8-KLeadership Changes

EXXON MOBIL CORP 8-K Report, Executive Changes (Dec 6, 2011)

Filed December 6, 2011For Securities:XOM

Summary

Exxon Mobil Corporation (XOM) filed an 8-K on December 5, 2011, detailing executive compensation decisions made by its Compensation Committee on November 30, 2011. The filing outlines the total bonus pool for the Short Term Incentive Program for 2011, set at $259 million, and specifies the bonus amounts awarded to several key officers, including R. W. Tillerson who received $4,368,000. A significant portion of these bonuses will be paid in cash, with the remainder deferred and tied to future company earnings through Earnings Bonus Units (EBUs), which have a defined payout structure and potential for recoupment in case of financial restatements. In addition to short-term incentives, the company also approved performance stock awards under its 2003 Incentive Program. A total of 11.5 million shares were allocated for these grants, with specific amounts awarded to top executives like R. W. Tillerson (225,000 shares). These restricted shares are subject to long vesting periods (5 to 10 years or retirement) and forfeiture conditions, aligning executive interests with long-term company performance. The filing also announced scheduled base salary increases for certain executive officers, effective January 1, 2012, with R. W. Tillerson's salary set to increase to $2,567,000.

Key Highlights

  • 1Exxon Mobil's Compensation Committee established a total bonus ceiling of $259 million for the 2011 Short Term Incentive Program.
  • 2Key officers received significant cash and deferred bonus components, with R. W. Tillerson receiving the largest bonus of $4,368,000.
  • 3A portion of the 2011 bonuses will be paid in Earnings Bonus Units (EBUs), which are tied to future company earnings per share and subject to recoupment for material restatements.
  • 4Performance stock awards totaling 11.5 million shares were granted under the 2003 Incentive Program, with R. W. Tillerson receiving 225,000 shares.
  • 5Restricted stock awards have long vesting periods (5-10 years) and are subject to forfeiture for violations of company policy or detrimental activity.
  • 6Annual base salaries for several executive officers are set to increase effective January 1, 2012, with R. W. Tillerson's salary increasing to $2,567,000.
  • 7All named executive officers are considered 'at will' employees without employment contracts.

Frequently Asked Questions

The filing states a total ceiling of $259 million for the 2011 Short Term Incentive Program bonuses and a total of 11.5 million shares for performance stock awards under the 2003 Incentive Program. Specific amounts for individual officers are also detailed.

Approximately 50% of the bonus is paid in cash by year-end. The remaining 50% is paid through Earnings Bonus Units (EBUs), which are settled in cash based on future company earnings per share and have a defined payout schedule and forfeiture conditions.

The restricted stock awards have tiered vesting periods: half of the shares cannot be sold for five years after the grant date, and the other half cannot be sold for ten years after the grant date or until retirement, whichever is later. These restrictions can only be accelerated by death.

Yes, the terms of the Short Term Incentive Program allow for recoupment of bonus awards if there is a material negative restatement of the company's financial results.