an important role in the energy transition as they are used in many lower-emission technologies. For example, they are used in solar panels, wind turbine blades, energy-saving building insulation, and lightweight, fuel-efficient vehicles, both traditional and electric vehicles. |
| • | | Single-use plastics are often seen to have many recognized benefits in their use, for example in medical applications or in packaging. According to an independent study by Franklin Associates, plastic packaging has 54 percent lower life-cycle greenhouse gas emissions versus alternative materials as a group, including aluminum, glass, and paper.2 Similarly, a recent report from McKinsey & Company showed that in 13 of the 14 applications studied, plastics had greenhouse gas savings ranging between 10- and 90-percent compared to next-best alternatives.3 A 2016 TruCost study found that replacing plastics in consumer products and packaging with alternatives that perform the same function would have nearly four times the negative environmental cost on a full life-cycle basis.4 |
| • | | Plastics are instrumental to achieving many of the United Nations’ (UN) Sustainable Development Goals, including good health, food preservation, and clean drinking water. Even in the International Energy Agency’s Net Zero Emissions by 2050 Scenario, global demand for primary chemicals is 30 percent higher than 2020; and plastics make up about half of that total volume. |
As mentioned above, we publicly provide our guidelines, measures, and practices to assess and mitigate risk factors related to plastics, and we include detailed information about plastic waste solutions in our Sustainability Report and Advancing Climate Solutions 2023 Progress Report, available on our website. We also publicly disclose our lobbying efforts, including those related to plastics, in a detailed Lobbying Report available on our website. Further, ExxonMobil, along with the American Chemistry Council and America’s plastic makers, looks forward to working with Congress on comprehensive solutions to address plastic waste in the environment while driving new economic growth in the United States through recycling – an important “win-win” that is achievable with the right policies, support, and dedication.
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| 2023 Proxy Statement | | | | 95 | | |
Acknowledging the importance of plastics in helping society achieve its lower-emission ambitions, and the UN’s Sustainable Development goals, and in light of our strong commitment to responsible operations, our support of expanding advanced recycling efforts, our well-established risk management processes and procedures, and our existing detailed, publicly available disclosures, the Board recommends a vote against this unnecessary proposal.
| 1 | Based on reporting under our global standard for resin-handling facilities. |
| 2 | Per April 2018 report of Franklin Associates; US; Max Decomp.; Figure 4-1;Impacts as defined in Chapter 4.7: Global Warming Potential (GWP) results, and Indexed to the alternatives as a group (including steel; aluminum; glass; paper- based packaging; fiber-based textiles; and wood). Source: https://www.americanchemistry.com /content/download /7885/file/Life-Cycle-Impacts-of-Plastic-Packaging-Compared-to-Substitutes-in-the-United-States-and-Canada.pdf |
| 3 | Climate Impact of Plastics, McKinsey, July 2022, p.12 |
| 4 | Plastics and Sustainability, A Valuation of Environmental Benefits, Costs and Opportunities for Continuous Improvement, TruCost, July 2016, p.7. |
Item 14 – Litigation Disclosure Beyond Legal and Accounting Requirements
This proposal was submitted by Anna Marie Lyles, 253 Jefferson Road, Princeton, New Jersey 08540, the beneficial owner of 60 shares for at least three years.
“PROPOSAL
RESOLVED: Shareholders request an actuarial assessment, omitting confidential information and prepared at a reasonable cost, of the potential cumulative risk to Exxon Mobil Corporation (‘ExxonMobil’ or the ‘Company’) from current environment-related litigation against the Company and its affiliates.
SUPPORTING STATEMENT
Environment-related litigation poses an increasing risk to oil and gas investments. For instance, BP paid more than $60bn in criminal and civil penalties and remediation costs following the Macondo blowout, and Shell has been ordered by a Dutch court to reduce its CO2 emissions by 45% by 2030.
In addition, we have observed a recent trend of courts cancelling energy production permits (e.g. in Australia, South Africa, Brazil), which poses a particular risk for investments in new production. These cancellations allegedly result from non-compliance with environmental laws and the incompatibility of new production with climate goals. Notably, we believe that courts may now use as a point of reference the International Energy Agency’s assessment in its 2021 report Net Zero by 2050 that no new oil, gas, or thermal coal projects can be approved by relevant licensing authorities in order to meet Paris Agreement emissions goals.
These environment-related lawsuits are often lengthy and we believe that the direct and indirect risks posed to the business and shareholder value in case of losing some of these lawsuits appear substantial, and shareholders deserve proper disclosure of these risks.
Media reports indicate that ExxonMobil also faces environment-related lawsuits with potentially material impacts on the business. For example:
| - | Multiple climate lawsuits brought by states and attorneys general alleging failures to adequately address climate risks, an obligation to pay damages for climate harms, and misleading consumers and investors regarding greenhouse gas emissions.1 Individually and cumulatively, losing these cases could have a direct financial and/or reputational impact on ExxonMobil. |
| - | Multiple lawsuits alleging non-compliance with legal requirements by ExxonMobil’s major investment in Guyana. A court has cut two of ExxonMobil’s Guyana subsidiary’s environmental permits from over 20 years to 5 years. |
| - | Ongoing lawsuits seek cancellation of more permits, enforcement regarding safety conditions amid reports of spills, and unlimited parent company indemnities to cover the risk of a major spill that could impact many Caribbean countries. Constitutional litigation demands that Guyana’s government halt oil and gas production entirely due to its alleged impact on the environment. |
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96 | | | | | | 2023 Proxy Statement |
Clearly, ExxonMobil is not immune to risks of environment-related litigation. However, it discloses what we believe is insufficient information on these risks, leaving shareholders with an inadequate means to assess the future value of their investments. Therefore, the shareholders believe the board of directors of the Company should take the steps necessary to direct the Company to provide additional disclosure regarding these risks so that the shareholders are able to properly evaluate potential impact such risks may have on the shareholder value.
| 1 | See e.g., City and County of Honolulu v. ExxonMobil et al. 1CCV-20-0000380; Matthew Platkin Attorney-General of New Jersey v. ExxonMobil Corporation et al. MER-L-001797-22; Commonwealth of Massachusetts v. ExxonMobil Corporation No. 19-12430-WGY.” |
The Board carefully considered this proposal and recommends you vote AGAINST it for the following reasons:
This is one of 10 new reports requested by proponents at this annual shareholder meeting.
ExxonMobil is committed to providing transparency to shareholders. In accordance with U.S. Securities and Exchange Commission (SEC) regulations and U.S. Generally Accepted Accounting Principles (GAAP), we disclose material litigation risks, and where appropriate, financial contingencies related to litigation.
SEC regulations also require public companies to disclose proceedings arising under environmental laws where a governmental authority is a party and the potential monetary sanctions exceed certain financial thresholds. These SEC and GAAP accounting rules strike a careful balance of providing information to investors while recognizing that the public disclosure of proprietary and/or confidential information, including protected attorney-client and work product communications, can impair a public company’s ability to defend itself in litigation while providing publicity and advantage to those attacking the company.
Despite our multiple invitations to the proponent to discuss the proposal, the proponent has declined to speak with us without her legal counsel present. Not only would the presence of counsel be inconsistent with the Company’s longstanding shareholder engagement practices, this particular proponent is affiliated with As You Sow, which has a history of adversarial conduct toward the Company in a litigation context; As You Sow’s President and Chief Counsel, Danielle Fugere, was named as a witness against the Company by the New York City Employees’ Retirement System,Attorney General (NYAG) and deposed in the New York City Fire Department Pension Fund,lead up to the New York City Teachers’ Retirement System,2019 trial, in which the New York City Police Pension Fund,
Demanding information beyond what is required by legal and accounting disclosure rules unnecessarily risks public disclosure of information that could jeopardize our operations or limit our ability to effectively defend the Company in current and future litigation. We believe that the proceedings referred to in the proposal do not meet the materiality standard for disclosure under applicable accounting rules and regulations. Moreover, we believe those proceedings lack merit, and we intend to vigorously defend against them.
As for the proposal’s reference to media reports regarding environmental proceedings in Guyana, ExxonMobil’s local affiliate works cooperatively with the Guyana Environmental Protection Agency to ensure environmental permitting relating to exploration, development, and production activity fully complies with Guyana law. To date, permit challenges have been found to be meritless by both trial and appellate courts. Similarly, activist litigation to halt oil and gas production has failed in the courts, and pending litigation against the Government of Guyana (in which ExxonMobil’s local affiliate has intervened) also is expected to fail.
In addition, we notified the SEC of our view that this proposal, combined with the proposal from Andrew Behar (Item 11 above), misuses the shareholder proposal process by violating the clear intent of the SEC’s one-proposal limitation given that both proposals originate with persons directly affiliated with As You Sow. The proponent serves as board member and treasurer of As You Sow, and Mr. Behar is the CEO of As You Sow. As we’ve pointed out, As You Sow has a history of activism against the oil and natural gas industry, including working with “keep it in the ground” activists like EarthJustice.1
Given these facts, we believe this proposal was written with the explicit intent to utilize the shareholder proposal process for the benefit of plaintiffs’ lawyers and could harm the Company and our shareholders. Therefore, we strongly recommend a vote against it.
| 1 | As You Sow has previously worked with EarthJustice in filing complaints with the SEC against energy companies. (Source: https://www.upi.com/Energy-News/2014/05/07/Maryland-LNG-terminal-draws-fire/4981399470232/). EarthJustice describes the aims of its work to include: “End the extraction and burning of fossil fuels…blocking new fossil fuel infrastructure, and more.” (Source: https://earthjustice.org/our_work). Its strategies include, “…work[ing] to halt investments in massive new gas plants…and we compel utilities to consider clean energy and energy efficiency alternatives.” (Source: https://earthjustice.org/our_work/oil-coal-gas). EarthJustice has also engaged in several legal campaigns that involved Exxon. (Source: https://earthjustice.org/blog/2017-may/taking-exxon-to-court-to-protect-clean-air-and-winning-big) |
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| 2023 Proxy Statement | | | | 97 | | |
Item 15 – Tax Reporting Beyond Legal Requirements
This proposal was submitted by Oxfam America, 226 Causeway Street, 5th Floor, Boston, Massachusetts 02114, the beneficial owner of shares with a market value greater than $2,000 for at least three years, and lead proponent of a filing group.
“RESOLVED: Shareholders request that the Board of Directors issue a tax transparency report to shareholders, at reasonable expense and excluding confidential information, prepared in consideration of the indicators and guidelines set forth in the Global Reporting Initiative’s (GRI) Tax Standard.
Supporting Statement
The GRI Standards are the world’s most utilized corporate reporting standard.1 The GRI Tax Standard – GRI 207 – is the first comprehensive, global standard for public tax disclosure. It includes four components. GRI 207-1, 207-2, and 207-3 require companies to disclose their approach to tax; their tax governance, control, and risk management; and their stakeholder engagement and management of concerns related to tax, respectively. 207-4 requires public country-by-country reporting (CbCR) of certain company financial information, including revenues, profits and losses, and tax payments within each jurisdiction.2 GRI 207 also recommends disclosing ‘industry-related and other taxes or payments to governments.’ Given the significance of other project-specific payments to governments in the oil and gas sector, GRI identifies disclosures of all significant project-level payments to governments as relevant for that sector in reporting under the Tax Standard.3
Tax transparency is increasingly important to investors. The PRI, representing investors with $89 trillion assets under management, states that tax avoidance is a key driver of inequality.4 Economic challenges have increased government concern about corporate tax avoidance, and 96% of US companies expect more tax disputes as governments become more rigorous in tax examinations.5
In October 2021, 136 countries agreed to a global tax reform framework.6 The proposed Disclosure of Tax Havens and Offshoring Act, passed by the House of Representatives in 2021, would require public CbCR of financial (including tax) data by SEC-registered companies.7 Further, in November 2021, the European Union approved a directive to implement public CbCR for large multinationals operating there.8
ExxonMobil does not disclose revenues or profits in non-US markets, nor foreign tax payments, with adequately disaggregated data, challenging investors’ ability to evaluate the risks of taxation reforms, or whether ExxonMobil engages in responsible tax practices that ensure long term value creation. Tax authorities across the globe have repeatedly challenged ExxonMobil’s taxation approach, producing significant costs for the company.9 In a recent case involving ExxonMobil’s dealings in Qatar and Malaysia, a US federal court denied ExxonMobil a $1 billion refund request and the New York CityIRS initially assessed a $200 million penalty to ExxonMobil for claiming an excessive refund.10
A GRI-aligned tax transparency report would bring ExxonMobil in line with peer companies – including many in the oil, gas, and mining industries11 – who report using GRI 207.12 ExxonMobil already reports CbCR information to OECD tax authorities privately, so any increased burden is negligible.
| 1 | https://assets.kpmg/content/dam/kpmg/xx/pdf/2020/11/the-time-has-come.pdf |
| 2 | https://www.globalreporting.org/standards/media/2482/gri-207-tax-2019.pdf |
| 3 | https://www.globalreporting.org/standards/standards-development/sector-standard-for-oil-and-gas/ |
| 4 | https://www.globalreporting.org/about-gri/news-center/backing-for-gri-s-tax-standard/ |
| 5 | https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/gx-beps-global-survey-summary-results-2022.pdf |
| 6 | https://www.oecd.org/tax/international-community-strikes-a-ground-breaking-tax-deal-for-the-digital-age.htm |
| 7 | https://www.congress.gov/bill/117th-congress/house-bill/3007; |
| 8 | https://www.internationaltaxreview.com/article/b1vf7yc65qpzcd/this-week-in-tax-eu-on-track-for-public-cbcr-by-2023 |
| 9 | https://www.theguardian.com/business/2018/jul/03/exxonmobil-spent-10m-fighting-australian-tax-office;https://www.bloomberg.com/news/articles/2018-08-09/exxon-loses-fight-for-337-million-tax-refund-from-u-s;https://www.france24.com/en/20170914-exxonmobil-russia-settle-tax-row |
| 10 | https://www.taxnotes.com/research/federal/court-documents/court-opinions-and-orders/fifth-circuit-affirms-mineral-lease%252C-fuel-credit%252C-penalty-holdings/7dvfy |
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| 11 | https://www.hess.com/sustainability/how-we-operate/tax-practices; https://reports.shell.com/tax-contribution-report/2020/our-tax-data.html; https://s24.q4cdn.com/382246808/files/doc_downloads/2022/sustainability/newmont-2021-tax-report.pdf; https://www.bp.com/en/global/corporate/sustainability/our-approach-to-sustainability/tax- transparency.html; https://reports.shell.com/tax-contribution-report/2020/;https://www.eni.com/assets/documents/eng/reports/2020/Country-by-Country-2020_ENG.pdf; https://totalenergies.com/sites/g/files/nytnzq121/files/documents/2022-03/Tax_transparency_report_2019_2020.pdf |
| 12 | https://www.globalreporting.org/news/news-center/momentum-gathering-behind-public-country-by-country-tax- reporting/” |
The Board carefully considered this proposal and recommends you vote AGAINST it for the following reasons:
This is one of Education Retirement System (the “Systems”), One Centre10 new reports requested by proponents at this annual shareholder meeting.
ExxonMobil is a global leader in supporting transparency initiatives that improve governance and accountability. As we conveyed to this proponent during our engagement, we take care to ensure the information we provide is meaningful and not competitively sensitive in the context of what our peers, competitors, and others in the industry provide. The tax rates that ExxonMobil is subject to are an important element of negotiations with resource owners and a commercially and competitively sensitive factor in our investment analysis and decisions.
