8-KLeadership ChangesExhibits & Filings

CHEVRON CORP 8-K Report, Executive Changes (Feb 2, 2024)

Filed February 2, 2024For Securities:CVX

Summary

Chevron Corporation's 8-K filing on February 2, 2024, details the 2024 executive compensation review and awards approved by the Board of Directors. Key executive base salaries have been adjusted, with notable increases for Mark A. Nelson and R. Hewitt Pate, while Pierre R. Breber's salary remains unchanged in anticipation of his retirement. The filing also outlines the 2024 incentive plan targets, which remain unchanged for key executives, and details significant equity awards granted under the 2022 Long-Term Incentive Plan (LTIP). The equity awards, to be granted on February 6, 2024, consist of performance shares, restricted stock units, and stock options, with the CEO, Michael K. Wirth, receiving the largest portion. The performance shares are tied to Total Shareholder Return (TSR) and Return on Capital Employed (ROCE) improvement relative to a peer group and the S&P 500 over a three-year period. Specific vesting and payout conditions are detailed, including provisions for termination of employment and post-vesting holding periods, which are adjusted for executives who have reached certain tenure or age milestones.

Key Highlights

  • 1Annual base salaries for key executives have been reviewed and adjusted, effective March 1, 2024.
  • 2CEO Michael K. Wirth's base salary increased by $50,000 to $1,900,000.
  • 3VP & CFO Pierre R. Breber's base salary of $1,150,000 remains unchanged due to his anticipated retirement.
  • 4Significant equity awards under the 2022 LTIP were approved for Messrs. Wirth, Nelson, and Pate, totaling $17,500,000 for Wirth, $5,593,500 for Nelson, and $4,286,100 for Pate.
  • 5Equity awards comprise 50% performance shares, 25% restricted stock units, and 25% stock options, with performance shares linked to relative TSR and ROCE improvement over a three-year period.
  • 6Vesting and payout of equity awards are subject to specific conditions, including performance metrics, employment continuation, and a two-year post-vesting holding period for RSUs, with exceptions for certain executives nearing retirement eligibility.
  • 7New forms of award agreements for performance shares, stock options, stock appreciation rights, and restricted stock units under the 2022 LTIP have been approved.

Frequently Asked Questions

The primary changes involve adjustments to annual base salaries and the grant of 2024 equity awards. CEO Michael K. Wirth received a base salary increase, as did Mark A. Nelson and R. Hewitt Pate. Pierre R. Breber's salary remains unchanged due to his upcoming retirement. Significant equity awards were also granted to these executives, structured with performance-based components.

The 2024 equity awards are granted under the 2022 Long-Term Incentive Plan and are composed of 50% performance shares, 25% restricted stock units (RSUs), and 25% stock options. The performance shares are contingent on Chevron's relative Total Shareholder Return (TSR) and Return on Capital Employed (ROCE) improvement compared to a peer group and the S&P 500 over a three-year period (January 1, 2024, through December 31, 2026).

Yes, Pierre R. Breber's base salary is unchanged in anticipation of his retirement. Additionally, executives who have met certain age and service criteria (90 points under the 2022 LTIP rules) will have accelerated vesting for stock options and restricted stock units upon termination of employment on or after February 10, 2025, and their performance shares will also continue to vest, though payout is still contingent on the performance period.

Performance shares vest on December 31, 2026, subject to performance modifiers based on Chevron's relative TSR (70% weight) and ROCE Improvement (30% weight) against its LTIP Performance Share Peer Group and the S&P 500 Index. The payout is calculated based on the number of vested performance shares multiplied by a performance multiplier (sum of weighted TSR and ROCE modifiers) and the stock price on the certification date. The Committee retains discretion to adjust payouts downward.