Exxon Mobil Corporation · NYSE:XOM
Exxon Mobil — Shareholder Meeting (May 2020)
44 slides from Exxon Mobil's shareholder meeting presentation, May 8, 2020
Slide 1: 2020 Shareholder Webcast
2020 Shareholder Webcast May 8, 2020 12020 Shareholder Webcast May 8, 2020 1
Slide 2: Agenda
Agenda 11:00 Welcome 11:05 Executive Compensation 11:30 Shareholder Proposals 11:45 Q&A 2Agenda 11:00 Welcome 11:05 Executive Compensation 11:30 Shareholder Proposals 11:45 Q&A 2
Slide 3: Opening Remarks & Agenda
Opening Remarks & Agenda - Slide 2 Good morning everyone and welcome to today’s shareholder webcast. · This is our eighth year for hosting the webcast and we welcome the opportunity to engage with you again to share our · perspectives on the items for vote in our proxy statement, and to gain your in
Slide 4: Cautionary Statement
Cautionary Statement Statements regarding future events or conditions are forward-looking statements. Actual future results, including achievement of strategic objectives; future financial and operating results; and project plans, schedules, and results, as well as the impact of compensation incenti
Slide 5: Cautionary Statement - Slide 3
Cautionary Statement - Slide 3 Please note the cautionary statement on this slide; compensation-related footnote and definitions are included at the end of · this presentation. Cautionary Statement - Slide 3 Please note the cautionary statement on this slide; compensation-related footnote and defini
Slide 6: Shareholder Engagement
Shareholder Engagement • Ongoing engagement is essential • Shareholder input is valued by the Board and company management in deliberations and disclosures ‒ Board responded to shareholder input this year with significant governance and disclosure enhancements • Variety of venues for outreach: ‒ Ann
Slide 7: Shareholder Engagement – Slide
Shareholder Engagement – Slide 4 We strongly believe ongoing engagement with our shareholders is vitally important, and keeping shareholders informed on · relevant business matters is a priority for us. We also benefit greatly from engagement as it provides the Board and management with your importa
Slide 8: Executive Compensation
Executive Compensation Key Messages Performance Share Program Bonus Program Determining CEO Compensation Pay for CEO Position 5Executive Compensation Key Messages Performance Share Program Bonus Program Determining CEO Compensation Pay for CEO Position 5
Slide 9: Executive Compensation Overview – Slide
Executive Compensation Overview – Slide 5 · Thank you Stephen, and thank you to everyone on the call today for your interest. · I appreciate that our time today is limited, so I will focus the discussion on a brief overview of our executive compensation program, more specifically the key design feat
Slide 10: Key Messages
Key Messages Program aligned with our business model and long-term shareholder returns Pay highly performance based and tied to Company performance Compensation Committee delivered market competitive pay 6Key Messages Program aligned with our business model and long-term shareholder returns Pay high
Slide 11: Key Messages – Slide
Key Messages – Slide 6 · As I do this, I would like to underscore three key messages, each of which we will review in greater detail on subsequent slides. · First, our compensation program is aligned with our business model and long-term shareholder returns. This is most evident in our performance s
Slide 12: Performance Share Program
Performance Share Program • Recognizes the long-term nature of ExxonMobil’s business model • Encourages a long-term view through commodity price cycle • Aligns experience of executives with that of long-term shareholders 7Performance Share Program • Recognizes the long-term nature of ExxonMobil’s bu
Slide 13: Performance Share Program – Slide
Performance Share Program – Slide 7 · To the first point, alignment with our business model and the experience of our long-term shareholders. Our business is a depletion business and involves continual and large investments over long periods of time that require our executives to maintain a long-ter
Slide 14: Performance Share Program
Performance Share Program • Compensation Committee does not adjust share grants to offset changes in share price, resulting in a one-for-one change in compensation through share price • Long restriction periods, coupled with performance metrics applied at grant • Key factors determining performance
Slide 15: Performance Share Program – Slide
Performance Share Program – Slide 8 · A share-denominated approach coupled with long restriction periods defines the risk/reward profile of our performance share program. Therefore, the Compensation Committee does not adjust share grants to offset changes in share price. As a result, executives see