Notwithstanding, ExxonMobil complies with the requirements of applicable laws everywhere we conduct business, including applicable tax laws. ExxonMobil conducts business in more than 100 countries and is subject to some of the highest tax rates in the world. Energy demand and the location of natural resources dictate where we conduct business, not tax rates. Many countries impose higher tax rates on petroleum operations than on other industries, and those rates can rise as high as 85 percent. For tax years 2019 to 2021, ExxonMobil’s effective income tax rate, excluding equity companies, was third highest of Fortune 10 companies, according to Bloomberg. ExxonMobil’s worldwide effective income tax rate, including equity companies, was 31 percent for 2021, and increased to 33 percent for 2022.
Several important new reporting requirements for our industry, intended to enhance tax transparency, take effect in the immediate future. For example, we will be complying for our 2023 financial year with the newly implemented rules for reporting of payments to governments, including taxes, for extractive activities on a country or project basis, as applicable, under Section 1504 of the Dodd-Frank Wall Street Room 629, New York, NY 10007,Reform and Consumer Protection Act (“Dodd-Frank”). Section 1504 of Dodd-Frank is only applicable to public companies in the extractive sectors, and will provide shareholders, policymakers, civil society, and the public an unprecedented level and amount of country-by-country tax payment information that no other industries are required to disclose publicly.
Additionally, beginning no later than for our 2025 financial year, ExxonMobil will be disclosing country-by-country data in the European Union as applicable under rules to be adopted by each jurisdiction.
We believe it is prudent that shareholders assess the utility, benefits, and trade-offs of the new, legally mandated disclosures before requesting still further and potentially duplicative and competitively sensitive disclosures.
This proposal requests the adoption of a disclosure framework on financial reporting and related metrics that is unevenly applied and not widely adopted with our U.S. peers; in our view, this creates regulatory, financial, and reputational risks without providing stakeholders with consistent, comparable data. Given the relatively novel and untested nature of the disclosure requested, there is also significant risk that information could be misunderstood. As such, implementing new disclosures, including onerous project-level payment disclosures, to report information beyond what is both currently and soon to be required by law, and beyond the practices of similarly situated U.S.-based companies with extensive international operations, risks putting ExxonMobil at a competitive disadvantage to our shareholders’ potential detriment.
The proposal mentions the risk of potential tax penalty payments as a rationale for seeking additional disclosures. The penalty assessed by the Internal Revenue Service, mentioned by the proponent, was dismissed by the Fifth Circuit Court of Appeals.
We believe our record demonstrates responsible tax practices. For these reasons, the Board recommends a vote against this proposal.
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Item 16 – Energy Transition Social Impact Report
This proposal was submitted by United Steelworkers, 60 Boulevard of the Allies, Pittsburgh, Pennsylvania 15222, the beneficial ownersowner of 7,168,317 shares.116 shares for at least three years.
“RESOLVED: ShareholdersThe shareholders of Exxon Mobil Corporation (the ‘Company’) ask, hereby request that the boardBoard of directors (the ‘Board’)Directors create a report regarding the social impact on workers and communities from closure or energy transition of the Company’s facilities, and alternatives that can be developed to takehelp mitigate the steps necessary to adopt a ‘proxy access’ bylaw. Such a bylaw shall require the Company to include in proxy materialssocial impact of such closures or energy transitions. The report should be prepared for a shareholder meeting at which directors are toreasonable cost, omitting proprietary information, and be elected the name, Disclosure and Statement (as defined herein) of any person nominated for election to the board by a shareholder or group (the ‘Nominator’) that meets the criteria established below. The Company shall allow shareholders to vote on such nomineeavailable on the Company’s proxy card.
The numberwebsite by the 2024 Annual Meeting of shareholder-nominated candidates appearing in proxy materials shall not exceed one quarter of the directors then serving. This bylaw, which shall supplement existing rights under Company bylaws, should provide that a Nominator must:Shareholders.
a) | have beneficially owned 3% or more of the Company’s outstanding common stock continuously for at least three years before submitting the nomination; |
b) | give the Company, within the time period identified in its bylaws, written notice of the information required by the bylaws and any Securities and Exchange Commission rules about (i) the nominee, including consent to being named in the proxy materials and to serving as director if elected; and (ii) the Nominator, including proof it owns the required shares (the ‘Disclosure’); and |
c) | certify that (i) it will assume liability stemming from any legal or regulatory violation arising out of the Nominator’s communications with the Company shareholders, including the Disclosure and Statement; (ii) it will comply with all applicable laws and regulations if it uses soliciting material other than the Company’s proxy materials; and (iii) to the best of its knowledge, the required shares were acquired in the ordinary course of business and not to change or influence control at the Company. |
The Nominator may submit with the Disclosure a statement not exceeding 500 words in support of each nominee (the ‘Statement’). The Board shall adopt procedures for promptly resolving disputes over whether notice of a nomination was timely, whether the Disclosure and Statement satisfy the bylaw and applicable federal regulations, and the priority to be given to multiple nominations exceeding the one-quarter limit.
SUPPORTING STATEMENT
We believe proxy access isAs the nation and our Company prepare for and participate in a fundamental shareholdertransitioning energy economy, our Company should play a role to in helping provide security for impacted workers and communities where our Company operates.
Our Company’s Chairman and CEO Darren W. Woods has personally signed the Business Roundtable’s Statement on the Purpose of a Corporation which affirmed our Company’s commitment to serve all stakeholders, including ‘investing in our employees’ and supporting the communities in which we work.’ (https://opportunity.businessroundtable.org/ourcommitment/)
UN PRI’s Statement of Investor Commitment to Support a Just Transition on Climate Change states that ‘the responsible management of workforce and community dimensions of climate change are increasingly material drivers for value creation.’ (https://www.unpri.org/download?ac=10382)
In the International Labour Organization’s (ILO) 2015 Guidelines for a Just Transition towards Environmentally Sustainable Economies and Societies for All, ILO emphasizes that the transition to environmentally sustainable economies and societies involves ‘the pivotal role of employers’ and ‘anticipating impacts on employment, adequate and sustainable social protection for job losses and displacement, skills development and social dialogue, including the effective exercise of the right to organize and bargain collectively.’ (https://www.ilo.org/wcmsp5/groups/public/@ed_emp/@emp_ent/documents/publication/wcms_432859.pdf)
In its Advancing Climate Solutions 2022 Progress Report, the Company stated that will make directorsit plans to invest more accountablethan $15 billion over the next six years under the International Energy Agency’s (IEA) Net Zero Emissions by 2050 (NZE) scenario to reduce emissions through carbon capture and enhance shareholder value. A 2014 CFA Institute study concluded that proxy access would ‘benefit both the marketsstorage, hydrogen and corporate boardrooms, with little cost or disruption’ and could raise overall US market capitalization by up to $140.3 billion if adopted market-wide. (http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2014.n9.1)
biofuels. The proposed terms are similar to those in vacated SEC Rule 14a-11 (https://www.sec.gov/rules/final/2010/33-9136.pdf). The SEC, following extensive analysis and input from companies and investors, determined that those terms struck the proper balance of providing shareholders with a viable proxy access right while containing appropriate safeguards.
A similar proposal received 49.40% of votes cast atreport discussed the Company’s 2015 annual meetingprocess to address socioeconomic risks before pursuing a new development, but the report did not discuss the implications for workers and similar bylaws have been adopted by more than 80 companies.communities when a refining, petrochemical or production facility is transitioning or closed. (https://corporate.exxonmobil.com/climate-solutions/advancing-climate-solutions-progress-report)
For these reasons, it is imperative that the Board creates the proposed report as a first step towards understanding and mitigating the impact of future plant closings and transition on workers and communities where the Company operates.
We urge shareholders to vote FOR‘FOR’ this proposal.”
The Board carefully considered this proposal and recommends you vote AGAINST this proposalit for the following reasons:
The Board agrees with the underlying objectiveThis is one of maintaining a highly qualified and independent Board10 new reports requested by accessing a broad pool of candidates who have experiences and capabilities that are complementary to the scope and complexity of the Company’s business. While the Board is fully aligned with the underlying objective, it believes that the long proven processes currently in place provide a more effective outcome than what is being proposed by the proponents and that the proposal presents potential risks to the Company and its shareholders.
The Board takes its duty as a fiduciary of the Company seriously and has processes in place to ensure that allat this annual shareholder interests are well represented. Twelve out of the fourteen Board nominees are independent and have
been selected based upon Board-adopted, published guidelines and processes that are intended to yield a Board comprised of the most highly qualified business and professional leaders. The high voter tallies that our directors receive year-on-year suggest that shareholders are pleased with the quality of our Board members and demonstrate the effectiveness of the established processes.
The proposal risks undercutting the critical role that the independent Board Affairs Committee plays in ensuring that, through well-established, rigorous processes, the Board is comprised of personnel with required skills, backgrounds and competencies. Introducing a novel selection process, as the proposal seeks to do, risks diminishing the caliber and effectiveness of the Board over time and the ability of the Company to attract the kinds of leaders to its Board that shareholders have come to expect. Furthermore, directors who recommend candidates for election each year under these processes do so with a legal duty to all shareholders and act in the best interests of the Company. It is unclear what duty applies to the selection of proxy candidates under the proposal.
The proposal additionally risks introducing non-constructive and destabilizing dynamics into the Board election process. Some whom the Company has spoken with as result of its expansive engagement with shareholders on the issue say that a nomination under proxy access does not necessarily mean that the candidate will be elected. However, there is little experience in the United States with how proxy access will work, and the practice here may vary considerably from other jurisdictions where proxy access currently exists. At a minimum, the process may result in a proxy contest, which history suggests can be costly, fractious, distracting, and lead to results that are not in the best interests of the Company or its shareholders. Further, we do not believe that there is any meaningful evidence that proxy access would improve corporate governance or enhance market capitalization.
Perhaps most concerning is the potential risk for the proposal to increase the influence of special interest groups and lead to single-issue participants on the Board. The Board believes that directors should represent all of the Company’s shareholders, not just those who propose them for election. The proposal, however well intentioned, may be misused by shareholder groups to address various single issues that individually or collectively could undermine a business model that has long served the interests of our shareholders well. The potential for a series of directors who rotate from one single issue to another can also undermine the long-term focus the Company seeks to foster in its management and Board, consistent with its business strategy and required investment horizons.
It is also important to reinforce that shareholders already have an important role in determining who is on the Board. Directors are required to stand for election each year and shareholders can evidence their support or concern regarding individual Board members by vote during the annual shareholders meeting, and the Company has a stringent resignation policy required of any director who fails to receive a majority of “for” votes. Also, shareholders have the right to suggest non-employee Board candidates for consideration, and these suggestions are considered in the same manner as other candidate recommendations, whether from Board members, the Board Affairs Committee’s independent search firm, or from other sources. Through the Company’s ongoing engagement process, shareholders also have an opportunity to share their views and to influence Company policies and approaches.meeting.
ExxonMobil has demonstrated a track record of engagementproven, long-term commitment to developing employees, facilitating local economic growth, and engaging with and responsivenesssupporting communities where we operate. As relayed to shareholders, established strong Boardthe proponent, our approach to employees and governance practices,the community, including considerations associated with lower-emission projects at existing sites, is already communicated in our publications, including the Sustainability Report. The report requested in this proposal is therefore unnecessary and continueswasteful of Company resources.
Our strategy for the energy transition is to maintain long-term industry-leading returnscreate flexibility for ExxonMobil’s existing facilities. Over time, we have the flexibility to change our refinery product mix, increasing production of biofuels, high-value lubricants, and chemical basestocks when demand for traditional fuels declines. Given the numerous benefits of plastics versus alternatives,
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including 54 percent lower greenhouse gas life-cycle emissions,1 we expect the demand for our shareholders.chemical products to continue to grow. We invest in both catalyst and other technology to upgrade our products to meet the changing needs of our customers at the lowest possible cost. We expect this will result in direct, ongoing employment opportunities, community investment programs, and indirect economic growth within the communities in which we operate.
ExxonMobil’s approach to new initiatives and investments is holistic. Our current governance practices provide strongannual Advancing Climate Solutions Progress Report, along with our Sustainability Report, lay out the range of ways in which the issues raised by the proponent are acknowledged and addressed. Specifically, our environmental and socioeconomic management approach, which serves as a framework for identifying and managing positive and negative impacts to local communities, is described in these reports.
Our management framework also includes developing our workforce where we operate throughout the life cycle of an asset. We periodically update our environmental and socioeconomic assessments to reflect any material changes to our operation or socioeconomic sensitivities, and we amend management plans where needed. We share details of this process on exxonmobil.com under “Managing Socioeconomic Impacts” in the Sustainability Report, and in the “Environmental Aspects Guide.”
Further, as outlined in our Investing in People supplement, people are ExxonMobil’s biggest competitive advantage. We invest in and support employees for long-term careers. The capabilities and skills of today’s workforce are the same critical skills required to thoughtfully lead an energy transition while continuing to meet the world’s energy needs. For example, our teams operating and supporting the Strathcona refinery today will also be responsible for operating a new biofuels unit, and our research teams who developed catalyst technology for refining operations are developing catalysts for biofuels production. Many of our geoscientists are working on new carbon capture and sequestration initiatives, while our project engineers are working on the infrastructure investments needed to support third-party emission reduction efforts, like the project announced in Louisiana, that will transport and store 2 million tons of carbon annually.
As we deliver on our strategic objectives, the Company strives to:
| • | | Create value for ExxonMobil’s customers, business partners, and communities; |
| • | | Provide employees unrivaled opportunities for personal and professional growth with impactful work; |
| • | | Consider potential environmental and socioeconomic impacts of projects and operations throughout the asset life cycle; and |
| • | | Engage with stakeholders, including employees and communities. |
For the reasons above, the Board accountability and important shareholder rights. We believe that instead of strengthening our existing practices,views the proposal could undermineas unnecessary and wasteful of Company resources, and recommends voting against the rigorous and effective processes we have in place.proposal.
Through the Company’s ongoing engagement with shareholders this past year, the Board has heard a broad range of views regarding this proposal. The Board appreciates all shareholder views
| 1 | April 2018 report of Franklin Associates on Life Cycle Impacts of Plastic Packaging Compared to Substitutes (April 2018 Franklin Associates Report); U.S. packaging market; alternatives include steel, aluminum, glass, paper-based packaging, fiber-based textiles, and wood (Table 4-14). Source: https://www.americanchemistry.com/content/download/7885/file/ Life-Cycle-Impacts-of-Plastic-Packaging-Compared-to-Substitutes-in-the-United-States-and-Canada.pdf. |
Item 17 – Report on the matter, and while it continues to consider the merits of the proposal in light of the Company’s ongoing engagement, it believes, for the reasons discussed above, that the proposal is not in the best interests of the Company at this time.
ITEM 8 – REPORT ON COMPENSATION FOR WOMENCommitment Against AMAP Work
This proposal was submitted by Eve S. Sprunt, PhD, 3753 Oakhurst Way, Dublin, CA 94568,Green Century Capital Management, 114 State St. Suite 200, Boston, Massachusetts 02109, the beneficial owner of shares with a market value greater than $2,000 for at least $2,000three years.
“Whereas: Petroleum development in market valueecologically sensitive and biologically rich protected areas poses material financial, climate, and reputational risks.
