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 Filed by a Party other than the Registrant
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §.240.14a-12
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CHEVRON CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Fee paid previously with preliminary materials. | |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
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2021 proxy statement
notice of 2021 annual meeting of stockholders to be held on may 26, 2021
2021 notice of the chevron corporation
annual meeting of stockholders
wednesday, may 26, 2021
8:00 a.m. PDT
Online by live audio webcast (www.virtualshareholdermeeting.com/CVX2021)
record date
Monday, March 29, 2021
agenda
| Elect 12 Directors named in this Proxy Statement; |
| Vote on a Board proposal to ratify the appointment of PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting firm for 2021; |
| Vote on a Board proposal to approve, on an advisory basis, Named Executive Officer (NEO) compensation; |
| Vote on six stockholder proposals, each if properly presented at the meeting; and |
| Transact any other business that is properly presented at the meeting by or at the direction of the Board. |
admission
Stockholders or their legal proxy holders may attend the 2021 Annual Meeting of Stockholders.
important notice regarding admission to the 2021 annual meeting
Virtual Annual Meeting
We are pleased to announce that the Company will conduct its 2021 Annual Meeting of Stockholders (Annual Meeting) on the above date and time solely by live audio webcast in lieu of an in-person meeting. Your Board believes this format will enhance and facilitate attendance by providing convenient access for all of our stockholders. In addition, this meeting format will eliminate public health concerns around the COVID-19 pandemic and the significant costs associated with holding an in-person meeting. We have planned and designed the meeting to encourage stockholder participation, protect stockholder rights, and promote transparency.
We encourage participation
Stockholders of record owning Chevron common stock at the close of business on Monday, March 29, 2021, are entitled to participate in and vote at the Annual Meeting. To participate in the Annual Meeting, including to vote, ask questions, and view the list of registered stockholders as of the record date during the meeting, stockholders should go to the meeting website at www.virtualshareholdermeeting.com/CVX2021, enter the 16-digit control number found on your proxy card, voting instruction form, or Notice Regarding the Availability of Proxy Materials, and follow the instructions on the website. If your voting instruction form or Notice Regarding the Availability of Proxy Materials does not indicate that you may vote those shares through the www.proxyvote.com website and it does not include a 16-digit control number, you should contact your bank, broker, or other nominee (preferably at least 5 days before the annual meeting) and obtain a legal proxy in order to be able to attend, participate in, or vote at the Annual Meeting. The Annual Meeting will be opened for access beginning at 7:45 a.m. PDT on May 26, 2021. Proponents of the stockholder proposals included in this Proxy Statement will be given the option to prerecord or call in live through a dedicated line to ensure their ability to present their proposals.
We welcome questions from stockholders
Questions may be submitted in advance of the meeting at www.proxyvote.com or live during the meeting at www.virtualshareholdermeeting.com/CVX2021. If we are not able to get to every question submitted, we will post a summary of the remaining questions and answers on www.chevron.com/investors/stockholder-services.
Technical difficulties and additional questions
If you have difficulty accessing the Annual Meeting, please call 844-976-0738 (toll free) or 303-562-9301 (international). Technicians will be available to assist you. Please submit any additional questions, comments, or suggestions by email at corpgov@chevron.com or by telephone by calling 1-877-259-1501.
In the event of a technical malfunction or other situation that the meeting Chair determines may affect the ability of the meeting to satisfy the requirements for a stockholder meeting to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the meeting, the Chair will convene the Annual Meeting at 8:30 a.m. PDT on the date specified above at the Companys headquarters in San Ramon, California, solely for the purpose of adjourning the meeting to reconvene at a date, time, and physical or virtual location announced by the meeting Chair. Under either of the foregoing circumstances, we will post information regarding the announcement on the investor relations page of the Companys website at www.chevron.com/investors/stockholder-services.
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voting
Stockholders owning Chevron common stock at the close of business on Monday, March 29, 2021, or their legal proxy holders, are entitled to vote at the Annual Meeting. Please refer to pages 93 through 94 of this Proxy Statement for information about voting at the Annual Meeting.
distribution of proxy materials
On Thursday, April 8, 2021, we will commence distributing to our stockholders (1) a copy of this Proxy Statement, a proxy card or voting instruction form, and our Annual Report (the Proxy Materials), (2) a Notice Regarding the Availability of Proxy Materials, with instructions to access the Proxy Materials and vote on the internet, or (3) for stockholders who receive materials electronically, an email with instructions to access the Proxy Materials and vote on the internet.
By Order of the Board of Directors,
Mary A. Francis
Corporate Secretary and Chief Governance Officer
April 8, 2021
Dear Stockholder,
A year ago, we knew 2020 was going to present a unique challenge. Chevron demonstrated both agility and resilience in adjusting to extreme market conditions, balancing short-term cash flow and long-term value. We intend to build on our track record of capital and cost discipline to deliver higher returns and lower carbon.
Our focus on higher returns is underpinned by a strong balance sheet, a dividend that is our first financial priority, and the transformation of our business to work more efficiently and effectively. This is built upon an advantaged portfolio that was further enhanced by the Noble Energy acquisition.
We recognize the need to deliver value for our stockholders and, at the same time, to help the world move toward a lower-carbon energy system. So we are focused on lowering our carbon intensity cost efficiently, increasing renewables and offsets in support of our business, and investing in low-carbon technologies that enable commercial solutions.
Chevrons latest Climate Change Resilience Report released last month lays out our perspective, strategy, actions and policy positions for a lower-carbon future. We are dedicated to leading the industry on transparent carbon emissions reporting, providing data and facts so stakeholders can see our progress toward the ambitions of the Paris Agreement. Having already exceeded our 2023 metrics, we now expect to achieve a 35 percent carbon intensity reduction by 2028 from 2016. We have also committed to zero routine flaring by 2030. In May 2021, we will release our Corporate Sustainability Report that further details our environmental, social, and governance priorities.
We believe investing in our people and our culture is essential for success. Our human capital management objectives are focused on hiring, developing and retaining critical talent, while fostering a culture that values diversity and inclusion and employee engagement. We believe innovative solutions to the most complex challenges emerge when diverse people, ideas, and experiences come together in an inclusive environment.
We take pride in providing the affordable, reliable, ever-cleaner energy that billions of people rely on every day. As the world emerges from a year of unprecedented challenges, we intend to continue to demonstrate Chevrons consistent, prepared, and adaptive strengths as we move into the future.
We appreciate your investment in Chevron.
Sincerely,
Michael K. Wirth Chairman and CEO |
Ronald D. Sugar Lead Director |
Chevron Corporation
6001 Bollinger Canyon Road, San Ramon, CA 94583
cautionary statements relevant to forward-looking information for the purpose of safe harbor provisions of the private securities litigation reform act of 1995
The statements in this Proxy Statement, including without limitation those relating to the action areas of Chevrons energy transition strategy in the Chevrons Approach to the Energy Transition section, are forward-looking statements based on managements current expectations, estimates and projections and, accordingly, involve risks and uncertainties that could cause actual outcomes and results to differ materially from those expressed or forecasted herein. Words or phrases such as advances, intends, plans, targets, forecasts, progress, commits, believes, improves, seeks, aims, sets, strives, helps, estimates, positions, pursues, may, could, should, will, budgets, outlook, trends, guidance, focus, on track, approaches, goals, objectives, strategies, opportunities, potential and similar expressions are intended to identify such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by the statements in this Proxy Statement can be found in our most recent Annual Report on Form 10-K filed with the SEC and in the Quarterly Reports on Form 10-Q that we will subsequently file under the headings Risk Factors and Cautionary Statements Relevant to Forward-Looking Information for the Purpose of Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
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Chevron Corporation
6001 Bollinger Canyon Road
San Ramon, CA 94583-2324
Your Board of Directors is providing you with these Proxy Materials in connection with its solicitation of proxies to be voted at Chevron Corporations 2021 Annual Meeting of Stockholders to be held by live audio webcast (www.virtualshareholdermeeting.com/CVX2021) on Wednesday, May 26, 2021, at 8:00 a.m. PDT, and at any postponement or adjournment of the Annual Meeting.
In this Proxy Statement, Chevron and its subsidiaries may also be referred to as we, our, the Company, the Corporation, or Chevron.
We are pleased to announce that the Company will conduct its Annual Meeting on the above date and time solely by live audio webcast in lieu of an in-person meeting. Your Board believes this meeting format will enhance and facilitate attendance by providing convenient access for all of our stockholders. In addition, this meeting format will help eliminate public health concerns around the COVID-19 pandemic and the significant costs associated with holding an in-person meeting. We have planned and designed the meeting to encourage stockholder participation, protect stockholder rights, and promote transparency.
Your Board is asking you to take the following actions at the Annual Meeting:
Item(s) |
Your Boards recommendation |
Vote required |
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Item 1: Elect 12 Directors named in this Proxy Statement |
Vote FOR |
Each Director nominee who receives a majority of the votes cast (i.e., the number of shares voted FOR a Director nominee must exceed the number of shares voted AGAINST that Director nominee, excluding abstentions) will be elected a Director in an uncontested election.
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Item 2: Vote to ratify the appointment of the independent registered public accounting firm
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Vote FOR | These items are approved if the number of shares voted FOR exceeds the number of shares voted AGAINST. |
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Item 3: Vote to approve, on an advisory
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Vote FOR | |||||
Items 49: Vote on six stockholder proposals, if properly presented
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Vote AGAINST |
If you are a street name stockholder (i.e., you own your shares through a bank, broker, or other holder of record) and do not vote your shares, your bank, broker, or other holder of record can vote your shares at its discretion ONLY on Item 2. If you do not give your bank, broker, or other holder of record instructions on how to vote your shares on Item 1 or Items 3 through 9, your shares will not be voted on those matters. If you have shares in an employee stock or retirement benefit plan and do not vote those shares, the plan trustee or fiduciary may or may not vote your shares, in accordance with the terms of the plan. Any shares not voted on Item 1 or Items 3 through 9 (whether by abstention, broker nonvote, or otherwise) will have no impact on that particular item.
We are not aware of any matters that are expected to be presented for a vote at the Annual Meeting other than those described above. If any other matter is properly brought before the Annual Meeting by or at the direction of the Board, the proxy holders identified in the Voting and Additional InformationAppointment of Proxy Holders section of this Proxy Statement intend to vote the proxies in accordance with their best judgment. When conducting the Annual Meeting, the Chairman or his designee may refuse to allow a vote on any matter not made in compliance with our By-Laws and the procedures described in the Voting and Additional InformationSubmission of Stockholder Proposals for 2021 Annual Meeting section of the 2020 Proxy Statement.
Chevron Corporation2021 Proxy Statement | 1 |
The Board Nominating and Governance Committee (the Governance Committee) recommended, and the Board set, a current Board size of 12 Directors. On September 8, 2020, the Board elected Jon Huntsman Jr. as a member of the Board effective September 15, 2020. In addition, on December 2, 2020, the Board elected Marillyn Hewson as a member of the Board effective January 1, 2021. Each of the nominees is a current Director and, other than Gov. Huntsman and Ms. Hewson, was previously elected at Chevrons 2020 Annual Meeting of Stockholders.
Directors are elected annually and serve for a one-year term or until their successors are elected. If any nominee is unable to serve as a Directora circumstance we do not anticipatethe Board by resolution may reduce the number of Directors or choose a substitute. Your Board has determined that each non-employee Director is independent in accordance with the New York Stock Exchange (NYSE) Corporate Governance Standards and has no material relationship with Chevron other than as a Director.
director election requirements
director qualifications and nomination processes
2 | Chevron Corporation2021 Proxy Statement |
election of directors
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These skills, experiences, and expertise are critical to the Boards ability to provide effective oversight of the Company and are directly relevant to Chevrons business, strategy, and operations.
CEO / Senior Executive / Leader of Significant Operations |
Chevron employs approximately 47,0001 people in business units throughout the world. Chevrons operations involve complex organizations and processes, strategic planning, and risk management. | |
Science / Technology / Engineering / Research / Academia |
Technology and engineering are at the core of Chevrons business and are key to finding, developing, producing, processing, and refining oil and natural gas, as well as assessing new energy sources. Our business processes are complex and highly technical. | |
Government / Regulatory / Legal / Public Policy |
Chevrons operations require compliance with a variety of regulatory requirements in numerous countries and involve relationships with various governmental entities and nongovernmental organizations throughout the world. | |
Finance / Financial Disclosure / Financial Accounting |
Chevrons business is multifaceted and requires complex financial management, capital allocation, and financial reporting processes. | |
Global Business / International Affairs |
Chevron conducts business around the globe. Our business success is derived from an understanding of diverse business environments, economic conditions, and cultures and a broad perspective on global business opportunities. | |
Environmental |
We place the highest priority on the health and safety of our workforce and the protection of our assets, the communities where we operate, and the environment. We are committed to continuously improving our environmental performance and reducing the potential impacts of our operations.
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1 | As of February 28, 2021. |
The following matrix displays the most significant skills and qualifications that each Director possesses. The Governance Committee reviews the composition of the Board as a whole periodically to ensure that the Board maintains a balance of knowledge and experience and to assess the skills and characteristics that the Board may find valuable in the future in light of current and anticipated strategic plans and operating requirements and the long-term interest of stockholders.
Chevron Corporation2021 Proxy Statement | 3 |
election of directors
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The Board seeks to achieve diversity of age, gender, and ethnicity and recognizes the importance of Board refreshment to ensure that it benefits from fresh ideas and perspectives. The following charts demonstrate the Boards commitment to diversity of backgrounds and Board refreshment.
strong board diversity | strong board refreshment | |
6 New Directors since 2016* |
Date of Change | Director | Reason for Nomination/ Departure | ||||
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January 2021 | Marillyn A. Hewson | Brings valuable global business experience as well as decades of perspective on international commerce and geopolitics | |||
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September 2020 | Jon M. Huntsman Jr.* | Strong international and public policy experience, knowledge of Chevrons business, and leadership experience | |||
- |
January 2020 | Inge G. Thulin | Time and logistics conflict | |||
+ |
December 2018 | Debra Reed-Klages | Depth of business leadership and experience with regulated utilities in California | |||
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May 2018 | Linnet F. Deily | Mandatory Director Retirement Policy | |||
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May 2018 | Robert E. Denham | Mandatory Director Retirement Policy | |||
- |
February 2018 | John S. Watson | Retirement from Chevron | |||
+ |
March 2018 | D. James Umpleby III | Strong background in international/environmental policy, heavy equipment engineering, and global workforce development | |||
+ |
November 2017 | John B. Frank | Legal and finance experience, and capital markets and risk management knowledge | |||
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September 2017 | Jon M. Huntsman Jr. | Nominated as the U.S. Ambassador to Russia | |||
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February 2017 | Michael K. Wirth | CEO succession planning |
* | Jon M. Huntsman Jr. previously served on Chevrons Board but resigned to serve as U.S. Ambassador to Russia. For purposes of calculating tenure going forward, we include only his current term. |
The Governance Committee considers Director candidates suggested for nomination to the Board from stockholders, Directors, and other sources. Directors periodically suggest possible candidates, and, from time to time, the Governance Committee may engage a third-party consultant to assist in identifying potential candidates. The Governance Committee has retained director search firms to assist with identifying potential candidates. Ms. Hewson was recommended by a search firm, and Gov. Huntsman was contacted by members of our Board upon his departure from his service as U.S. Ambassador to Russia. Both were reviewed and recommended by our independent Governance Committee.
4 | Chevron Corporation2021 Proxy Statement |
election of directors
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The Governance Committee recommended, and the Board set, a current Board size of 12 Directors. Each of the Director nominees is a current Director.
Director Summary
Committee Composition(1) | ||||||||||||||||||
Director | Director Age(1) |
Director Since |
Principal Occupation |
IND(2) | AC(3) | BN&GC(4) | MCC(5) | PP&SC(6) | Other Current Public Company Directorships | |||||||||
Wanda M. Austin | 66 | 2016 | Retired President and CEO, The Aerospace Corporation | l | M | C | Amgen, Inc. Virgin Galactic Holdings, Inc. | |||||||||||
John B. Frank | 64 | 2017 | Vice Chairman, Oaktree Capital Group, LLC |
l | M | Oaktree Capital Group, LLC ¡ Oaktree Acquisition Corporation II ¡ Oaktree Specialty Lending Corporation | ||||||||||||
Alice P. Gast | 62 | 2012 | President, Imperial College London |
l | M | M | None | |||||||||||
Enrique Hernandez, Jr. | 65 | 2008 | Chairman and CEO, Inter-Con Security Systems, Inc. |
l | C | M | McDonalds Corporation | |||||||||||
Marillyn A. Hewson | 67 | 2021 | Retired Chairman, CEO, and President of Lockheed Martin Corporation | l | M | Johnson & Johnson | ||||||||||||
Jon M. Huntsman Jr.(7) | 61 | 2020 | Former U.S. Ambassador to Russia and China and former Governor of Utah | l | M | M | Ford Motor Company | |||||||||||
Charles W. Moorman IV | 69 | 2012 | Senior advisor to Amtrak Retired Chairman and CEO, Norfolk Southern Corporation |
l | C | Oracle Corporation | ||||||||||||
Dambisa F. Moyo | 52 | 2016 | CEO, Mildstorm LLC |
l | M | 3M Company | ||||||||||||
Debra Reed-Klages | 64 | 2018 | Retired Chairman, CEO, and President, Sempra Energy | l | M | Caterpillar Inc. Lockheed Martin Corporation | ||||||||||||
Ronald D. Sugar | 72 | 2005 | Retired Chairman and CEO, Northrop Grumman Corporation | L | C | M | Amgen Inc. Apple Inc. Uber Technologies, Inc. | |||||||||||
D. James Umpleby III | 63 | 2018 | Chairman and CEO, Caterpillar Inc. |
l | M | M | Caterpillar Inc. | |||||||||||
Michael K. Wirth | 60 | 2017 | Chairman and CEO, Chevron Corporation |
None |
Your Board recommends that you vote FOR each of these Director nominees.
Chevron Corporation2021 Proxy Statement | 5 |
election of directors
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Wanda M. Austin
Retired President and Chief Executive
Age: 66 Director Since: December 2016 Independent: Yes
Chevron Committees:
Board Nominating and Governance Public Policy and Sustainability (Chair)
Current Public Company Directorships:
Amgen Inc. Virgin Galactic Holdings, Inc.
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Prior Public Company Directorships (within last five years):
None
Other Directorships and Memberships:
Horatio Alger Association National Academy of Engineering University of Southern California (transitions to Life Trustee as of May 15, 2021) |
Dr. Austin has held an adjunct Research Professor appointment at the University of Southern Californias Viterbi Schools Department of Industrial and Systems Engineering since 2007. She has been Co-founder and Chief Executive Officer of MakingSpace, Inc., a leadership and STEM (science, technology, engineering, and math) consulting firm, since December 2017. She is a World 50 executive advisor, fostering peer-to-peer discussions among senior executives from some of the worlds largest companies. She served as Interim President of the University of Southern California from August 2018 until July 2019. She served as President and Chief Executive Officer of The Aerospace Corporation (Aerospace), a leading architect for the United States national security space programs, from 2008 until her retirement in 2016. From 2004 to 2007, she was Senior Vice President, National Systems Group, at Aerospace. Dr. Austin joined Aerospace in 1979.
skills and qualifications
Business Leadership / Operations: Eight years as CEO of Aerospace. Thirty-seven-year career with Aerospace included numerous senior management and executive positions. CEO of MakingSpace, Inc., since December 2017.
Finance: More than a decade of financial responsibility and experience at Aerospace. Audit Committee member at Amgen Inc.
Global Business / International Affairs: Internationally recognized for her work in satellite and payload system acquisition, systems engineering, and system simulation. Former CEO of a company that provides space systems expertise to international organizations. Director of companies with international operations.
Government / Regulatory / Public Policy: Served on the Presidents Council of Advisors on Science and Technology and the Presidents Review of U.S. Human Space Flight Plans Committee. Appointed to the Defense Policy Board, the Defense Science Board, and the NASA Advisory Council.
Science / Technology / Engineering: Ph.D. in Industrial and Systems Engineering from the University of Southern California, Master of Science in both Systems Engineering and Mathematics from the University of Pittsburgh. Thirty-seven-year career in national security space programs. Director at Amgen Inc., a biotechnology company, and Virgin Galactic Holdings, Inc., the worlds first commercial space line and vertically integrated aerospace company. Fellow of the American Institute of Aeronautics and Astronautics. Member of the National Academy of Engineering.
Research / Academia: Adjunct Research Professor at the University of Southern Californias Viterbi School of Engineering. Former Interim President of the University of Southern California.
