8-KLeadership Changes

CHEVRON CORP 8-K Report, Executive Changes (Feb 3, 2015)

Filed February 3, 2015For Securities:CVX

Summary

This 8-K filing from Chevron Corporation (CVX) primarily details changes in key personnel and executive compensation. The report announces the retirement of Vice President and Comptroller Matthew J. Foehr, effective March 31, 2015, and the appointment of Jeanette L. Ourada to this role starting April 1, 2015. Additionally, Inge G. Thulin was elected to the Board of Directors and appointed to key committees, receiving both restricted stock units and a prorated cash retainer. Of significant note for investors are the substantial equity awards granted to senior executives, including the CEO, J.S. Watson. These grants consist of stock options and performance shares, with vesting and payout structures tied to continued service, stock price, and comparative Total Shareholder Return (TSR) against a peer group. These compensation packages are designed to align executive interests with long-term shareholder value creation.

Key Highlights

  • 1Retirement of VP and Comptroller Matthew J. Foehr, effective March 31, 2015.
  • 2Appointment of Jeanette L. Ourada as new VP and Comptroller, effective April 1, 2015.
  • 3Election of Inge G. Thulin to Chevron's Board of Directors and appointment to Nominating & Governance and Management Compensation Committees.
  • 4Grant of 707 restricted stock units and prorated cash retainer to newly appointed Director Inge G. Thulin.
  • 5Significant stock option and performance share grants to key executives, including CEO J.S. Watson, G.L. Kirkland, R.H. Pate, M.K. Wirth, and P.E. Yarrington.
  • 6Performance shares are tied to Chevron's Total Shareholder Return (TSR) relative to a peer group over a three-year period, with potential payouts ranging from zero to 200% of the award.
  • 7Stock options granted have a ten-year term with staggered vesting, and the exercise price is set at $103.71 per share.

Frequently Asked Questions

The filing announces the retirement of Matthew J. Foehr, Vice President and Comptroller, effective March 31, 2015, and the appointment of Jeanette L. Ourada to this position starting April 1, 2015. It also details the election of Inge G. Thulin to the Board of Directors.

The executive compensation includes grants of stock options, performance shares, and restricted stock units. These equity awards are typically subject to vesting periods and performance conditions, particularly the performance shares which are contingent on Chevron's Total Shareholder Return (TSR) compared to its peers over a three-year period.

Performance shares are granted with a three-year performance period (January 1, 2015, through December 31, 2017). The payout depends on Chevron's TSR relative to a peer group (BP, Exxon Mobil, Royal Dutch Shell, Total S.A.). The payout multiplier can range from 0% to 200%, based on Chevron's TSR ranking within this group. The Management Compensation Committee also retains discretion to adjust payouts downwards.

The stock options have an exercise price of $103.71 per share, based on the closing price on January 28, 2015. Typically, one-third of the options vest on each anniversary of the grant date over a ten-year term. Special vesting provisions apply for certain executives upon separation from service.