8-KLeadership ChangesExhibits & Filings

CHEVRON CORP 8-K Report, Executive Changes (Jan 27, 2023)

Filed January 27, 2023For Securities:CVX

Summary

This 8-K filing from Chevron Corporation details executive compensation adjustments made on January 25, 2023. The Board of Directors, through its independent directors and the Management Compensation Committee, approved changes to base salaries, bonus targets, and equity awards for its Named Executive Officers. Notably, the CEO, Michael K. Wirth, received a base salary increase, and both he and other key executives, Pierre R. Breber and Mark A. Nelson, were granted performance shares, stock options, and restricted stock units under the 2022 Long-Term Incentive Plan (LTIP). The performance share awards are tied to a three-year performance period (2023-2025) with payouts contingent on Chevron's relative Total Shareholder Return (TSR) and Return on Capital Employed (ROCE) Improvement compared to a defined peer group. The filing also outlines specific terms regarding vesting and potential forfeiture of these awards under certain termination conditions, especially for Mr. Wirth, Mr. Breber, and Mr. Nelson upon reaching 90 points (age + years of service) by January 31, 2024. Additionally, James W. Johnson's compensation is impacted by his upcoming separation from the company, leading to no CIP award and no equity grant for the 2023 cycle.

Key Highlights

  • 1Chevron's Board approved updated base salaries for key executives, including a $150,000 increase for CEO Michael K. Wirth to $1,850,000.
  • 2Annual bonus targets for 2023 were reviewed, with CEO Wirth's target remaining at 165%, while Mark A. Nelson's target increased to 120%.
  • 3Significant equity awards were granted to Messrs. Wirth, Breber, and Nelson, including performance shares, stock options, and restricted stock units under the 2022 LTIP.
  • 4Performance share payouts are linked to relative TSR and ROCE Improvement against a peer group over a three-year period (2023-2025).
  • 5Specific vesting and forfeiture conditions for equity awards are detailed, including provisions for executives who reach 90 points (age + service) by January 31, 2024.
  • 6Executive Vice President James W. Johnson will not receive a 2023 incentive plan award or equity grant due to his impending separation from Chevron.
  • 7Forms of award agreements for various equity instruments under the 2022 LTIP were approved for future grants.

Frequently Asked Questions

The filing details increases in base salaries for CEO Michael K. Wirth and CFO Pierre R. Breber, and Executive Vice President Mark A. Nelson. It also specifies bonus targets for 2023 and outlines significant equity grants (performance shares, stock options, restricted stock units) to these executives under the 2022 Long-Term Incentive Plan. These changes reflect annual compensation reviews and, in some cases, new roles or responsibilities.

Performance share payouts are determined over a three-year period (January 1, 2023, through December 31, 2025) and are contingent on Chevron's relative performance. The payouts are weighted 70% on relative Total Shareholder Return (TSR) against a specified peer group (including BP, ExxonMobil, Shell, TotalEnergies, and the S&P 500 TSR Index) and 30% on relative Return on Capital Employed (ROCE) Improvement against a group of large-cap integrated energy companies.

For stock options, restricted stock units, and performance shares granted in this cycle, if employment terminates for any reason before January 31, 2024, these awards will generally be forfeited. However, for Messrs. Wirth, Breber, and Nelson, if their employment terminates on or after January 31, 2024 (and they have reached 90 points in age + service), specific unvested portions of these awards will continue to vest under certain conditions, though payout dates and holding periods may be adjusted.

James W. Johnson, Executive Vice President and Senior Advisor, is not receiving a 2023 incentive plan award or an equity grant because he is slated for separation from Chevron. This indicates his departure from the company in the near future.