Slide 1: Schedule 14A Definitive Additional Materials
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant x Filed by a Party other than the Registrant ¨ Check the appropriate box: ¨ Preliminary Proxy
Slide 2: Executive Compensation Overview Audio Webcast
Executive Compensation Overview Audio Webcast May 16, 2012 2:00 p.m. CT
Slide 3: Welcome/introductions and shareholder outreach
• Welcome/introductions • Shareholder outreach at direction of Compensation Committee of the Board of Directors 1
Slide 4: Cautionary Statement
Cautionary Statement Forward-looking Statements. Information concerning future events or conditions in this presentation or subsequent Q&A period are forward-looking statements. Actual future results, including capital expenditures; business and project plans, timing, costs, and capacities; and fina
Slide 5: Please bear Cautionary Statement in mind
• Please bear Cautionary Statement in mind during today’s discussion. 2
Slide 6: Agenda
Agenda • ExxonMobil’s Business Environment and Key Business Strategies • Pay for Long-Term Performance • Long-Term Business Performance and Basis for Compensation Decisions – Financial and Operating Performance – Strategic Business Results • CEO Compensation • Scale and Scope of ExxonMobil • Develop
Slide 7: Review agenda and procedure to submit questions
• Review agenda and procedure to submit questions 3
Slide 8: ExxonMobil's Business Environment
ExxonMobil’s Business Environment • Long investment horizons – Typically requires 10+ years for capital investments to generate returns • Large capital investments – More than $36 billion in 2011 – Approximately $185 billion expected over next 5 years • Worldwide diverse resources and markets • Sign
Slide 9: Business environment speaker notes
• Due to the nature of our industry and size of ExxonMobil, our senior executives are responsible for making very large capital investments that generate attractive returns on capital employed for many years into the future. • These capital investments, including more than $36 billion in 2011, can t
Slide 10: ExxonMobil's Key Business Strategies
ExxonMobil’s Key Business Strategies • Long-term growth in shareholder value • Disciplined, selective, and long-term focus in making investments • Operational excellence and risk management • Industry-leading returns on capital and superior cash flow 5
Slide 11: Overriding strategy: long-term growth in shareholder value
• Given this business environment, our overriding strategy is to generate long-term growth in shareholder value. • We accomplish this through a disciplined, selective, and long-term focus in making the large investments we just discussed. • Given the nature of our business, operational excellence is
Slide 12: Pay for Long-Term Performance
Pay for Long-Term Performance • Linkage to the Business Model – ExxonMobil’s compensation program is unique in how it effectively links executive pay to the business model and the interests of long-term shareholders • Long-Term Program Design – This linkage achieved by granting more than half of ann
Slide 13: Linkage to the Business Model
Linkage to the Business Model: • ExxonMobil’s business model is characterized by significant capital intensity, operations risk, and very long investment leadtimes which can span decades. These three elements of our business model determine the design of the compensation program. Long-Term Program D
Slide 14: Pay for Long-Term Performance, cont'd
Pay for Long-Term Performance, cont’d • Risk of Forfeiture – In the oil and gas industry, management decisions on large, capital- intensive projects affect financial and operating results for decades into the future – Thus, to motivate executives to achieve the best long-term results the holding per
Slide 15: Risk of Forfeiture and Alignment with Long-Term Shareholders
• Risk of Forfeiture: • In the oil and gas industry, management decisions on large, capital-intensive projects affect financial and operating results for decades into the future. • The performance feature of the stock grant is substantially reinforced by the risk of forfeiture provision that is in p
Slide 16: Pay for Long-Term Performance: Holding Periods Exceed Comparators
Pay for Long-Term Performance, cont’d • Holding Periods Exceed Holding Periods of Annually Granted Compensation (1) Comparators – Long-term orientation of ExxonMobil’s compensation program far exceeds the holding periods of our comparator companies – Holding periods for ExxonMobil are 2.5 times the
Slide 17: Holding Periods Exceed Comparators
Holding Periods Exceed Comparators: • The long-term design of our compensation program is illustrated by the bar graph. • We measured the holding periods of the elements of the compensation program that are granted annually by the Compensation Committee, and compared the results with benchmark compa
