8-KMaterial AgreementsExhibits & Filings

EXXON MOBIL CORP 8-K Report, Material Agreement (Dec 1, 2005)

Filed December 1, 2005For Securities:XOM

Summary

This Form 8-K filing by Exxon Mobil Corporation (XOM) on November 30, 2005, details executive compensation decisions made by the Compensation Committee on November 29, 2005. The report outlines the establishment of a total ceiling for the 2005 Short Term Incentive Program, with specific bonus awards granted to 17 executive officers. These bonuses are to be settled approximately 50% in cash and 50% in Earnings Bonus Units (EBUs), which are tied to the company's cumulative net income per share over time. Additionally, the filing discloses the award of restricted stock and restricted stock units under the 2003 Incentive Program, with significant holding periods of up to 10 years for a portion of the shares, designed to retain executive talent and align their interests with long-term company performance.

Key Highlights

  • 1Exxon Mobil's Compensation Committee approved 2005 incentive awards for executive officers on November 29, 2005.
  • 2A total ceiling of $214 million was established for the 2005 Short Term Incentive Program.
  • 3Bonuses totaling $30,202,100 were awarded to 17 current executive officers.
  • 4Bonuses will be paid approximately 50% in cash and 50% in Earnings Bonus Units (EBUs).
  • 5EBUs are linked to ExxonMobil's cumulative net income per common share and have payout conditions based on quarterly announcements and a maximum settlement value.
  • 6A total ceiling of 12 million shares was set for 2005 restricted stock/unit awards.
  • 71,627,500 restricted shares were awarded to executive officers with vesting periods of up to 10 years, subject to forfeiture conditions such as early termination or detrimental activity.

Frequently Asked Questions

Earnings Bonus Units (EBUs) are a form of incentive award granted to executives. Each EBU entitles the holder to receive a cash amount equivalent to ExxonMobil's cumulative net income per common share announced each quarter, beginning after the grant date. Payout occurs either on the third anniversary of the grant or when a maximum settlement value of $3.75 per unit is reached, whichever comes first.

The restricted stock awards granted to executive officers have significant restrictions. Half of the shares cannot be sold for five years from the grant date, and the other half are restricted for 10 years from the grant date or until retirement, whichever is later. These restrictions can only be accelerated in the event of the holder's death. The shares are subject to forfeiture if employment is terminated early or if the executive engages in detrimental activity, such as violating ethics policies or working for a competitor.

The incentive structure is designed to align executive interests with those of shareholders. The cash portion of the short-term incentive provides immediate reward, while the EBUs and long-term restricted stock awards tie executive compensation to company performance metrics (net income per share) and long-term share value appreciation. The extended vesting periods for restricted stock encourage executives to remain with the company and focus on sustainable, long-term growth and profitability, thereby enhancing shareholder value.