6 | Chevron Corporation2021 Proxy Statement |
election of directors
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John B. Frank Vice Chairman, Oaktree Capital Group, LLC
Age: 64 Director Since: November 2017 Independent: Yes
Chevron Committees:
Audit audit committee financial expert
Current Public Company Directorships:
Oaktree Capital Group, LLC ¡ Oaktree Acquisition Corporation II ¡ Oaktree Specialty Lending Corporation |
Prior Public Company Directorships (within last five years):
None
Other Directorships and Memberships:
The James Irvine Foundation Wesleyan University XPRIZE Foundation |
Mr. Frank has been Vice Chairman since 2014, and Director since 2007, of Oaktree Capital Group, LLC (Oaktree Capital), a global investment management company with expertise in credit strategies. He is one of four members of Oaktree Capitals Executive Committee and was previously the firms principal executive officer. Mr. Frank was Oaktree Capitals Managing Principal from 2005 until 2014, having joined Oaktree Capital in 2001 as General Counsel. Prior to that, he served as a Partner of the Los Angeles law firm of Munger, Tolles & Olson LLP, where his practice focused on mergers and acquisitions and general corporate counseling.
skills and qualifications
Business Leadership / Operations: Over 20 years of service as senior executive of Oaktree Capital, a global investment management company, including service as principal executive officer, Vice Chairman, Director, Managing Principal, and General Counsel.
Finance: More than 21 years of financial responsibility and experience as a senior executive at Oaktree Capital, and as the partner responsible for financial affairs at the law firm of Munger, Tolles and Olson LLP.
Global Business / International Affairs: Senior executive of Oaktree Capital, which conducts business worldwide from 18 offices around the globe. Travels around the world to meet with Oaktree Capitals institutional clients and speak at international investment forums. Director of companies with international operations.
Government / Regulatory / Public Policy: Two decades of experience working with government officials regarding regulatory and public policy issues, including testimony before the U.S. Senate Finance Committee and as a senior executive of Oaktree Capital. Served as a Legislative Assistant to the Honorable Robert F. Drinan, Member of Congress, and as a law clerk to the Honorable Frank M. Coffin of the U.S. Court of Appeals for the First Circuit.
Legal: Served as General Counsel of Oaktree Capital. Former Partner of Munger, Tolles & Olson LLP. Extensive experience with mergers and acquisitions and strategic, financial, and corporate governance issues. Law degree from the University of Michigan.
Chevron Corporation2021 Proxy Statement | 7 |
election of directors
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Alice P. Gast President, Imperial College London
Age: 62 Director Since: December 2012 Independent: Yes
Chevron Committees:
Board Nominating and Governance Public Policy and Sustainability
Current Public Company Directorships:
None |
Prior Public Company Directorships (within last five years):
None
Other Directorships and Memberships:
National Academy of Engineering Royal Academy of Engineering |
Dr. Gast has been President of Imperial College London, a public research university specializing in science, engineering, medicine, and business, since 2014. She was President of Lehigh University, a private research university, from 2006 until 2014 and Vice President for Research, Associate Provost, and Robert T. Haslam Chair in Chemical Engineering at Massachusetts Institute of Technology from 2001 until 2006. Dr. Gast was professor of chemical engineering at Stanford and the Stanford Synchrotron Radiation Laboratory from 1985 until 2001.
skills and qualifications
Environmental Affairs: At Imperial College London, oversees environmental institutes and centers and leads the university crisis management group. At Lehigh University, presided over environmental centers, advisory groups, and crisis management. Expertise in chemical and biological terrorism issues gained through service on several governmental committees.
Finance: Fifteen years of service as president of leading educational institutions, with ultimate responsibility for finance, fundraising, and endowment management.
Global Business / International Affairs: Served as a U.S. Science Envoy for the U.S. Department of State to advise on ways to foster and deepen relationships with the Caucasus and Central Asia. Serves on the Singapore Ministry of Educations Academic Research Council and on the Global Federation of Competitiveness Councils. Served on the Board of Trustees for the King Abdullah University of Science and Technology in Saudi Arabia.
Government / Regulatory / Public Policy: Served on the Homeland Security Science and Technology Advisory Committee. Chaired the scientific review committee empaneled by the National Research Council at the request of the FBI to conduct an independent review of the investigatory methods used by the FBI in the criminal case involving the mailing of anthrax spores. Served on the Board of UKRI, the UK Research and Innovation funding and policy body.
Research / Academia: More than three decades of service in academia and research at leading educational institutions.
Science / Technology / Engineering: M.A. and Ph.D. in chemical engineering from Princeton University. Former Vice President for Research, Associate Provost, and Robert T. Haslam Chair in Chemical Engineering at Massachusetts Institute of Technology and professor of chemical engineering at Stanford University and the Stanford Synchrotron Radiation Laboratory. Member of the National Academy of Engineering and the Royal Academy of Engineering.
8 | Chevron Corporation2021 Proxy Statement |
election of directors
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Enrique Hernandez, Jr. Chairman and Chief Executive Officer, Inter-Con Security Systems, Inc.
Age: 65 Director Since: December 2008 Independent: Yes
Chevron Committees:
Management Compensation (Chair) Public Policy and Sustainability
Current Public Company Directorships:
McDonalds Corporation
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Prior Public Company Directorships (within last five years):
Nordstrom, Inc. Wells Fargo & Company
Other Directorships and Memberships:
Catalyst Harvard College Visiting Committee Harvard University Resources Committee John Randolph Haynes and Dora Haynes Foundation Ronald McDonald House Charities
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Mr. Hernandez has been Chairman and Chief Executive Officer of Inter-Con Security Systems, Inc. (Inter-Con), a global provider of security and facility support services to governments, utilities, and industrial customers, since 1986. He was President of Inter-Con from 1986 until 2018 and was previously Executive Vice President and Assistant General Counsel from 1984 until 1986. He was an associate of the law firm of Brobeck, Phleger & Harrison from 1980 until 1984.
skills and qualifications
Business Leadership / Operations: More than three decades as Chairman and CEO of Inter-Con. Co-founder of Interspan Communications, a television broadcasting company. Chairman of the Board of McDonalds Corporation.
Finance: More than three decades of financial responsibility and experience at Inter-Con. Chaired the Audit Committee at McDonalds Corporation. Former Chair of the Finance Committee and the Risk Committee at Wells Fargo & Company. Former Audit Committee member at Great Western Financial Corporation, Nordstrom, Inc., Washington Mutual, Inc., and Wells Fargo & Company.
Global Business / International Affairs: CEO of a company that conducts business worldwide. Current and former director of companies with international operations.
Government / Regulatory / Public Policy: Trustee of the John Randolph Haynes Foundation, which has funded hundreds of important urban studies in education, transportation, local government elections, public safety, and other public issues. Former appointee and Commissioner and President of the Los Angeles Police Commission. Served on the U.S. National Infrastructure Advisory Committee.
Legal: Served as Executive Vice President and Assistant General Counsel of Inter-Con. Former litigation associate of the law firm of Brobeck, Phleger & Harrison. Law degree from Harvard Law School.
Chevron Corporation2021 Proxy Statement | 9 |
election of directors
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Marillyn A. Hewson Retired Chairman, President, and Chief Executive Officer of Lockheed Martin Corporation
Age: 67 Director Since: January 2021 Independent: Yes
Chevron Committees:
Audit audit committee financial expert
Current Public Company Directorships:
Johnson & Johnson |
Prior Public Company Directorships (within last five years):
DuPont, DowDuPont Inc. Lockheed Martin Corporation
Other Directorships and Memberships:
Catalyst (Chair) United Service Organizations (USO) Culverhouse College of Commerce & Business Administration, University of Alabama Board of Visitors University of Alabamas Presidents Cabinet
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Ms. Hewson has been strategic advisor to the CEO of Lockheed Martin Corporation (Lockheed Martin), a security and aerospace company principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products, and services since March 2021. She served as Executive Chairman from June 2020 to March 2021, and as Lockheed Martins Chairman, President and Chief Executive Officer from January 2014 to June 2020 and held the positions of President and Chief Executive Officer from January 2013 to December 2013. Ms. Hewson joined Lockheed Martin in 1983 as an industrial engineer and has held leadership positions across Lockheed Martin, including President and Chief Operating Officer and Executive Vice President of Lockheed Martins Electronic Systems business area.
skills and qualifications
Business Leadership / Operations: Served six years as Chairman, President, and CEO of Fortune 100 company. Thirty-eight-year career with Lockheed Martin included numerous senior management and executive positions, including over seven years as President and CEO.
Environmental Affairs: As Chairman, CEO, and President of Lockheed Martin, oversaw initiatives for energy and environmental stewardship, including Go Green, carbon and energy reduction, and water use reduction, and partnered with the United States Department of Energys Better Plants Program, and the Environmental Protection Agencys ENERGY STAR Program and Green Power Partnerships.
Finance: Former Chairman, President, and CEO of Fortune 100 company. More than three decades of financial responsibility and experience at Lockheed Martin.
Global Business / International Affairs: Former Chairman, President and CEO of Fortune 100 company with extensive international operations. Served on the Board of Trustees for the King Abdullah University Science and Technology in Saudi Arabia and Khalifa University in the United Arab Emirates. Current and former director of companies with international operations.
Government / Regulatory / Public Policy: At Lockheed Martin, a government contractor, oversaw development and production of military and rotary-wing aircraft for all five branches of the U.S. armed forces along with military services and commercial operations. Serves on the American Workforce Policy Advisory Board. Appointed by the President of the United States to the Presidents Export Council.
Science / Technology / Engineering: Served in a variety of senior management and executive positions at Lockheed Martin, a leading aerospace and advanced technology company, which positions required expertise in engineering and technology. Former director of DowDuPont, a global chemical company, and Chair of Sandia National Laboratories, one of three National Nuclear Security Administration research and development laboratories in the United States. Former Chair of the Aerospace Industries Association, Fellow of the Royal Aeronautical Society, and Associate Fellow of the American Institute of Aeronautics and Astronautics.
10 | Chevron Corporation2021 Proxy Statement |
election of directors
|
|
Jon M. Huntsman Jr. Former U.S. Ambassador to Russia and China and former Governor of Utah
Age: 61 Director Since: September 2020 Independent: Yes
Chevron Committees:
Management Compensation Public Policy and Sustainability
Current Public Company Directorships:
Ford Motor Company |
Prior Public Company Directorships (within last five years):
Caterpillar, Inc. Hilton Worldwide Holdings Inc.
|
Governor Huntsman is an American businessman, diplomat, and politician who served as U.S. Ambassador to Russia from 2017 to 2019. He served as Chairman of the Atlantic Council, a nonprofit that promotes leadership and engagement in international affairs from 2014 until 2017. He has served in the administrations of five Presidents and was a candidate for the Republican nomination for president of the United States in 2011. He was Chairman of the Huntsman Cancer Foundation, a nonprofit organization that financially supports research, education and patient care initiatives at Huntsman Cancer Institute at the University of Utah from 2012 until 2017. Governor Huntsman served as U.S. Ambassador to China from 2009 until 2011 and two consecutive terms as Governor of Utah from 2005 until 2009. Prior to his service as Governor, he served as U.S. Ambassador to Singapore, Deputy U.S. Trade Representative, and Deputy Assistant Secretary of Commerce for Asia.
skills and qualifications
Business Leadership / Operations: Served eight years as Vice Chairman of Huntsman Corporation and Chairman and CEO of Huntsman Holdings Corporation.
Environmental Affairs: As Governor of Utah, oversaw environmental policy, including signing the Western Climate Initiative, by which Utah joined with other U.S. state governments to pursue targets for reduced greenhouse gas emissions. Significant experience overseeing environmental practices and related matters as Vice Chairman of Huntsman Corporation and Chairman and CEO of Huntsman Holdings Corporation. Sustainability and Innovation Committee member at Ford Motor Company.
Finance: Former executive officer of Huntsman Corporation and Huntsman Holdings Corporation.
Global Business / International Affairs: Former U.S. Ambassador to Russia. Former Chairman of the Atlantic Council. Former Trustee of the National Committee on US-China Relations and of the Carnegie Endowment for International Peace. Former U.S. Ambassador to China. Former U.S. Ambassador to Singapore, Deputy U.S. Trade Representative, and Deputy Assistant Secretary of Commerce for Asia. Founding director of the Pacific Council on International Policy. Current and former director of companies with international operations.
Government / Regulatory / Public Policy: Former two-term Governor of Utah. Former Deputy U.S. Trade Representative and Deputy Assistant Secretary of Commerce for Asia. Former Co-Chair of No-Labels, a nonprofit organization that works across political party lines to reduce gridlock and create policy solutions.
Chevron Corporation2021 Proxy Statement | 11 |
election of directors
|
|
Charles W. Moorman IV Senior advisor to Amtrak and Retired Chairman and Chief Executive Officer, Norfolk Southern Corporation
Age: 69 Director Since: May 2012 Independent: Yes
Chevron Committees:
Audit (Chair) audit committee financial expert
Current Public Company Directorships:
Oracle Corporation |
Prior Public Company Directorships (within last five years):
Duke Energy Corporation
Other Directorships and Memberships:
Focused Ultrasound Foundation Georgia Tech Foundation Inc. National Academy of Engineering Nature Conservancy of Virginia Smithsonian National Board |
Mr. Moorman has been senior advisor to Amtrak, a passenger rail provider since 2018. He previously served as Amtraks coChief Executive Officer from July 2017 until his retirement in December 2017, and as President and Chief Executive Officer from September 2016 until July 2017. He was Chairman from 2006, and Chief Executive Officer from 2004, of Norfolk Southern Corporation (Norfolk Southern), a freight and transportation company, until his retirement in 2015. He served as President of Norfolk Southern from 2004 until 2013. Prior to that, Mr. Moorman was Senior Vice President of Corporate Planning and Services from 2003 until 2004 and Senior Vice President of Corporate Services in 2003. Mr. Moorman joined Norfolk Southern in 1975.
skills and qualifications
Business Leadership / Operations: Served more than a decade as CEO of Norfolk Southern. Forty-year career with Norfolk Southern included numerous senior management and executive positions, with emphasis on operations. Senior advisor and former CEO of Amtrak.
Environmental Affairs: At Norfolk Southern, gained experience with environmental issues related to transportation of coal, automotive, and industrial products. Former Virginia chapter chair and current Virginia chapter director of The Nature Conservancy, a global conservation organization. Served as a trustee of the Chesapeake Bay Foundation, whose mission is to protect the environmental integrity of the bay.
Finance: Former Chairman and CEO of Fortune 500 company. More than three decades of financial responsibility and experience at Norfolk Southern.
Government / Regulatory / Public Policy: More than four decades of experience in the highly regulated freight and transportation industry.
Science / Technology / Engineering: Forty-year career with Norfolk Southern included numerous senior management and executive positions requiring expertise in engineering and technology. Norfolk Southern builds and maintains track and bridges, operates trains and equipment, and designs and manages complex information technology systems. Member of the National Academy of Engineering.
12 | Chevron Corporation2021 Proxy Statement |
election of directors
|
|
Dambisa F. Moyo Chief Executive Officer, Mildstorm LLC
Age: 52 Director Since: October 2016 Independent: Yes
Chevron Committees:
Audit audit committee financial expert
Current Public Company Directorships:
3M Company |
Prior Public Company Directorships (within last five years):
Barclays plc Barrick Gold Corporation Seagate Technology
Other Directorships and Memberships: Condé Naste Department for International Trade Board |
Dr. Moyo has been Chief Executive Officer of Mildstorm LLC, a financial and economics firm, since she founded it in 2015. She is a global economist and commentator analyzing the macroeconomy and international affairs. Since 2008, Dr. Moyo has been engaged in researching, speaking, and writing about international macroeconomics. From 2001 to 2008, she worked at Goldman Sachs, a multinational investment bank and financial services company, in various roles, including as an economist. Prior to that she worked at the World Bank, an international financial institution in Washington, D.C., from 1993 until 1995.
skills and qualifications
Environmental Affairs: As director at Barrick Gold Corporation, served on the committee that considered and provided oversight on environmental matters.
Finance: Ten years of experience at Goldman Sachs and the World Bank. Ph.D. in economics from the University of Oxford and MBA in finance from the American University. Audit Committee member at 3M Company. Former Audit Committee and Risk Committee member at Barrick Gold Corporation.
Global Business / International Affairs: Traveled to more than 80 countries, with a particular focus on the interplay of international business and the global economy, while highlighting key opportunities for investment. Current and former director of companies with international operations.
Government / Regulatory / Public Policy: Ten years of experience in the highly regulated banking and financial services industry. MPA in Public Administration from John F. Kennedy School of Government, Harvard University.
Research / Academia: Author of four New York Times bestsellers. Dr. Moyos writing regularly appears in economics and finance-related publications.
Chevron Corporation2021 Proxy Statement | 13 |
election of directors
|
Debra Reed-Klages Retired Chairman, Chief Executive Officer and President, Sempra Energy
Age: 64 Director Since: December 2018 Independent: Yes
Chevron Committees:
Audit audit committee financial expert
Current Public Company Directorships:
Caterpillar Inc. Lockheed Martin Corporation |
Prior Public Company Directorships (within last five years):
Halliburton Company Oncor Electric Delivery Company LLC Sempra Energy
Other Directorships and Memberships: The Trusteeship, International Womens Forum Rady Childrens Hospital and Health Center Rady Childrens Hospital San Diego, CA State Farm Mutual Board of Directors University of Southern California Viterbi School of Engineering, Board of Councilors
|
Ms. Reed-Klages served as Chairman from 2012, Chief Executive Officer from 2011, and President from 2017 until her retirement in 2018 from Sempra Energy (Sempra), an energy services holding company whose operating units invest in, develop, and operate energy infrastructure and provide electric and gas services to customers in North and South America. Prior to that, she was Executive Vice President of Sempra from 2010 to 2011. From 2006 to 2010, she served as President and Chief Executive Officer of San Diego Gas and Electric and Southern California Gas Co. (SoCalGas), Sempras regulated California utilities. She joined SoCalGas in 1978 as an energy systems engineer.
skills and qualifications
Business Leadership / Operations: Served seven years as CEO of Sempra. Over three decades of experience in senior management and executive positions at Sempra, including responsibility for utility and infrastructure operations.
Environmental Affairs: As Chairman and CEO of Sempra, oversaw all aspects of Sempras environmental and sustainability policies and strategies, which include initiatives to address challenges like limiting water use, improving the quality and efficiency of operations, infrastructure development and access to energy, human health, and environmental safety.
Finance: Former Chairman and CEO of Fortune 500 company. More than a decade of financial responsibility and experience at Sempra. Former CFO of San Diego Gas & Electric and SoCalGas.
Global Business / International Affairs: Former Chairman and CEO of Fortune 500 company that conducts business in Mexico and South America. Current and former director of companies with international operations.
Government / Regulatory / Public Policy: At Sempra, worked with and adhered to the rules established by the California Public Utilities Commission, the principal regulator of Sempras California utilities. Served four years on the National Petroleum Council, a federally chartered advisory committee to the U.S. Secretary of Energy.
Science / Technology / Engineering: B.S. in civil engineering from the University of Southern California. Served in a variety of senior management and executive positions at Sempra, requiring expertise in engineering and technology. Director at Caterpillar, a manufacturer of construction and mining equipment, and Lockheed Martin, a global security and aerospace company.
14 | Chevron Corporation2021 Proxy Statement |
election of directors
|
|
Ronald D. Sugar Retired Chairman and Chief Executive Officer, Northrop Grumman Corporation
Lead Director Since: 2015
Age: 72 Director Since: April 2005 Independent: Yes
Chevron Committees:
Board Nominating and Governance (Chair) Management Compensation
Current Public Company Directorships:
Amgen Inc. Apple Inc. Uber Technologies, Inc.
|
Prior Public Company Directorships (within last five years):
Air Lease Corporation
Other Directorships and Memberships:
Los Angeles Philharmonic Association National Academy of Engineering Nexli Building Solutions, Inc. UCLA Anderson School of Management Board of Visitors University of Southern California |
Dr. Sugar is a senior advisor to various businesses and organizations, including Ares Management LLC, a private investment firm; Bain & Company, a global consulting firm; Temasek Americas Advisory Panel, a private investment company based in Singapore; and the G100 and World 50 peer-to-peer exchanges for current and former senior executives and directors from some of the worlds largest companies. He is also an advisor to Northrop Grumman Corporation (Northrop Grumman), a global aerospace and defense company, and was previously Northrop Grummans Chairman and Chief Executive Officer, from 2003 until his retirement in 2010, and President and Chief Operating Officer, from 2001 until 2003. He joined Northrop Grumman in 2001, having previously served as President and Chief Operating Officer of Litton Industries, Inc., a developer of military products, and earlier as an executive of TRW Inc., a developer of missile systems and spacecraft.
skills and qualifications
Business Leadership / Operations: Served seven years as CEO of Northrop Grumman. Held senior management and executive positions, including service as COO, at Northrop Grumman, Litton Industries, Inc., and TRW Inc.