The Arctic National Wildlife Refuge is home to over 200 bird species, 42 species of fish, and 45 species of mammals, including four threatened species protected under the Endangered Species Act. It is also experiencing rapid warming, estimated to be nearly four times faster than the rest of the Company’s stock.
“RESOLVED, that to improve transparency regarding compensation earned by female employees relative to their male peers, ExxonMobil will annually report to shareholders the percentage of female employees in each of ten
equally-sized fractions of its workforce by total compensation, namely, the lowest 10% by total compensation and so on, continuing with each increasingly compensated group, up through the tenth and final group that includes the 10% of employees who receive the highest total compensation.
STATEMENT OF SUPPORT
Women on average in the United States still earn less than 79% of what men earn and often face more barriers to advancement than their male counterparts. Greater transparency concerning compensation is essential to identifying and eliminating remaining obstacles that impede progress towards gender pay equity.
Publicly held companies are required to report sensitive financial information so that stockholders are appropriately informed. Since employees play a critical role in a company’s success and women are a large percentage of the workforce, it is important for stockholders and potential employees to have access to financial information that documents how well women are succeeding relative to their male counterparts.
ExxonMobil should be proud to release the information on women’s compensation relative to men’s. Annual reports would show how women rank, and over time would reveal the effectiveness of ExxonMobil’s programs in providing equal opportunities for women. If the requested data reveal that ExxonMobil ranks among the best employers for women, this would improve the corporation’s competitive position by enhancing attraction and retention of top female talent.”
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil values diversity, including gender, and has well-established processes that have allowed us to successfully advance women on a global basis.
Within ExxonMobil, compensation, development and advancement are highly integrated. As an individual advances through various career stages, pay grade and total compensation will advance accordingly. The program compensates each individual at a level commensurate with individual performance, experience, and pay grade, independent of gender. This ensures alignment of compensation among employees with similar performance who are in jobs of similar scope and complexity.
Within this context, metrics that measure the progress in development and advancement of women are more meaningful.
ExxonMobil develops future leaders from within the Company worldwide, drawing upon our diverse employee population. We promote leadership opportunities for women and work to improve the gender balance within the Company through all aspects of the employment relationship, including recruitment, training, advancement and salary administration.
At multiple times during the year, management discusses efforts in the area of diversity talent development, which includes both stewardship of metrics and a review of specific development plans. These reviews take place at multiple levels within the organization and include representatives of senior management.
Robust development processes and rigorous management reviews, scheduled throughout the year, allow us to advance our goal of drawing from the most diverse and most qualified pool of candidates for each position at each level within the organization.
TheCorporate Citizenship Report (CCR), published by the Company on an annual basis, includes detailed information on our workforce demographics and provides additional information on our comprehensive diversity and inclusion efforts.
Key headlines from the 2015CCR:
28 percent of our worldwide workforce are women.
Over the last 10 years, 40 percent of management and professional new hires were women.
Within the executive employee population, which represents the top 2.4 percent of our worldwide workforce, 17 percent are women. This represents an increase of 50 percent over the past decade.
This increase is a result of continued focus on early identification and focused development of high-performing female employees. Notably, 29 percent of our early career stage executive employees worldwide are women.
Our commitment extends to our support of organizations that aim to expand women’s economic opportunities as well as bolster women in science and engineering.
We believe that a focus on all aspects of the development path supported by a consistently applied compensation program will continue to result in a strong and diverse pool of highly qualified talent. We view the metrics that are disclosed in ourCorporate Citizenship Report to be more meaningful to shareholders as they better represent our development model.
ITEM 9 – REPORT ON LOBBYING
This proposal was submitted by United Steelworkers, Five Gateway Center, Pittsburgh, PA 15222, the beneficial owner of 116 shares and lead proponent of a filing group.
“Whereas, we believe in full disclosure of our company’s direct and indirect lobbying activities and expenditures to assess whether our company’s lobbying is consistent with ExxonMobil’s expressed goals and in the best interest of shareholders.
Resolved, the shareholders of ExxonMobil request the preparation of a report, updated annually, disclosing:world.
1. | Company policy | | | | | |
| 2023 Proxy Statement | | | | 101 | | |
Pursuit of drilling and related activities in the Arctic Refuge and broader AMAP area could expose ExxonMobil to considerable material financial risk, including:
| • | | Regulatory: The political landscape creates uncertainty for developing the Refuge; any developments could become stranded assets. The Interior Department has suspended current oil and procedures governing lobbying, both directgas leases in the Refuge, and indirect,the House of Representatives has passed legislation including provisions for the repeal of the Arctic Refuge Oil and grassroots lobbying communications.Gas Leasing Program. |
2.• | Payments by ExxonMobil used for (a) direct | Liability: In its 2020 10-K, Exxon states that ‘substantial liabilities and other adverse impacts could result if we do not timely [sic] identify and mitigate applicable risks, or indirect lobbying or (b) grassroots lobbying communications,if our management systems and controls do not function as intended.’ The Trans-Alaska Pipeline will transport oil from the Arctic Refuge. Oil spills have occurred along the pipeline and around Prudhoe Bay, the pipeline’s northern terminus, including a three-week-long spill in each case including the amount of the payment and the recipient.2020. |
3.• | ExxonMobil’s membership | Price Risk: Oil spills negatively affect stock prices. Chevron’s share price declined 8.5% in and payments to any tax-exempt organization that writes and endorses model legislation.the weeks after a public announcement of an 800,000 gallon spill at a Chevron oil well. BP’s stock dropped 54% as a result of the Deepwater Horizon oil spill. |
4.• | Description | Constrained access to capital: All major US banks are now unwilling to finance drilling in the Arctic Refuge, including Goldman Sachs, Morgan Stanley, JPMorgan Chase, Wells Fargo, CitiBank, and Bank of management’s and the Board’s decision making process and oversight for making payments described in sections 2 and 3 above.America. |
For purposes of this proposal, a ‘grassroots lobbying communication’ is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. ‘Indirect lobbying’ is lobbying engaged in by a trade association or other organization of which ExxonMobil is a member.
Both ‘direct and indirect lobbying’ and ‘grassroots lobbying communications’ include efforts at the local, state and federal levels.
The report shall be presented to the Audit Committee or other relevant oversight committees and posted on ExxonMobil’s website.
Supporting Statement
As shareholders, we encourage transparency and accountability in ExxonMobil’s use of corporate funds to influence legislation and regulation. ExxonMobil spent $26.07 million in 2013 and 2014 on federal lobbying (opensecrets.org). These figures do not include lobbying expenditures to influence legislation in states, where ExxonMobil also lobbies but disclosure is uneven or absent. For example, ExxonMobil spent $699,362 on lobbying in California for 2014 (http://cal-access.ss.ca.gov/). ExxonMobil’s lobbying on climate change has attracted media attention (‘Exxon Knew about Climate Change Decades Ago, Spent $30M to Discredit It,’ Christian Science Monitor, Sep. 17, 2015).
ExxonMobil is a member of the American Petroleum Institute, Business Roundtable and National Association of Manufacturers, which together spent over $65 million on lobbying for 2013 and 2014. ExxonMobil is also a member of the Western States Petroleum Association, which spent $13,553,942 on lobbying in California for 2013 and 2014. ExxonMobil does not disclose its memberships in, or payments to, trade associations, or the
portions of such amounts used for lobbying. Transparent reporting would reveal whether company assets are being used for objectives contrary to ExxonMobil’s long-term interests.
And ExxonMobil does not disclose membership in or contributions to tax-exempt organizations that write and endorse model legislation, such as being a member of the American Legislative Exchange Council (ALEC). ExxonMobil’s ALEC membership has drawn press scrutiny (‘ExxonMobil Gave Millions to Climate-Denying Lawmakers despite Pledge,’ The Guardian, Jul. 15, 2015). More than 100 companies have publicly left ALEC, including BP, ConocoPhillips, Occidental Petroleum and Shell.”
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil, like many U.S. companies, labor unions, and other entities, engages in lobbying in the United States at both the federal and state levels to explain or advocate the Corporation’s position when necessary. ExxonMobil complies fully with all state and federal requirements concerning lobbying activity and related disclosures. Pursuant to the federal Lobby Disclosure Act, ExxonMobil publicly reports on a quarterly basis to Congress its lobbying expenses and the specific issues lobbied. The reports are accessible to the general public on the U.S. Senate’s website atsenate.gov. Lobby reports are also filed with state and local jurisdictions as required by law.
ExxonMobil also provides support to a variety of think tanks, trade associations, and coalitions in order to promote informed dialogue and sound public policy on matters pertinent to the Corporation’s interests. Some of the support provided to these organizations may be used by the firms for lobbying. The total figure reported in ExxonMobil’s public Lobby Disclosure Act filings includes expenses associated with the costs of employee federal lobbying, as well as those portions of payments to trade associations, coalitions and think tanks that are spent on federal lobbying.
The Corporation believes the rigor of these requirements provides sufficient transparency and accountability of our public advocacy activities to the general public, including shareholders. The Congress and Executive Branch are the appropriate recipients of the proponent’s specific positions on our nation’s policy disclosure laws, and any reforms they seek.
The Corporation has an established practice to determine which public policy issues are important to ExxonMobil, which includes gaining input from affected business lines and functional departments such as Law and Public and Government Affairs. Key issues are reviewed by the Management Committee and Board of Directors of the Corporation. ExxonMobil’s position on key policy issues are posted in the Current Issues section atexxonmobil.com, and our lobbying activities are aligned with those positions. In addition, our policy and procedures governing lobbying, including oversight, can be found in the Accountability section of the same website. We believe detailed disclosures concerning internal deliberations on public policy issues could be competitively harmful, and would be of questionable utility to shareholders.
ExxonMobil promotes discussion on issues of direct relevance to the Company. We contribute to a wide range of academic and policy organizations that research and promote dialogue on significant domestic and foreign policy issues. Our contributions do not constitute an endorsement of every policy position or point of view expressed by a recipient organization. As is true of all non-profits we support, we conduct an annual evaluation of the merits of each organization and reserve the right to initiate, sustain, or withdraw support at any time.
ExxonMobil believes that the risks of climate change are serious and warrant thoughtful action. Managing these risks requires innovation and collaboration. We are dedicated to working to reduce the risks of climate change in the most efficient way for society, while recognizing the importance of reliable and affordable energy in supporting economic growth. We actively engage in constructive dialogue on climate change policy with a wide variety of stakeholders, including governments, non-governmental organizations, academia and the public.
Policymakers around the world currently are considering a variety of legislative proposals and regulatory options related to climate policies. ExxonMobil advocates an approach that ensures a uniform and predictable cost of carbon; allows market prices to drive solutions; maximizes transparency to stakeholders; reduces administrative complexity; promotes global participation; and is easily adjusted to future developments in climate science and policy impacts. We continue to believe a revenue-neutral carbon tax is better able to accommodate these key criteria.
ExxonMobil updates shareholders annually on our views on climate change and how the Company plans capital expenditures, assesses and plans for policies limiting greenhouse gas emissions, and works to reduce emissions as part of theCorporate Citizenship Report. The Company also periodically responds to specific shareholder requests. Currently available reports and responses are viewable onexxonmobil.com.
A robust civil society requires the airing of different voices and perspectives as part of the nation’s ongoing public policy debate. In light of the importance and implications of sound public policies, ExxonMobil will continue to engage actively with stakeholders who have an interest in key issues that affect the Company and industry.
ITEM 10 – INCREASE CAPITAL DISTRIBUTIONS
This proposal was submitted by Eric McCallum, a client of Arjuna Capital/Baldwin Brothers Inc., 204 Spring Street, Marion, MA 02738, the beneficial owner of 200 shares.
“Capital Distributions
WHEREAS:
In the face of global climate change, we believe investor capital is at risk from investments in projects that may prove economically stranded and unburnable if fossil fuel demand is reduced through public policy carbon restrictions, pricing and competition from renewables.
Global governments have agreed ‘the increase in global temperature should be below 2 degrees Celsius.’ The International Energy Agency states, ‘No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2º C goal.’
In 2015 Citigroup estimated the value of unburnable fossil fuel reserves could amount to over 100 trillion dollars out to 2050:
‘Lessons learned from the stranding of assets via the recent fall in the oil price gives food for thought about what the impact of the introduction of carbon pricing (or similar measures from Paris COP21) on higher-cost fossil fuel reserves might be.’
The industry cancelled approximately 200 billion dollars of capex in 2015 (Wood Mackenzie). The Carbon Tracker Initiative (CTI) estimates 2 trillion dollars of industry capex and 72.9 percent of ExxonMobil’s capex is ‘unneeded’ if we are to achieve a 2 degree pathway.
Massive production cost inflation over the past decade has made the industry vulnerable to a downturn in demand and oil prices.
A decade of cost escalation and the recent decline in oil prices has eroded the sector’s returns on equity to a record 29 year low (Citigroup).
Major new project costs have recently averaged between 70 and 100 dollars per barrel, raising the risk of stranded, unprofitable assets (Goldman Sachs).
A ‘capex crisis’ has increased upstream oil investment 100 percent (2005 to 2013), while crude oil supply has increased only 3 percent (Kepler Cheuvreux).
Analysts indicate companies may not be adequately accounting for or disclosing downside risks from lower than expected demand and prices.
The equity valuation of oil producers could drop 40 to 60 percent under a low carbon scenario (HSBC).
Approximately 40 percent of current oil investments are stranded at prices below 75 dollars per barrel in the current price environment (Citigroup).
Approximately 44 percent percent of Exxon’s potential future product portfolio (2014 to 2050) requires an oil price of 75 dollars per barrel to be economical (CTI).
Investors are concerned ExxonMobil risks eroding shareholder value through investments in what may prove stranded, uneconomical assets in a low carbon demand scenario. Exxon’s capital expenditures grew at a
compound annual growth rate of 9 percent from 2005 to 2014, coinciding with a 1 percent net income decline. Exxon cut total capital distributions (summing dividends and share buybacks) to shareholders approximately 25 percent over the last twelve months.
RESOLVED:Shareholders hereby approve, on an advisory basis, a proposal that ExxonMobil commit to increasing the total amount authorized for capital distributions (summing dividends and share buybacks) to shareholders as a prudent use of investor capital in light of the climate change related risks of stranded carbon assets.”
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil published the report,Energy and Carbon – Managing the Risks, to address questions raised on the topic of global energy demand and supply, climate change policy and carbon asset risks. This report further described how the Company integrates consideration of climate change risks into planning processes and investment evaluation. The Board is confident that the Company’s robust planning and investment processes adequately contemplate and address climate change related risks.
Each year, we update our long-term energy demand projection in ourOutlook for Energy – taking into account the most up-to-date demographic, economic, technological, and climate policy information available. This analysis serves as a foundation for our long-term business strategies and investments, and is generally consistent with other forecasting organizations such as the International Energy Agency. OurOutlook by no means represents a “business as usual” case and it includes a significant reduction in projected energy use and greenhouse gas (GHG) emissions due to energy efficiency initiatives. Because we assume policy action will become increasingly more stringent over time, ourOutlook projects lower future energy-related CO2 emissions through 2040 than would be implied by a “no policy scenario” where limited GHG reduction policies and regulations are implemented.
ExxonMobil maintains a disciplined capital allocation approach with a long-term horizon. Our commitment to shareholders is to invest in attractive business opportunities and pay a reliable and growing dividend. Across the business cycle, we manage cash by returning excess to shareholders through share repurchases or borrowing to fund our investments.
