8-KExhibits & Filings

EXXON MOBIL CORP 8-K Report, Exhibit Filing (Dec 1, 2006)

Filed December 1, 2006For Securities:XOM

Summary

This Form 8-K filing by Exxon Mobil Corporation (XOM) on December 1, 2006, primarily details compensation arrangements for certain executive officers, effective as of November 28, 2006. The Compensation Committee established a total ceiling of $217 million for the 2006 Short Term Incentive Program, with specific bonus amounts allocated to key executives including R. W. Tillerson ($2.8 million), S. R. McGill ($2.15 million), J. S. Simon ($2.15 million), and D. D. Humphreys ($1.75 million). A significant portion of these bonuses is structured to be paid in deferred form through Earnings Bonus Units (EBUs), which are tied to the company's cumulative net income per common share. Additionally, a total of 11 million shares were authorized for restricted stock or restricted stock unit grants under the 2003 Incentive Program, with substantial awards also made to the aforementioned officers, subject to long-term vesting periods. Investors should note the significant emphasis on performance-based compensation and long-term incentive structures designed to align executive interests with shareholder value. The deferred payment mechanism and the restricted stock awards with multi-year holding periods underscore the company's strategy to retain key talent and incentivize sustained performance. The filing also discloses a notable salary increase for R. W. Tillerson, effective January 1, 2007, to $1.75 million. All executives are employed on an "at will" basis, meaning they do not have employment contracts.

Key Highlights

  • 1ExxonMobil's Compensation Committee set a $217 million total ceiling for its 2006 Short Term Incentive Program.
  • 2Key executives received substantial bonuses, with R. W. Tillerson receiving $2.8 million, and S. R. McGill, J. S. Simon, and D. D. Humphreys each receiving $2.15 million, $2.15 million, and $1.75 million, respectively.
  • 3Approximately 50% of awarded bonuses will be paid in cash by year-end, with the remaining 50% deferred via Earnings Bonus Units (EBUs) tied to cumulative net income per share.
  • 4The company authorized up to 11 million shares for restricted stock/unit grants under the 2003 Incentive Program.
  • 5Significant restricted stock awards were granted to top officers, with holding periods of five and ten years, or retirement, whichever is later.
  • 6R. W. Tillerson's annual salary is set to increase to $1.75 million effective January 1, 2007.
  • 7All executive officers are employed on an "at will" basis without employment contracts.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report on the compensation decisions made by ExxonMobil's Compensation Committee for certain executive officers, including bonus payouts, restricted stock awards, and salary adjustments for the 2006 performance year and upcoming 2007.

Bonuses are split, with roughly 50% paid in cash by year-end. The other 50% is deferred and paid in the form of Earnings Bonus Units (EBUs). EBUs convert to cash based on ExxonMobil's cumulative net income per common share announced quarterly, with payouts occurring on the third anniversary of the grant or when a maximum settlement value is reached, providing a long-term incentive tied to profitability.

The restricted stock awards have lengthy vesting periods. Half of the shares are subject to a five-year holding period, while the remaining half must be held for ten years from the grant date or until retirement, whichever is later. These restrictions can only be lifted in cases of death and may result in forfeiture if employment is terminated early or detrimental activity (like violating ethics policies or joining a competitor) occurs.

Yes, the filing explicitly states that all ExxonMobil executive officers are "at will" employees and do not have employment contracts. This means their employment can be terminated by either the company or the employee at any time, subject to applicable laws, without the constraints of a fixed-term contract.