What were the main changes to executive base salaries for 2022?

Effective March 1, 2022, base salaries were increased for several Named Executive Officers. CEO Michael K. Wirth's salary increased by $50,000 to $1,700,000. Other increases included $55,000 for CFO Pierre R. Breber (to $1,075,000), $40,000 for EVP James W. Johnson (to $1,250,000), $30,000 for EVP Joseph C. Geagea (to $1,050,000), and $100,000 for EVP Mark A. Nelson (to $1,050,000).

How are the long-term incentive awards structured and what are the performance metrics?

The 2022 equity awards consist of performance shares, stock options, and restricted stock units. Performance shares are tied to a three-year performance period (2022-2024) and their payout is determined by a weighted average of Chevron's relative Total Stockholder Return (TSR) against a peer group (70% weight) and relative Return on Capital Employed (ROCE) Improvement against a different peer group (30% weight). Stock options vest over three years, and restricted stock units vest on January 31, 2027.

What happens to executive equity awards if an executive leaves the company?

If an executive's employment terminates for any reason prior to January 31, 2023, all equity awards (stock options, restricted stock units, performance shares) will be forfeited. However, for executives who reach 90 points (age + years of service) by January 31, 2023, their unvested awards will continue to vest (though payout may be delayed for performance shares and RSUs) if they terminate employment on or after that date for reasons other than misconduct.

Were there any changes to the CEO's incentive plan target?

Yes, the target bonus percentage under the Chevron Incentive Plan (CIP) for CEO Michael K. Wirth was increased to 165 percent for 2022, up from 160 percent in 2021. The target bonus percentages for the other Named Executive Officers remained unchanged from 2021.

CVX 8-K: Leadership Changes

Summary

This 8-K filing from Chevron Corporation (CVX) details the annual executive compensation review conducted by the independent Directors of the Board on January 26, 2022. Key decisions include adjustments to base salaries for Named Executive Officers (NEOs), an increase in the target bonus percentage for CEO Michael K. Wirth under the Chevron Incentive Plan (CIP), and the approval of significant equity awards for 2022 under the Long-Term Incentive Plan (LTIP). These changes reflect the Board's compensation philosophy and are effective in early 2022. Notably, the compensation adjustments are tied to performance metrics, particularly for long-term incentives which are weighted towards relative Total Stockholder Return (TSR) and Return on Capital Employed (ROCE) Improvement against a peer group of major energy companies and the S&P 500. The filing also outlines specific vesting and payout conditions for stock options, restricted stock units, and performance shares, including provisions for executive departures under certain circumstances. Mr. Joseph C. Geagea did not receive equity awards due to his upcoming retirement.

Key Highlights

1Annual base salaries for top executives were increased, effective March 1, 2022, with CEO Michael K. Wirth's salary rising to $1,700,000.
2CEO Michael K. Wirth's target bonus percentage under the Chevron Incentive Plan (CIP) increased to 165% for 2022, up from 160% in 2021.
3Significant equity awards, including performance shares, stock options, and restricted stock units, were granted to key NEOs under the Long-Term Incentive Plan (LTIP).
4Performance shares have a three-year performance period (2022-2024) and payout is contingent on Chevron's relative TSR (70% weight) and ROCE Improvement (30% weight) against a defined peer group.
5Stock options granted have a ten-year term with one-third vesting annually starting January 31, 2023.
6Restricted stock units vest on January 31, 2027, and will pay out in cash based on the closing price at vesting.
7Executive Joseph C. Geagea did not receive 2022 equity awards due to his impending retirement.

CHEVRON CORP 8-K Report, Executive Changes (Jan 31, 2022)

Summary

Key Highlights

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