From 2000 through 2015, the Company returned $357 billion of value to shareholders through dividend payments and share purchases, which reduced outstanding shares by 40 percent. ExxonMobil remains committed to a reliable and growing dividend, which has been increased 33 consecutive years. Despite a nearly 40 percent drop in crude prices in 2015, the dividend was increased by 5.8 percent and $3 billion of stock was repurchased, further enhancing the underlying value of all remaining shares and demonstrating the resiliency of our integrated business model. This value was delivered to shareholders while maintaining a robust capital investment program.
ExxonMobil is committed to disciplined investing in attractive opportunities across normal fluctuations in business cycles. Projects are evaluated under a wide range of possible economic conditions and commodity prices that are reasonably likely to occur. The Company does not publish the economic bases upon which we evaluate investments due to competitive considerations; however, it applies prudent and substantial safety margins in our planning assumptions to help ensure robust returns.
The Company also stress tests its oil and natural gas capital investment opportunities, which provides an added margin of safety against uncertainties, such as those related to technology, regulation/legislation, costs, geopolitics, availability of required materials, services, and labor. Such stress testing differs from alternative scenario planning, which we do not develop, but stress tests provide us an opportunity to fully consider a wide range of market conditions in the planning and investment process.
The Company addresses the potential for future climate-related policy, including the potential for restriction on emissions, through the use of a proxy cost of carbon. The proxy cost seeks to reasonably reflect the types of actions and policies that governments may take over the outlook period relating to the exploration, development, production, transportation or use of carbon-based fuels. This proxy cost of carbon is embedded in ourOutlook for Energy, and has been a feature of the report since 2007. All business segments are required to include, where appropriate, an estimate of the costs associated with greenhouse gas emissions in their economics when seeking funding for capital investments.
The scale and integrated nature of our operating cash flows along with prudent cash management provide unmatched financial strength, enabling the Company to invest in attractive projects throughout the business cycle.
A key strategy to ensure investment selectivity under a wide range of economic assumptions is to maintain a diverse portfolio of oil, gas, and petrochemical investment opportunities. This diversity, in terms of resource type and corresponding development options (oil, gas, natural gas liquids, onshore, offshore, deepwater, conventional, unconventional, liquefied natural gas) and geographic dispersion, is unparalleled in the industry.
These factors have positioned ExxonMobil consistently as an industry leader in return on capital employed and underpin our ability to continue leading shareholder distributions and maintain a long-term investment program that creates significant shareholder value.
ITEM 11• | – POLICY TO LIMIT GLOBAL WARMING TO 2°C | Reputational: Reputationally damaging events have financial consequences. BP lost 38% of its American clients after the 2010 oil spill. 67% of Americans oppose drilling in the Arctic Refuge. In 2020, 259 organizations, representing more than 27 million members, launched a campaign against drilling in the Arctic Refuge. |
This proposal was submitted by the SistersWhile ExxonMobil pulled out of St. Dominic of Caldwell New Jersey, 40 South Fullerton Avenue, Montclair, NJ 07042, the beneficial owner of 200 shares and lead proponent of a filing group.
“Whereas:
Pope Francis, in his encyclical letter Laudato Si’, states that ‘the climate is a common good, belonging to all and meant for all.’1 Numerous faith traditions have issued statements highlighting the moral responsibility to address climate change and care for creation and calling for urgent action.2 They join experts in science, business, and politics who have stated that global warming is unequivocal, that climate change is human-induced, and that its decisive mitigation is a moral imperative for humanity.3
The poor and most vulnerable are the first to suffer, while future generations, holding no responsibility, will live with greater impacts of global warming.
World leaderssome joint ventures in the 2010 Cancun Agreement agreedArctic in 2018 and terminated their leases in the Arctic Refuge, competitors Chevron and Hilcorp have no remaining stake in the Refuge and stopped pursuing any exploration projects in the region in 2021.
Drilling in the Arctic, and particularly in the Arctic Refuge, poses unnecessary risks to limit warming of the average global atmospheric temperature to less than 2 degrees Centigrade (2°C) above pre-industrial levelscompany and fragile Arctic ecosystems as climate-related risks grow in order to prevent the worst impacts of climate change, including extreme weather, drought, rising sea levels, crop failure, and accelerated species loss. These impacts will likely have societal consequences including migration, food insecurity, and conflict. The World Bank and the Intergovernmental Panel on Climate Change warn that if warming exceeds 2°C, there are risks of ‘triggering nonlinear tipping elements’ thus producing ‘irreversible’ impacts.concern for investors.
The emissions profile of ExxonMobil’s 2015Outlook for Energy report approximates scenarios that would entail warming in excess of 2°C.4
ExxonMobil claims that its energy production responds to a ‘moral imperative’5 to meet growing energy demand and eradicate poverty, but this does not offset the necessity to mitigate climate change or the moral imperative to limit warming to 2°C. Further, World Bank and energy analyst reports conclude that renewable energy provides a better pathway to energy access.6 Billions of people living in energy poverty are not only the least responsible for greenhouse gas (GHG) emissions, but also likely to be most adversely impacted by climate change.7
As a large GHG emitter with carbon intensive products, ExxonMobil should robustly support the global framework to address climate change resulting from the 21st Conference of Parties of the United Nations Framework Convention on Climate Change in December 2015. Constructive engagement on climate policy is especially important given Exxon’s historical role in financing climate denial and misinformation campaigns on climate change.8 Failing to address this could present reputational risk for ExxonMobil. In contrast to ExxonMobil, ten oil industry peers including Total, Shell, BP, and Saudi Aramco, and business leaders in other industries, support an international agreement to limit warming to 2°C.9
Resolved: Resolved: Shareholders request that the Board of Directors adoptissue a policy acknowledgingpublic report, within a reasonable time, assessing the imperativebenefits and drawbacks of committing to limit global average temperature increasesnot engage in oil and gas exploration and production in the AMAP area, particularly in the Arctic Refuge, as well as the financial and reputational risks to 2°C above pre-industrial levels,the company associated with such development.”
The Board carefully considered this proposal and recommends you vote AGAINST it for the following reasons:
This is one of 10 new reports requested by proponents at this annual shareholder meeting.
To meet society’s growing need for our energy and products, we must often work in remote and challenging environments all over the world, and in some cases in ecologically sensitive and/or biologically rich areas. This is something we have done for decades. Using a rigorous and comprehensive assessment process, we consider the full range of potential environmental, socioeconomic, security, and health risks associated with our operations before we begin a new development. This enables us to establish a comprehensive understanding of the potential impacts and develop specific measures to avoid or significantly reduce the potential risks, or to remedy the impacts with the higher-risk exposures requiring more extensive mitigation. This proven assessment approach is worked jointly with the communities in which includes committingwe operate and in cooperation with the Companygovernments and regulatory agencies that provide oversight for permit application and approval processes and ongoing regulatory oversight.
Our Operations Integrity Management System (OIMS) has proven effective at ensuring readiness and resiliency, including design, operating procedures, and emergency preparedness. Our operations and facilities are designed, constructed, and operated consistent with industry standards to supportwithstand a variety of environmental conditions. We monitor and manage ongoing facility integrity, and maintain disaster preparedness, response, and business continuity plans.
With regard to this proposal:
| 1. | ExxonMobil does not hold any active leases and is not pursuing any active developments within the Arctic National Wildlife Refuge (ANWR). |
| | | | | | |
102 | | | | | | 2023 Proxy Statement |
| 2. | Our current investment plans do not include exploration activity within the Arctic Monitoring and Assessment Program (AMAP) region, and we plan relatively limited investment to sustain our existing interests in the region, which include our equity in the long-standing facilities in Norman Wells, Prudhoe Bay, Point Thompson, Kuparuk and associated infrastructure in Alaska. For example, Alaska North Slope oil from Prudhoe Bay is transported through one of the world’s largest pipeline systems, the Trans Alaska Pipeline System, in which ExxonMobil owns a minority interest; the Norman Wells facilities include both producing wells and a central processing facility, which also generates electricity for the town of Norman Wells. Sustainment of production from these assets in the AMAP region, and outside of the ANWR, plays an important role in providing reliable and affordable energy to North America and beyond. |
| 3. | The significant measures ExxonMobil takes to ensure the safety of, and manage risk for, all of our operations and investments are already described in our Advancing Climate Solutions 2023 Progress Report. This report includes information about our enterprise risk framework, which provides a structured, comprehensive approach to identifying, prioritizing, and managing risks across the Company. As detailed, we are committed to the ongoing assessment and mitigation of potential physical impacts to the environments in which we operate and use data and advanced computer modeling to assess the full range of potential environmental, socioeconomic, security, and health risks associated with potential construction and operations before pursuing a new development. In addition, the risks associated with all of our operations are included in our financial filings, including our Form 10-K. |
| 4. | We believe the proponent has been disingenuous in its motives for this proposal on behalf of shareholders. The proponent openly acknowledges on its website that its funds do not invest in the fossil fuel and other industries.1 In the About Us section of its website, Green Century also claims to be “one of the first fossil free, diversified and environmentally responsible mutual funds,” yet is the beneficial owner of ExxonMobil shares with a market value greater than $2,000. |
In summary, and as mentioned to this proponent during our engagement, given ExxonMobil’s comprehensive assessment and risk mitigation to all of our developments and operations, and more specifically our limited operations in the goal of limiting warmingAMAP region (with none at all in the Arctic National Wildlife Refuge), combined with the safety and risk-related disclosures we already provide, we believe a separate report for this region is unnecessary. The Board therefore encourages shareholders to less than 2°C.
SUPPORTING STATEMENT
We believe that ExxonMobil should assert moral leadership with respect to climate change. This policy would supplement ExxonMobil’s existing positions on climate policy.vote against this proposal.
1.1 | http://w2.vatican.va/content/francesco/en/encyclicals/documents/papa-francesco_20150524_enciclica-laudato-si.html |
2. | http://www.umc.org/what-we-believe/resolution-on-global-warming; http://www.pcusa.org/media/uploads/acswp/pdf/energyreport.pdf; http://www.abc-usa.org/wp-content/uploads/2012/06/globwarm.pdf; http://www.ucc.org/environmental-ministries_synod-resolutions_a-resolution-on-climate; http://www.uua.org/statements/threat-global-warmingclimate-change; http://islamicclimatedeclaration.org/islamic-declaration-on-global-climate-change/; See https://theshalomcenter.org/torah-pope-crisis-inspire-400-rabbis-call-vigorous-climate-action; http://www.quakerearthcare.org/article/shared-quaker-statement-facing-challenge-climate-change |
3. | http://www.casinapioiv.va/content/dam/accademia/pdf/declaration%20(final).pdf |
4. | http://cdn.exxonmobil.com/~/media/global/files/energy-and-environment/report---energy-and-climate.pdf |
5. | http://corporate.exxonmobil.com/en/company/news-and-updates/speeches/unleashing-innovation-to-meet-our-energy-and-environmental-needs |
6. | http://www.carbontracker.org/report/energyaccess/; http://www.theguardian.com/sustainable-business/2015/aug/07/world-bank-clean-energy-is-the-solution-to-poverty-not-coal |
7. | http://www.se4all.org/tracking-progress/ |
8. | http://www.ucsusa.org/global-warming/fight-misinformation/climate-deception-dossiers-fossil-fuel-industry-memos#.Vfrd3RFViko |
9. | http://www.oilandgasclimateinitiative.com/wp-content/uploads/2015/10/OGCI-Report-2015.pdf; https://www.whitehouse.gov/the-press-office/2015/10/19/fact-sheet-white-house-announces-commitments-american-business-act”www.greencentury.com/about-us/ |
| | | | | | |
| 2023 Proxy Statement | | | | 103 | | |
The Board recommends you vote AGAINST this proposal
Please refer to the Compensation and Discussion Analysis on pages 45 to 67 for a detailed description of the Company’s Executive Compensation program design and 2022 pay decisions, including how the Company links executive compensation to performance. This section is provided solely to comply wit
h recently adopted SEC rules under the Dodd-Frank Act. | | | | | | | | | | | | | | | | | | | | | | |
| |
Pay Versus Performance Table |
| | | | | | | | | | | | | Valu e of Init ial Fixed $100 Investment Based On: | | | | | |
| | Summary
Compensation
Table Total for | | Compensation Actually Paid to PEO 1,4 | | | Average Summary Compensation Table Total for Non-PEO NEOs 2 | | Average Compensation Actually Paid to Non-PEO NEOs 2,4 | | | | | Peer Group Total Shareholder Return 3 | | | | | |
| | | | | | | | | |
| 2022 | | 35,909,231 | | | 89,747,677 | | | 20,844,030 | | | 37,954,580 | | | 188 | | 136 | | | 55,740 | | | 82,044 |
| | | | | | | | | |
| 2021 | | 23,572,488 | | | 40,080,212 | | | 11,277,117 | | | 18,671,104 | | | 101 | | 94 | | | 23,040 | | | 51,305 |
| | | | | | | | | |
| 2020 | | 15,639,061 | | | -7,691,707 | | | 8,331,316 | | | -8,714,670 | | | 64 | | 69 | | | -22,440 | | | 15,667 |
See footnote text on page 105
for the
following reasons:ExxonMobil takesSummary Compensation Table (SCT) to Compensation Actually Paid (CAP) calculation.
Following table and information are provided to supplement the risksPay versus Performance table.
| | | | | | | | |
| | Total Direct Compensation PEO 1,6 | | | | | | |
| | | | | |
| 2022 | | 33,024,000 | | 18,116,008 | | 17,704,820 | | 7,649,062 |
| | | | | |
| 2021 | | 18,262,225 | | 9,068,366 | | 7,594,806 | | 4,188,130 |
| | | | | |
| 2020 | | 10,049,725 | | 3,748,895 | | 4,785,620 | | 2,744,862 |
| | | | | |
| | | | | | | | |
Columns (b) and (d) represent Total Reported Pay for PEO and other NEOs as disclosed in the Summary Compensation Table on page 68. In its pay deliberations, the Compensation Committee considers Total Direct Compensation, columns (j) and (l), as it excludes the volatility that results from changes in pension value and all other compensation. See pages 58 to 61.
“Compensation Actually Paid” in columns (c) and (e) includes pension service cost and year-over-year change in value of global climateunvested awards. We believe Realized Pay, shown in columns (k) and (m), is a more accurate representation of pay actually realized during the year. See pages 58 to 59 for details specific to PEO Realized Pay.