Environmental Affairs: As Chairman, CEO, and President of Northrop Grumman, oversaw environmental assessments and remediations at shipyards and aircraft and electronics factories.
Finance: Former CFO of Fortune 500 company. More than three decades of financial responsibility and experience at Northrop Grumman, Litton Industries, Inc., and TRW Inc. Current Audit Committee Chair at Apple Inc. and former Audit Committee Chair at Chevron.
Global Business / International Affairs: Former CEO of Fortune 500 company with extensive international operations. Current and former director of companies with international operations.
Government / Regulatory / Public Policy: At Northrop Grumman, a key government contractor, oversaw development of weapons and other technologies. Appointed by the President of the United States to the National Security Telecommunications Advisory Committee. Former director of the World Affairs Council of Los Angeles.
Science / Technology / Engineering: B.S., M.S., and Ph.D. in engineering from the University of California at Los Angeles. Served in a variety of senior management and executive positions at Northrop Grumman, Litton Industries, Inc., and TRW Inc., requiring expertise in engineering and technology. Director at Amgen Inc., a biotechnology company; Apple Inc., a designer, manufacturer, and marketer of, among other things, personal computers and mobile communication and media devices; Uber Technologies, Inc., a technology company; and former director at BeyondTrust, a global cybersecurity company. Member of National Academy of Engineering.
Chevron Corporation2021 Proxy Statement | 15 |
election of directors
|
D. James Umpleby III Chairman and Chief Executive Officer, Caterpillar Inc.
Age: 63 Director Since: March 2018 Independent: Yes
Chevron Committees:
Board Nominating and Governance Management Compensation
Current Public Company Directorships:
Caterpillar Inc. |
Prior Public Company Directorships (within last five years):
None
Other Directorships and Memberships:
Business Roundtable The Business Council National Petroleum Council Peterson Institute for International Economics Rose-Hulman Institute of Technology U.S.-China Business Council U.S.-India Strategic Partnership Forum
|
Mr. Umpleby has been Chairman since 2018, and Chief Executive Officer since 2017, of Caterpillar Inc. (Caterpillar), a leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. He was Group President of Caterpillar from 2013 until 2016, with responsibility for Caterpillars energy and transportation business segment, and Vice President from 2010 to 2013. He joined Solar Turbines Incorporated, now a Caterpillar subsidiary, in 1980 as an associate engineer.
skills and qualifications
Business Leadership / Operations: Chairman and CEO of Fortune 100 company. More than three decades of experience in senior management and executive positions at Caterpillar, including responsibility for engineering, manufacturing, marketing, sales, and services.
Environmental Affairs: As Chairman and CEO of Caterpillar, oversees all aspects of Caterpillars environmental and sustainability policies and strategies, which include initiatives to address challenges like preventing waste, improving the quality and efficiency of operations, developing infrastructure, and ensuring access to energy, human health, and environmental safety. Served as a member of the Latin America Conservation Council, in partnership with The Nature Conservancy, a global conservation organization. Former director of the World Resources Institute, an international research nonprofit organization working to secure a sustainable future.
Finance: Chairman and CEO of Fortune 100 company. More than a decade of financial responsibility and experience at Caterpillar.
Global Business / International Affairs: Chairman and CEO of Fortune 100 company with extensive international operations. Served in assignments at Caterpillar in Singapore and Kuala Lumpur from 1984 to 1990. Director of the Peterson Institute for International Economics, the U.S.-China Business Council, and the U.S.-India Business Strategic Partnership Forum and a former member of the U.S.-India CEO Forum.
Science / Technology / Engineering: B.S. in Mechanical Engineering from the Rose-Hulman Institute of Technology. Has served in a variety of senior management and executive positions at Caterpillar, requiring expertise in engineering and technology.
16 | Chevron Corporation2021 Proxy Statement |
election of directors
|
|
Michael K. Wirth Chairman and Chief Executive Officer, Chevron Corporation
Age: 60 Director Since: February 2017 Independent: No
Chevron Committees:
None
Current Public Company Directorships:
None |
Prior Public Company Directorships (within last five years):
None
Other Directorships and Memberships:
American Heart Association CEO Roundtable American Petroleum Institute American Society of Corporate Executives The Business Council Business Roundtable Catalyst International Business Council of the World Economic Forum National Petroleum Council
|
Mr. Wirth has been Chairman and Chief Executive Officer of Chevron since February 2018. He was Vice Chairman in 2017 and Executive Vice President of Midstream & Development from 2016 until 2018, where he was responsible for supply and trading, shipping, pipeline, and power operating units; corporate strategy; business development; and policy, government, and public affairs. He served as Executive Vice President of Downstream & Chemicals from 2006 to 2015. From 2003 until 2006, Mr. Wirth was President of Global Supply & Trading. Mr. Wirth joined Chevron in 1982.
skills and qualifications
Business Leadership / Operations: Chairman and CEO of Chevron. Twelve years as Executive Vice President of Chevron. More than three decades of experience in senior management and executive positions at Chevron.
Environmental Affairs: As Chairman and CEO of Chevron, oversees all aspects of Chevrons environmental policies and strategies. Oversaw environmental policies and strategies of Chevrons Downstream & Chemicals and shipping and pipeline operations.
Finance: CEO of Fortune 100 company. More than a decade of financial responsibility and experience at Chevron.
Global Business / International Affairs: Chairman and CEO of Fortune 100 company with extensive international operations. Served as President of Marketing for Chevrons Asia/Middle East/Africa marketing business based in Singapore and served as director of Caltex Australia Ltd. and GS Caltex in South Korea.
Government / Regulatory / Public Policy: More than three decades of experience in highly regulated industry. As Chairman and CEO of Chevron, oversees all aspects of Chevrons government, regulatory, and public policy affairs.
Science / Technology / Engineering: B.S. in Chemical Engineering from the University of Colorado. More than three decades of experience at Chevron. Joined as a design engineer and advanced through a number of engineering, construction, marketing, and operations roles.
Each Director nominee who receives a majority of the votes cast (i.e., the number of shares voted FOR a Director nominee must exceed the number of shares voted AGAINST that Director nominee, excluding abstentions) will be elected a Director in an uncontested election. Any shares not voted (whether by abstention or otherwise) will have no impact on the elections. If you are a street name stockholder and do not vote your shares, your bank, broker, or other holder of record cannot vote your shares at its discretion in these elections.
If the number of Director nominees exceeds the number of Directors to be electeda circumstance we do not anticipatethe Directors shall be elected by a plurality of the shares present in person or by proxy at the Annual Meeting, or any adjournment or postponement thereof, and entitled to vote on the election of Directors.
Your Board recommends that you vote FOR the 12 Director nominees named in this Proxy Statement.
Chevron Corporation2021 Proxy Statement | 17 |
non-employee director compensation
In 2020, each non-employee Director received annual compensation of $375,000, with 40 percent paid in cash (or stock options at the Directors election) and 60 percent paid in restricted stock units (RSUs). An additional cash retainer, in the amounts described below, is paid to the Lead Director and each Committee Chair. Directors do not receive fees for attending Board or Board Committee meetings, nor do they receive fees for meeting with stockholders. Under the Chevron Corporation Non-Employee Directors Equity Compensation and Deferral Plan, as amended, and Plan Rules, as amended (together, the NED Plan), Chevrons Annual Compensation Cycle for its non-employee Directors is the period commencing on the day of the Annual Meeting at which the Director is elected through the day immediately preceding the next Annual Meeting.
Position
|
Cash Retainer(1)
|
RSUs(2)
| ||||
Non-Employee Director |
$ | 150,000 | $225,000 | |||
Lead Director |
$ | 30,000 | | |||
Audit Committee Chair |
$ | 30,000 | | |||
Board Nominating and Governance Committee Chair |
$ | 20,000 | | |||
Management Compensation Committee Chair |
$ | 25,000 | | |||
Public Policy and Sustainability Committee Chair |
$ | 20,000 | |
(1) | Each cash retainer is paid in monthly installments beginning with the date the Director is elected to the Board. Under the NED Plan, Directors can elect to receive nonstatutory/nonqualified stock options instead of any portion of their cash compensation. Directors can also elect to defer receipt of any portion of their cash compensation. Deferral elections must be made by December 31 in the year preceding the year in which the cash to be deferred is earned. Deferrals are credited, at the Directors election, into accounts tracked with reference to the same investment fund options available to participants in the Chevron Deferred Compensation Plan, including a Chevron Common Stock Fund. Distribution of deferred amounts is in cash except for amounts valued with reference to the Chevron Common Stock Fund, which are distributed in shares of Chevron common stock. |
(2) | RSUs are granted on the date of the Annual Meeting at which the Director is elected. If a Director is elected to the Board between annual meetings, a prorated grant is made. RSUs are paid out in shares of Chevron common stock unless the Director has elected to defer the payout until retirement. RSUs are subject to forfeiture (except when the Director dies, reaches mandatory retirement age of 74, becomes disabled, changes primary occupation, or enters government service) until the earlier of 12 months or the day preceding the first Annual Meeting following the date of the grant. |
expenses and charitable matching gift program
18 | Chevron Corporation2021 Proxy Statement |
director compensation
|
|
compensation during the fiscal year ended december 31, 2020
The following table sets forth the compensation of our non-employee Directors for the fiscal year ended December 31, 2020.
Name
|
Fees earned or ($)(1)
|
Stock ($)(2)
|
Option ($)(3)
|
All other ($)(4)
|
Total ($)
|
|||||||||||||||
Wanda M. Austin |
|
|
|
$ |
225,000 |
|
$ |
170,000 |
(5) |
$ |
10,654 |
|
$ |
405,654 |
| |||||
John B. Frank |
$ |
93,750 |
(6)(7) |
$ |
225,000 |
|
$ |
37,500 |
|
$ |
10,654 |
|
$ |
366,904 |
| |||||
Alice P. Gast |
$ |
150,000 |
(6) |
$ |
225,000 |
|
|
|
$ |
654 |
|
$ |
375,654 |
| ||||||
Enrique Hernandez, Jr. |
$ |
87,500 |
(5)(7)(8) |
$ |
225,000 |
|
|
|
$ |
10,654 |
|
$ |
323,154 |
| ||||||
Marillyn A. Hewson(9) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Jon M. Huntsman Jr.(10) |
$ |
29,258 |
|
$ |
156,387 |
|
|
|
$ |
179 |
|
$ |
185,824 |
| ||||||
Charles W. Moorman IV |
$ |
45,000 |
(5)(6)(7) |
$ |
225,000 |
|
$ |
90,000 |
(5) |
$ |
10,654 |
|
$ |
370,654 |
| |||||
Dambisa F. Moyo |
$ |
150,000 |
|
$ |
225,000 |
|
|
|
$ |
654 |
|
$ |
375,654 |
| ||||||
Debra Reed-Klages |
$ |
150,000 |
(6) |
$ |
225,000 |
|
|
|
$ |
654 |
|
$ |
375,654 |
| ||||||
Ronald D. Sugar |
$ |
200,000 |
(5)(6)(11) |
$ |
225,000 |
|
|
|
$ |
10,654 |
|
$ |
435,654 |
| ||||||
Inge G. Thulin |
$ |
12,500 |
(12) |
|
|
|
|
|
|
|
$ |
12,500 |
| |||||||
D. James Umpleby III
|
$
|
150,000
|
(6)
|
$
|
225,000
|
|
|
|
|
$
|
654
|
|
$
|
375,654
|
|
(1) | Form of compensation elected by a Director, as described above, can result in differences in reportable compensation. |
(2) | Amounts reflect the aggregate grant date fair value for RSUs granted in 2020 under the NED Plan. We calculate the grant date fair value of these awards in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, CompensationStock Compensation (ASC Topic 718), for financial reporting purposes. The grant date fair value of these RSUs was $93.30 per unit, the closing price of Chevron common stock on May 26, 2020, except for the prorated award for Gov. Huntsman. For Gov. Huntsman, the grant date fair value of these RSUs was $76.35 per unit, the closing price of Chevron common stock on September 15, 2020, the day he joined the Board. Gov. Huntsman received a prorated grant of 2,048 RSUs for the compensation period covering September 15, 2020, through May 25, 2021. RSUs accrue dividend equivalents, the value of which is factored into the grant date fair value. For purposes of this table only, estimates of forfeitures related to service-based vesting conditions have been disregarded. RSUs are payable in Chevron common stock. |
At December 31, 2020, the following Directors had the following number of shares subject to outstanding stock awards or deferrals:
Name
|
Restricted
|
Stock units(a)
|
RSUs(a)
|
Stock units from
|
Total
|
|||||||||||||||
Wanda M. Austin |
| | 2,485 | | 2,485 | |||||||||||||||
John B. Frank |
| | 7,906 | | 7,906 | |||||||||||||||
Alice P. Gast |
| | 17,062 | | 17,062 | |||||||||||||||
Enrique Hernandez, Jr. |
| | 19,586 | 1,369 | 20,955 | |||||||||||||||
Marillyn A. Hewson |
| | | | | |||||||||||||||
Jon M. Huntsman Jr. |
| | 2,076 | | 2,076 | |||||||||||||||
Charles W. Moorman IV |
| | 22,089 | 11,095 | 33,184 | |||||||||||||||
Dambisa F. Moyo |
| | 2,485 | | 2,485 | |||||||||||||||
Debra Reed-Klages |
| | 5,564 | 1,099 | 6,663 | |||||||||||||||
Ronald D. Sugar |
2,811 | 8,603 | 39,526 | 17,710 | 68,650 | |||||||||||||||
Inge G. Thulin |
| | 11,016 | 648 | 11,664 | |||||||||||||||
D. James Umpleby III
|
|
|
|
|
|
|
|
2,485
|
|
|
|
|
|
2,485
|
|
(a) | Represents awards of restricted stock and dividends and stock units and dividend equivalents from 2005 through 2006, and awards of RSUs and dividend equivalents beginning in 2007, rounded to whole units. Awards of restricted stock are fully vested and are settled in shares of Chevron common stock upon retirement. Awards of stock units and RSUs are settled in shares of Chevron common stock in either one or 10 annual installments following the Directors retirement, resignation, or death. The terms of awards of RSUs are described above. |
(b) | Represents deferred compensation and dividend equivalents, rounded to whole units. Distribution will be made in either one or 10 annual installments. Any deferred amounts unpaid at the time of a Directors death are distributed to the Directors beneficiary. |
(3) | For Directors electing to receive stock options in lieu of all or a portion of the annual cash retainer, the stock options are granted on the date of the Annual Meeting at which the Director is elected, with 50 percent vested on November 27, 2020, and 50 percent vesting on May 25, 2021. The aggregate grant date fair value is being reported as compensation in 2020, the year of grant, notwithstanding the Annual Compensation Cycle covering the period from May 27, 2020, through May 25, 2021. The stock options are exercisable for that number of shares of Chevron common stock determined by dividing the amount of the cash retainer subject to the election by the Black-Scholes value of a stock option on the date of grant. Elections to receive stock options in lieu of any portion of cash compensation must be made by December 31 in the year preceding the year in which the stock options are granted. The stock options have an exercise price based on the closing price of Chevron common stock on the date of grant. |
Amounts reported here reflect the aggregate grant date fair value for stock options granted on May 27, 2020. The grant date fair value was determined in accordance with ASC Topic 718 for financial reporting purposes. The grant date fair value of each option is calculated using the Black-Scholes model. Stock options granted on May 27, 2020, have an exercise |
Chevron Corporation2021 Proxy Statement | 19 |
director compensation
|
price of $93.90 and a grant date fair value of $14.12. The assumptions used in the Black-Scholes model to calculate this grant date fair value were: an expected life of 6.6 years, a volatility rate of 29.3 percent, a risk-free interest rate of 0.48 percent, and a dividend yield of 4.71 percent. For purposes of this table only, estimates of forfeitures related to service-based vesting conditions have been disregarded. |
Dr. Austin and Messrs. Frank and Moorman each elected to receive all or a part of their 2020 annual cash compensation in the form of stock options. The number of stock options granted in 2020 was 12,039 to Dr. Austin, 2,655 to Mr. Frank, and 6,373 to Mr. Moorman. One-half of the stock options vested on November 27, 2020, and the remaining half vests on May 25, 2021. Stock options expire after 10 years. |
At December 31, 2020, Dr. Austin had 23,471, Mr. Frank had 12,003, and Mr. Moorman had 28,809 outstanding, vested and unvested stock options. Under the NED Plan, Directors who retire in accordance with Chevrons Director Retirement Policy have until 10 years from the date of grant to exercise any outstanding options. |
(4) | All Other Compensation for 2020 includes the following items: |
Name
|
Insurance(a)
|
Perquisites(b)
|
Charitable(c)
| |||
Wanda M. Austin |
$ 654 |
|
$ 10,000 | |||
John B. Frank |
$ 654 |
|
$ 10,000 | |||
Alice P. Gast |
$ 654 |
|
| |||
Enrique Hernandez, Jr. |
$ 654 |
|
$ 10,000 | |||
Marillyn A. Hewson |
|
|
| |||
Jon M. Huntsman Jr. |
$ 179 |
|
| |||
Charles W. Moorman IV |
$ 654 |
|
$ 10,000 | |||
Dambisa F. Moyo |
$ 654 |
|
| |||
Debra Reed-Klages |
$ 654 |
|
| |||
Ronald D. Sugar |
$ 654 |
|
$ 10,000 | |||
Inge G. Thulin |
|
|
| |||
D. James Umpleby III
|
$ 654
|
|
|
(a) | Amounts reflect the annualized premium for accidental death and dismemberment insurance coverage paid by Chevron. |
(b) | Perquisites and personal benefits did not equal or exceed $10,000 for any Director in 2020. |
(c) | Amounts reflect payments made to charitable organizations under Chevron Humankind, our charitable matching gift and community involvement program, to match donations made by the Directors in 2020. |
(5) | Amount includes the additional retainer paid for serving as a Board Committee Chair during 2020. |
(6) | Director has elected to defer all or a portion of the cash retainer under the NED Plan in 2020. None of the earnings under the NED Plan are above market or preferential. |
(7) | Messrs. Frank, Hernandez, and Moorman each elected to receive all or a portion of his 2020 cash retainer covering the period from January 1, 2020, through May 26, 2020, in the 2019 Annual Compensation Cycle in stock options in lieu of cash. Accordingly, all or a portion of the cash retainer was reported as compensation in 2019. |
(8) | Reflects Mr. Hernandezs cash retainer covering the period from May 27, 2020, through December 31, 2020. |
(9) | Ms. Hewson joined the Board on January 1, 2021; therefore, she received no compensation in 2020. |
(10) | Gov. Huntsman joined the Board on September 15, 2020. |
(11) | Amount includes the additional cash retainer paid for serving as Lead Director during 2020. |
(12) | Mr. Thulin resigned from the Board effective January 1, 2020. Reflects Mr. Thulins cash retainer paid in January 2020 for his service as a Director for the period December 1, 2019, through December 31, 2019. |
20 | Chevron Corporation2021 Proxy Statement |
corporate governance
|
Diversity and Inclusion
We are committed to advancing diversity and inclusion in the workplace so that employees are enabled to contribute to their full potential. We believe innovative solutions to our most complex challenges emerge when diverse people, ideas, and experiences come together in an inclusive environment. We reinforce the value of diversity and inclusion through accountability, communication, training, and personnel selection processes. Examples of initiatives to further advance diversity and inclusion include our Neurodiversity program through which we employ neurodiverse individuals and leverage their talents, our Elevate program, which focuses on learning opportunities to promote a deeper understanding of employees in underrepresented groups, and our Returnship initiative, which provides support for women re-entering the workforce. In addition, we have 12 employee networks (voluntary groups of employees that come together based on shared identity or interests) and more than 15 diversity councils across our business units that help align diversity and inclusion efforts with business strategies. Through these programs, and others, we foster a culture that values the uniqueness and diversity of individual talents, experiences, and ideas.
