8-KLeadership ChangesExhibits & Filings

EXXON MOBIL CORP 8-K Report, Executive Changes (Dec 1, 2009)

Filed December 1, 2009For Securities:XOM

Summary

This Form 8-K filing by Exxon Mobil Corporation (XOM) on December 1, 2009, primarily details the compensation arrangements for its executive officers for the 2009 performance year and adjustments to annual salaries. The Compensation Committee established a total bonus pool of $139 million under the Short-Term Incentive Program, with specific amounts allocated to key executives such as R. W. Tillerson ($2.4 million) and D. D. Humphreys ($1.418 million). A significant portion of these bonuses will be paid in cash, with the remainder deferred through Earnings Bonus Units (EBUs), whose payout is tied to cumulative earnings per share and has a potential maximum settlement value. Additionally, the filing outlines the grant of restricted stock awards under the 2003 Incentive Program, totaling 13 million shares for 2009, with R. W. Tillerson receiving the largest grant of 225,000 shares. These shares are subject to long vesting periods of five to ten years, with forfeiture provisions for detrimental activities or early termination of employment. The filing also announces salary increases for several named executive officers, effective in late 2009 and early 2010, indicating adjustments to base compensation.

Key Highlights

  • 1Total Short-Term Incentive Program (STIP) bonus pool ceiling set at $139 million for 2009.
  • 2Key executive bonuses include $2.4 million for R. W. Tillerson and $1.418 million for D. D. Humphreys.
  • 3Bonuses are paid 50% in cash and 50% via Earnings Bonus Units (EBUs) tied to EPS performance.
  • 4A total of 13 million shares were granted under the 2003 Incentive Program as restricted stock awards.
  • 5Restricted stock awards have long vesting periods of 5-10 years and include forfeiture clauses.
  • 6Annual salaries for R. W. Tillerson and other executive officers are set to increase in late 2009 and early 2010.
  • 7The STIP was amended to clarify EBU accrual based on reported earnings per common share.

Frequently Asked Questions

Earnings Bonus Units (EBUs) are a component of ExxonMobil's Short-Term Incentive Program, used to defer 50% of executive bonuses. The payout of EBUs is tied to the company's cumulative earnings per common share (assuming dilution) reported quarterly. The payout occurs 12 quarters after the grant date or when a specified maximum settlement value per unit is reached, whichever is earlier. This structure aligns executive compensation with long-term company performance and earnings.

The restricted stock awards granted under the 2003 Incentive Program have significant holding periods: half of the shares are restricted for five years, and the remaining half for ten years after the grant date or until retirement, whichever is later. These restrictions can only be accelerated in the event of death. Shares are subject to forfeiture if employment is terminated early or if the executive engages in detrimental activities, such as violating company ethics policies or working for a competitor.

No, all ExxonMobil executive officers are considered '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.

The amendment to the Short Term Incentive Program was made to align certain accounting terminology with the company's current financial statement usage. More importantly, it clarifies that Earnings Bonus Units (EBUs) accrue based on the cumulative earnings per common share (assuming dilution) as reported in ExxonMobil's official quarterly or annual reports filed with the SEC. This ensures transparency and a clear link between EBU accrual and officially reported financial results.