The main factor in year-over-year changes in “Compensation Actually Paid” is the change
seriously and believes these risks warrant thoughtful action. The long-term objectivein value of
climate change policy should be to reduceunvested equity awards. Performance shares with uniquely long vesting periods represent over 70 percent of Total Direct Compensation, aligning the
risksinterests of
serious harm to humanity and ecosystems at minimum societal cost, while recognizing additional shared humanitarian necessities, including providing reliable and affordable energy to improve global living standards.The Board believes the Company has an obligation to shareholders to continue to invest in economically attractive energy sources in an environmentally responsible manner. The Board further believes the Company’s capabilities are best utilized finding practical, achievable solutions to address climate change risks consistentour executives with the Company’s mandate, rather than focusingreturns of long-term shareholders.
| | | | | | | | | | | | | | | | | | | | | | |
PEO “Compensation Actually Paid” 2022 versus 2021 ($ in millions) | | | | | | As a result, close to 90 percent of the year-over-year change of PEO “Compensation Actually Paid” reflects unvested equity, its value influenced by the Company’s stock performance. Year-end stock price of $110.30 in 2022,
from $61.19 in 2021 and $41.22 in 2020,
resulted in significant year-over-year change. |
| | | | | | | | |
| Cash: Salary, Bonus, All Other Compensation | | | | 8.5 | | | | | 4.9 | | | | | 3.5 | | | | | 7 | % |
| Stock Awards granted in current year, YE value | | | | 24.8 | | | | | 13.2 | | | | | 11.7 | | | | | 23 | % |
| Outstanding equity, year-over-year change in value | | | | 48.5 | | | | | 16.8 | | | | | 31.8 | | | | | 64 | % |
| Vested awards, vested value minus prior YE value | | | | 3.3 | | | | | 1.3 | | | | | 2.0 | | | | | 4 | % |
| Dividends paid prior to vesting of underlying awards | | | | 3.7 | | | | | 3.2 | | | | | 0.6 | | | | | 1 | % |
| Pension Service Cost | | | | 0.9 | | | | | 0.7 | | | | | 0.2 | | | | | 0 | % |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
While the charts below suggest correlation, it is important to note that in its pay deliberations, the Compensation Committee evaluates the CEO’s performance based on progress against a future global temperature stabilization outcome that ultimately willbroad range of plan goals and objectives and performance measures. See pages 49 to 51.
The table below indicates certain performance measures used by the Compensation Committee to link compensation to performance. ExxonMobil operates in a capital intensive industry where decisions and management of risk play out over time horizons decades in length through cyclical commodity price environments. As a result, and particularly in a down-cycle, near-term financial performance may not be
dictated by many variables beyond the Company’s control.Recognizing that reducing greenhouse gas emissionsreflective of strong business and operational performance. For this reason, performance is assessed across the global economy is a shared objective, the Company remains focused on finding practical, prudent,broad range of financial and affordable solutions to address the dual challenge of expanding energy supplies to support economic growth, improve living standards, alleviate poverty,operating metrics, over near- and improve resilience while simultaneously addressing the societallong-term time horizons and environmental risks posed by rising greenhouse gas emissions and climate change.
Through effective solutions, progress can and has been made. For example, according to the U.S. Energy Information Agency, CO2 emissions in the U.S. power sector are down 15 percent since 2005, with 60 percent of this reduction reflecting the benefit of shifting from coal to natural gas. Also, per the U.S. Environmental Protection Agency, net methane emissions from natural gas have fallen 38 percent since 2005, during which time U.S. natural gas production has increased by 26 percent. Looking forward, we believe more progress will be made in the development of low greenhouse gas emissions technology, such as advanced carbon capture and sequestration (CCS).
As the policy and regulatory landscape has continued to develop, we have proactively addressed this global challenge. We have long taken action by increasing energy efficiency and reducing greenhouse gas emissions in our operations, providing products that help consumers reduce their emissions, supporting research into technology breakthroughs, and participating in constructive dialogue on policy options with non-governmental organizations, industry, and policy makers.
Each year, we update our long-term energy demand projection in ourOutlook for Energy – taking into account the most up-to-date demographic, economic, technological, and climate policy information available. This analysis servesbroader business environment. See pages 49 to 51.
|
Supporting Financial & Operating Metrics ∎ Cash Flow from Operations and Asset Sales∎ Return on Capital Employed∎ Environmental Performance∎ Corporate-wide operated asset GHG emissions intensity |
Information on performance measures as well as a foundationdescription of Executive Compensation Program, including information on Compensation Design, Determining Compensation, other Compensation Elements, Risk and Governance can be found in the Compensation and Discussion Analysis on pages 45 to 67.
| 1 | Principle Executive Officer (PEO): 2020-2022 D.W. Woods |
| 2 | Named Executive Officer (NEO): In 2022, K.A. Mikells, N.A. Chapman, J.P. Williams, Jr., and K.T. McKee; in 2021, K.A. Mikells, A.P. Swiger, N.A. Chapman, J.P. Williams, Jr., and L.M. Mallon; in 2020, A.P. Swiger, N.A. Chapman, J.P. Williams, Jr., and N.W. Duffin |
| 3 | CD&A Performance Peer group: BP, Chevron, Shell, and TotalEnergies |
| 4 | Adjustments to determine “Compensation Actually Paid”: |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | PEO 1 | | | | | | Average Non-PEO NEOs2 | |
| | | +/- | | 2022 | | | 2021 | | | 2020 | | | 2022 | | | 2021 | | | 2020 | |
| | | | | | | | |
| SCT grant value of current year long-term awards | | – | | | 24,939,000 | | | | 13,505,225 | | | | 8,434,725 | | | | 12,594,195 | | | | 5,892,181 | | | | 3,594,016 | |
| | | | | | | | |
Year-end value of current long-term awards | | + | | | 24,817,500 | | | | 13,155,850 | | | | 8,450,100 | | | | 12,532,838 | | | | 5,827,736 | | | | 3,600,567 | |
| | | | | | | | |
| Year-over-year change in “fair value” of unvested awards | | + | | | 48,547,691 | | | | 16,765,814 | | | | -20,079,108 | | | | 17,672,847 | | | | 7,865,983 | | | | -15,015,063 | |
| | | | | | | | |
| Value of vested awards received | | + | | | 3,273,600 | | | | 1,314,686 | | | | -1,274,817 | | | | 751,602 | | | | 486,992 | | | | -1,009,384 | |
| | | | | | | | |
| SCT change in pension value | | – | | | 2,506,363 | | | | 5,137,153 | | | | 5,348,636 | | | | 3,044,269 | | | | 2,710,176 | | | | 3,442,800 | |
| | | | | | | | |
| Pension Service cost | | + | | | 901,365 | | | | 744,658 | | | | 751,812 | | | | 460,833 | | | | 326,056 | | | | 462,472 | |
| | | | | | | | |
| Dividends | | + | | | 3,743,653 | | | | 3,169,095 | | | | 2,604,606 | | | | 1,330,895 | | | | 1,489,577 | | | | 1,952,237 | |
| 5 | Additional information on CFOAS is included in Exhibit A starting on page 109 . |
| 6 | Definitions of “Total Direct Compensation” and “Realized Pay” are included on page 66. |
| | | | | | |
| | | | 10 5 | | |
PAY RATIO
Annual total CEO compensation for our2022 was $35,950,331. The median annual total compensation of all employees of the Corporation, except the CEO, for 2022 was $171,582. The ratio of annual total CEO compensation to the median annual total compensation of all employees was 210:1.
The median employee was identified as of October 15, 2022, based on total taxable wages for the most recently completed prior fiscal year as shown in the Corporation’s records. No estimates or sampling methodologies were used for this purpose. No cost-of-living adjustments were made and the taxable wages of employees employed for less than the full fiscal year were not annualized. “Employees” were defined based on applicable employment and tax laws.
For purposes of this disclosure, as permitted by SEC rules, the value of non-discriminatory benefits is included in annual total compensation of both the median employee and the CEO. These non-discriminatory benefits are long-term business strategiesdisability plan, basic life insurance and investments,accidental death and dismemberment plan, medical plan, and dental plan.
Including these benefits provides a more accurate pay ratio. Since SEC rules do not require inclusion of these generally available benefits in the Summary Compensation Table, annual total CEO compensation shown above is generally consistent with other forecasting organizations such asslightly higher than the International Energy Agency. OurOutlook by no means represents a “business as usual” case and it includes a significant reductionTotal CEO Compensation shown in projected energy use and GHG emissions due to energy efficiency initiatives. Because we assume policy action will become increasingly more stringent over time,
ourOutlook projects lower future energy-related CO2 emissions through 2040 than would be implied by a ‘no policy scenario’ where limited GHG reduction policies and regulations are implemented.that table.
ExxonMobil believes that effective policies to address climate change should putis a price on greenhouse gas emissions that will:
Promote global participation;
Ensure a uniform and predictable cost of greenhouse gas emissions acrosscompany with employees in many countries around the economy;
Let market prices drive the selection of solutions;
Minimize regulatory complexity and administrative costs;
Maximize transparency; and
Provide flexibility for future adjustments in response to scientific developments and the economic consequences of climate policies.
ExxonMobil has for many years held the view that a revenue-neutral carbon tax is the best option to fulfill these key principles. Instead of subsidies and mandates that distort markets, stifle innovation, and needlessly raise energy costs, a carbon tax could help create the conditions to reduce greenhouse gas emissions in a way that spurs new efficiency and technology solutions at the lowest cost to society and consumers.
ITEM 12 | – REPORT ON IMPACTS OF CLIMATE CHANGE POLICIES |
This proposal was submittedworld. As permitted by the New York State Common Retirement Fund, 59 Maiden Lane – 30th Floor, New York, NY 10038,de minimis exemption under the beneficial ownerSEC rules, for purposes of 10,926,248 shares and lead proponent of a filing group.
“RESOLVED: Shareholders request that by 2017 ExxonMobil publish an annual assessment of long term portfolio impacts of public climate change policies, at reasonable cost and omitting proprietary information. The assessment can be incorporated into existing reporting and should analyzeidentifying the impacts on ExxonMobil’s oil and gas reserves and resources under a scenariomedian employee in 2022, we excluded employees from 34 countries, which reductionrepresent in demand results from carbon restrictions and related rules or commitments adopted by governments consistent with the globally agreed upon 2 degree target. The reporting should assess the resilienceaggregate less than 5 percent of the company’s full portfolio of reserves and resources through 2040 and beyond and address the financial risks associated with suchCorporation’s total employees. As required, where any employees from a scenario.
Supporting Statement:
It is our intentionjurisdiction were excluded, all employees from that this be a supportive but stretching resolution that ensures the long-term success of the company.
Recognizing the severe and pervasive economic and societal risks associated with a warming climate, global governments have agreed that increases in global temperature should be held below 2 degrees Celsius from pre-industrial levels (Cancun Agreement). Pursuant to the Durban Platform, 184 parties submitted plans to reduce greenhouse gas emissions in advance of the 21st Conference of the Parties.jurisdiction were excluded. In November 2014 the United States and China agreed to policy and regulatory actions to reduce greenhouse gas emissions and re-affirmed and expanded those actions in September 2015.
ExxonMobil recognized in its 2014 10-K that ‘a number of countries have adopted, or are considering adoption of, regulatory frameworks to reduce greenhouse gas emissions,’ and that such policies, regulations, and actions could make its ‘products more expensive, lengthen project implementation timelines and reduce demand for hydrocarbons,’ but ExxonMobil has not presented any analysis of how its portfolio performs under a 2 degree scenario.
In response to a previous shareholder resolution regarding Carbon Asset Risk, ExxonMobil asserted ‘that an artificial capping of carbon-based fuels to levels in the ‘low carbon scenario’ [such as IEA 450ppm] is highly unlikely’ and did not test its portfolio against a 2 degree scenario.
However, ExxonMobil’s peers, Shell, BP, and Statoil have recognized the importance of assessing the impacts of these scenarios by endorsing the ‘Strategic Resilience for 2035 and beyond’ resolutions that received almost
unanimous investor support in 2015. BHP Billiton now publishes a ‘Climate Change: Portfolio Analysis’ evaluating its assets against 2 degree scenarios, and ConocoPhillips states that it stress tests its portfolio against 2 degree scenarios. More recently, ten major oil and gas companies have announced that they will support the implementation of clear stable policy frameworks consistent with a 2 degree future.
This resolution aims to ensure that ExxonMobil fully evaluates and mitigates risks to the viability of its assets as a result of public climate change policies, including in a 2 degrees scenario.”
The Board recommends you vote AGAINST this proposal for the following reasons:
In 2014, ExxonMobil published the report, Energy and Carbon – Managing the Risks, to provide shareholders an enhanced description of global energy demand and supply, climate change policy and carbon asset risks. This report further described how the Company integrates consideration of climate change risks into planning processes and investment evaluation. The Board is confident that the Company’s robust planning and investment processes adequately contemplate and address climate change related risks, ensuring the viability of its assetstotal, as detailed in the above report. This report is found atexxonmobil.com intable below, 1,307 employees out of a total number of 64,062 worldwide employees (as of October 15, 2022) were excluded under theClimate section.de minimis exemption.
ExxonMobil believes that producing our existing hydrocarbon resources is essential to meeting growing global energy demand. We enable consumers – especially those in the least-developed and most-vulnerable economies – to pursue higher living standards and greater economic opportunity. We believe all economic energy sources will be necessary to meet growing demand, and the transition
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Countries Excluded / Number of Employees |
| 1. | | | Equatorial Guinea | | | 224 | | | 10. | | Taiwan | | | 51 | | | 19. | | N. Mariana Islands | | | 17 | | | 28. | | Cameroon | | 3 |
| 2. | | | Qatar | | | 136 | | | 11. | | Mozambique | | | 35 | | | 20. | | South Korea | | | 17 | | | 29. | | Luxembourg | | 3 |
| 3. | | | Norway | | | 115 | | | 12. | | Guam | | | 33 | | | 21. | | Saudi Arabia | | | 13 | | | 30. | | Peru | | 3 |
| 4. | | | Turkey | | | 105 | | | 13. | | Kazakhstan | | | 33 | | | 22. | | Greece | | | 12 | | | 31. | | South Africa | | 3 |
| 5. | | | New Zealand | | | 80 | | | 14. | | Cyprus | | | 28 | | | 23. | | Vietnam | | | 10 | | | 32. | | Micronesia | | 2 |
| 6. | | | Finland | | | 78 | | | 15. | | Fiji | | | 25 | | | 24. | | Spain | | | 8 | | | 33. | | Namibia | | 2 |
| 7. | | | Japan | | | 67 | | | 16. | | New Caledonia | | | 24 | | | 25. | | Denmark | | | 5 | | | 34. | | Bahamas | | 1 |
| 8. | | | Sweden | | | 65 | | | 17. | | Colombia | | | 23 | | | 26. | | Ukraine | | | 4 | | | | | | | |
| 9. | | | Utd. Arab Emir. | | | 56 | | | 18. | | Poland | | | 23 | | | 27. | | Azerbaijan | | | 3 | | | | | | | |
Total number of the energy system to lower carbon sources will take many decades due to its enormous scale, capital intensity and complexity. As such, we believe that none of our proven hydrocarbon reserves are, or will become, stranded. This is further detailed in the aforementioned report.
Each year, we update our long-term energy demand projection in ourOutlook for Energy – taking into account the most up-to-date demographic, economic, technological, and climate policy information available. This analysis serves as a foundation for our long-term business strategies and investments, and is generally consistent with other forecasting organizations such as the International Energy Agency. OurOutlook, which can be foundat exxonmobil.com/energyoutlook, by no means represents a “business as usual” case and it includes a significant reduction in projected energy use and GHG emissions due to energy efficiency initiatives. TheOutlook projects lower future energy-related CO2 emissions through 2040 than would be implied by a “no policy scenario” where limited GHG reduction policies and regulations are implemented.
In December 2015, parties to the United Nations Framework Convention on Climate Change (UNFCCC) convened in Paris for the 21st Conference of the Parties (COP 21). COP 21 resulted in a global compact, which for the first time, directs all parties to undertake action on climate change and report on related progress. For many years, ourOutlook has taken into account the potential for climate polices to become increasingly stringent over time by imposing higher costs on energy-related carbon dioxide emissions. Preliminary analysis of the aggregation of intended nationally determined contributions, which were submitted by governments as part of the COP 21 process, indicates a greenhouse gas emissions trajectory similar to that anticipated in ourOutlook.