Slide 18: Long-Term Business Performance and Basis for Compensation Decisions
Long-Term Business Performance and Basis for Compensation Decisions Lost-Time Injuries and Illnesses Return on Average Capital Employed (ROCE) (1) Employee safety data from participating American Petroleum (1) Royal Dutch Shell, BP, and Chevron values are on a consistent Institute companies (2011 in
Slide 19: Long-Term Business Performance and Basis for Compensation Decisions
Long-Term Business Performance and Basis for Compensation Decisions • These charts illustrate “how we are doing” in terms of (1) managing operating risk, (2) achieving returns on invested capital, and (3) achieving shareholder returns. • These results helped form the basis for compensation decisions
Slide 20: Ten- and Twenty-Year Cumulative Total Returns
Long-Term Business Performance and Basis for Compensation Decisions, cont’d Ten-Year Cumulative Total Returns (1) Twenty-Year Cumulative Total Returns (1) (1) The value of $100 invested in common stock of the company on (1) The value of $100 invested in common stock of the company on January 1, 2001
Slide 21: 10-year and 20-year TSR
• 10-year TSR: Our 10-year total returns exceed that of our industry group and the market in general ($100 invested 10 years ago: ExxonMobil: $269; industry group: $221; and S&P 500: $133). • 20-year TSR: On the chart to the right, you can see similar outperformance over a 20-year period (XOM: $968;
Slide 22: Comparator Companies Total Shareholder Return
Comparator Companies Total Shareholder Return ExxonMobil Comparator Company Average (1) (percent) 20 15 10 5 0 1 Year 3 Year 5 Year 10 Year 20 Year 30 Year ExxonMobil 18.7% 4.6% 4.3% 10.4% 12.0% 15.3% Rank 4 of 13 12 of 13 5 of 13 4 of 13 4 of 13 1 of 11 Percentile 74 8 67 81 77 100 (1) AT&T, Boeing
Slide 23: Comparison to 12 comparator companies
• We typically compare our shareholder returns to the industry group presented in the previous slides. • We were asked by shareholders to compare our shareholder returns to the 12 comparator companies we use to benchmark compensation for the Named Executive Officers. • This graph shows that ExxonMob
Slide 24: Financial and Operating Performance
Financial and Operating Performance • Financial and operating results outlined below provide additional perspective on Company performance: – Earnings of $41 billion in 2011, increased by 35 percent versus 2010. Five-year annual average of $35 billion – Total shareholder return was 18.7 percent in 2
Slide 25: Financial and Operating Performance
Financial and Operating Performance • The financial and operating results outlined [on this slide] provide additional perspective on Company performance: • Earnings of $41 billion in 2011, increased by 35 percent versus 2010. Five-year annual average of $35 billion. • Total shareholder return was 18
Slide 26: Strategic Business Results
Strategic Business Results • Expansion of opportunities in U.S. Gulf of Mexico and a major oil discovery with the Hadrian-5 exploration well • Strategic Cooperation Agreement with Rosneft to jointly participate in exploration and development activities in Russia, the United States, and other parts o
Slide 27: Strategic Business Results
Strategic Business Results • Another key factor underlying the compensation decisions made by the Compensation Committee in 2011 was the progress achieved on strategic priorities. • The accomplishments outlined [on this slide] are expected to have a positive impact on Company performance for decades
Slide 28: Strategic Business Results, cont'd
Strategic Business Results, cont’d • Additional unconventional resource acquisitions enabled by XTO – Continued leverage of XTO expertise to expand unconventional resource base in the United States and evaluate potential global unconventional opportunities in Argentina, Canada, Indonesia, and Poland
Slide 29: Strategic Business Results, cont'd
• Additional unconventional resource acquisitions enabled by XTO. • Continued leverage of XTO expertise to expand unconventional resource base in the United States and evaluate potential global unconventional opportunities in Argentina, Canada, Indonesia, and Poland. • Completion of new facilities a
Slide 30: CEO Reported Pay vs. Realized Pay
CEO Compensation CEO Reported Pay vs. Realized Pay • Difference between “Reported Pay” and “Realized Pay” reinforces the concept that a significant portion of the CEO’s compensation is deferred, at risk of forfeiture, and dependent on future performance of the Company 15
Slide 31: Reported pay and realized pay over CEO tenure
• A substantial portion of the CEO’s compensation granted by the Compensation Committee and reported in the CD&A represents an incentive for future performance, not current cash compensation. • This long-term incentive pay will not actually be received by the CEO for many years in the future, and th