Employee Engagement
24 | Chevron Corporation2021 Proxy Statement |
corporate governance
|
The Board of Directors and the Board Committees oversee Chevrons risk management policies, processes, and practices for the risk management systems throughout the Company. Chevron faces a broad array of risks, including without limitation market, operational, strategic, legal, regulatory, political, financial, cybersecurity, sustainability, and climate change risks. The Board exercises its role of risk oversight in a variety of ways, including the following:
Board of Directors |
Monitors overall corporate performance, the integrity of financial and other controls, and the effectiveness of the Companys legal compliance and enterprise risk management programs, risk governance practices, and risk mitigation efforts, particularly with regard to those risks specified by the Company as Risk Factors in its Annual Report on Form 10-K
Oversees managements implementation and utilization of appropriate risk management systems at all levels of the Company, including operating companies, business units, corporate departments, and service companies
Reviews specific facilities and operational risks as part of visits to Company operations
Reviews portfolio, capital allocation, and geopolitical risks in the context of the Boards annual strategy session and the annual business plan and capital budget review and approval process
Receives reports from management on and considers risk matters in the context of the Companys strategic, business, and operational planning and decision making
Receives reports from management on, and routinely considers, critical risk topics such as operational, financial, geopolitical/legislative, strategic, geological, security, commodity trading, skilled personnel/human capital, capital project execution, civil unrest, legal, technology/cybersecurity risk, and climate change risks
| |
Audit Committee |
Assists the Board in fulfilling its oversight of accounting and financial reporting processes, including the audits and integrity of the Corporations financial statements, financial risk exposures as part of Chevrons broad enterprise management program, the qualifications, performance and independence of the independent auditor, the effectiveness of internal controls over financial reporting, and the implementation and effectiveness of Chevrons compliance programs and Internal Audit function
Meets with and reviews reports from Chevrons independent registered public accounting firm and internal auditors
Discusses Chevrons policies with respect to financial risk assessment and financial risk management including, but not limited to, cybersecurity and sustainability and climate change risks
Meets with Chevrons Chief Compliance Officer and certain members of Chevrons Compliance Policy Committee to receive information regarding compliance policies and procedures and internal controls
Meets with Chevrons Chief Information Officer to review cybersecurity implications and risk management on financial exposures
Reports its discussions to the full Board for consideration and action when appropriate
|
Chevron Corporation2021 Proxy Statement | 25 |
corporate governance
|
Board Nominating and Governance Committee |
Assists the Board in fulfilling its oversight of risks that may arise in connection with Chevrons governance practices and processes
Conducts an annual evaluation of Chevrons governance practices with the help of the Corporate Governance Department
Discusses risk management in the context of general governance matters, including topics such as Board succession planning to ensure desired skills and attributes are represented, including but not limited to diversity, business leadership, finance, policy, and environmental and climate change experience; Board and individual Director assessment; delegations of authority and internal approval processes; stockholder proposals and activism; and Director and officer liability insurance
In conjunction with the Public Policy and Sustainability Committee, oversees Chevrons stockholder engagement program and makes recommendations regarding stockholder engagement
Reports its discussions to the full Board for consideration and action when appropriate
| |
Management Compensation Committee |
Assists the Board in fulfilling its oversight of risks that may arise in connection with Chevrons compensation programs and practices
Reviews the design and goals of Chevrons compensation programs and practices in the context of possible risks to Chevrons financial and reputational well-being, and alignment with stockholders interests, including those related to sustainability and climate change risks and opportunities.
Reviews Chevrons strategies and supporting processes for executive retention and diversity
Reports its discussions to the full Board for consideration and action when appropriate
| |
Public Policy and Sustainability Committee |
Assists the Board in fulfilling its oversight of risks that may arise in connection with the social, political, environmental, human rights, and public policy aspects of Chevrons business and the communities in which it operates
Provides oversight and guidance on and receives reports regarding environmental matters, including those related to sustainability and climate change, in connection with Chevrons projects and operations
Discusses risk management in the context of, among other things, legislative and regulatory initiatives (including political activities such as political contributions and lobbying), safety and environmental stewardship, community relations, government and nongovernmental organization relations, and Chevrons global reputation
In conjunction with the Governance Committee, oversees Chevrons stockholder engagement program and makes recommendations regarding stockholder engagement
Reports its discussions to the full Board for consideration and action when appropriate
|
26 | Chevron Corporation2021 Proxy Statement |
corporate governance
|
Committees and membership |
Committee functions |
|||
Audit Charles W. Moorman IV, Chair* John B. Frank Marillyn A. Hewson Dambisa F. Moyo Debra Reed-Klages* |
Selects the independent registered public accounting firm for endorsement by the Board and ratification by the stockholders
Reviews reports of the independent registered public accounting firm and internal auditors
Reviews and approves the scope and cost of all services (including non-audit services) provided by the independent registered public accounting firm
Monitors the effectiveness of the audit process and financial reporting
Monitors the maintenance of an effective internal audit function
Reviews the adequacy of accounting, internal control, auditing, and financial reporting matters
Monitors implementation and effectiveness of Chevrons compliance policies and procedures
Assists the Board in fulfilling its oversight of enterprise risk management, particularly financial risks, including, but not limited to, cybersecurity and sustainability and climate change risks as they relate to financial risk exposures
Evaluates the effectiveness of the Audit Committee
|
|||
Board Nominating and Governance Ronald D. Sugar, Chair Wanda M. Austin* Alice P. Gast D. James Umpleby III |
Evaluates the effectiveness of the Board and its Committees and recommends changes to improve Board, Board Committee, and individual Director effectiveness
Assesses the size and composition of the Board to evaluate the skills and experience that are currently represented, as well as the skills and characteristics that the Board may find valuable in the future, including but not limited to diversity, business leadership, finance, policy, and environmental and climate change experience
Engages in succession planning for the Board and key leadership roles on the Board and its Committees
Recommends prospective Director nominees
Oversees the orientation process for new Directors and ongoing education for Directors
Reviews and approves non-employee Director compensation
Evaluates and recommends changes as appropriate in Chevrons Corporate Governance Guidelines, Restated Certificate of Incorporation, By-Laws, and other Board-adopted governance provisions
Assesses stock ownership guidelines for Directors and the Directors ownership relative to the guidelines
Reviews stockholder proposals and recommends (in conjunction with the Public Policy and Sustainability Committee) Board responses to proposals
Assists the Board in fulfilling its oversight of enterprise risk management, particularly risks in connection with Chevrons corporate governance practices and processes
Evaluates the effectiveness of the Governance Committee
|
|||
Management Compensation Enrique Hernandez, Jr., Chair* Jon M. Huntsman Jr. Ronald D. Sugar D. James Umpleby III* |
Conducts an annual review of the CEOs performance
Reviews and recommends to the independent Directors salary and the short-term and long-term incentive compensation for the CEO
Reviews and approves salaries and short-term and long-term incentive compensation for executive officers other than the CEO
Reviews the annual Compensation Discussion and Analysis (CD&A) and recommends to the independent Directors to include in the Proxy Statement.
Administers Chevrons executive incentive and equity-based compensation plans
Reviews Chevrons strategies and supporting processes for executive retention and diversity
Reviews and approves executive compensation philosophy that aligns with Chevrons strategy and stockholder interests, including those related to sustainability and climate change risks and opportunities
Reviews and approves peer group(s) used to benchmark executive compensation levels, program design and practices, and relative performance
Assists the Board in fulfilling its oversight of enterprise risk management, particularly risks in connection with Chevrons compensation programs Evaluates the effectiveness of the MCC
|
|||
Public Policy and Sustainability Wanda M. Austin, Chair* Alice P. Gast Enrique Hernandez, Jr.* Jon M. Huntsman Jr. |
Identifies, monitors, and evaluates domestic and international environmental, social, human rights, political, and public policy matters, including those related to sustainability and climate change, that are relevant to Chevrons activities and performance
Assists the Board in devoting appropriate attention and effective response to stockholder concerns regarding such issues
Recommends to the Board policies, programs, and practices concerning support of charitable, political, and educational organizations
Reviews annually the policies, procedures, expenditures, and public disclosure practices related to Chevrons political activities, including political contributions and direct and indirect lobbying
Reviews stockholder proposals and recommends (in conjunction with the Governance Committee) Board responses to proposals
Assists the Board in fulfilling its oversight of enterprise risk management, particularly risks in connection with the environmental, social, human rights, political, and public policy aspects of Chevrons activities, and in doing so direct that the Company consider a broad range of perspectives
Evaluates the effectiveness of the Public Policy and Sustainability Committee |
* | Effective May 26, 2021, Ms. Reed-Klages will be the Chair of the Audit Committee; Ms. Austin will be the Chair of the Governance Committee, rotate off of the Public Policy and Sustainability Committee, and join the MCC; Mr. Moorman will be the Chair of the MCC, rotate off of the Audit Committee and join the Governance Committee; Mr. Hernandez will be the Chair of the Public Policy and Sustainability Committee; and Mr. Umpleby will rotate off of the MCC and join the Public Policy and Sustainability Committee. |
30 | Chevron Corporation2021 Proxy Statement |
corporate governance
|
corporate governance guidelines
Your Board has adopted Corporate Governance Guidelines to provide a transparent framework for the effective governance of Chevron. The Corporate Governance Guidelines are reviewed regularly and updated as appropriate. The full text of the Corporate Governance Guidelines can be found on our website at www.chevron.com/investors/corporate-governance. The guidelines address, among other topics:
business conduct and ethics code
We have adopted a code of business conduct and ethics for Directors, officers (including the Companys Chief Executive Officer, Chief Financial Officer, and Controller), and employees, known as the Business Conduct and Ethics Code, which is available on our website at www.chevron.com and is available in print upon request. We will post any amendments to the code on our website. Directors, officers, and employees certify biennially that they will comply with the code.
hedging, pledging, and other transactions
Members of the Board and members of Chevrons Global Leadership Forum are prohibited from:
Employees, other than those listed above, are generally permitted to engage in transactions involving Chevron securities that are designed to hedge or offset market risk.
Chevron Corporation2021 Proxy Statement | 31 |
corporate governance
|
chevrons approach to the energy transition
Climate change and our approach to the energy transition is one of the frequent topics in our engagements with stockholders and other stakeholders. In 2020, we received four stockholder proposals specifically related to this topic. Many of the issues raised in these climate changerelated proposals are addressed in Chevrons TCFD-aligned reports as well as on our website. Below, we provide a high-level summary of how Chevron is advancing the global energy transition and helping to achieve a lower carbon future for all.
Chevrons objective is to deliver higher returns, lower carbon. Chevron aims to be among the most efficient and responsible producers of energy. Chevrons energy transition strategy is to advance a lower carbon future and strive for actions that drive measurable progress toward the global net zero ambitions of the Paris Agreement. Our strategy is focused on three specific action areas:
| Lower carbon intensity cost efficiently |
| Increase renewables and offsets in support of our business |
| Invest in low-carbon technologies to enable commercial solutions |
Through 2028, Chevron plans to spend approximately $3 billion in advancing our energy transition strategy, which includes $2 billion in carbon reduction projects, $750 million in renewables and offsets, and $300 million committed to the Future Energy Fund II.
Chevrons energy-transition strategy is to help advance a lower carbon future. We aim to leverage our market position, assets, organizational capability, technology, and venture capital to pursue lower carbon opportunities and seek progress toward the ambitions of the Paris Agreement. We strive to apply our capabilities toward developing and commercializing breakthrough technologies, helping create lower carbon solutions that can compete effectively in the marketplace and ultimately achieve global scale.
Lower carbon intensity cost efficiently: In our first action area, we set metrics that communicate performance in the activities in which we participate. We establish our Upstream metrics on an equity basis and then on an individual commodity basis. We have established targeted carbon intensities for oil, gas, flaring, and methane to communicate our targeted performance transparently. In alignment with the Paris Agreement requirement that governments report their performance in five-year stocktakes, we have set metrics for 2023 and 2028 and intend to do so every five years thereafter. We have set 2016 as our baseline to align with the year the Paris Agreement came into force.
Our actions and progress are linked to virtually all employees compensation as part of the Chevron Incentive Plan (CIP) scorecard as described on pages 49 through 51. Below is a table of the Companys adopted metrics:
Chevron Upstream emissions intensity reduction metrics for 2028:
| ||||
24
|
kg CO2e/boe* for oil (global industry averages 46)
|
40% reduction from 2016
| ||
24
|
kg CO2e/boe* for gas (global industry averages 71)
|
26% reduction from 2016
| ||
2
|
kg CO2e/boe* for methane and a global methane detection campaign
|
53% reduction from 2016
| ||
0
|
routine flaring by 2030 and 3 kg CO2e/boe* for overall flaring
|
66% reduction from 2016
|
* | CO2e/boe = carbon dioxide equivalent/barrels of oil-equivalent |
Chevron Corporation2021 Proxy Statement | 33 |
corporate governance
|
Scope 3
Chevron believes the worlds continued demand for oil and gas should be supplied by the cleanest and most efficient producers. Chevron addresses Scope 3 emissions, by taking the following actions:
(1) Supporting a price on carbon through well-designed policies;
(2) Transparently reporting Scope 3 emissions from the use of our products; and
(3) Enabling customers to lower their emissions through increasing our renewable products, offering offsets, and investing in low-carbon technologies.
These contributions support a global approach to achieve the goals of the Paris Agreement as efficiently and cost-effectively as possible for society.
|
|
Increase renewables and offsets in support of our business: In our second action area, we are advancing opportunities to develop renewables and offsets that improve returns and help reduce Scope 2 and, in some cases, Scope 3 emissions. We are investing in renewable fuels, products, and power to reduce the carbon intensity of our operations and make energy and global supply chains more sustainable. By reducing carbon intensity across the supply chain, we have an even greater opportunity to help all others who rely on our products achieve their own lower carbon goals. We are also working to provide verified, low-cost, high-quality offsets to our customers around the world to help them achieve their own lower carbon goals.
Invest in low-carbon technologies to enable commercial solutions: Our third strategic focus is an integrated approach toward commercial solutions and technology. This includes supporting innovation and venture capital investment, deploying technologies that could be a part of a lower carbon future, and developing new commercial opportunities.
As part of our work on the energy transition, we aim to lead the industry in the transparency of our reporting so that we can hold ourselves responsible for our progress and our stakeholders can hold us accountable. We support access to reliable, verifiable carbon-footprinted data that is critical to measure contributions toward meeting Paris Agreement goals. We believe that our key actions support a global approach to achieving the goals of the Paris Agreement as efficiently and cost-effectively as possible for society.
Our energy transition strategy is aligned with our core strengths and depends on leveraging our unique capabilities, assets, and expertise. Our goal is to invest in projects that build on these strengths, deliver attractive returns, and advance our shared ambition for a lower carbon future. As a Company, we are focused on improving returns from our capital investments. This discipline runs through our capital allocation, mergers and acquisitions decisions, and low-carbon investments, and helps ensure we have the financial strength to play a key role in the energy transition.
The Governance Committee reviews interested-party communications, including stockholder inquiries directed to non-employee Directors. The Corporate Secretary and Chief Governance Officer compiles the communications, summarizes lengthy or repetitive communications and the responses sent, and takes further action, as appropriate. All communications are available to the Directors.
Interested parties wishing to communicate their concerns or questions about Chevron to the independent Lead Director or any other non-employee Director may do so by mail addressed to the Lead Director or Non-Employee Directors, c/o Office of the Corporate Secretary and Chief Governance Officer, 6001 Bollinger Canyon Road, San Ramon, CA 94583-2324 or by email to corpgov@chevron.com.
|
|
34 | Chevron Corporation2021 Proxy Statement |
corporate governance
|
management compensation committee report
The Management Compensation Committee (the Committee) of Chevron has reviewed and discussed with management the Compensation Discussion and Analysis beginning on page 38 of this Proxy Statement. Based on such review and discussion, the Committee recommended to the Board of Directors of the Corporation that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Corporations Annual Report on Form 10-K.
Respectfully submitted on March 30, 2021, by members of the Management Compensation Committee of your Board:
Enrique Hernandez, Jr., Chair |
Jon M. Huntsman Jr. |
Ronald D. Sugar |
D. James Umpleby III |
Chevron Corporation2021 Proxy Statement | 37 |
executive compensation
|
Note:
(4) | Figures rounded. |
Chevron Corporation2021 Proxy Statement | 39 |
executive compensation
|
highlights 2020 compensation outcomes & 2021 program design changes
The Chevron Board Management Compensation Committee (MCC) maintained a disciplined and consistent approach through an extremely challenging year. The key compensation outcomes and program design changes include the following:
2020 Highlights
|
||||
No adjustment to the annual bonus (i.e., Chevron Incentive Plan CIP) scorecard, no modifications to Long-Term Incentive Plan (LTIP) metrics and objectives, and no repricing of underwater options.
No annual bonus (i.e., 2020 CIP award) for any Named Executive Officer (NEO).
Performance shares (2018-2020) vested at 97 percent of target value, reflecting a 120 percent modifier based on the predefined payout formula, a lower stock price and dividend accrual. The relative TSR comparison, which includes industry peers and the S&P 500 Total Return Index, has been consistently applied since 2017.
|
||||
2021 Highlights and Changes
|
||||
No change in any NEOs 2021 salary.
No change in any NEOs 2021 target compensation level.
Added Energy Transition as one of the four CIP performance categories linking employees annual bonus to advancing a lower carbon future.
Added a second LTIP performance share metric, Relative ROCE Improvement linking LTIP to our focus on delivering higher returns.
|
pay philosophy and plan design
The material components of our executive compensation program are summarized in the following chart.
40 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
The MCC believes a large majority of each NEOs target compensation should be at risk based on Company performance (approximately 92 percent for the CEO and 84 percent for the other NEOs), and the majority of this at-risk compensation should be tied to Chevrons stock price. The amount NEOs eventually earn from their at-risk compensation will align strongly with what stockholders earn over that same period from their investment in Chevron.
2020 CEO compensation mix |
2020 other NEOs compensation mix | |
|
| |
*Comprised of the following equity vehicles: 50% Performance Shares, 25% RSUs, 25% Stock Options
2020 named executive officers
Chevrons Named Executive Officers, or NEOs |
Michael K. Wirth, Chairman and Chief Executive Officer |
Pierre R. Breber, Vice President and Chief Financial Officer |
James W. Johnson, Executive Vice President, Upstream |
Joseph C. Geagea, Executive Vice President, Technology, Projects & Services |
Mark A. Nelson, Executive Vice President, Downstream & Chemicals |
2020 NEO target compensation
The table below summarizes the 2020 target compensation opportunities the Board and the MCC approved for the NEOs. Details of Chevrons compensation philosophy and design can be found starting on page 45.
Name |
Base salary |
Target CIP |
LTIP target value |
Target total compensation |
||||||||||||
Michael K. Wirth |
$ |
1,650,000 |
|
$ |
2,640,000 |
|
$ |
15,500,000 |
|
$ |
19,790,000 |
| ||||
Pierre R. Breber |
$ |
1,020,000 |
|
$ |
1,122,000 |
|
$ |
4,002,320 |
|
$ |
6,144,320 |
| ||||
James W. Johnson |
$ |
1,210,000 |
|
$ |
1,452,000 |
|
$ |
5,197,500 |
|
$ |
7,859,500 |
| ||||
Joseph C. Geagea |
$ |
1,020,000 |
|
$ |
1,122,000 |
|
$ |
4,002,320 |
|
$ |
6,144,320 |
| ||||
Mark A. Nelson |
$ |
950,000 |
|
$ |
1,045,000 |
|
$ |
4,002,320 |
|
$ |
5,997,320 |
|
These amounts may differ from those shown in the Summary Compensation Table, based on actual salary received during the calendar year, the actual CIP award resulting from 2020 performance, and differences between the MCCs target LTIP valuation approach and the grant date fair value calculations as presented in the Summary Compensation Table.
Chevron Corporation2021 Proxy Statement | 41 |
executive compensation
|
response to say-on-pay advisory vote and stockholder engagement
2020 performance
42 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
Notes:
(2) | Total capital and exploratory expenditures include equity in affiliates. Figures rounded. |
(3) | Operating expenses, selling, general and administrative expenses and other components of net periodic benefit costs as reported in the consolidated statement of income (excludes affiliate spend). Figures rounded. |
Chevron Corporation2021 Proxy Statement | 43 |
executive compensation
|
CEO realizable pay
Notes
(1) | Target Value reflects: (i) base salary rate each year, (ii) target CIP award, and (iii) intended grant date value of LTIP awards (50 percent performance shares, 25 percent restricted stock units, and 25 percent stock options). |
(2) | Realizable Value at 12/31/2020 reflects: (i) paid base salary during the calendar year; (ii) the actual CIP award earned for that year, and (iii) the actual prevailing LTIP value at 12/31/2020. For (i) 2019 and 2020 performance shares: reflects 12/31/2020 TSR rank versus the LTIP Performance Share Peer Group and associated performance modifier (120 percent for both 2019 and 2020 grants) multiplied by Chevrons stock price at 12/31/2020 ($84.45), including dividend accrual; and (ii) for the 2018 performance shares: the amount earned and paid at 120 percent using the 20-day average trailing price of Chevron common stock at 12/31/2020 ($88.27), including dividend accrual. For restricted stock units, reflects Chevrons stock price at 12/31/2020 ($84.45) including dividend accrual. For stock options reflects that none of the past three awards is currently in the money, with exercise prices of $125.35 (2018), $113.01 (2019), and $110.37 (2020) relative to Chevrons common stock price at 12/31/2020 of $84.45. |
44 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
compensation discussion and analysis in detail
compensation planning and governance
The graphic below illustrates the timing and key governance elements of the executive compensation planning cycle:
use of peer groups
We are always competing for the best talent with our direct industry peers and with the broader market. Accordingly, the MCC regularly reviews the market data, pay practices, and compensation ranges among both oil industry peers and non-oil industry peers to ensure that we continue to offer a reasonable and competitive executive pay program. Our core peer group is reviewed regularly by the MCC, with input from the MCCs independent compensation consultant, and updated as appropriate. Throughout this Compensation Discussion and Analysis, we refer to three distinct peer groups, as described below. We source peer company data from compensation consultant surveys and public disclosures.