Slide 16: Bonus Program
Bonus Program • Size of bonus program aligned with change in annual earnings % change in bonus program = (% change in annual earnings) x (2/3) • Individual grant levels determined by the above formula, changes in pay grade, and individual performance • Bonus delivered using two vehicles: BONUS PROGR
Slide 17: Bonus Program – Slide
Bonus Program – Slide 9 · The annual bonus program ties executive compensation to annual Company earnings performance and encourages strong earnings performance in the near- and mid-term while maintaining risk of forfeiture. · The size of the annual bonus pool (“ceiling”) itself is determined by a f
Slide 18: Determining CEO Compensation
Determining CEO Compensation 10Determining CEO Compensation 10
Slide 19: Determining CEO Compensation – Slide
Determining CEO Compensation – Slide 10 · During engagements with shareholders, we received feedback to provide additional clarity on the process and considerations used by the Compensation Committee to determine CEO pay. This visual is intended to address this feedback. · In determining CEO pay, th
Slide 20: Pay for CEO Position
Pay for CEO Position • Over 70 percent of CEO total direct compensation delivered in the form of performance shares with long restriction periods • Realized pay is 23 percent of total reported pay 11Pay for CEO Position • Over 70 percent of CEO total direct compensation delivered in the form of perf
Slide 21: Pay for CEO Position Slide
Pay for CEO Position Slide 11 Let me now turn to 2019 CEO compensation. TSR perf il To that point, value is due to changes in interest rates. $161 ml $1 million in 2018, form of performance shares with long restriction periods. h bonus, and vesting of previously granted incentive awards.
Slide 22: Pay for CEO Position
Pay for CEO Position • Relative rank position in 10-year realized pay demonstrative of long restriction periods in program design 12Pay for CEO Position • Relative rank position in 10-year realized pay demonstrative of long restriction periods in program design 12
Slide 23: Pay for CEO Position – Slide
Pay for CEO Position – Slide 12 · Looking at pay for any particular year in isolation is not the most complete way to assess compensation. For this reason, as we have done in the past, we also disclose CEO realized and unrealized pay over a 10-year period and continue to receive positive feedback fr
Slide 24: Summary – Why Vote FOR Say-on-Pay?
Summary – Why Vote “FOR” Say-on-Pay? Program aligned with our business model and long-term shareholder returns Pay highly performance based and tied to Company performance Compensation Committee delivered market competitive pay 13Summary – Why Vote “FOR” Say-on-Pay? Program aligned with our business
Slide 25: Summary – Why vote FOR Say-on-Pay? – Slide
Summary – Why vote “FOR” Say-on-Pay? – Slide 13 · To recap the key messages I covered at the beginning: − Our compensation program design is fully aligned with our business model and the returns of our long-term shareholders. − Executive pay is highly performance based and tied to Company performanc
Slide 26: Shareholder Proposals
Shareholder Proposals • Appreciate engagement with shareholders • Some proposals satisfactorily addressed and withdrawn from proxy • Remaining proxy proposals – generally agree on objectives, differ on approach • Important to maintain constructive dialogue throughout the year 14Shareholder Proposals
Slide 27: Shareholder Proposals – Slide
Shareholder Proposals – Slide 14 · We appreciate the opportunities to engage with you, our shareholders. During 2019, we were pleased to have more than 80 engagements on environmental, social, and governance issues, either in person or by teleconference, and including members from all levels of our
Slide 28: Item 4: Independent Chairman
Item 4: Independent Chairman Proposal: Adopt a policy to require that whenever possible the Chairman be an independent member of the Board; phase in for next CEO transition ExxonMobil’s Board recommends a vote AGAINST: • Board significantly enhanced authorities of the independent Lead Director this
Slide 29: Item 4: Independent Chairman – Slide
Item 4: Independent Chairman – Slide 15 · A moment ago, I mentioned that often ExxonMobil and its shareholders are able to agree on objectives, but occasionally cannot align on the approach to reach those objectives. The shareholder proposals covered on the next several slides are good examples of t
Slide 30: Item 5: Special Shareholder Meetings
Item 5: Special Shareholder Meetings Proposal: Amend bylaws to give holders in the aggregate of 10% of outstanding common stock the power to call a special shareholder meeting without the need for a court petition ExxonMobil’s Board recommends a vote AGAINST: • In response to shareholder input, the
