8-KLeadership ChangesExhibits & Filings

EXXON MOBIL CORP 8-K Report, Executive Changes (Dec 2, 2008)

Filed December 2, 2008For Securities:XOM

Summary

This Exxon Mobil Corporation (XOM) 8-K filing, dated December 2, 2008, primarily details executive compensation arrangements for the fiscal year 2008. The Compensation Committee established a total ceiling of $232 million for the Short-Term Incentive Program (STIP) and a ceiling of 11 million shares for restricted stock or restricted stock units under the 2003 Incentive Program. Significant bonus payouts and restricted stock grants were made to key officers, including R. W. Tillerson, D. D. Humphreys, and H. R. Cramer, with specific details on cash and "Earnings Bonus Unit" (EBU) components for bonuses, and vesting schedules for restricted stock.

Key Highlights

  • 1Total ceiling for 2008 Short-Term Incentive Program (STIP) bonuses established at $232 million.
  • 2R. W. Tillerson received a $4,000,000 bonus, D. D. Humphreys $2,364,000, and H. R. Cramer $1,744,598.
  • 3Bonuses are paid 50% in cash and 50% via Earnings Bonus Units (EBUs), with EBUs tied to per-share earnings and a delayed payout mechanism.
  • 4A total ceiling of 11 million shares was set for 2008 restricted stock/unit grants under the 2003 Incentive Program.
  • 5R. W. Tillerson was granted 225,000 restricted shares, D. D. Humphreys 106,400, and H. R. Cramer 77,000.
  • 6Restricted stock has a forfeiture risk for detrimental activity and a vesting period of 5 to 10 years (or later upon retirement), with dividends and voting rights granted during this period.
  • 7Annual salaries for H. R. Cramer, R. W. Tillerson, and D. D. Humphreys were increased effective December 1, 2008, and January 1, 2009, respectively.

Frequently Asked Questions

Earnings Bonus Units (EBUs) represent a deferred portion of executive bonuses, with 50% of the total bonus paid in EBUs. Each EBU entitles the executive to a cash payment equivalent to ExxonMobil's cumulative net income per common share announced each quarter. The payout occurs on the publication date of the Corporation's quarterly earnings statement for the twelfth full quarter following the grant, or earlier if a maximum settlement value of $5.75 per unit is reached. These EBUs are subject to recoupment if there's a material negative restatement of results.

The restricted stock grants have a significant vesting period: half of the shares cannot be sold until five years after the grant, and the remaining half until ten years after the grant or until retirement, whichever is later. These restrictions cannot be accelerated except in cases of 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 joining a competitor. During the restricted period, holders receive dividends and voting rights but cannot transfer the shares.

Yes, in addition to the bonuses and restricted stock awards, the filing also reports increases in the annual salaries for key officers. Effective December 1, 2008, H. R. Cramer's annual salary increased to $880,000. Effective January 1, 2009, R. W. Tillerson's annual salary will increase to $2,057,000, and D. D. Humphreys' annual salary will increase to $1,010,000.

No, the filing explicitly states that all ExxonMobil executive officers are 'at will' employees and do not have employment contracts with the Corporation.