Peer group |
Description | |
Oil industry peer group (11 companies) |
Companies with substantial U.S. or global operations that closely approximate the size, scope, and complexity of our business or segments of our business.
This is the primary peer group used to understand how each NEOs total compensation compares with the total compensation for reasonably similar industry-specific positions.
Anadarko was removed from the benchmarks for 2020 compensation actions due to its acquisition by Occidental. Devon will be removed from the benchmarks for 2021 compensation actions due to its withdrawal from the reported survey data.
| |
Nonoil industry peer group (14 companies) | Companies of significant financial and operational size that have, among other features, global operations, significant assets and capital requirements, long-term project investment cycles, extensive technology portfolios, an emphasis on engineering and technical skills, and extensive distribution channels.
This is the secondary peer group used to periodically compare our overall compensation practices against a broader mix of non-oil companies that are similar to Chevron in size, complexity, and scope of operations.
In March 2019, the MCC approved the removal of GE from the benchmarks for 2020 compensation actions, due to change in its size and comparability.
In June 2019, DowDupont split into three companies. The new Dupont de Nemours was retained in the benchmark referenced for 2020 compensation actions and will be removed for benchmarking for 2021 compensation actions.
| |
LTIP performance share peer group (four companies & one stock index) |
Companies used to compare our TSR for the purpose of determining performance share payout: BP, ExxonMobil, Royal Dutch Shell, Total, and the S&P 500 Total Return Index.
The inclusion of the S&P 500 Total Return Index broadens the performance benchmark beyond industry peers and requires Chevron to outperform both industry peers and a market-based index in order to receive maximum payout. The MCC believes this further aligns executive pay with long-term stockholder interests.
Effective with the 2021 grant, a second metric Relative ROCE Improvement was added and measured against the large-cap integrated energy companies (BP, ExxonMobil, Royal Dutch Shell, and Total).
|
Chevron Corporation2021 Proxy Statement | 45 |
executive compensation
|
Note: (1) Total is part of the LTIP Performance Share Peer Group but not part of the Oil Industry Peer Group due to its limited U.S. operations. |
base salary
46 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
adjustments in 2020 base salaries
Name | Position |
2019 |
2020 |
Adjustment for 2020 |
||||||||||
Michael K. Wirth
|
Chairman and Chief Executive Officer
|
$
|
1,600,000
|
|
$
|
1,650,000
|
|
|
3.1
|
%
| ||||
Pierre R. Breber
|
Vice President and Chief Financial Officer
|
$
|
1,000,000
|
|
$
|
1,020,000
|
|
|
2.0
|
%
| ||||
James W. Johnson
|
Executive Vice President, Upstream
|
$
|
1,200,000
|
|
$
|
1,210,000
|
|
|
0.8
|
%
| ||||
Joseph C. Geagea
|
Executive Vice President, Technology, Projects & Services
|
$ |
1,000,000 |
|
$ |
1,020,000 |
|
|
2.0 |
% | ||||
Mark A. Nelson
|
Executive Vice President, Downstream & Chemicals
|
$ |
900,000 |
|
$ |
950,000 |
|
|
5.6 |
% |
* | Base salary refers to the approved annual salary rate as of the effective date. |
adjustments in 2021 base salaries
annual incentive plan (chevron incentive plan)
2020 CIP Highlights
|
||||
No adjustment to the annual bonus (i.e., CIP) scorecard.
No annual bonus (i.e., 2020 CIP award) for any NEO.
|
||||
2021 CIP Highlights and Changes
|
||||
Added Energy Transition as one of the four CIP performance categories linking employees annual bonus to advancing a lower carbon future.
|
Chevron Corporation2021 Proxy Statement | 47 |
executive compensation
|
The CIP award for the CEO and the other NEOs is calculated as follows:
Corporate Performance Rating
|
x |
Individual Bonus Component (base salary x bonus percentage)
| ||
À | À | |||
At the beginning of each performance year, the MCC reviews and approves the annual performance measures, weightings, and goals established with the Business Plan. After the end of the performance year, the MCC reviews and assesses Company performance metrics and sets the Corporate Performance Rating based on a range of measures in four categories.
Performance is viewed across multiple parameters (i.e., absolute results; results vs. Business Plan; results vs. Oil Industry Peer Group and/or general industry; performance trends over time). The performance measures are also assessed taking into account the elements that may be market- driven or otherwise beyond the control of management. See pages 49 and 50 for a discussion of 2020 performance.
The minimum Corporate Performance Rating is zero (i.e., no award), and the maximum is two (i.e., 200 percent).
|
The Individual Bonus Component (IBC) is determined by the MCC taking into account competitive bonus targets among oil peers and individual performance.
Before the beginning of each performance year, the MCC establishes a target as a percentage of the NEOs base salary, which is set with reference to target opportunities found across Chevrons Oil Industry Peer Group. The MCC then establishes a bonus range, which is 75 to 125 percent of the target for the 2020 performance cycle. All CIP participants in the same salary grade have the same target and bonus range, which provides for internal equity and consistency.
At the end of the performance year, the MCC determines the IBC for each NEO by selecting a percentage point within the bonus range based on an assessment of individual performance, including personal effort and initiative, business unit performance, and the individuals leadership impact on the enterprise. Under extraordinary circumstances, the IBC may be adjusted upward or downward, including to zero, for any employee at the sole discretion of the MCC.
The CEO recommends to the MCC an IBC for each NEO other than himself.
The MCC recommends the IBC for the CEO and approves the IBC for the other NEOs. The independent Directors of the Board approve the IBCs for the CEO and ratify the IBCs for the other NEOs.
|
Overall award capped at 200 percent of target |
2020 CIP corporate performance rating
48 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
Specific inputs to the MCCs evaluation are summarized below.
Category | Weight | Performance measures |
Year-end results vs. Plan
highlights Plan refers to Board- approved Business Plan |
Results(1) | Raw score (0.00 - 2.00) |
Weighted score | ||||||||
Financial results |
40% | Earnings(2) |
-$5.5B, significantly below Plan primarily driven by global economic conditions and COVID-19, resulting in lower Upstream realizations and Downstream margins and volumes, along with impairments and write-offs. Normalized earnings below Plan. 5-year EPS performance versus peers negatively impacted. |
0.20 0.30 | 0.08 0.12 | |||||||||
Cash flow(3) |
$10.6B, significantly below Plan. Normalized for price / market effects, slightly below Plan. |
| ||||||||||||
Divestiture proceeds |
$2.9B, below Plan, largely due to timing. Delivered proceeds above mid-point of $5B to $10B program guidance range (2018-2020). |
0.70 0.80 |
0.21 0.24 | |||||||||||
Capital management |
30% | Return on capital employed(4)(5) |
-2.8%, significantly below Plan, mainly due to lower earnings. Improved position relative to peers over 5-year period. |
|||||||||||
Organic Capital and exploratory expenditures, including equity in affiliates |
$13.1B, significantly better than Plan and exceeded announced 30% target reduction for 2020. |
| ||||||||||||
Major milestones | FGP / WPMP |
Completed module fabrication, all sealift activities, and restack / set on foundations of four Pressure Boost Facility compressor modules. Integration of 3GP / 3GI utility modules delayed due to resource reprioritization after COVID-19 demobilizations. |
||||||||||||
Permian |
Met unit development cost objective. | |||||||||||||
USGC II Petrochemicals |
Completed FEED in 4Q2020; project on hold. | |||||||||||||
Operating performance |
15% | Net production, excluding impact of divestments |
Annual growth at upper end of 0-3% guidance range. |
0.90 1.00 | 0.14 0.15 | |||||||||
Operating expense(6) |
$25.4B, slightly better than Plan despite severance charges. |
|||||||||||||
Refining utilization, including joint ventures and affiliates |
Short of Plan by 10.6 percentage points, largely due to COVID-19 impacts. |
|||||||||||||
Health, environmental, and safety |
15% | Personal safety(4,7,8) |
Total Recordable Injury rate led industry. Serious Injury count significantly better than Plan. Gaps in fatality prevention. |
1.50 1.60 | 0.23 0.24 | |||||||||
Process safety and environmental |
Record low with zero Severe Tier 1 loss of containment (LOC) incidents. LOC and spill volumes better than Plan. |
|||||||||||||
Greenhouse gas management |
On track to achieve oil, gas, flaring, and methane intensity reductions. |
|||||||||||||
Corporate Performance Rating Range | 0.65 0.75 | |||||||||||||
Final Corporate Performance Rating for NEOs | | |||||||||||||
Final Corporate Performance Rating for remaining employees | 0.75 |
Notes:
(1) | Results refer to met / exceeded Plan (green), met Plan with some gaps (yellow), or did not meet Plan (red). |
Chevron Corporation2021 Proxy Statement | 49 |
executive compensation
|
(2) | Normalized earnings exclude market factors beyond the control of management, including commodity price, foreign exchange, and uncontrollable tax impacts; comparison more accurately measures controllable performance. |
(3) | Cash Flow From Operating Activities as reported in the 2020 Consolidated Statement of Cash Flows; normalized cash from operating activities excludes the impact of commodity price and Downstream market and price effects. |
(4) | Relative peer comparisons based on externally disclosed results through the end of 3Q20. |
(5) | See ROCE calculation on page 46 and Definitions of Selected Financial Terms in Exhibit 99.1 of the Chevron Annual Report on Form 10-K for the year ended December 31, 2020. |
(6) | Operating expenses, selling, general, and administrative expenses, and other components of net periodic benefit costs as reported in the 2020 Consolidated Statement of Income (excludes affiliate spending). Figures rounded. |
(7) | Total Recordable Incident Rate sum of fatalities, DAFW cases, restricted duty (work activity) cases, and other recordable cases, per 200,000 work hours. |
(8) | Serious Injury injury that results in permanent or long-term impairment of an internal organ, body function, or body part. |
financial results40 percent
50 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
2020 NEO CIP awards
2021 CIP new energy transition measures
long-term incentive plan
2020 LTIP Highlights
|
||||
No modifications to LTIP metrics and objectives, and no repricing of underwater options.
Performance shares (2018-2020) vested at 97 percent of target value, reflecting a 120 percent modifier based on the predefined payout formula, a lower stock price and dividend accrual. The relative TSR comparison, which includes industry peers and the S&P 500 Total Return Index, has been consistently applied since 2017.
|
||||
2021 LTIP Highlights and Changes
|
||||
Added a second LTIP performance share metric, Relative ROCE Improvement linking LTIP to our focus on delivering higher returns.
|
Chevron Corporation2021 Proxy Statement | 51 |
executive compensation
|
The LTIP program comprises the following three equity vehicles:
Component
|
2020
|
How it works
|
||||||||||||||||||
Performance shares |
50% | Payout is dependent on Chevrons TSR over a three-year period, compared with TSRs of our LTIP Performance Share Peer Group. For the 2020 grant, the peer group is: ExxonMobil, BP, Shell, Total, and the S&P 500 Total Return Index.
|
||||||||||||||||||
Relative TSR ranking
|
1
|
2
|
3
|
4
|
5
|
6
|
||||||||||||||
2020 grant payout as a % of target
|
200%
|
160%
|
120%
|
80%
|
40%
|
0%
|
||||||||||||||
|
|
Performance shares accrue dividend equivalents that are reinvested as additional shares, to be paid at the end of the performance period and are subject to the same three-year cliff vesting schedule and performance modifier.
The MCC can exercise negative discretion to reduce the payout.
Actual number of shares granted is determined by dividing the proportionate value of the NEOs LTIP award by Chevrons closing common stock price on the grant date.
Payment is made in cash. Refer to Footnote 2 on pages 66 and 67 for calculation details.
|
||||||||||||||||||
RSUs |
25% | Actual number of RSUs granted is determined by dividing the proportionate value of the NEOs LTIP award by Chevrons closing common stock price on the grant date.
Five-year cliff vesting lengthens equity holding time, which enhances retention and alignment with stockholders.
RSUs accrue dividend equivalents that are reinvested as additional shares, to be paid at the time of vesting.
Payment is made in cash based on closing common stock price on the vesting date.
|
||||||||||||||||||
Stock options |
25% | Strike price is equal to Chevrons closing common stock price on the grant date.
Options vest and become exercisable at a rate of one-third per year for the first three years and expire 10 years after the grant date.
Gains realized depend on the Chevron common stock price at the time of exercise compared with the strike price.
Actual number of stock options granted is determined by dividing the proportionate value of the NEOs LTIP award by the Black-Scholes option value on the grant date, consistent with the grant date fair value calculation as presented in the Summary Compensation Table.
|
52 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
LTIP mix and timing why a mix of performance shares, RSUs, and options
2020 LTIP grants
In January 2020, the independent Directors, upon recommendation of the MCC, approved the LTIP award to the CEO and ratified the following LTIP awards to the other NEOs.
Name |
2020 LTIP target value* |
Performance |
RSUs |
Stock |
||||||||||||
Michael K. Wirth |
$ |
15,500,000 |
|
|
70,220 |
|
|
35,110 |
|
|
298,100 |
| ||||
Pierre R. Breber |
$ |
4,002,320 |
|
|
18,130 |
|
|
9,070 |
|
|
77,000 |
| ||||
James W. Johnson |
$ |
5,197,500 |
|
|
23,550 |
|
|
11,770 |
|
|
100,000 |
| ||||
Joseph C. Geagea |
$ |
4,002,320 |
|
|
18,130 |
|
|
9,070 |
|
|
77,000 |
| ||||
Mark A. Nelson |
$ |
4,002,320 |
|
|
18,130 |
|
|
9,070 |
|
|
77,000 |
|
* | The number of awarded performance shares, RSUs, and stock options was determined based on the Companys common stock price on January 29, 2020, the grant date Black-Scholes value for stock options, and a performance share factor of 100 percent reflecting expected performance at target. As these inputs may vary from those used for financial reporting, the target value shown above may not match the values presented in the Summary Compensation Table or the Grants of Plan-Based Awards in Fiscal Year 2020 table in this Proxy Statement on pages 60 and 63, respectively. |
Chevron Corporation2021 Proxy Statement | 53 |
executive compensation
|
2021 LTIP grants
In January 2021, the independent Directors, upon recommendation of the MCC, approved the LTIP award to the CEO and ratified the following LTIP awards to the other NEOs. The MCC and the independent Directors kept the CEO and other NEOs 2021 LTIP target values flat and made no change to the share calculation methodology. The number of shares increased modestly year-over-year due to a lower grant price. In addition, the MCC awarded Mr. Geagea a supplemental RSU grant of 18,150 shares in recognition of his extraordinary leadership in managing Chevrons global COVID-19 pandemic response, serving as integration executive for the acquisition of Noble Energy Inc., and leading the enterprise-wide business restructuring, in addition to his regular responsibilities. This is the first supplemental RSU award to a NEO since 2016.
Name |
2021 LTIP target value* |
Performance |
RSUs |
Stock | ||||||||||||||||
Michael K. Wirth |
|
$15,500,000 |
|
87,870 |
|
43,930 |
|
317,100 |
||||||||||||
Pierre R. Breber |
|
$ 4,002,300 |
|
22,690 |
|
11,340 |
|
81,900 |
||||||||||||
James W. Johnson |
|
$ 5,197,500 |
|
29,460 |
|
14,730 |
|
106,300 |
||||||||||||
Joseph C. Geagea |
|
$ 5,603,200 |
|
22,690 |
|
29,490 |
|
81,900 |
||||||||||||
Mark A. Nelson |
|
$ 4,002,300 |
|
22,690 |
|
11,340 |
|
81,900 |
* | The number of awarded performance shares, RSUs, and stock options was determined based on the Companys common stock price on January 27, 2021, the grant date Black-Scholes value for stock options, and a performance share factor of 100 percent reflecting expected performance at target. As these inputs may vary from those used for financial reporting, the target value shown above may not match the values presented in the 2022 Proxy Statements Summary Compensation Table or the Grants of Plan-Based Awards in Fiscal Year 2021 table. Mr. Geageas LTIP target value and awarded RSU shares include the supplemental RSU grant. |
2021 new performance share measure relative ROCE improvement
Effective with 2021 performance share grant, the MCC approved adding Relative ROCE Improvement as a second performance measure to align the performance share payout with Chevrons focus on increasing ROCE to sustain and grow the dividend. Performance shares continue to represent 50 percent of the LTIP grant value, with payout weighted 70 percent based on Relative TSR against the LTIP Performance Share Peer Group and 30 percent based on Relative ROCE Improvement against large-cap integrated energy companies (BP, ExxonMobil, Royal Dutch Shell, and Total).
Relative ranking
|
1
|
2
|
3
|
4
|
5
|
6
| ||||||
Relative TSR (70% weight, ranking includes S&P 500 Index) |
200% | 160% | 120% | 80% | 40% | 0% | ||||||
Relative ROCE Improvement (30% weight, ranking excludes S&P 500 Index) |
200% | 150% | 100% | 50% | 0% | n/a |
The MCC continues to believe TSR should be the primary overall pay-for-performance measure to align our CEOs and other NEOs performance with stockholder interests. It is objectively determined and allows for meaningful comparisons of our performance relative to other companies within the same industry, and to our stockholders other investment alternatives within the S&P 500 Index. Similar to TSR, ROCE is a standard performance measure by which stockholders measure a companys performance, and it allows for meaningful comparisons relative to peers within our industry. The MCC believes that the addition of Relative ROCE Improvement as a performance measure further strengthens the Companys alignment with stockholder interests and reinforces our focus on delivering higher returns.
retirement programs and other benefits
NEOs, like all other employees, have retirement programs and other benefits as part of their overall compensation package at Chevron. We believe these programs and benefits support our long-term investment cycle and encourage retention and long-term employment.
54 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
retirement programs
All of our employees, including our NEOs, have access to retirement programs that are designed to enable them to accumulate retirement income. The defined benefit and defined contribution restoration plans allow highly compensated employees to receive the same benefits they would have earned without the IRS limitations on qualified retirement plans under the Employee Retirement Income and Security Act. The deferred compensation plan allows eligible employees to defer salary, CIP awards, and LTIP payouts.
Plan name |
Plan type |
How it works |
Whats disclosed | |||
Chevron Retirement Plan (CRP) | Qualified Benefit |
Participants are eligible for a pension benefit when they leave the Company as long as they meet age, service, and other provisions under the plan. | In the Summary Compensation Table and the Pension Benefits Table in this Proxy Statement, we report the change in pension value in 2020 and the present value of each NEOs accumulated benefit under the CRP. | |||
Chevron Retirement Restoration Plan (RRP) |
Nonqualified |
Provides participants with retirement income that cannot be paid from the CRP due to IRS limits on compensation and benefits.(1) |
In the Pension Benefits Table and accompanying narrative in this Proxy Statement, we describe how the RRP works and present the current value of each NEOs accumulated benefit under the RRP. | |||
Employee Savings Investment Plan (ESIP) |
Qualified |
Participants who contribute a percentage of their annual compensation (i.e., base salary and CIP award) are eligible for a Company matching contribution, up to annual IRS limits.(2) |
In the footnotes to the Summary Compensation Table in this Proxy Statement, we describe Chevrons contributions to each NEOs ESIP account. | |||
Employee Savings Investment Plan Restoration Plan (ESIP-RP) |
Nonqualified Defined |
Provides participants with an additional Company matching contribution that cannot be paid into the ESIP due to IRS limits on compensation and benefits.(3) |
In the footnotes to the Nonqualified Deferred Compensation Table in this Proxy Statement, we describe how the ESIP-RP works. In the Summary Compensation Table and the Nonqualified Deferred Compensation Table, we present Chevrons contributions to each NEOs ESIP-RP account. | |||
Deferred Compensation Plan (DCP) |
Nonqualified |
Participants can defer up to: 90 percent of CIP awards and LTIP performance share payouts; and 40 percent of base salary above the IRS limit (IRS §401(a)(17)) for payment after retirement or separation from service. |
In the Nonqualified Deferred Compensation Table in this Proxy Statement, we report the aggregate NEO deferrals and earnings in 2020. |
(1) | IRS annual compensation limit was $285,000 in 2020. |
(2) | Participants who contribute at least 2 percent of their annual compensation to the ESIP receive a Company matching contribution of 8 percent (or 4 percent if they contribute 1 percent). |
(3) | Participants who contribute at least 2 percent of their base salary to the DCP receive an ESIP-RP Company matching contribution of 8 percent of their base salary that exceeds the IRS annual compensation limit. |
The change in pension value disclosed in the Summary Compensation Table on page 60 is not a current cash payment. It represents the change in the NEOs calculated pension value, which is paid only after retirement. The values remained high in 2020, due to actuarial factors beyond the normal salary increases and age/service increments:
| Lower interest rates, which increased the present value of pension benefits; and |
| Promotional pay increases, notably for Mr. Wirth who became CEO in February 2018 |
Pension values will continue to fluctuate up or down in any given year until an NEOs retirement, based on the actuarial factors described in further detail in the footnotes to the Summary Compensation Table on page 61. Among the factors discussed, we anticipate that the impact of Mr. Wirths CEO promotional pay increase has now been largely accounted for in the pension value and will level off in future years. As a result, the Company expects to report a substantially lower CEO pension accrual for 2021 and in future years, assuming other factors such as interest rates remain stable.
benefit programs
The same health and welfare programs, including post-retirement health care, that are broadly available to employees on our U.S. payroll also apply to NEOs, with no other special programs except executive physicals (as described below under Perquisites).
perquisites
We provide limited perquisites to eligible members of senior management, including the NEOs, as discussed below.