Slide 31: Item 5: Special Shareholder Meetings – Slide
Item 5: Special Shareholder Meetings – Slide 16 · Next, we have a proposal regarding special shareholder meetings. · For many years now, under existing New Jersey law, ExxonMobil’s shareholders have had the right to call a special meeting with the agreement of shareholders of 10 percent or more of o
Slide 32: Item 6: Report on Environmental Expenditures
Item 6: Report on Environmental Expenditures Proposal: Prepare a report of the incurred costs and associated benefits that have accrued to shareholders, the public health and the environment, including the global climate, from the company’s environment- related activities. ExxonMobil’s Board recomme
Slide 33: Item 6: Report on Environmental Expenditures – Slide
Item 6: Report on Environmental Expenditures – Slide 17 · Next, is a proposal that asks for a report on the costs and benefits of ExxonMobil’s voluntary, environment-related activities. · This resolution proposes that ExxonMobil should spend less on reducing emissions from its business and developin
Slide 34: Item 7: Report on Risks of Petrochemical Investments
Item 7: Report on Risks of Petrochemical Investments Proposal: Prepare a report assessing the public health risks of expanding petrochemical operations and investments in areas increasingly prone to storms, flooding and sea level rise ExxonMobil’s Board recommends a vote AGAINST: • ExxonMobil has ex
Slide 35: Item 7: Report on Risks of Petrochemical Investments – Slide 18
Item 7: Report on Risks of Petrochemical Investments – Slide 18 · Next is a proposal requesting a report on the risks associated with our petrochemical facilities. · ExxonMobil has extensive experience designing, constructing, and operating facilities around the world, using a rigorous and comprehen
Slide 36: Item 8: Report on Political Contributions
Item 8: Report on Political Contributions Proposal: Prepare a report disclosing the policies and procedures for making political contributions and expenditures with corporate funds, including the Board’s role, and monetary and non-monetary contributions or expenditures that are not deductible for U.
Slide 37: Item 8: Report on Political Contributions – Slide
Item 8: Report on Political Contributions – Slide 19 · We turn now to a proposal asking for a report on our political contributions. · Before I get into the specifics of this proposal, I want to highlight that in response to shareholder feedback we have further enhanced details around our rigorous o
Slide 38: Item 9: Report on Lobbying
Item 9: Report on Lobbying Proposal: Prepare a report disclosing the policy and procedures governing lobbying; amounts and recipients; memberships in organizations that write model legislation; decision-making process; and oversight by management and Board ExxonMobil’s Board recommends a vote AGAINS
Slide 39: Item 9: Report on Lobbying – Slide
Item 9: Report on Lobbying – Slide 20 · The final shareholder proposal requests a report on lobbying. · We agree with appropriate transparency, accountability, and disclosure of lobbying policy, activities and expenditures, and fully comply with both the spirit and letter of all federal and state la
Slide 40: Virtual Annual Shareholder Meeting
Virtual Annual Shareholder Meeting • ExxonMobil’s 2020 Annual Meeting of Shareholders is scheduled on May 27, 2020 beginning at 9:30 a.m. Central Time • Due to public health concerns associated with COVID-19, Annual Meeting will now be conducted exclusively as a virtual-only meeting • ExxonMobil mad
Slide 41: Virtual Annual Meeting – Slide
Virtual Annual Meeting – Slide 21 · Before we conclude, I want make sure you’re aware that our 2020 Annual Meeting of Shareholders, scheduled for Wednesday, th May 27 beginning at 9:30 a.m. Central Time, will now be conducted exclusively as a virtual-only meeting. · This decision to forgo our regula
Slide 42: Questions
Questions 22Questions 22
Slide 43: Questions – Slide
Questions – Slide 22 · This concludes our presentation. We appreciate all of you who have joined us today to review these important topics. Your input and your vote is important to us and we look forward to continuing our shareholder engagements throughout the year. · Now, Inge and I are happy to ta
Slide 44: Footnote and Definitions
Footnote and Definitions Footnote, slide 9 1) Bonus program is based on estimates of year-end earnings made in November of each year, such that payment can occur in that calendar year. The purpose of the two-thirds adjustment in the formula is to mitigate the impact of commodity price swings on shor