We address the potential for future climate change policy, including the potential for restrictions on emissions, by estimating a proxy cost of carbon. This cost, which in some geographies may approach $80 per ton by 2040, has been included in ourOutlook since 2007. This approach seeks to reflect potential policies governments may employ related to the exploration, development, production, transportation or use of carbon-based fuels. We believe our view on the potential for future policy action is realistic and we require all of our business lines to include, where appropriate, an estimate of GHG-related emissions costs in their economics when seeking funding for capital investments.
We evaluate potential investments and projects using a wide range of economic conditions and commodity prices. We apply prudent and substantial margins in our planning assumptions to help ensure competitive returns over a wide range of market conditions. We also financially “stress test” our investment opportunities, which provides an added margin against uncertainties, such as those related to technology development, costs, regulation/legislation, geopolitics, availability of required materials, services, and labor. Stress testing, which differs from alternative scenario planning, further enables us to consider a wide range of market environments in our planning and investment process.
We maintain our long-standing commitment to energy efficiency, progressing the benefits of natural gas, research and development in alternative energies, providing access to energy, and constructive engagement with industry, governments, academic institutions, trade associations, and known external experts. We are an active participant in the International Petroleum Industry Environmental Conservation Association (IPIECA), an association that advances ideas and potential solutions for the industry concerning the risk of climate change.
In summary, while the Board agrees with the importance of assessing the resiliency of the Company’s resource portfolio, it believes the current processes as described above sufficiently test the portfolio to ensure long-term shareholder value. Framed by the 2014 report and assessed annually through stress testing in ourOutlookand in investment planning, we remain confident in the commercial viability of our portfolio. Furthermore, all proved reserves fully comply with SEC definitions and requirements as detailed in our annual 10-K.employees excluded: 1,307
ITEM 13 | – REPORT RESERVE REPLACEMENTS IN BTUs | | | | | |
106 | | | | | | 2023 Proxy Statement |
This proposal was submitted by Adelaide Gomer, c/o As You Sow, 1611 Telegraph Ave., Suite 1450, Oakland, CA 94612, the beneficial owner of 150 shares and lead proponent of a filing group.
“Whereas:The current accounting system for oil and gas reserve replacement has inherent limitations that impede ExxonMobil’s ability to adapt to a climate constrained global energy market.
A primary metric the market uses to assess the value of an oil and gas company is its reserve replacement ratio. (Cambridge Energy Policy Forum, March 2015). Reserve replacement is currently denominated in oil and gas units, incentivizing the production and development of new oil and gas reserves. Where annual oil and gas reserve replacement is not fully achieved, a company’s stock market value is likely to be impaired and top company executives may not receive full incentive packages. This fuel specific reporting metric does not allow management the latitude needed to optimize enterprise goals in a carbon constrained environment.
Global governments recognize severe risks associated with a warming climate and the need to limit warming to 2 degrees Celsius or less. At the Conference of the Parties in Paris, world leaders made significant commitments to reduce greenhouse emissions and initiated discussions to implement carbon pricing policies. As worldwide energy needs grow, it is becoming increasingly likely that such demand will be met with a much greater amount of renewable energy. Climate change induced transitions are already occurring in energy markets in the form of rapid energy efficiency increases, decreasing costs of renewables, and disruptive technology development such as electric vehicles.
The need for Exxon to develop new pathways in response to these transitions is highlighted by Citi, Statoil, and other analysts, which predict that global oil demand could peak in the next 10 to 15 years. As the 2015 oil market decline demonstrates, even a relatively small global oversupply of oil can substantially decrease the value of oil companies.
Company management must have maximum flexibility to optimize production and development of energy reserves in line with these changing market conditions and opportunities. Further, management should be incentivized to adopt a stable, long-term revenue path that includes replacing carbon holdings with renewable energy. The current system of oil and gas reserve replacement accounting hampers such flexibility and creates inappropriate incentives. Moving to a system that accounts for resources in energy units, such as the internationally accepted standard British Thermal Units, instead of oil and gas, will create a new measure of successful operation and incentivize a stable transition to a climate appropriate resource mix. It will also help foster better company valuations by investors, creditors, and analysts, thus improving capital allocation and reducing investment risk.
Resolved:Proponents request that, by February 2017 and annually thereafter in a publication such as its annual or Corporate Social Responsibility report, Exxon quantify and report to shareholders its reserve replacements in British Thermal Units, by resource category, to assist the Company in responding appropriately to climate change induced market changes. Such reporting shall be in addition to reserve reporting required by the Securities and Exchange Commission, and should encompass all energy resources produced by the company.”
The Board recommends you vote AGAINST this proposal for the following reasons:
The current practice of reporting annual reserves replacement on an Oil-Equivalent Basis is the industry standard and compliant with the requirements of the Securities and Exchange Commission. Supplementing that statutory reporting with a BTU-based equivalent would not fundamentally provide the investment community with additional information nor influence investment choices. Importantly, the Company’s success as measured by the stock market is not, as the proposal suggests, driven by reserve replacement, but primarily by financial performance over a period consistent with investment horizons.
ExxonMobil executives are not compensated on the basis of a reserves replacement ratio. As detailed in ourExecutive Compensation Overview (ECO) and our Proxy Statement, the Compensation Committee assesses ExxonMobil’s leadership position in seven key areas in determining the appropriateness of total compensation. These seven metrics include Safety and Operations Integrity, Return on Average Capital Employed, Strategic Initiatives, Free Cash Flow, Shareholder Distributions, Total Shareholder Return and Project Execution. TheECO demonstrates how outstanding performance is required in all seven of these areas to result in a top award.
ExxonMobil’s long-termOutlook for Energy (exxonmobil.com/energyoutlook) is updated annually to reflect global economic and demographic trends as well as emerging technologies and policies that will impact energy supply and demand. As in past years, theOutlook continues to assume governments will place significant costs on greenhouse gas (GHG) emissions. TheOutlook also anticipates that even with substantial gains in efficiency, and strong growth in nuclear and modern renewable energy supplies, demand for oil will continue to rise through 2040, driven by developing nations. Credible third-party outlooks, including those developed by the International Energy Agency (IEA) and the U.S. Department of Energy, share this view. Also consistent with theOutlook, the IEA sees natural gas growing more than any other energy type through 2040, reflecting its ability to meet a wide variety of needs and provide one of the most cost-effective ways to reduce GHG emissions. The rising use of natural gas is a key factor in theOutlook’s view that by 2040 the carbon intensity of the global economy is likely to fall by half.
We address the potential for future climate change policy, including the potential for restrictions on emissions, by estimating a proxy cost of carbon. This cost, which in some geographies may approach $80 per ton by 2040, has been included in ourOutlook since 2007. This approach seeks to reflect potential policies governments may employ related to the exploration, development, production, transportation or use of carbon-based fuels. We believe our view on the potential for future policy action is realistic and, by no means represents a “business as usual” case. We require all of our business lines to include, where appropriate, an estimate of GHG-related emissions costs in their economics when seeking funding for capital investments.
ExxonMobil monitors the business environment, including long-term supply and demand fundamentals. The Company is structured to capture shareholder value throughout the commodity price cycle and is well positioned for the future. Moving to a system that accounts for reserves in energy units will not enhance ExxonMobil’s ability to create shareholder value.
ITEM 14 | – REPORT ON HYDRAULIC FRACTURING |
This proposal was submitted by the Park Foundation, P.O. Box 550, Ithaca, NY 14851, the beneficial owner of 117 shares.
“WHEREAS:
Extracting oil and gas from shale formations using hydraulic fracturing and horizontal drilling technology has become a controversial public issue. Leaks, spills, explosions and community impacts have led to bans and moratoria in New York State and elsewhere in the U.S., putting the industry’s social license to operate at risk. Hydraulic fracturing has also become a topic of controversy in many locations across the world, including in Germany which has impacted ExxonMobil’s unconventional oil and gas development in the region.
Disclosure of management practices and their impacts is the primary means by which investors can assess how companies are managing the risks of their operations. The Department of Energy’s Shale Gas Production Subcommittee recommended that companies ‘adopt a more visible commitment to usingquantitative measures as a means of achieving best practice and demonstrating to the public that there is continuous improvement in reducing the environmental impact of shale gas production.’
ExxonMobil has become a laggard in the oil and gas industry in its disclosure practices. In a 2015 report ‘Disclosing the Facts: Transparency and Risk in Hydraulic Fracturing Operations’, which ranked companies on disclosure of quantitative information to investors, Exxon scored only 4 out of 39 points for its disclosure practices. Two thirds of the companies reviewed earned higher scores for their disclosures.
Exxon’s subsidiary, XTO Energy, was cited for having 113 hydraulic fracturing environmental and health violations, from January 2011 to August 2014, in Pennsylvania alone (Environment America, Fracking Failures, 2015). These violations have increased shareholder concern about Exxon’s practices.
Due to Exxon’s poor disclosure performance, investors call for the Company to provide detailed, quantitative, comparable data about how it is managing the risks and reducing the impacts of its hydraulic fracturing extraction operations. ItsOperations Integrity Management System fails to provide such reporting to investors; as a generalized framework for companywide operations, it provides no specific information on the company’s shale energy operations.
THEREFORE BE IT RESOLVED:
Shareholders request the Board of Directors report to shareholders, using quantitative indicators, by December 31, 2016, and annually thereafter, the results of company policies and practices above and beyond regulatory requirements, to minimize the adverse environmental and community impacts from the company’s hydraulic fracturing operations associated with shale formations. Such report should be prepared at reasonable cost, omitting confidential information.
SUPPORTING STATEMENT:
Proponents suggest the report provide quantitative information for each play in which the company has substantial extraction operations, on issues including, at a minimum:
Goals and quantitative reporting on progress to reduce toxicity of drilling fluids;
Quantitative reporting on methane leakage as a percentage of total production;
Percentage of drilling residuals managed in closed loop systems;
Numbers and categories of community complaints of alleged impacts, and their resolution;
Systematic post-drilling ground water assessment; and
Practices for identifying and managing the hazards from naturally occurring radioactive materials.”
The Board recommends you vote AGAINST this proposal for the following reasons:
The Board believes the Company has provided a comprehensive and sufficient discussion of its policies and practices on risk management of unconventional resource development, including hydraulic fracturing. Additional quantitative reporting at the “play level” will not improve our risk management or community engagement efforts.
The Company details its risk management practices in several public documents in order to inform key stakeholders. In September 2014, ExxonMobil prepared the report,Unconventional Resources Development – Managing theRisks, which describes in detail how the Company assesses and manages risks associated with developing unconventional resources. This report is available atexxonmobil.com/hfreport. Further, the Company’s annualCorporate Citizenship Report also discusses risk management issues associated with unconventional resource development.
The Company continually engages with communities in which we operate regarding upcoming and ongoing operations. We learn of community concerns directly and address them in a timely and proactive manner.
Modern drilling technologies and adherence to appropriate safety protocols allow unconventional oil and gas resources to be developed in a manner that protects human health and the environment, and we are committed to environmentally responsible operations. Our Environment Policy and Operations Integrity Management System commit us to continuous efforts to improve environmental performance. The reports cited by the proposal including the Proponent’s report do not credibly represent the Company’s performance.
This is the seventh year such a proposal has been filed. The proposal fails to recognize the continued operational enhancements and disclosures made by industry, and the significant expansion of federal and state regulatory requirements that govern industry operations.
A subset of detailed “by play” data as suggested by the proposal, all of which are managed by industry best practices and federal and state regulation, will not meaningfully inform the shareholder. Informing shareholders of the risks and how these risks are effectively managed is important, which we have done through the 2014 report mentioned above and through our annualCorporate Citizenship Report.
ADDITIONAL INFORMATION
Other Business
We are not currently aware of any other business to be acted on at the annual meeting. Under the laws of New Jersey, where ExxonMobil is incorporated, no business other than procedural matters may be raised at the meeting unless proper notice has been given to the shareholders. If other business is properly raised, your proxies have authority to vote as they think best, including to adjourn the meeting.
People with DisabilitiesOutstanding Shares
We can provide reasonable assistance to help you participate in the meeting if you tell us about your disability and your plans to attend. Please call or write the Secretary at least two weeks before the meetingHolders of record of our common stock at the telephone number, address, or fax number listed under Contact Informationclose of business on page 4.
Outstanding Shares
April 5, 2023 are entitled to vote at the 2023 annual meeting of shareholders. On February 29, 2016,28, 2023, there were 4,150,241,2794,059,294,340 shares of common stock outstanding.outstanding and entitled to vote. Each common share hasentitles the holder to one vote.
How We Solicit Proxies
We bear the cost of solicitation of proxies by the Company. In addition to this mailing, ExxonMobil directors, officers, and employees in the ordinary course of their employment, without special compensation other than reimbursement of expenses, may solicit proxies personally, electronically, by telephone, or with additional mailings. ExxonMobil pays the costs of soliciting this proxy. We are paying D.F. King & Co.Innisfree a fee of $30,000$40,000 plus expenses to help with the solicitation. We also reimburse brokersbrokerage firms, banks, and other nomineesintermediaries for their expenses in sending these materials to you and getting your voting instructions.
Shareholder Proposals and Director Nominations for Next Year
Any shareholder proposal for the annual meeting in 20172024 must be sent to the Secretary at the address or fax number of ExxonMobil’s principal executive office or email address listed under Contact Information on page 4.7. The deadline for receipt of a proposal to be considered for inclusion in the 20172024 proxy statement is 5:00 p.m., Central Time, on December 14, 2016.15, 2023. The deadline for notice of a proposal for which a shareholder will conduct his or her own solicitation is February 27, 2017.28, 2024. Upon request, the Secretary will provide instructions for submitting proposals.
Submissions of nominees for director under the proxy access provisions of our by-laws for the 2024 annual meeting must be submitted in compliance with those by-laws no later than December 15, 2023, and no earlier than November 15, 2023. Notice of a director nomination other than under proxy access must be submitted in compliance with the advance notice provisions of our by-laws no later than February 1, 2024, and no earlier than January 2, 2024.
For the 2023 annual meeting of shareholders, the ExxonMobil proxy card will be White. ExxonMobil intends to use the White proxy card for its annual meeting next year and for all future shareholder meetings.
Duplicate Annual Reports
Registered shareholdersShareholders with multiple accounts may authorize ExxonMobil to discontinue mailing annual reports onfor an account by calling ExxonMobil Shareholder Services at the toll-free telephone number listed on page 47 at any time during the year. Beneficial holders should contact their banks, brokers,brokerage firms, or other holders of record to discontinue duplicate mailings. At least one account must continue to receive an annual report. Eliminating these duplicate mailings will not affect receipt of future proxy statements and proxy cards.
Shareholders withWith the Same Address
If you share an address with one or more ExxonMobil shareholders, you may elect to “household” your proxy mailing. This means you will receive only one set of proxy materials at that address unless one or more shareholders at that address specifically electelects to receive separate mailings. Shareholders who participate in householding will
continue to receive separate proxy cards. Householding will not affect dividend check mailings. We will promptly send separate proxy materials to a shareholder at a shared address on request. Shareholders with a shared address may also request us to send separate proxy materials in the future, or to send a single copy in the future, if we are currently sending multiple copies to the same address.
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Requests related to householding should be made by calling ExxonMobil Shareholder Services at the telephone number listed on page 4.7. Beneficial shareholders should request information about householding from their banks, brokers, or other holders of record.