Ensuring the safety and security of our Chairman and CEO, Mr. Wirth, and the other NEOs is of critical importance to Chevron. Accordingly, perquisites include business-related security measures; in particular, these security measures include residential
Chevron Corporation2021 Proxy Statement | 55 |
executive compensation
|
and personal security and the aggregate incremental costs to Chevron for personal use of Chevron automobiles and corporate aircraft to ensure secure travel and protection. For security reasons, the Board has mandated that Mr. Wirth fly on the corporate aircraft for all business and personal travel whenever it is feasible, and Mr. Wirth is also provided with access to Chevrons cars, drivers, and security personnel for both business and personal use.
Further, consistent with peer practice and as part of our standard employee benefit package, we provide financial counseling services pursuant to Chevrons Financial Counseling Program to approximately 300 eligible members of senior management, including the NEOs, to assist them in obtaining professional advice on personal financial matters. We also provide executive physicals to approximately 50 eligible members of senior management, including the NEOs, to promote overall health and wellness.
The MCC periodically reviews our practices and disclosures with respect to perquisites. In footnote 6 to the Summary Compensation Table of this Proxy Statement on page 62, we report the value of each NEOs perquisites for 2020, as well as additional details regarding these perquisites.
56 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
best practice in compensation governance
To ensure independent oversight, stockholder alignment, and long-term sustainability, our executive compensation program has the following governance elements in place.
What we do
|
What we do not do
| |||||||
✓
|
Robust stockholder engagement plan to ensure alignment with stockholder interests
|
û
|
No excessive perquisites; all have a specific business rationale
| |||||
✓
|
Stock ownership guidelines for the Chief Executive Officer, six times base salary; for the Executive Vice Presidents and Chief Financial Officer, four times base salary
|
û
|
No individual supplemental executive retirement plans
| |||||
✓
|
Deferred accounts inaccessible until a minimum of one year following termination
|
û
|
No stock option repricing, reloads or exchanges without stockholder approval
| |||||
✓
|
Clawback provisions included in the CIP, LTIP, DCP, RRP, and ESIP-RP for misconduct
|
û
|
No loans or purchases of Chevron equity securities on margin
| |||||
✓
|
Significant CEO pay at risk (92 percent)
|
û |
No transferability of stock options (except in the case of death or a qualifying court order)
| |||||
✓
|
Thorough assessment of Company and individual performance
|
û
|
No stock options granted below fair market value
| |||||
✓ |
Robust succession planning process with Board review twice a year | û
|
No hedging or pledging of Chevron equity securities
| |||||
✓
|
MCC composed entirely of independent Directors
|
û
|
No change-in-control agreements for NEOs
| |||||
✓
|
Independent compensation consultant, hired by and reports directly to the MCC
|
û
|
No tax gross-ups for NEOs
| |||||
✓
|
MCC has discretion to reduce performance share payouts
|
û
|
No golden parachutes or golden coffins for NEOs
| |||||
✓
|
Annual assessment of incentive compensation risks
|
Chevron Corporation2021 Proxy Statement | 57 |
executive compensation
|
compensation governance: oversight and administration of the executive compensation program
role of the board of directors management compensation committee
independent compensation advice
compensation risk management
stock ownership guidelines
We require our NEOs to hold prescribed levels of Chevron common stock, further linking their interests with those of our stockholders. Executives have five years to attain their stock ownership guideline. Further, NEOs who have not attained their stock ownership guidelines are required to hold shares acquired under the LTIP program until such ownership requirements are met.
Position |
2020 ownership guidelines | |
CEO |
Six times base salary | |
Executive Vice Presidents and CFO |
Four times base salary | |
All Other Executive Officers |
Two times base salary |
Based upon our 250-day trailing average stock price ending December 31, 2020 ($87.87), Mr. Wirth had a stock ownership base salary multiple of 8.9. All other NEOs met their respective ownership requirement and had an average stock ownership base salary multiple of 7.1. The MCC believes these ownership levels provide adequate focus on our long-term business model.
employment, severance, and change-in-control agreements
In general, we do not maintain employment, severance, or change-in-control agreements with our NEOs. Upon retirement or separation from service for other reasons, NEOs are entitled to certain accrued benefits and payments generally available to other employees. We describe these benefits and payments in the Pension Benefits Table, the Nonqualified Deferred Compensation Table, and the Potential Payments Upon Termination or Change-in-Control table in this Proxy Statement.
58 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
compensation recovery policies
The Chevron Incentive Plan, Long-Term Incentive Plan, Deferred Compensation Plan, Retirement Restoration Plan, and Employee Savings Investment PlanRestoration Plan include provisions permitting us to claw back certain amounts of cash and equity awarded to an NEO at any time if the NEO engages in certain acts of misconduct, including, among other things: embezzlement; fraud or theft; disclosure of confidential information or other acts that harm our business, reputation or employees; misconduct resulting in Chevron having to prepare an accounting restatement; and failure to abide by post-termination agreements respecting confidentiality, non-competition, or non-solicitation.
hedging and pledging
Under our insider trading policy, our NEOs are prohibited from hedging and pledging Chevron securities, as described in more detail on page 31.
tax gross-ups
We do not pay tax gross-ups to our NEOs. We do provide standard expatriate packages, which include tax equalization payments, to all employees of the Company who serve on overseas assignments, including executive officers.
tax deductibility of NEO compensation
For years prior to 2018, Section 162(m) of the Internal Revenue Code (Code) limited companies deduction for compensation paid to the CEO and the other three most highly paid executives (excluding the CEO and CFO) to $1 million, but allowed for the deduction for performance-based compensation costs/expenses for amounts even in excess of the $1 million limit. Effective January 1, 2018, the Tax Cut and Jobs Act (TCJA) repealed this exclusion for performance-based compensation and expanded the class of affected executives, which means that all compensation paid to persons who in 2017, or any year following, were the CEO, CFO (in 2018 or later) or one of the other three most highly paid executives (excluding our CEO and CFO) will be subject to the cap of $1 million. For LTIP awards made on or prior to November 2, 2017, but not yet vested and/or paid out (other than time-based RSUs, which are not qualified under Section 162(m) and therefore are not deductible unless paid after the executive terminates), we expect that the Company will still be able to deduct those amounts, provided that the Company meets the requirements in the TCJA. In January 2021, the Board amended and restated the CIP to remove outdated terms that were designed to allow awards under the CIP to satisfy conditions in Section 162(m) of the Code that were repealed in 2017 by the TCJA.
Chevron Corporation2021 Proxy Statement | 59 |
executive compensation
|
The following table sets forth the compensation of our NEOs for the fiscal year ended December 31, 2020, and for the fiscal years ended December 31, 2019, and December 31, 2018, if they were NEOs in those years. The primary components of each NEOs compensation are also described in our Compensation Discussion and Analysis in this Proxy Statement.
Name and principal position |
Year |
Salary ($)(1) |
Stock ($)(2) |
Option ($)(3) |
Non-Equity ($)(4) |
Change in value
and ($)(5) |
All
other ($)(6) |
Total ($) | ||||||||||||||||||||||||||||||||
M.K. Wirth, Chairman and CEO |
|
2020 |
$ |
1,635,417 |
$ |
11,248,191 |
$ |
3,875,300 |
|
|
|
$ 11,414,991 |
|
$ 842,787 |
$ |
29,016,686 |
||||||||||||||||||||||||
|
2019 |
|
$ |
1,570,833 |
|
$ |
11,663,631 |
|
$ |
3,750,127 |
|
|
$ 2,280,000 |
|
|
$ 13,383,378 |
|
|
$ 422,693 |
|
$ |
33,070,662 |
| |||||||||||||||||
|
2018
|
|
$
|
1,468,750
|
|
$
|
10,102,641
|
|
$
|
3,312,399
|
|
|
$ 3,600,000
|
|
|
$ 1,229,552
|
|
|
$ 927,281
|
|
$
|
20,640,623
|
| |||||||||||||||||
P.R. Breber, Vice President and Chief Financial Officer |
|
2020 |
$ |
1,014,167 |
$ |
2,904,706 |
$ |
1,001,000 |
|
|
|
$ 3,327,613 |
|
|
$ 105,728 |
$ |
8,353,214 |
|||||||||||||||||||||||
|
2019 |
|
$ |
988,917 |
|
$ |
3,081,375 |
|
$ |
990,958 |
|
|
$ 1,045,000 |
|
|
$ 5,222,222 |
|
|
$ 91,948 |
|
$ |
11,420,420 |
| |||||||||||||||||
|
2018
|
|
$
|
948,875
|
|
$
|
2,934,703
|
|
$
|
962,251
|
|
|
$ 1,629,600
|
|
|
$ 1,445,807
|
|
|
$ 108,808
|
|
$
|
8,030,044
|
| |||||||||||||||||
J.W. Johnson, Executive Vice President, Upstream |
|
2020 |
$ |
1,207,083 |
$ |
3,771,805 |
$ |
1,300,000 |
|
|
|
$ 3,765,630 |
|
$ 157,538 |
$ |
10,202,506 |
||||||||||||||||||||||||
|
2019 |
|
$ |
1,180,458 |
|
$ |
4,003,471 |
|
$ |
1,286,979 |
|
|
$ 1,231,200 |
|
|
$ 7,479,507 |
|
|
$ 134,015 |
|
$ |
15,315,630 |
| |||||||||||||||||
|
2018
|
|
$
|
1,123,375
|
|
$
|
3,811,432
|
|
$
|
1,249,653
|
|
|
$ 2,284,100
|
|
|
$ 2,263,287
|
|
|
$ 194,135
|
|
$
|
10,925,982
|
| |||||||||||||||||
J.C. Geagea, Executive Vice President, Technology, Projects & Services |
|
2020 |
$ |
1,014,167 |
$ |
2,904,706 |
$ |
1,001,000 |
|
|
|
$ 2,929,733 |
|
|
$ 102,652 |
$ |
7,952,258 |
|||||||||||||||||||||||
|
2019 |
|
$ |
994,750 |
|
$ |
3,081,375 |
|
$ |
990,958 |
|
|
$ 992,800 |
|
|
$ 6,535,781 |
|
|
$ 414,139 |
|
$ |
13,009,803 |
| |||||||||||||||||
|
2018
|
|
$
|
979,083
|
|
$
|
2,934,703
|
|
$
|
962,251
|
|
|
$ 1,663,500
|
|
|
$ 1,210,881
|
|
|
$ 98,993
|
|
$
|
7,849,411
|
| |||||||||||||||||
M.A. Nelson, Executive Vice President, Downstream & Chemicals |
|
2020 |
$ |
935,417 |
$ |
2,904,706 |
$ |
1,001,000 |
|
|
|
$ 4,767,497 |
|
$ 96,354 |
$ |
9,704,974 |
||||||||||||||||||||||||
|
2019 |
|
$ |
847,292 |
|
$ |
3,081,375 |
|
$ |
990,958 |
|
|
$ 940,500 |
|
|
$ 3,843,391 |
|
|
$ 118,017 |
|
$ |
9,821,533 |
| |||||||||||||||||
(1) | Reflects actual salary earned during the fiscal year covered. The following table reflects the annual salary rate and effective date for the years in which each person was an NEO and the amounts deferred under the Deferred Compensation Plan (DCP). |
Name
|
Salary effective date
|
Salary
|
Total salary deferred under the DCP
| |||
M.K. Wirth
|
April 2020
|
$ 1,650,000
|
$ 27,008
| |||
April 2019
|
$ 1,600,000
|
$ 25,817
| ||||
February 2018
|
$ 1,500,000
|
$ 23,875
| ||||
P.R. Breber
|
April 2020
|
$ 1,020,000
|
$ 14,583
| |||
April 2019
|
$ 1,000,000
|
$ 14,178
| ||||
April 2018
|
$ 962,000
|
$ 13,478
| ||||
J.W. Johnson
|
April 2020
|
$ 1,210,000
|
$ 18,442
| |||
April 2019
|
$ 1,200,000
|
$ 18,009
| ||||
April 2018
|
$ 1,133,000
|
$ 16,968
| ||||
J.C. Geagea
|
April 2020
|
$ 1,020,000
|
$ 14,583
| |||
April 2019
|
$ 1,000,000
|
$ 14,295
| ||||
April 2018
|
$ 982,000
|
$ 14,082
| ||||
M.A. Nelson
|
April 2020
|
$ 950,000
|
$ 13,008
| |||
March 2019
|
$ 900,000
|
$ 11,346
|
We explain the amount of salary and non-equity incentive plan compensation in proportion to total compensation in our Compensation Discussion and AnalysisPay Philosophy and Plan Design. |
(2) | Amounts for each fiscal year reflect the aggregate grant date fair value of performance shares and RSUs granted under the LTIP on January 29, 2020. We calculate the grant date fair value of these awards in accordance with ASC Topic 718, as described in Note 20, Stock Options and Other Share-Based Compensation, to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2020. These RSUs and performance shares accrue dividend equivalents. For purposes of this table only, estimates of forfeitures related to service-based vesting conditions for awards have been disregarded. |
60 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
For performance shares granted on January 29, 2020, the per-share grant date fair value was $105.00. We use a Monte Carlo approach to calculate estimated grant date fair value. To derive estimated grant date fair value per share, this valuation technique simulates TSR for the Company and the LTIP peer group (BP, ExxonMobil, Royal Dutch Shell, Total, and the S&P 500 Total Return Index) using market data for a period equal to the term of the performance period, correlates the simulated returns within the peer group to estimate a probable payout value, and discounts the probable payout value using a risk-free rate for Treasury bonds having a term equal to the performance period. Performance shares are paid in cash, and the cash payout, if any, is based on market conditions at the end of the performance period (January 2020 through December 2022). Payout is calculated in the manner described in Footnote 2 to the Option Exercises and Stock Vested in Fiscal Year 2020 table in this Proxy Statement. If the maximum level of performance were to be achieved for the performance shares granted in 2020, the grant date value would be $220.74 per share (200 percent of the grant date stock price), or $15,500,363 for Mr. Wirth; $5,198,427 for Mr. Johnson; and $4,002,016 for Messrs. Breber, Geagea, and Nelson. |
The per-unit grant date fair value of the RSUs was $110.37, the closing price of Chevron common stock on the grant date. These RSUs earn dividend equivalents and are paid in cash upon vesting on January 31 following the fifth anniversary of the grant. Total payout will be based on the Chevron common stock closing price on the vesting date. |
The material terms of performance shares and RSUs granted in 2020 are described in the Grants of Plan-Based Awards in Fiscal Year 2020 and Outstanding Equity Awards at 2020 Fiscal Year-End tables in this Proxy Statement. |
(3) | Amounts for each fiscal year reflect the aggregate grant date fair value of nonstatutory/nonqualified stock options granted under the LTIP on January 29, 2020. The per-option grant date fair value was $13.00. We calculate the grant date fair value of these stock options in accordance with ASC Topic 718, as described in Note 20, Stock Options and Other Share-Based Compensation, to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2020. Stock options do not accrue dividends or dividend equivalents. For purposes of this table only, estimates of forfeitures related to service-based vesting conditions for awards have been disregarded. |
The material terms of stock options granted in 2020 are described in the Grants of Plan-Based Awards in Fiscal Year 2020 and Outstanding Equity Awards at 2020 Fiscal Year-End tables in this Proxy Statement. |
(4) | 2020 amounts reflect CIP awards for the 2020 performance year that would have been paid in March 2021. None of the NEOs received a CIP award for the 2020 performance year. See Compensation Discussion and AnalysisCompensation Discussion and Analysis in DetailAnnual Incentive Plan (Chevron Incentive Plan) for a detailed description of CIP awards. |
(5) | 2020 amounts represent the aggregate change in the actuarial present value of the NEOs pension value for the Chevron Retirement Plan (CRP) and the Chevron Retirement Restoration Plan (RRP) from January 1, 2020, through December 31, 2020, expressed as a lump sum. The DCP and ESIP-RP do not pay above-market or preferential earnings and are not represented in this table. For purposes of this disclosure, we have used the same amounts required to be disclosed in the Pension Benefits Table in this Proxy Statement. |
2020 changes in the actuarial present value of an NEOs pension value are attributable to five factors: |
Increases in highest average earnings (HAE) |
HAE is the highest consecutive 36-month average base salary and CIP awards. A significant portion of the changes in Messrs. Wirth and Nelsons pension values was due to large increases in salary and CIP awards tied to recent promotions. In addition, CIP awards were above target for the 2017 and 2018 performance years, which increased pensionable earnings for all NEOs. |
Interest rate impact |
Generally, a higher interest rate produces a lower pension value, and a lower interest rate produces a higher pension value. The lump sum interest rates for determining the actuarial present values of the pension benefit are based on the Pension Protection Act of 2006 lump sum interest rates, and such rates were lower in 2020 than those used in 2019 by an average of 0.9 percentage points. In addition, the 2020 discount rate used to discount pension values from age 60 to the NEOs current age, 2.4 percent, is lower than the 2019 discount rate of 3.1 percent. |
An additional year of age |
The CRP and RRP provide an unreduced benefit at age 60 for eligible participants. Generally, being a year older results in an increase in pension value due to a shorter discount period from the current age to the assumed retirement age of 60. Once an NEO reaches age 60, the discount rate no longer applies. Furthermore, the pension value can be negatively impacted when the assumed duration of future payments is shorter based on age and actuarial assumptions. |
An additional year of benefit service earned in 2020 |
All of the NEOs worked for a full year in 2020; as a result, their pension benefits increased because they earned an additional year of benefit service. |
Demographic assumption changes |
Current mortality tables project shorter life spans; as a result, pension benefits decrease. |
The following table provides a breakdown of the percent of change in the NEOs pension: |
Factors
| |||||||||||||||||||||||||||||||||||
Name
|
Total percent change in pension value, Jan.-Dec. 2020(a)
|
Higher HAE
|
Interest rate impact
|
One additional
|
One additional year of service
|
Demographic changes
| |||||||||||||||||||||||||||||
M.K. Wirth
|
|
36.4
|
%
|
|
17.2
|
%
|
|
11.1
|
%
|
|
4.6
|
%
|
|
3.6
|
%
|
|
(0.1%)
|
| |||||||||||||||||
P.R. Breber
|
|
23.3
|
%
|
|
6.3
|
%
|
|
9.2
|
%
|
|
4.3
|
%
|
|
3.6
|
%
|
|
(0.1%)
|
| |||||||||||||||||
J.W. Johnson
|
|
14.5
|
%
|
|
5.0
|
%
|
|
9.0
|
%
|
|
(2.3
|
%)
|
|
2.9
|
%
|
|
(0.1%)
|
| |||||||||||||||||
J.C. Geagea
|
|
13.9
|
%
|
|
4.2
|
%
|
|
9.1
|
%
|
|
(2.2
|
%)
|
|
2.9
|
%
|
|
(0.1%)
|
| |||||||||||||||||
M.A. Nelson
|
|
47.8
|
%
|
28.2 | % |
|
11.3
|
%
|
|
4.5
|
%
|
|
3.9
|
%
|
|
(0.1%)
|
|
(a) | Calculated as follows: (actuarial present value of accumulated benefit at December 31, 2020 (reported in the Pension Benefits Table in this Proxy Statement)actuarial present value of accumulated benefit at December 31, 2019 (reported in the Pension Benefits Table in last years Proxy Statement)) / actuarial present value of accumulated benefit at December 31, 2019 (reported in the Pension Benefits Table in last years Proxy Statement). |
Additional information concerning the present value of benefits accumulated by our NEOs under these defined benefit retirement plans is included in the Pension Benefits Table in this Proxy Statement. |
Chevron Corporation2021 Proxy Statement | 61 |
executive compensation
|
(6) | All Other Compensation for 2020 includes the following items, but excludes other arrangements that are generally available to our salaried employees on the U.S. payroll and do not discriminate in scope, terms, or operation in favor of our NEOs, such as our medical, dental, disability, group life insurance and vacation programs. |
M.K. Wirth |
P.R. Breber |
J.W. Johnson |
J.C. Geagea |
M.A. Nelson |
||||||||||||||||
ESIP Company Contributions(a) |
$ |
22,800 |
|
$ |
22,800 |
|
$ |
22,800 |
|
$ |
22,800 |
|
$ |
22,800 |
| |||||
ESIP-RP Company Contributions(a) |
$ |
108,033 |
|
$ |
58,333 |
|
$ |
73,767 |
|
$ |
58,333 |
|
$ |
52,033 |
| |||||
Perquisites(b) |
||||||||||||||||||||
Financial Counseling(c) |
$ |
19,305 |
|
$ |
24,595 |
|
$ |
21,928 |
|
$ |
18,101 |
|
$ |
18,801 |
| |||||
Motor Vehicles(d) |
$ |
15,187 |
|
|
|
|
|
|
|
$ |
18 |
|
|
|
| |||||
Corporate Aircraft(e) |
$ |
80,449 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Security(f) |
$ |
588,766 |
