8-KLeadership Changes

CHEVRON CORP 8-K Report, Executive Changes (Apr 3, 2007)

Filed April 3, 2007For Securities:CVX

Summary

This 8-K filing from Chevron Corporation, dated April 3, 2007, details compensation adjustments for its executive officers, effective April 1, 2007. The Management Compensation Committee approved significant salary increases for key executives, including S.J. Crowe, P.J. Robertson, G.L. Kirkland, and J.S. Watson. Additionally, substantial grants of stock options and performance shares were awarded under the Long Term Incentive Plan (LTIP), reflecting a focus on long-term performance and executive retention.

Key Highlights

  • 1Salary increases effective April 1, 2007, for named executive officers: S.J. Crowe (+$75,000 to $650,000), P.J. Robertson (+$50,000 to $1,000,000), G.L. Kirkland (+$65,000 to $765,000), and J.S. Watson (+$65,000 to $765,000).
  • 2Grants of stock options and performance shares under the LTIP for several executives, including D.J. O’Reilly, S.J. Crowe, P.J. Robertson, G.L. Kirkland, and J.S. Watson.
  • 3Stock options have a ten-year term, with one-third vesting annually. The exercise price is set at $74.08 per share, based on the March 28, 2007 closing price.
  • 4Performance shares are tied to Total Stockholder Return (TSR) performance over a three-year period (Jan 1, 2007 - Dec 31, 2009) relative to a peer group including BP, ExxonMobil, Royal Dutch Shell, and ConocoPhillips.
  • 5A performance modifier for the shares ranges from 0% to 200% based on Chevron's TSR ranking compared to its peers.
  • 6Accelerated vesting provisions for stock options and performance shares are outlined for officers who meet certain age and service point criteria under the LTIP, with variations based on accumulated points.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose changes in executive compensation, specifically salary increases and new grants of stock options and performance shares awarded to Chevron's executive officers.

The payout for performance shares is determined by Chevron's Total Stockholder Return (TSR) relative to its peer group over a three-year period. The final payout amount will be the number of performance shares multiplied by the 20-day trailing average stock price at the end of the performance period, adjusted by a performance modifier (0-200%) based on TSR ranking.

Yes, accelerated vesting provisions exist. For officers D.J. O’Reilly, S.J. Crowe, and P.J. Robertson, vesting can occur upon separation from service (other than for cause) if held for at least one year, due to accumulating 90 points (age + service). For G.L. Kirkland and J.S. Watson, with over 75 points, vesting upon separation (other than for cause) is pro rata based on months held, and options have a modified exercise window.

No, the filing explicitly states that Chevron does not have employment agreements with any of the executive officers mentioned in this report.