SEC Form 10-K
Shareholders may obtain a copy of the Corporation’sAnnual Report on Form 10-K to the Securities and Exchange Commission without charge by writing to the Secretary at the address listed under Contact Information on page 4,7, or by visiting ExxonMobil’s website atexxonmobil.com/secfilings.
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DIRECTIONSEXHIBIT A: Forward-Looking Statements and Frequently Used Terms
Set forth below is important information concerning forward-looking statements, as well as definitions and additional information for certain key business and financial performance measures, made or referenced in this proxy statement.
Statements regarding potential future earnings and cash flow assume a Brent crude price of $60/bbl and a Henry Hub gas price of $3/mmbtu, in each case adjusted for inflation after 2022; Energy, Chemical, and Specialty Products margins at historical averages for the 10-year period 2010-2019, and before-tax Corporate and Financing expenses between $2.3 and $2.5 billion annually. These price assumptions are not intended to reflect management’s forecasts for future prices or prices we use for internal planning purposes. The 2019 baseline excludes identified items.
Statements of future events or conditions, including outlooks, projections, ambitions, plans and objectives are forward-looking statements. Actual future results, including financial and operating performance; total capital expenditures and mix, including allocations of capital to low carbon solutions; cost reductions and efficiency gains; ambitions to achieve net-zero operated Scope 1 and Scope 2 emissions by 2050, to reach net-zero operated Scope 1 and 2 emissions in our unconventional Permian Basin operated assets by 2030, to eliminate routine flaring in-line with World Bank Zero Routine Flaring, and to reach near-zero methane emissions from operated assets, within evolving growth, start-up, divestment, and technological efforts; timing and outcome of projects to capture and store CO2, produce hydrogen or biofuels, and increase plastics recycling; cash flow, dividends and shareholder returns, including the timing and amounts of share repurchases; future debt levels; and other business and project plans, timing, costs, capacities and returns could differ materially due to a number of factors. These include global or regional changes in the supply and demand for oil, natural gas, petrochemicals, and feedstocks and other market factors, economic conditions or seasonal fluctuations that impact prices and differentials for our products; laws and government policies supporting lower carbon investment opportunities or limiting the attractiveness of future investments; actions of competitors and commercial counterparties; the outcome of commercial negotiations, including final agreed terms and conditions and satisfaction of conditions precedent; the ability to access debt markets; the impacts of COVID-19 or other public health crises, including the effects of government responses on people and economies; reservoir performance; the level and outcome of, and allocation of capital to, exploration projects; timely completion of development and other construction projects; final management approval of future projects and any changes in the scope, terms, or costs of such projects as approved; changes in law, taxes, or regulation including environmental regulations, trade sanctions, and timely granting of governmental permits, as well as expropriations or seizures; war, civil unrest, and other political or security disturbances; capacity, insurance or shipping limitations; the capture of efficiencies within and between business lines and the ability to maintain near-term cost reductions as ongoing efficiencies; unforeseen technical or operating difficulties and unplanned maintenance; the development and competitiveness of, and market demand for, alternative energy and low-carbon technologies; the results of research programs and the ability to bring new technologies to commercial scale on a cost-competitive basis; and other factors discussed under Item 1A. Risk Factors in ExxonMobil’s 2022 Annual Report on Form 10-K.
Historical, current, and forward-looking environmental, social and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future, including future rule-making. The reference to any scenario in this report, including any potential net-zero scenarios, does not imply ExxonMobil 2016 Annual Meetingviews any particular scenario as likely to occur. In addition, energy demand scenarios require assumptions on a variety of parameters. As such, the outcome of any given scenario using an energy demand model comes with a high degree of uncertainty. Third-party scenarios discussed in this report reflect the modeling assumptions and outputs of their respective authors, not ExxonMobil, and their use by ExxonMobil is not an endorsement by ExxonMobil of their underlying assumptions, likelihood or probability.
Wednesday, May 25, 2016
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| 2023 Proxy Statement | | | | 109 | | |
Cash Flow From Operations and Asset Sales (Non-GAAP)
9:30 a.m.Cash flow from operations and asset sales is the sum of the net cash provided by operating activities and proceeds associated with sales of subsidiaries, property, plant and equipment, and sales and returns of investments from the Consolidated Statement of Cash Flows. This cash flow reflects the total sources of cash both from operating the Corporation’s assets and from the divesting of assets. The Corporation employs a long-standing and regular disciplined review process to ensure that assets are contributing to the Corporation’s strategic objectives. Assets are divested when they are no longer meeting these objectives or are worth considerably more to others. Because of the regular nature of this activity, we believe it is useful for investors to consider proceeds associated with asset sales together with cash provided by operating activities when evaluating cash available for investment in the business and financing activities, including shareholder distributions.
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| | | |
Cash Flow From Operations and Asset Sales | | | 2022 | | | | 2021 | | | | 2020 | |
(millions of dollars) |
Net cash provided by operating activities | | | 76,797 | | | | 48,129 | | | | 14,668 | |
Proceeds associated with sales of subsidiaries, property, plant and equipment, and sales and returns of investments | | | 5,247 | | | | 3,176 | | | | 999 | |
Cash flow from operations and asset sales (Non-GAAP) | | | 82,044 | | | | 51,305 | | | | 15,667 | |
Capital Employed (Non-GAAP)
Capital employed is a measure of net investment. When viewed from the perspective of how the capital is used by the businesses, it includes ExxonMobil’s net share of property, plant and equipment and other assets less liabilities, excluding both short-term and long-term debt. When viewed from the perspective of the sources of capital employed in total for the Corporation, it includes ExxonMobil’s share of total debt and equity. Both of these views include ExxonMobil’s share of amounts applicable to equity companies, which the Corporation believes should be included to provide a more comprehensive measure of capital employed.
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| | | |
Capital Employed | | | 2022 | | | | 2021 | | | | 2020 | |
(millions of dollars) |
Business uses: asset and liability perspective | | | | | | | | | | | | |
Total assets | | | 369,067 | | | | 338,923 | | | | 332,750 | |
Less liabilities and noncontrolling interests share of assets and liabilities | | | | | | | | | | | | |
Total current liabilities excluding notes and loans payable | | | (68,411) | | | | (52,367) | | | | (35,905) | |
Total long-term liabilities excluding long-term debt | | | (56,990) | | | | (63,169) | | | | (65,075) | |
Noncontrolling interests share of assets and liabilities | | | (9,205) | | | | (8,746) | | | | (8,773) | |
Add ExxonMobil share of debt-financed equity company net assets | | | 3,705 | | | | 4,001 | | | | 4,140 | |
Total capital employed (Non-GAAP) | | | 238,166 | | | | 218,642 | | | | 227,137 | |
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Total corporate sources: debt and equity perspective | | | | | | | | | | | | |
Notes and loans payable | | | 634 | | | | 4,276 | | | | 20,458 | |
Long-term debt | | | 40,559 | | | | 43,428 | | | | 47,182 | |
ExxonMobil share of equity | | | 195,049 | | | | 168,577 | | | | 157,150 | |
Less noncontrolling interests share of total debt | | | (1,781) | | | | (1,640) | | | | (1,793) | |
Add ExxonMobil share of equity company debt | | | 3,705 | | | | 4,001 | | | | 4,140 | |
Total capital employed (Non-GAAP) | | | 238,166 | | | | 218,642 | | | | 227,137 | |
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Return on Average Capital Employed (Non-GAAP)
Return on average capital employed (ROCE) is a performance measure ratio. From the perspective of the business segments, ROCE is annual business segment earnings divided by average business segment capital employed (average of beginning and end-of-year amounts). These segment earnings include ExxonMobil’s share of segment earnings of equity companies, consistent with our capital employed definition, and exclude the cost of financing. The Corporation’s total ROCE is net income attributable to ExxonMobil excluding the after-tax cost of financing, divided by total corporate average capital employed. The Corporation has consistently applied its ROCE definition for many years and views it as one of the best measures of historical capital productivity in our capital-intensive, long-term industry. Additional measures, which are more cash flow based, are used to make investment decisions.
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Return on Average Capital Employed | | | 2022 | | | | 2021 | | | | 2020 | |
(millions of dollars) |
Net income (loss) attributable to ExxonMobil | | | 55,740 | | | | 23,040 | | | | (22,440) | |
Financing costs (after-tax) | | | | | | | | | | | | |
Gross third-party debt | | | (1,213) | | | | (1,196) | | | | (1,272) | |
ExxonMobil share of equity companies | | | (198) | | | | (170) | | | | (182) | |
All other financing costs – net | | | 276 | | | | 11 | | | | 666 | |
Total financing costs | | | (1,135) | | | | (1,355) | | | | (788) | |
Earnings (loss) excluding financing costs | | | 56,875 | | | | 24,395 | | | | (21,652) | |
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Average capital employed | | | 228,404 | | | | 222,890 | | | | 234,031 | |
Return on average capital employed – corporate total (Non-GAAP) | | | 24.9% | | | | 10.9% | | | | (9.3)% | |
Structural Cost Savings
Structural cost savings describe decreases certain expenses as a result of operational efficiencies, workforce reductions, and other cost saving measures that are expected to be sustainable compared to 2019 levels. Relative to 2019, estimated cumulative annual structural cost savings totaled $7 billion. The total change between periods in expenses below will reflect both structural cost savings and other changes in spend, including market factors, such as inflation and foreign exchange impacts, as well as changes in activity levels and costs associated with new operations. Estimates of cumulative annual structural savings may be revised depending on whether cost reductions realized in prior periods are determined to be sustainable compared to 2019 levels. Structural cost savings are stewarded internally to support management’s oversight of spending over time. This measure is useful for investors to understand the Corporation’s efforts to optimize spending through disciplined expense management.
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| CALCULATION OF STRUCTURAL COST SAVINGS | | | 2019 | | | | | | | | | | | | | | | | 2022 | |
(Dollars in billions) | | | | | | | | | | | | |
Components of operating costs | | | | | | | | | | | | | | | | | | | | |
From ExxonMobil’s Consolidated Statement of Income (U.S. GAAP) | | | | | | | | | | | | | | | | | | | | |
Production and manufacturing expenses | | | 36.8 | | | | | | | | | | | | | | | | 42.6 | |
Selling, general and administrative expenses | | | 11.4 | | | | | | | | | | | | | | | | 10.1 | |
Depreciation and depletion (includes impairments) | | | 19.0 | | | | | | | | | | | | | | | | 24.0 | |
Exploration expenses, including dry holes | | | 1.3 | | | | | | | | | | | | | | | | 1.0 | |
Non-service pension and postretirement benefit expense | | | 1.2 | | | | | | | | | | | | | | | | 0.5 | |
Subtotal | | | 69.7 | | | | | | | | | | | | | | | | 78.2 | |
ExxonMobil’s share of equity company expenses | | | 9.1 | | | | | | | | | | | | | | | | 13.0 | |
Total operating costs (non-GAAP) | | | 78.8 | | | | | | | | | | | | | | | | 91.2 | |
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Less: | | | | | | | | | | | | | | | | | | | | |
Depreciation and depletion (includes impairments) | | | 19.0 | | | | | | | | | | | | | | | | 24.0 | |
Non-service pension and postretirement benefit expense | | | 1.2 | | | | | | | | | | | | | | | | 0.5 | |
Other adjustments (includes equity company depreciation and depletion) | | | 3.6 | | | | | | | | | | | | | | | | 3.5 | |
Total cash operating expenses (cash opex) (non-GAAP) | | | 55.0 | | | | | | | | | | | | | | | | 63.2 | |
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Energy and production taxes | | | 11.0 | | | | | | | | | | | | | | | | 23.8 | |
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| | | | | | | Market | | |
| Activity /
Other |
| |
| Structural
Savings |
| | | | |
Total cash operating expenses (cash opex) excluding energy and production taxes (non-GAAP) | | | 44.0 | | | | +3 | | | | -1 | | | | -7 | | | | 39.4 | |
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Earnings (Loss) excluding Identified Items (Non-GAAP)
Earnings (loss) excluding Identified Items, are earnings (loss) excluding individually significant non-operational events with an absolute corporate total earnings impact of at least $250 million in a given quarter. The earnings (loss) impact of an Identified Item for an individual segment in a given quarter may be less than $250 million when the item impacts several segments or several periods. Management uses these figures to improve comparability of the underlying business across multiple periods by isolating and removing significant non-operational events from business results. The Corporation believes this view provides investors increased transparency into business results and trends, and provides investors with a view of the business as seen through the eyes of management. Earnings (loss) excluding Identified Items is not meant to be viewed in isolation or as a substitute for net income (loss) attributable to ExxonMobil as prepared in accordance with U.S. GAAP.