|
|
|
|
$ |
39,017 |
|
|
|
|
|
|
| |||||
Executive Physical(g) |
|
|
|
|
|
|
|
|
|
$ |
2,510 |
|
|
|
| |||||
Other(h) |
$ |
8,247 |
|
|
|
|
$ |
26 |
|
$ |
890 |
|
$ |
2,720 |
| |||||
Total, All Other Compensation |
$ |
842,787 |
|
$ |
105,728 |
|
$ |
157,538 |
|
$ |
102,652 |
|
$ |
96,354 |
|
(a) | The ESIP is a tax-qualified defined contribution plan open to employees on the U.S. payroll. The Company provides a matching contribution of 8 percent of annual compensation when an employee contributes 2 percent of annual compensation or 4 percent if they contribute 1 percent. Employees may also choose to contribute an amount above 2 percent, but none of the amount above 2 percent is matched. The Company match up to IRS limits ($285,000 of income in 2020) is made to the qualified ESIP account. For amounts above the IRS limit, the executive can elect to have 2 percent of base pay directed into the DCP, and the Company will match those funds with a contribution to the nonqualified ESIP-RP. Company contributions to the ESIP-RP are described further in the Nonqualified Deferred Compensation Table in this Proxy Statement. |
(b) | Reflects perquisites and personal benefits received by an NEO in 2020 to the extent that the total value of such perquisites and personal benefits was equal to or exceeded $10,000. Items deemed perquisites are valued on the basis of their aggregate incremental cost to the Company. We do not provide tax gross ups to our NEOs for any perquisites. |
(c) | Reflects amounts related to income tax preparation services, plus other services provided under Chevrons Financial Counseling Program, including life event, tax, investment, and estate planning services. |
(d) | The Company maintains cars and drivers that the NEOs may use for business transportation and, in certain circumstances, for personal travel. NEOs may reimburse the Companys incremental costs for any personal travel. For security reasons, Mr. Wirth is provided with access to the Companys cars, drivers, and security personnel for both business and personal use. The aggregate incremental cost for such personal use reflects the sum of (i) a percentage of the total variable operating costs (including fuel and incremental maintenance costs, if any) for each vehicle used for personal use, based on personal use miles divided by the total miles traveled per vehicle, and (ii) all amounts paid for driver overtime for personal use. |
(e) | Generally, executives are not allowed to use Company planes for personal use. For security reasons due to the nature of Chevrons business as a global integrated energy company, the Board mandates that Mr. Wirth fly on the corporate aircraft for all business and personal travel whenever it is feasible. Chevron U.S.A. Inc. (CUSA) and Mr. Wirth have entered into an Aircraft Time-Sharing Agreement pursuant to which Mr. Wirth may reimburse CUSA for his personal use of corporate aircraft in appropriate circumstances within amounts permitted under FAA regulations. On a very limited basis, the CEO may authorize the personal use of a Company plane by other persons if, for example, it is in relation to and part of a trip that is otherwise business-related, such as authorizing a spouse and/or other family members to accompany an executive on business travel (for which there was no incremental cost to the Company in 2020), or it is in connection with a personal emergency. Aggregate incremental cost was determined by multiplying the operating hours attributable to personal use by the 2020 average hourly direct operating costs, plus actual crew and security costs (for overnight lodging, meals, transportation, and other incremental costs), plus actual flight-specific incremental costs and fees, where applicable. |
(f) | For Mr. Wirth, reflects residential security, which includes network security and monitoring, security consulting fees ($81,323) and one-time perimeter and physical security enhancements as part of new home construction ($499,485) that were implemented in accordance with a security assessment conducted by Chevrons Global Security department, in conjunction with the review and recommendation of a third-party security firm, that took into account, among other factors, geopolitical conditions, media attention on Chevron and our industry, Mr. Wirths public visibility as our Chairman and CEO, and specifically targeted local security incidents. Although Chevron expects to incur ongoing maintenance and monitoring costs associated with providing residential security for Mr. Wirth, the costs for physical residential security enhancements are not expected to recur. Also included are incremental cost of security detail incurred in relation to personal air travel (for meals, transportation and lodging). For Mr. Johnson, includes residential security costs related to perimeter and physical security enhancements, network security and monitoring, and security consulting fees. |
(g) | Includes executive physical and/or related diagnostic procedures. |
(h) | Includes the aggregate incremental cost of tickets for performing arts events and commercial flights, meals, activities, ground transportation, and other amenities for corporate events or employee service anniversary trips attended by an NEO and their spouse. From time to time, the NEOs attend sporting or performing arts events for which Chevron is a corporate sponsor and for which the Company incurs no incremental cost. |
62 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
grants of plan-based awards in fiscal year 2020
The following table sets forth information concerning the grants of non-equity and equity incentive plan awards to our NEOs in 2020. Non-equity incentive plan awards are made under our CIP, and equity incentive plan awards (i.e., performance shares, RSUs and stock options) are made under our LTIP. These awards are also described in our Compensation Discussion and Analysis in this Proxy Statement.
Name | Award type |
Grant date |
Estimated future payouts under non-equity |
Estimated future payouts under equity incentive plan awards(2) |
All other stock awards: number of shares of stock or units (#)(3) |
All
other of |
Exercise base of |
Grant date fair and |
||||||||||||||||||||||||||
Threshold ($) |
Target ($) |
Max ($) |
Threshold (#) |
Target (#) |
Max (#) | |||||||||||||||||||||||||||||
M.K. Wirth |
CIP | | $ | 2,640,000 | $ | 5,280,000 | | | | | | | | |||||||||||||||||||||
Perf Shares | 1/29/2020 | | | | 14,044 | 70,220 | 140,440 | | | | $7,373,100 | |||||||||||||||||||||||
Options | 1/29/2020 | | | | | | | | 298,100 | $110.37 | $3,875,300 | |||||||||||||||||||||||
RSUs | 1/29/2020 | | | | | | | 35,110 | | | $3,875,091 | |||||||||||||||||||||||
P.R. Breber |
CIP | | $ | 1,122,000 | $ | 2,244,000 | | | | | | | | |||||||||||||||||||||
Perf Shares | 1/29/2020 | | | | 3,626 | 18,130 | 36,260 | | | | $1,903,650 | |||||||||||||||||||||||
Options | 1/29/2020 | | | | | | | | 77,000 | $110.37 | $1,001,000 | |||||||||||||||||||||||
RSUs | 1/29/2020 | | | | | | | 9,070 | | | $1,001,056 | |||||||||||||||||||||||
J.W. Johnson |
CIP | | $ | 1,452,000 | $ | 2,904,000 | | | | | | | | |||||||||||||||||||||
Perf Shares | 1/29/2020 | | | | 4,710 | 23,550 | 47,100 | | | | $2,472,750 | |||||||||||||||||||||||
Options | 1/29/2020 | | | | | | | | 100,000 | $110.37 | $1,300,000 | |||||||||||||||||||||||
RSUs | 1/29/2020 | | | | | | | 11,770 | | | $1,299,055 | |||||||||||||||||||||||
J.C. Geagea |
CIP | | $ | 1,122,000 | $ | 2,244,000 | | | | | | | | |||||||||||||||||||||
Perf Shares | 1/29/2020 | | | | 3,626 | 18,130 | 36,260 | | | | $1,903,650 | |||||||||||||||||||||||
Options | 1/29/2020 | | | | | | | | 77,000 | $110.37 | $1,001,000 | |||||||||||||||||||||||
RSUs | 1/29/2020 | | | | | | | 9,070 | | | $1,001,056 | |||||||||||||||||||||||
M.A. Nelson |
CIP | | $ | 1,045,000 | $ | 2,090,000 | | | | | | | | |||||||||||||||||||||
Perf Shares | 1/29/2020 | | | | 3,626 | 18,130 | 36,260 | | | | $1,903,650 | |||||||||||||||||||||||
Options | 1/29/2020 | | | | | | | | 77,000 | $110.37 | $1,001,000 | |||||||||||||||||||||||
RSUs | 1/29/2020 | | | | | | | 9,070 | | | $1,001,056 |
(1) | The CIP is an annual incentive plan that pays a cash award for performance and is paid in March following the performance year. See our Compensation Discussion and AnalysisCompensation Discussion and Analysis in DetailAnnual Incentive Plan (Chevron Incentive Plan) for a detailed description of CIP awards, including the criteria for determining the amounts payable. |
Target is a dollar value based on a percentage of an NEOs base salary set by the MCC. Actual 2020 performance-year CIP award results, which are approved in January 2021 and paid in March 2021, are reported in the Summary Compensation Table in the Non-Equity Incentive Plan Compensation column. Under the 2020 CIP, there is no threshold award. The maximum award is 200 percent of target for all CIP-eligible employees. |
(2) | Reflects performance shares granted under the LTIP. See our Compensation Discussion and AnalysisCompensation Discussion and Analysis in DetailLong-Term Incentive Plan for a detailed description of performance share awards, including the criteria for determining the cash amounts payable. Target is the number of performance shares awarded in 2020. If there is a payout, Threshold represents the lowest possible payout (20 percent of the grant) and Max reflects the highest possible payout (200 percent of the grant). The performance shares awarded in 2020 accrue dividend equivalents and are paid out in cash, and the cash payout, if any, will occur at the end of the three-year performance period (January 2020 through December 2022). Payout is calculated in the manner described in Footnote 2 to the Option Exercises and Stock Vested in Fiscal Year 2020 table in this Proxy Statement. |
(3) | Reflects RSUs granted under the LTIP. See our Compensation Discussion and AnalysisCompensation Discussion and Analysis in DetailLong-Term Incentive Plan for a detailed description of RSU awards. These RSUs accrue dividend equivalents and are paid in cash upon vesting on January 31 following the fifth annual anniversary of the grant date. Total payout will be based on the Chevron common stock closing price on the vesting date multiplied by the number of vested RSUs. |
(4) | Reflects nonstatutory/nonqualified stock options granted under the LTIP. See our Compensation Discussion and AnalysisCompensation Discussion and Analysis in DetailLong-Term Incentive Plan for a description of stock option awards. Stock options have a 10-year term. One-third vests each January 31, starting with the January 31 that is at least one year following the grant date. The value of stock options realized upon exercise is determined by multiplying the number of stock options by the difference between the fair market value at the time of exercise and the exercise price of the stock options. Stock option awards do not accrue dividends or dividend equivalents. |
(5) | The exercise price is the closing price of Chevron common stock on the grant date. |
(6) | We calculate the grant date fair value of each award in accordance with ASC Topic 718 and as described in Footnotes 2 and 3 to the Summary Compensation Table in this Proxy Statement. |
Chevron Corporation2021 Proxy Statement | 63 |
executive compensation
|
outstanding equity awards at 2020 fiscal year-end
The following table sets forth information concerning the outstanding equity incentive awards at December 31, 2020, for each of our NEOs.
Option awards | Stock awards | |||||||||||||||||||||||||||||||||||
Name(1) | Grant date of awards |
Number of securities underlying unexercised options (#) exercisable |
Number of securities underlying unexercised options (#) unexercisable(2) |
Option exercise price ($) |
Option expiration date |
Number of shares or |
Market value of shares or units of stock that have not vested ($)(4) |
Equity incentive plan awards: Number of unearned shares, units, or other rights that have not vested (#)(5) |
Equity incentive plan awards: Market or payout value of unearned shares, units, or other rights that have not vested ($)(6) |
|||||||||||||||||||||||||||
M.K. Wirth |
|
1/29/2020 |
|
|
|
|
|
298,100 |
|
$ |
110.37 |
|
|
1/29/2030 |
|
|
37,218 |
|
$ |
3,143,026 |
|
|
119,096 |
|
$ |
10,057,682 |
||||||||||
|
1/30/2019 |
|
|
78,966 |
|
|
157,934 |
|
$ |
113.01 |
|
|
1/30/2029 |
|
|
34,943 |
|
$ |
2,950,925 |
|
|
117,046 |
|
$ |
9,884,572 |
| ||||||||||
|
1/31/2018 |
|
|
121,400 |
|
|
60,700 |
|
$ |
125.35 |
|
|
1/31/2028 |
|
|
28,904 |
|
$ |
2,440,957 |
|
||||||||||||||||
|
1/25/2017 |
|
|
80,800 |
|
$ |
117.24 |
|
|
1/25/2027 |
|
|
11,998 |
|
$ |
1,013,194 |
|
|||||||||||||||||||
|
1/27/2016 |
|
|
239,900 |
|
$ |
83.29 |
|
|
1/27/2026 |
|
|||||||||||||||||||||||||
|
1/28/2015 |
|
|
164,600 |
|
$ |
103.71 |
|
|
1/28/2025 |
|
|||||||||||||||||||||||||
|
1/29/2014 |
|
|
90,000 |
|
$ |
116.00 |
|
|
1/29/2024 |
|
|||||||||||||||||||||||||
|
3/27/2013 |
|
|
3,000 |
|
$ |
120.19 |
|
|
3/27/2023 |
|
|||||||||||||||||||||||||
|
1/30/2013 |
|
|
90,000 |
|
$ |
116.45 |
|
|
1/30/2023 |
|
|||||||||||||||||||||||||
|
1/25/2012 |
|
|
105,000 |
|
$ |
107.73 |
|
|
1/25/2022 |
|
|||||||||||||||||||||||||
|
1/26/2011 |
|
|
132,000 |
|
$ |
94.64 |
|
|
1/26/2021 |
|
|||||||||||||||||||||||||
P.R. Breber |
|
1/29/2020 |
|
|
|
|
|
77,000 |
|
$ |
110.37 |
|
|
1/29/2030 |
|
|
9,614 |
|
$ |
811,941 |
|
|
30,749 |
|
$ |
2,596,778 |
| |||||||||
|
1/30/2019 |
|
|
20,866 |
|
|
41,734 |
|
$ |
113.01 |
|
|
1/30/2029 |
|
|
9,501 |
|
$ |
802,394 |
|
|
30,915 |
|
$ |
2,610,766 |
| ||||||||||
|
1/31/2018 |
|
|
35,266 |
|
|
17,634 |
|
$ |
125.35 |
|
|
1/31/2028 |
|
|
8,562 |
|
$ |
723,084 |
|
||||||||||||||||
|
1/25/2017 |
|
|
62,200 |
|
$ |
117.24 |
|
|
1/25/2027 |
|
|
9,319 |
|
$ |
787,012 |
|
|||||||||||||||||||
|
1/27/2016 |
|
|
234,900 |
|
$ |
83.29 |
|
|
1/27/2026 |
|
|||||||||||||||||||||||||
|
1/28/2015 |
|
|
86,300 |
|
$ |
103.71 |
|
|
1/28/2025 |
|
|||||||||||||||||||||||||
|
1/29/2014 |
|
|
45,000 |
|
$ |
116.00 |
|
|
1/29/2024 |
|
|||||||||||||||||||||||||
|
1/30/2013 |
|
|
37,000 |
|
$ |
116.45 |
|
|
1/30/2023 |
|
|||||||||||||||||||||||||
|
1/25/2012 |
|
|
37,000 |
|
$ |
107.73 |
|
|
1/25/2022 |
|
|||||||||||||||||||||||||
|
1/26/2011 |
|
|
13,000 |
|
$ |
94.64 |
|
|
1/26/2021 |
|
|||||||||||||||||||||||||
J.W. Johnson |
|
1/29/2020 |
|
|
|
|
|
100,000 |
|
$ |
110.37 |
|
|
1/29/2030 |
|
|
12,477 |
|
$ |
1,053,643 |
|
|
39,942 |
|
$ |
3,373,091 |
| |||||||||
|
1/30/2019 |
|
|
27,100 |
|
|
54,200 |
|
$ |
113.01 |
|
|
1/30/2029 |
|
|
11,995 |
|
$ |
1,012,991 |
|
|
40,174 |
|
$ |
3,392,656 |
| ||||||||||
|
1/31/2018 |
|
|
45,800 |
|
|
22,900 |
|
$ |
125.35 |
|
|
1/31/2028 |
|
|
10,903 |
|
$ |
920,785 |
|
||||||||||||||||
|
1/25/2017 |
|
|
80,800 |
|
$ |
117.24 |
|
|
1/25/2027 |
|
|
11,998 |
|
$ |
1,013,194 |
|
|||||||||||||||||||
|
1/27/2016 |
|
|
311,700 |
|
$ |
83.29 |
|
|
1/27/2026 |
|
|||||||||||||||||||||||||
|
1/28/2015 |
|
|
164,600 |
|
$ |
103.71 |
|
|
1/28/2025 |
|
|||||||||||||||||||||||||
|
1/29/2014 |
|
|
90,000 |
|
$ |
116.00 |
|
|
1/29/2024 |
|
|||||||||||||||||||||||||
|
1/30/2013 |
|
|
77,500 |
|
$ |
116.45 |
|
|
1/30/2023 |
|
|||||||||||||||||||||||||
|
1/25/2012 |
|
|
78,000 |
|
$ |
107.73 |
|
|
1/25/2022 |
|
|||||||||||||||||||||||||
|
1/26/2011 |
|
|
38,000 |
|
$ |
94.64 |
|
|
1/26/2021 |
|
64 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
Option awards | Stock awards | ||||||||||||||||||||||||||||||||||||||||||||
Name(1) | Grant date of awards |
Number of securities underlying unexercised options (#) exercisable |
Number of securities underlying unexercised options (#) unexercisable(2) |
Option exercise price ($) |
Option expiration date |
Number of shares or |
Market value of shares or units of stock that have not vested ($)(4) |
Equity incentive plan awards: number of unearned shares, units, or other rights that have not vested (#)(5) |
Equity incentive plan awards: market or payout value of unearned shares, units, or other rights that have not vested ($)(6) | ||||||||||||||||||||||||||||||||||||
J.C. Geagea |
|
1/29/2020 |
|
|
|
77,000 |
$ |
110.37 |
|
1/29/2030 |
|
9,614 |
$ |
811,941 |
|
30,749 |
$ |
2,596,778 |
|||||||||||||||||||||||||||
|
1/30/2019 |
|
20,866 |
|
41,734 |
$ |
113.01 |
|
1/30/2029 |
|
9,236 |
$ |
779,976 |
|
30,915 |
$ |
2,610,766 |
||||||||||||||||||||||||||||
|
1/31/2018 |
|
35,266 |
|
17,634 |
$ |
125.35 |
|
1/31/2028 |
|
8,399 |
$ |
709,291 |
||||||||||||||||||||||||||||||||
|
1/25/2017 |
|
62,200 |
$ |
117.24 |
|
1/25/2027 |
9,225 | $ | 779,085 | |||||||||||||||||||||||||||||||||||
|
1/27/2016 |
|
239,900 |
$ |
83.29 |
|
1/27/2026 |
||||||||||||||||||||||||||||||||||||||
|
1/28/2015 |
|
164,600 |
$ |
103.71 |
|
1/28/2025 |
||||||||||||||||||||||||||||||||||||||
|
1/29/2014 |
|
90,000 |
$ |
116.00 |
|
1/29/2024 |
||||||||||||||||||||||||||||||||||||||
|
1/30/2013 |
|
54,000 |
$ |
116.45 |
|
1/30/2023 |
||||||||||||||||||||||||||||||||||||||
|
1/25/2012 |
|
37,000 |
$ |
107.73 |
|
1/25/2022 |
||||||||||||||||||||||||||||||||||||||
1/26/2011 | 38,000 | $ | 94.64 | 1/26/2021 | |||||||||||||||||||||||||||||||||||||||||
M.A. Nelson |
|
1/29/2020 |
|
|
|
77,000 |
$ |
110.37 |
|
1/29/2030 |
|
9,614 |
$ |
811,941 |
|
30,749 |
$ |
2,596,778 |
|||||||||||||||||||||||||||
|
1/30/2019 |
|
20,866 |
|
41,734 |
$ |
113.01 |
|
1/30/2029 |
|
9,331 |
$ |
788,023 |
|
30,915 |
$ |
2,610,766 |
||||||||||||||||||||||||||||
|
1/31/2018 |
|
18,466 |
|
9,234 |
$ |
125.35 |
|
1/31/2028 |
4,396 | $ | 371,269 | |||||||||||||||||||||||||||||||||
|
1/25/2017 |
|
18,100 |
$ |
117.24 |
|
1/25/2027 |
|
2,681 |
$ |
226,440 |
||||||||||||||||||||||||||||||||||
|
1/27/2016 |
|
69,700 |
$ |
83.29 |
|
1/27/2026 |
||||||||||||||||||||||||||||||||||||||
|
1/28/2015 |
|
47,700 |
$ |
103.71 |
|
1/28/2025 |
||||||||||||||||||||||||||||||||||||||
|
1/29/2014 |
|
25,000 |
$ |
116.00 |
|
1/29/2024 |
||||||||||||||||||||||||||||||||||||||
|
1/30/2013 |
|
29,500 |
$ |
116.45 |
|
1/30/2023 |
(1) | Termination for reasons other than for misconduct may result in full or partial vesting of awards granted under the LTIP. Full or partial vesting depends upon the sum of an NEOs age plus his or her years of service. This policy is a reflection of our belief that the LTIP should be designed to encourage retention and support long-term employment. For a description of the effect of this policy on the outstanding LTIP awards of our NEOs, refer to the Potential Payments Upon Termination or Change-in-Control section of this Proxy Statement. |
(2) | Stock options have a 10-year term. 2016 and earlier grants vest at the rate of one-third per year, with vesting occurring on the first, second, and third annual anniversary of the grant date. For 2017 and later grants, one-third vests each January 31, starting with the January 31 that is at least one year following the grant date. Stock option awards do not accrue dividends or dividend equivalents. |
(3) | Represents unvested RSUs and dividend equivalents, rounded to whole units, that are paid out in cash at the end of the five-year vesting period. |
(4) | Market value is based upon number of RSUs that have not been vested or released, including, when applicable, dividend equivalents, multiplied by $84.45, the closing price of Chevron common stock on December 31, 2020. |
(5) | Represents performance shares and dividend equivalents, rounded to whole shares, that vest and are paid out in cash at the end of the applicable three-year performance period. The estimated shares for the 2019 and 2020 grant are based upon a 160% percent performance modifier. |
(6) | Represents the estimated cash payout value of performance shares based upon the number of performance shares, including dividend equivalents, multiplied by $84.45, the closing price of Chevron common stock on December 31, 2020. The estimated payout value for the 2019 and 2020 grants are based upon a 160% percent performance modifier. The estimated payout value may not necessarily reflect the final payout. The final payout will be calculated in the manner described in Footnote 2 to the Option Exercises and Stock Vested in Fiscal Year 2020 table in this Proxy Statement. |
Chevron Corporation2021 Proxy Statement | 65 |
executive compensation
|
option exercises and stock vested in fiscal year 2020
The following table sets forth information concerning the cash value realized by each of our NEOs upon exercise of stock options; vesting of performance share and restricted stock unit awards in 2020; and withholding of portions of unvested restricted stock unit awards to pay taxes.