Slide 32: CEO Compensation, cont'd: CEO Reported Pay 2011
CEO Compensation, cont’d CEO Reported Pay – 2011 • Restricted Stock Grant: 2011 restricted stock grant was awarded at the same share level as the last three years • Annual Bonus: 2011 corporate earnings increased 35 percent to over $41 billion, but the annual bonus increase was limited to 30 percent
Slide 33: CEO Reported Pay 2011
CEO Reported Pay2011 – Restricted Stock Grant: The 2011 restricted stock grant was awarded at the same share level as the last three years (225,000 shares of restricted stock) with the vesting periods we described earlier. Annual Bonus and Delayed Bonus Feature: 2011 bonus of $4.4M, half of which wa
Slide 34: CEO Pay Alignment
CEO Compensation, cont’d CEO Pay Alignment • The following chart illustrates how the percent change in “Reported Pay” has tracked changes in TSR during the current CEO’s tenure 17
Slide 35: Pay Alignment
Pay Alignment • This chart illustrates how the percent change in “Reported Pay” has tracked changes in total shareholder returns (TSR) during the current CEO’s tenure. • Very strong correlation between CEO pay and ExxonMobil stock performance. 17
Slide 36: Scale and Scope of ExxonMobil
Scale and Scope of ExxonMobil Scale of ExxonMobil vs. Comparator Companies(1) (1) Comparator companies consist of: AT&T, Boeing, Chevron, ConocoPhillips, General Electric, Hewlett-Packard, IBM, Johnson & Johnson, Pfizer, Procter & Gamble, United Technologies, and Verizon. These comparator companies
Slide 37: Scale and scope versus comparator companies
• The Compensation Committee believes that performance should be the primary basis on which compensation decisions are made, particularly annual changes in compensation. • At the same time, the Committee believes that the compensation program should recognize that our senior executives are responsib
Slide 38: Scale and Scope of ExxonMobil, cont'd
Scale and Scope of ExxonMobil, cont’d • To put the size and scale challenge in perspective, the charts below illustrate the financial values managed (from the table on the previous slide) for each dollar of compensation paid to the CEO of ExxonMobil relative to the CEOs of our comparator companies E
Slide 39: Financial values managed per dollar of CEO compensation
• This chart expands on the prior table and helps answer the question “What is the shareholder getting for the compensation paid relative to the other benchmark companies?” • Thisanalysisshowsthe financialvaluesmanagedfor eachdollar of compensationpaid to the CEO [ExxonMobil as multiple of the media
Slide 40: Development and Retention of Executive Talent
Development and Retention of Executive Talent • Technical Depth and Experience: Retaining high-quality executives for a career and developing technical and leadership skills provide the Company with a strong competitive advantage • Executive Development is an Investment: Aggressive investment in the
Slide 41: Executive talent development and retention
• TechnicalDepthandExperience:In this business,superiorbusinessresultsrequireexperiencedexecutives with strong technical depth that is honed over decades. Thus, retention is critical. • ExecutiveDevelopment:Weinvestaggressivelyin the developmentof eachexecutiveovertheir career,which makes retention
Slide 42: Prior Say on Pay Vote and Shareholder Engagement
Prior Say on Pay Vote and Shareholder Engagement • In 2011, over 67 percent of votes cast were in favor of the say on pay resolution • The Compensation Committee has carefully considered this result as well as shareholder feedback on executive compensation through a wide-ranging dialogue between man
Slide 43: Shareholder engagement on compensation
• The Compensation Committee of the Board believes that our program should not be designed in isolation. This also means the Committee is committed to engagement between shareholders and the Company to fully understand diverse viewpoints on the topic of executive compensation. • The Committee has ca
Slide 44: Vote 'FOR' Item 3: Advisory Vote to Approve Executive Compensation
Vote ‘FOR’ Item 3: Advisory Vote to Approve Executive Compensation • ExxonMobil’s compensation program supports a business model that has weathered volatile commodity prices and industry business cycles for many years • Our compensation program has demonstrated critical alignment between executive c
Slide 45: Conclusion
Conclusion: • ExxonMobil’s compensation program supports a business model that has weathered volatile commodity prices and industry business cycles for many years. • It sets ExxonMobil apart and has established a culture of performance, integrity, reliability, and consistency. • Through this busines
Slide 46: Questions and Answers
Questions and Answers ExonMobil 23
Slide 47: Begin question and answer session
• Begin question and answer session. 23