8-KLeadership Changes

EXXON MOBIL CORP 8-K Report, Executive Changes (Dec 4, 2007)

Filed December 4, 2007For Securities:XOM

Summary

Exxon Mobil Corporation (XOM) filed an 8-K on December 4, 2007, reporting on compensation arrangements for its executive officers as of November 28, 2007. The Compensation Committee established a total incentive pool of $214 million for the Short Term Incentive Program for 2007. Significant bonus amounts were awarded to key executives, with a portion paid in cash and the remainder deferred through Earnings Bonus Units (EBUs) which are tied to cumulative net income per common share and have a payout at the third anniversary of the grant or upon reaching a $5.00 per unit value. Additionally, the company authorized the grant of up to 11 million shares as restricted stock or restricted stock units under its 2007 Incentive Program. Specific allocations of restricted stock were made to top officers, subject to lengthy vesting periods of five to ten years, or until retirement, with provisions for forfeiture under certain conditions. The filing also noted salary increases for two key executives, H. R. Cramer and R. W. Tillerson, effective in late 2007 and early 2008 respectively. All executives are employed on an "at will" basis.

Key Highlights

  • 1Exxon Mobil's Compensation Committee set a $214 million ceiling for the 2007 Short Term Incentive Program.
  • 2Key executives received substantial bonuses, with 50% paid in cash and 50% deferred via Earnings Bonus Units (EBUs).
  • 3EBUs offer a deferred payout based on cumulative net income per share, with a settlement value cap of $5.00 per unit.
  • 4Up to 11 million shares were authorized for restricted stock/unit grants under the 2007 Incentive Program.
  • 5Restricted stock awards come with long vesting periods (5-10 years or retirement) and forfeiture clauses.
  • 6Annual salaries for H. R. Cramer and R. W. Tillerson were increased.
  • 7All executive officers are employed on an "at will" basis, without employment contracts.

Frequently Asked Questions

This 8-K filing primarily details the compensation decisions made by Exxon Mobil's Compensation Committee for its executive officers for the 2007 fiscal year. It covers short-term incentives, long-term equity awards (restricted stock and EBUs), and salary adjustments.

Bonuses are paid 50% in cash by year-end. The remaining 50% is deferred and paid through Earnings Bonus Units (EBUs). These EBUs entitle the executive to receive cash equivalent to ExxonMobil's cumulative net income per common share, with payouts occurring on the third anniversary of the grant or when the unit reaches a maximum settlement value of $5.00 per unit, whichever comes first.

The restricted stock awards have significant holding periods. Half of the granted shares are subject to a five-year restriction from the grant date. The remaining half are restricted for ten years from the grant date or until retirement, whichever is later. These restrictions can only be accelerated in the event of the executive's death.

Yes, the filing notes an increase in annual salary for H. R. Cramer, effective December 1, 2007, to $840,000, and for R. W. Tillerson, effective January 1, 2008, to $1,870,000.