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Upstream | | | | | | | 2022 | | | | | | | | | | | | 2021 | | | | | | | | | | | | 2020 | | | | | |
(millions of dollars) | | | U.S. | | | | Non-U.S. | | | | Total | | | | U.S. | | | | Non-U.S. | | | | Total | | | | U.S. | | | | Non-U.S. | | | | Total | |
Earnings (loss) (U.S. GAAP) | | | 11,728 | | | | 24,751 | | | | 36,479 | | | | 3,663 | | | | 12,112 | | | | 15,775 | | | | (19,385) | | | | (645) | | | | (20,030) | |
Impairments | | | — | | | | (3,790) | | | | (3,790) | | | | (263) | | | | (489) | | | | (752) | | | | (17,092) | | | | (2,244) | | | | (19,336) | |
Gain/(loss) on sale of assets | | | 299 | | | | 587 | | | | 886 | | | | — | | | | 459 | | | | 459 | | | | — | | | | — | | | | — | |
Inventory valuation – lower of cost or market | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (61) | | | | (61) | |
Tax-related items | | | — | | | | (1,415) | | | | (1,415) | | | | — | | | | — | | | | — | | | | — | | | | (297) | | | | (297) | |
Contractual provisions | | | — | | | | — | | | | — | | | | — | | | | (250) | | | | (250) | | | | — | | | | — | | | | — | |
Other | | | — | | | | 1,380 | | | | 1,380 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Identified Items | | | 299 | | | | (3,238) | | | | (2,939) | | | | (263) | | | | (280) | | | | (543) | | | | (17,092) | | | | (2,602) | | | | (19,694) | |
Earnings (loss) excluding Identified Items (Non-GAAP) | | | 11,429 | | | | 27,989 | | | | 39,418 | | | | 3,926 | | | | 12,392 | | | | 16,318 | | | | (2,293) | | | | 1,957 | | | | (336) | |
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Energy Products | | | | | | | 2022 | | | | | | | | | | | | 2021 | | | | | | | | | | | | 2020 | | | | | |
(millions of dollars) | | | U.S. | | | | Non-U.S. | | | | Total | | | | U.S. | | | | Non-U.S. | | | | Total | | | | U.S. | | | | Non-U.S. | | | | Total | |
Earnings (loss) (U.S. GAAP) | | | 8,340 | | | | 6,626 | | | | 14,966 | | | | 668 | | | | (1,014) | | | | (347) | | | | (1,342) | | | | (1,230) | | | | (2,572) | |
Impairments | | | (58) | | | | (216) | | | | (274) | | | | — | | | | — | | | | — | | | | (4) | | | | (374) | | | | (378) | |
Tax-related items | | | — | | | | (410) | | | | (410) | | | | — | | | | — | | | | — | | | | — | | | | (262) | | | | (262) | |
Identified Items | | | (58) | | | | (626) | | | | (684) | | | | — | | | | — | | | | — | | | | (4) | | | | (636) | | | | (640) | |
Earnings (loss) excluding Identified Items (Non-GAAP) | | | 8,398 | | | | 7,252 | | | | 15,650 | | | | 668 | | | | (1,014) | | | | (347) | | | | (1,338) | | | | (594) | | | | (1,932) | |
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Chemical Products | | | | | | | 2022 | | | | | | | | | | | | 2021 | | | | | | | | | | | | 2020 | | | | | |
(millions of dollars) | | | U.S. | | | | Non-U.S. | | | | Total | | | | U.S. | | | | Non-U.S. | | | | Total | | | | U.S. | | | | Non-U.S. | | | | Total | |
Earnings (loss) (U.S. GAAP) | | | 2,328 | | | | 1,215 | | | | 3,543 | | | | 3,697 | | | | 3,292 | | | | 6,989 | | | | 1,196 | | | | 1,061 | | | | 2,257 | |
Impairments | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (90) | | | | (2) | | | | (92) | |
Tax-related items | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (13) | | | | (13) | |
Identified Items | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (90) | | | | (15) | | | | (105) | |
Earnings (loss) excluding Identified Items (Non-GAAP) | | | 2,328 | | | | 1,215 | | | | 3,543 | | | | 3,697 | | | | 3,292 | | | | 6,989 | | | | 1,286 | | | | 1,076 | | | | 2,362 | |
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Specialty Products | | | | | | | 2022 | | | | | | | | | | | | 2021 | | | | | | | | | | | | 2020 | | | | | |
| (millions of dollars) | | | U.S. | | | | Non-U.S. | | | | Total | | | | U.S. | | | | Non-U.S. | | | | Total | | | | U.S. | | | | Non-U.S. | | | | Total | |
Earnings (loss) (U.S. GAAP) | | | 1,190 | | | | 1,225 | | | | 2,415 | | | | 1,452 | | | | 1,807 | | | | 3,259 | | | | 571 | | | | 630 | | | | 1,201 | |
Impairments | | | — | | | | (40) | | | | (40) | | | | — | | | | — | | | | — | | | | — | | | | (219) | | | | (219) | |
Gain/(loss) on sale of assets | | | — | | | | — | | | | — | | | | 498 | | | | 136 | | | | 634 | | | | — | | | | — | | | | — | |
Tax-related items | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (9) | | | | (9) | |
Identified Items | | | — | | | | (40) | | | | (40) | | | | 498 | | | | 136 | | | | 634 | | | | — | | | | (228) | | | | (228) | |
Earnings (loss) excluding Identified Items (Non-GAAP) | | | 1,190 | | | | 1,265 | | | | 2,455 | | | | 954 | | | | 1,672 | | | | 2,625 | | | | 571 | | | | 858 | | | | 1,429 | |
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112 | | | | | | 2023 Proxy Statement |
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Corporate and Financing | | | 2022 | | | | 2021 | | | | 2020 | |
(millions of dollars) |
Earnings (loss) (U.S. GAAP) | | | (1,663) | | | | (2,636) | | | | (3,296) | |
Impairments | | | (98) | | | | — | | | | (35) | |
Gain/(loss) on sale of assets | | | — | | | | (12) | | | | — | |
Tax-related items | | | 324 | | | | — | | | | — | |
Severance charges | | | — | | | | (52) | | | | (326) | |
Other | | | 76 | | | | — | | | | — | |
Identified Items | | | 302 | | | | (64) | | | | (361) | |
Earnings (loss) excluding Identified Items (Non-GAAP) | | | (1,965) | | | | (2,572) | | | | (2,935) | |
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Corporate Total | | | 2022 | | | | 2021 | | | | 2020 | |
(millions of dollars) |
Net income (loss) attributable to ExxonMobil (U.S. GAAP) | | | 55,740 | | | | 23,040 | | | | (22,440) | |
Impairments | | | (4,202) | | | | (752) | | | | (20,060) | |
Gain/(loss) on sale of assets | | | 886 | | | | 1,081 | | | | — | |
Inventory valuation – lower of cost or market | | | — | | | | — | | | | (61) | |
Tax-related items | | | (1,501) | | | | — | | | | (581) | |
Severance charges | | | — | | | | (52) | | | | (326) | |
Contractual provisions | | | — | | | | (250) | | | | — | |
Other | | | 1,456 | | | | — | | | | — | |
Identified Items | | | (3,361) | | | | 27 | | | | (21,028) | |
Earnings (loss) excluding Identified Items (Non-GAAP) | | | 59,101 | | | | 23,013 | | | | (1,412) | |
References in this discussion to Corporate earnings (loss) mean net income (loss) attributable to ExxonMobil (U.S. GAAP) from the Consolidated Statement of Income. Unless otherwise indicated, references to earnings (loss), Central TimeUpstream, Energy Products, Chemical Products, Specialty Products, and Corporate and Financing segment earnings (loss), and earnings (loss) per share are ExxonMobil’s share after excluding amounts attributable to noncontrolling interests.
Morton H. Meyerson Symphony Center
2301 Flora Street
Dallas, Texas 75201Due to rounding, numbers presented may not add up precisely to the totals indicated.
Free parking is available at the Hall Arts Center Parking Garage. Traffic and construction in the area may cause a delay; please allow extra time for parking. | | | | | | |
| 2023 Proxy Statement | | | | 113 | | |
From I-45/Hwy. 75 – Take I-35E exit (Woodall Rodgers Frwy.) to Pearl Street exit or St. Paul exit (follow frontage road east to Pearl Street); turn south and continue to Ross Avenue; turn left to the Hall Arts Center Parking Garage.
From I-35E – Take I-45/Hwy. 75 exit (Woodall Rodgers Frwy.) to Pearl Street exit; continue to Ross Avenue; turn left to the Hall Arts Center Parking Garage.
From DFW Airport – Take South exit to Hwy. 183 East (merges with I-35E); follow directions from I-35E (above).
From Love Field – Exit airport on Mockingbird Lane west to I-35E South; follow directions from I-35E (above).
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  | | Printed entirely on recycled paper | | | 002CSN61B5 | 002CSND8F5 |
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IMPORTANT ANNUAL MEETING INFORMATION
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Electronic Voting Instructions
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You may vote by Internet or telephone 24 hours a day, 7 days a week. Login details are located in the shaded bar below. |
Please vote immediately. Your vote is important.
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| | Vote by Internet
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| | • Go towww.investorvote.com/exxonmobilor scan the QR code with your smartphone
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| | • Follow the steps outlined on the secure website
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Vote by Telephone
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• Call toll free at 1-800-652-VOTE (8683)
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• Outside the U.S., Canada, and Puerto Rico, call 1-781-575-2300 through an operator and we will accept the charge
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Using a black inkpen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. | | x |
qC123456789 000000000.000000 ext 000000000.000000 ext ADAM SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 YOUR VOTE IS IMPORTANT The meeting will be held on May 31, 2023, at 9:30 a.m. (Central Time). All votes must be received by closing of the polls at the meeting. SCAN the QR code or visit envisionreports.com/xom to vote your shares CALL 1-800-652-VOTE (8683) within the USA, US territories and Canada 1234 5678 9012 345 2023 ANNUAL MEETING — PROXY CARD IF VOTING BY MAIL, SIGN, THE REVERSE SIDE, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
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A | | VOTING ITEMS — The Directors recommend a voteFOR items 1 through 3. |
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR THE NOMINEES LISTED, FOR PROPOSALS 2-3, AND 1 YR FOR PROPOSAL 4: 1. Election of Directors (page 16):
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| | For | | Withhold | | | | For | | Withhold | | | | For | | Withhold | | | | For | | Against | | Abstain | |
01 - M.J. Boskin
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| | 06 - J.S. Fishman
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| | 11 - S.S Reinemund
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| | 2.Ratification of Independent Auditors (page 24)
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02 - P. Brabeck-Letmathe | | ¨ | | ¨ | | 07 - H.H. Fore | | ¨ | | ¨ | | 12 - R.W. Tillerson | | ¨ | | ¨ | | | | | | | | | |
03 - A.F. Braly | | ¨ | | ¨ | | 08 - K.C. Frazier | | ¨ | | ¨ | | 13 - W.C. Weldon | | ¨ | | ¨ | | 3.Advisory Vote to Approve Executive Compensation (page 26)
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04 - U.M. Burns | | ¨ | | ¨ | | 09 - D.R. Oberhelman | | ¨ | | ¨ | | 14 - D.W. Woods | | ¨ | | ¨ | | | | | | | | | |
05 - L.R. Faulkner
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The Directors recommendDirectors: 01 - Michael J. Angelakis 04 - Gregory J. Goff 07 - Joseph L. Hooley 10 - Lawrence W. Kellner For Against Abstain 02 - Susan K. Avery 05 - John D. Harris II 08 - Steven A. Kandarian 11 - Jeffrey W. Ubben For Against Abstain 03 - Angela F. Braly 06 - Kaisa H. Hietala 09 - Alexander A. Karsner 12 - Darren W. Woods For Against Abstain 2. Ratification of Independent Auditors For Against Abstain 3. Advisory Vote to Approve Executive Compensation For Against Abstain 4. Frequency of Advisory Vote on Executive Compensation 1 YR 2 YRS 3 YRS Abstain THE BOARD OF DIRECTORS RECOMMENDS VOTES AGAINST PROPOSALS 5 THROUGH 17: 5. Establish a voteAGAINST shareholder proposal items 4 throughNew Board Committee on Decarbonization Risk 8. Additional Direct Methane Measurement 11. GHG Reporting on Adjusted Basis 14. Litigation Disclosure Beyond Legal and Accounting Requirements 17. Report on Commitment Against AMAP Work For Against Abstain 6. Reduce Executive Stock Holding Period 9. Establish a Scope 3 Target and Reduce Hydrocarbon Sales 12. Report on Asset Retirement Obligations Under IEA NZE Scenario 15. Tax Reporting Beyond Legal Requirements For Against Abstain 7. Additional Carbon Capture and Storage and Emissions Report 10. Additional Report on Worst-case Spill and Response Plans 13. Report on Plastics Under SCS Scenario 16. Energy Transition Social Impact Report For Against Abstain MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND C1234567890 JNT 1UPX COYMTG 03R8UJ [mastercode line]
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| | For | | Against | | Abstain | | | | For | | Against | | Abstain | | | | For | | Against | | Abstain | | |
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4. Independent Chairman (page 56)
| | ¨ | | ¨ | | ¨ | | 8. Report on Compensation for Women (page 61)
| | ¨ | | ¨ | | ¨ | | 12. Report on Impacts of Climate Change Policies (page 69)
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5. Climate Expert on Board (page 58)
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6. Hire an Investment Bank (page 59)
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| | 14. Report on Hydraulic Fracturing (page 72)
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7. Proxy Access Bylaw (page 59)
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| | 11. Policy to Limit Global Warming to 2°C (page 67)
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002CSP0074 029OVI
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c/o Computershare Investor Services
P.O. Box 43105
Providence, RI 02940-5076
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2016 Annual Meeting of Shareholders Admission Ticket | | | | 
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TIME
| | Wednesday, May 25, 2016 | | | |
| | 9:30 a.m., Central Time | | | |
PLACE
| | Morton H. Meyerson Symphony Center | | | |
| | 2301 Flora Street | | | |
| | Dallas, Texas 75201 | | | |
AUDIO WEBCAST
| | A slide presentation with audio will be available on the Internet atexxonmobil.com.Instructions will appear on the website prior to the event.
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ADMISSION
| | This ticket will admit shareholder. Ticket for one guest can be requested at Admissions desk at the annual meeting. Valid admission ticket and government-issued picture identification are required for shareholder and guest. For safety and security reasons, cameras, smartphones, recording equipment, electronic devices, computers, large bags, briefcases, packages, and firearms or other weapons will not be permitted in the building.
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qATTEND the meeting on May 31, 2023, at 9:30 a.m. (Central Time). Go to envisionreports.com/xom for instructions. YOUR VOTE MATTERS • Have a voice • Stay informed • Keep your account active VOTE NOW Please go to envisionreports.com/xom to vote your shares now. SAVE PAPER AND TIME... Choose to receive future proxy materials electronically when you enroll at envisionreports.com/xom. IF VOTING BY MAIL, SIGN, BELOW, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q 2023 ANNUAL MEETING — PROXY CARD PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING — WEDNESDAY, MAY 31, 2023, AT 9:30 A.M. CENTRAL TIME The undersigned hereby appoints, and instructs the appropriate account trustee(s), if any, to appoint, Michael J. Angelakis, Ursula M. Burns, Gregory J. Goff, Joseph L. Hooley and Darren W. Woods, or each or any of them, with power of substitution, proxies to act and vote shares of common stock of the undersigned at the 2023 annual meeting of shareholders of Exxon Mobil Corporation and at any adjournments thereof, as indicated, upon all matters referred to on the reverse side and described in the proxy statement for the meeting and, at their discretion, upon any other matters that may properly come before the meeting. This proxy covers shares of ExxonMobil common stock registered in the name of the undersigned (whether certificated or book entry) and shares held in the name of the undersigned in the Computershare Investment Plan. This card also provides voting instructions to the applicable trustees for any shares held in the name of the undersigned in the ExxonMobil Savings Plan and/or a Computershare Investment Plan IRA. Voting instructions for shares held in the ExxonMobil Savings Plan must be received by May 25, 2023, at 4:00 p.m. (Central Time). If no other indication is made on the reverse side of this form, the proxies/trustees shall vote: (a) for the election of the director nominees; and (b) in accordance with the recommendations of the Board of Directors on the other matters referred to on the reverse side. NON-VOTING ITEMS Change of Address – Please print new address below. Comments – Please print your comments below. AUTHORIZED SIGNATURES — THIS SECTION MUST BE COMPLETED FOR YOUR VOTE TO COUNT; PLEASE DATE AND SIGN BELOW. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) – Please print date below. Signature 1 – Please keep signature within the box. Signature 2 – Please keep signature within the box.
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PROXY/VOTING INSTRUCTIONS | | +
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Solicited by the Board of Directors
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The undersigned hereby appoints, and instructs the appropriate account trustee(s), if any, to appoint, M.J. Boskin, L.R. Faulkner, S.J. Palmisano, S.S Reinemund, and R.W. Tillerson, or each or any of them, with power of substitution, proxies to act and vote shares of common stock of the undersigned at the 2016 annual meeting of shareholders of Exxon Mobil Corporation and at any adjournments thereof, as indicated, upon all matters referred to on the reverse side and described in the proxy statement for the meeting and, at their discretion, upon any other matters that may properly come before the meeting. |
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This proxy covers shares of ExxonMobil common stock registered in the name of the undersigned (whether certificated or book entry) and shares held in the name of the undersigned in the Computershare Investment Plan. This card also provides voting instructions to the applicable trustees for any shares held in the name of the undersigned in the ExxonMobil Savings Plan and/or a Computershare Investment Plan IRA. |
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If no other indication is made on the reverse side of this form, the proxies/trustees shall vote: (a) for the election of the director nominees; and (b) in accordance with the recommendations of the Board of Directors on the other matters referred to on the reverse side. |
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Change of Address — Please print new address below. | | | | Comments— Please print your comments below. |
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C | | AUTHORIZED SIGNATURES — This section must be completed for your vote to be counted. Date and sign below. |
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Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. |
Date (mm/dd/yyyy) — Please print date below. | | | | Signature 1 — Please keep signature within the box. | | | | Signature 2 — Please keep signature within the box. |
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