Options | Stock awards | |||||||||||||||||||
Name
|
Number of
shares
|
Value realized on
|
Number of shares
|
Value realized on vesting ($)(2)
| ||||||||||||||||
M.K. Wirth |
|
67,500 |
$ |
3,197,620 |
|
74,218 |
$ |
6,551,462 |
||||||||||||
P.R. Breber |
|
5,000 |
$ |
42,425 |
|
11,385 |
$ |
1,005,020 |
||||||||||||
J.W. Johnson |
|
|
|
|
|
27,947 |
$ |
2,466,931 |
||||||||||||
J.C. Geagea |
|
|
|
|
|
21,514 |
$ |
1,899,075 |
||||||||||||
M.A. Nelson |
|
|
|
|
|
21,418 |
$ |
1,890,651 |
(1) | Value realized upon exercise was determined by multiplying the number of stock options exercised by the difference between the weighted average fair market value of Chevron common stock on the exercise date and the exercise price of the stock options. |
Name | Shares acquired on exercise |
Grant date |
Exercise price |
Exercise date |
Market price at exercise |
Value realized on exercise | ||||||||||||||||||||||||
M.K. Wirth |
|
33,750 |
|
1/27/2010 |
$ |
73.70 |
|
1/6/2020 |
$ |
121.0726 |
$ |
1,598,825 |
||||||||||||||||||
|
33,750 |
|
1/27/2010 |
$ |
73.70 |
|
1/6/2020 |
$ |
121.0717 |
$ |
1,598,795 |
|||||||||||||||||||
P.R. Breber |
|
5,000 |
|
1/27/2016 |
$ |
83.29 |
|
3/2/2020 |
$ |
91.7750 |
$ |
42,425 |
(2) | Represents the cash value of vested performance shares granted in 2018 for the performance period January 2018 through December 2020, paid in February 2021. Also includes the cash value of RSUs withheld to pay taxes on unvested RSUs no longer subject to substantial risk of forfeiture. Each of these is described further below. |
performance shares
We calculate the cash value of performance share payouts as follows:
First, we calculate our TSR and the TSR of our LTIP Performance Share Peer Group (BP, ExxonMobil, Royal Dutch Shell, Total and S&P 500 Total Return Index) for the three-year performance period. We calculate TSR for the three-year performance period as follows:
TSR = |
(20-day average ending share price () 20-day average beginning share price (+) reinvested dividend value) | |
20-day average beginning share price |
Ending refers to the last 20 trading days of the performance period. Beginning refers to the last 20 trading days prior to the start of the performance period. In each instance, we use closing prices to calculate the 20-day average.
The results are expressed as an annualized average compound rate of return.
Second, we rank our TSR against the TSR of our LTIP Performance Share Peer Group to determine the performance modifier applicable to the awards. Our rank then determines what the performance modifier will be, as follows:
Our rank |
1st |
2nd |
3rd |
4th |
5th |
6th | ||||||
Performance modifier |
200% |
160% |
120% |
80% |
40% |
0% |
For example, if we rank first in TSR as compared with our LTIP Performance Share Peer Group, then the performance modifier would be 200 percent. Under the rules of the LTIP, in the event our measured TSR is less than 1 percentage point of the nearest competitor(s), the results will be considered a tie, and the performance modifier will be the average of the tied ranks. For example, if Chevron ranks sixth in TSR and ties with the TSR of the peer that ranks fifth, it will result in a modifier of 20 percent (the average of 40 percent and 0 percent).
Third, we determine the cash value and payout of the performance share award, as follows:
Number of performance shares granted + dividend equivalents |
x | Performance modifier | x |
20-day trailing average price of Chevron common stock at the end of the performance period |
= | Cash value/payout |
66 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
For awards of performance shares made in 2018, the three-year performance period ended December 2020. Chevron came in third place, resulting in a performance modifier for the period of 120 percent. Accordingly, the cash value of the 2018 grant was calculated as follows:
Name | Shares granted plus dividend equivalents |
x | Modifier | = | Shares acquired on vesting |
x | 20-Day trailing average price |
= | Cash value/payout |
|||||||||||||||||||||
M.K. Wirth |
|
60,491 |
|
120% | 72,589 | $88.27 |
|
$ 6,407,475 |
| |||||||||||||||||||||
P.R. Breber |
|
17,569 |
|
120% | 21,083 |
$88.27 |
|
$ 1,861,017 |
| |||||||||||||||||||||
J.W. Johnson |
|
22,823 |
|
120% |
27,388 |
$88.27 |
|
$ 2,417,503 |
| |||||||||||||||||||||
J.C. Geagea |
|
17,569 |
|
120% |
21,083 |
$88.27 |
|
$ 1,861,017 |
| |||||||||||||||||||||
M.A. Nelson |
|
9,214 |
|
120% |
11,057 |
$88.27 |
|
$ 975,973 |
|
The cash value/payout includes the value of fractional shares.
Mr. Nelson elected to defer 25 percent of his 2018 performance share grant, or $243,993, to the DCP. Provisions of the DCP and distribution elections are described in the footnotes to the Nonqualified Deferred Compensation Table in this Proxy Statement.
restricted stock units
RSUs became part of the standard LTIP mix in 2017. These RSUs are subject to certain tax liabilities prior to vesting, when a substantial risk of forfeiture no longer exists. Generally, this event occurs when grant recipients reach age or age and service milestones. In December 2020, Chevron withheld the following RSUs from grants to pay taxes. The cash value of shares withheld includes the value of fractional shares withheld. Messrs. Wirth, Johnson, Geagea, and Nelson have more than 90 points, and the full FICA tax obligation for the 2017 and 2018 grants was paid in prior years, when the grants were no longer subject to substantial risk of forfeiture. Mr. Breber has not yet reached 90 points, and the cash value of his shares withheld is based on the pro-rata portion of his RSUs no longer subject to substantial risk of forfeiture.
Name |
Shares withheld |
Grant date |
Valuation |
Price used |
Cash value of |
|||||||||||||
M.K. Wirth |
1,629 |
|
1/30/2019 |
|
|
12/17/2020 |
|
|
$88.41 |
|
|
$ 143,988 |
| |||||
P.R. Breber |
85 |
|
1/25/2017 |
|
|
12/17/2020 |
|
|
$88.41 |
|
|
$ 7,555 |
| |||||
78 |
|
1/31/2018 |
|
|
12/17/2020 |
|
|
$88.41 |
|
|
$ 6,902 |
| ||||||
165 |
|
1/30/2019 |
|
|
12/17/2020 |
|
|
$88.41 |
|
|
$ 14,589 |
| ||||||
J.W. Johnson |
559 |
|
1/30/2019 |
|
|
12/17/2020 |
|
|
$88.41 |
|
|
$ 49,428 |
| |||||
J.C. Geagea |
430 |
1/30/2019 |
|
12/17/2020 |
|
|
$88.41 |
|
|
$ 38,058 |
| |||||||
M.A. Nelson |
335 |
|
1/30/2019 |
|
|
12/17/2020 |
|
|
$88.41 |
|
|
$ 29,635 |
|
(a) | Closing price of Chevron common stock on the NYSE on the valuation date. |
Chevron Corporation2021 Proxy Statement | 67 |
executive compensation
|
The following table sets forth information concerning the present value of benefits accumulated by our NEOs, under our defined benefit retirement plans, or pension plans.
Name | Plan name | Number of years credited service(1) |
Present value of accumulated benefit(2) |
Payments during last fiscal year | ||||
M.K. Wirth |
Chevron Retirement Plan |
35 |
$ 2,646,484 |
| ||||
Chevron Retirement Restoration Plan |
$ 40,108,805 |
| ||||||
P.R. Breber |
Chevron Retirement Plan |
31 |
$ 2,007,535 |
| ||||
Chevron Retirement Restoration Plan |
$ 15,615,709 |
| ||||||
J.W. Johnson |
Chevron Retirement Plan |
37 |
$ 2,649,724 |
| ||||
Chevron Retirement Restoration Plan |
$ 27,079,362 |
| ||||||
J.C. Geagea |
Chevron Retirement Plan |
36 |
$ 2,684,855 |
| ||||
Chevron Retirement Restoration Plan |
$ 21,361,396 |
| ||||||
M.A. Nelson |
Chevron Retirement Plan |
35 |
$ 2,400,956 |
| ||||
Chevron Retirement Restoration Plan |
$ 12,346,784 |
|
(1) | Credited service is computed as of the same pension plan measurement date used for financial statement reporting purposes with respect to Chevrons audited 2020 financial statements and is generally the period that an employee is a participant in the plan for which he or she is an eligible employee and receives pay from a participating company. Credited service does not include service prior to July 1, 1986, if employees were under age 25. Our NEOs have such preJuly 1, 1986, age 25 service. Their actual years of service are as follows: Mr. Wirth, 38 years; Mr. Johnson, 40 years; Mr. Geagea, 39 years; and Mr. Nelson, 36 years. |
(2) | Reflects the actuarial present value of the accumulated benefit as of December 31, 2020, computed as of the same pension plan measurement date used for financial statement reporting purposes with respect to Chevrons audited 2020 financial statements. A present value of the benefit is determined at the earliest age when participants may retire without any benefit reduction due to age (age 60, or current age if older, for the NEOs), using service and compensation as of December 31, 2020. This present value is then discounted with interest to the date used for financial reporting purposes. Except for the assumption that the retirement age is the earliest retirement without a benefit reduction due to age, the assumptions used to compute the present value of accumulated benefits are the assumptions described in Note 21, Employee Benefit Plans, to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2020. These assumptions include the discount rate of 2.4% percent as of December 31, 2020. This rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from yield curve analysis as described in Note 21. The present values reflect the lump sum forms of payment based on the lump sum interest rate assumptions used for financial reporting purposes on December 31, 2020, which are representative of the Pension Protection Act of 2006 lump sum interest rates. |
See Footnote 5 to the Summary Compensation Table in this Proxy Statement for a description of the factors related to the change in the present value of the pension benefit. |
Our NEOs are eligible for a pension after retirement and participate in both the Chevron Retirement Plan (CRP) (a defined-benefit pension plan that is intended to be tax-qualified under Internal Revenue Code section 401(a)) and the Chevron Retirement Restoration Plan (RRP) (an unfunded, nonqualified defined-benefit pension plan). The RRP is designed to provide benefits comparable with those provided by the CRP, but that cannot be paid from the CRP because of Internal Revenue Code limitations on benefits and earnings.
For employees hired prior to January 1, 2008, including all of our NEOs, the age 65 retirement benefits are calculated as a single life annuity equal to 1.6 percent of the participants highest average earnings multiplied by years of credited service, minus an offset for Social Security benefits. For this purpose, highest average earnings are the average of the highest base salary and CIP awards over 36 consecutive months. On December 31, 2020, the applicable annualized averages were: Mr. Wirth, $4,190,556; Mr. Breber, $2,320,783; Mr. Johnson, $2,913,833; Mr. Geagea, $2,331,167; and Mr. Nelson, $1,622,797.
The CRP benefit reflects the earnings limitation imposed by the Internal Revenue Code for qualified plans. On December 31, 2020, the applicable annualized earnings, after reflecting the average of the last three-year Internal Revenue Code Compensation limitations, was $280,000.
The RRP benefit reflects the difference between the total retirement benefit and the benefit provided under the CRP. The age 65 retirement benefits for employees hired prior to January 1, 2008, are actuarially reduced below age 50, reduced by early retirement discount factors of 5 percent per year from age 50 to age 60, and unreduced at age 60.
A participant is eligible for an early retirement benefit if he or she is vested on the date employment ends. Generally, a participant is vested after completing five years of service. All NEOs are eligible for an early retirement benefit, calculated as described above.
Despite the calculations above, all retirees may elect to have their benefits paid in the form of a single life annuity or lump sum. Joint and survivor annuity, life and term-certain annuity, and uniform income annuity options are also available under the CRP.
The equivalent of optional forms of annuity payment are calculated by multiplying the early retirement benefit by actuarial factors, based on age, in effect on the benefit calculation date. The Internal Revenue Code applicable interest rate and applicable mortality table are used for converting from one form of benefit to an actuarially equivalent optional form of benefit. Employees
68 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
can elect to have their CRP benefit commence prior to normal retirement age, which is age 65, but no earlier than when employment ends. CRP participants do not make distribution elections until separation from service.
The RRP may be paid as early as the first quarter that is at least one year following separation from service. Retirees may elect to receive the RRP lump sum equivalent in a single payment or in up to 10 annual installments.
Our NEOs made the following RRP distribution elections:
Name | Number of annual installments elected |
Time of first payment | ||
M.K. Wirth |
1 |
First quarter that is at least one year following separation from service | ||
P.R. Breber |
5 |
First January that is at least one year following separation from service | ||
J.W. Johnson |
4 |
First quarter that is at least one year following separation from service | ||
J.C. Geagea |
1 |
First quarter that is at least one year following separation from service | ||
M.A. Nelson |
10 |
First quarter that is at least one year following separation from service |
nonqualified deferred compensation table
In this section, we set forth information concerning the value of each NEOs compensation that is deferred pursuant to our DCP and our ESIP-RP.
DCP
The DCP is an unfunded and nonqualified defined contribution plan that permits NEOs to defer up to 90 percent of CIP awards, up to 90 percent of LTIP performance share awards, and up to 40 percent of salary. The DCP is intended to qualify as an unfunded pension plan maintained by an employer for a select group of management or highly compensated employees within the meaning of the Employee Retirement Income and Security Act.
DCP deferrals accrue earnings, including dividend equivalents and common stock price appreciation or depreciation, based upon an NEOs selection of investments from 15 different funds that are designated by the MCC and that are also available in the ESIP, Chevrons tax-qualified defined contribution plan open to employees on the U.S. payroll. DCP funds and their annual rates of return as of December 31, 2020, were:
Chevron Common Stock Fund |
|
-25.97 |
% | |
Capital Group EuroPacific Growth Trust (US) Class U3 |
|
24.86 |
% | |
Dodge & Cox Income Separate Account |
|
10.13 |
% | |
State Street U.S. Inflation Protected Bond Index Non-Lending Series Fund Class C |
|
10.83 |
% | |
Vanguard Balanced Index Fund Institutional Shares |
|
16.41 |
% | |
Vanguard Developed Market Index Institutional Plus Shares |
|
10.27 |
% | |
Vanguard Emerging Markets Stock Index Fund Institutional Plus Shares |
|
15.29 |
% | |
Vanguard Federal Money Market Fund Investor Shares |
|
0.45 |
% | |
Vanguard Institutional 500 Index Trust |
|
18.40 |
% | |
Vanguard Institutional Extended Market Index Trust |
|
32.26 |
% | |
Vanguard Institutional Total Bond Market Index Trust |
|
7.74 |
% | |
Vanguard PRIMECAP Fund Admiral Shares |
|
17.32 |
% | |
Vanguard Real Estate Index Fund Institutional Shares |
|
-4.67 |
% | |
Vanguard Short-Term Bond Index Fund Institutional Plus Shares |
|
4.72 |
% | |
Vanguard Value Index Fund Institutional Shares |
|
2.30 |
% |
NEOs may transfer into and out of funds daily. NEOs and other insiders may only transact in the Chevron Common Stock Fund during a 20-business day period that begins on the first business day that is at least 24 hours after the public release of quarterly and annual earnings (an Insider Trading Window). Deferrals for NEOs and other insiders who elect their deferrals be tracked with reference to Chevron common stock are, upon deferral, tracked with reference to the Vanguard Treasury Money Market Fund. At the close of the Insider Trading Window, the balance of the Vanguard Treasury Money Market Fund is transferred to the Chevron Common Stock Fund. The 2020 annual rate of return for the Vanguard Treasury Money Market Fund was 0.47 percent.
Chevron Corporation2021 Proxy Statement | 69 |
executive compensation
|
Payments of DCP deferrals are made after the end of employment in up to 10 annual installments. Amounts tracked in Chevron common stock are paid in common stock, and all other amounts are paid in cash. Participants may elect payment to commence as early as the first quarter that is at least 12 months following separation from service. The DCP was amended for post-2004 deferrals in accordance with Section 409A of the Internal Revenue Code. As a result, NEOs may make different elections for pre-2005 and post-2004 deferrals. If a plan participant engages in misconduct (as defined in the DCP), DCP balances related to awards made under the LTIP or the CIP on or after June 29, 2005, may be forfeited.
ESIP-RP
The ESIP-RP is a nonqualified defined contribution restoration plan that provides for the Company contribution that would have been paid into the ESIP but for the fact that the NEOs base salary exceeded the annual compensation limit under Internal Revenue Code 401(a)(17) ($285,000 in 2020). A minimum 2 percent deferral of base pay over the tax codes annual compensation limit is required in order to receive a Company contribution in the ESIP-RP. Contributions are tracked in phantom Chevron common stock units. Participants receive phantom dividends on these units, based on the dividend rate that is earned on Chevron common stock. Plan balances may be forfeited if a participant engages in misconduct (as defined in the ESIP-RP). Accounts are paid out in cash, commencing as early as the first quarter that is at least 12 months following separation from service, in up to 10 annual installments.
Name(1) | Executive contributions in the last fiscal year(2) |
Company contributions in the last fiscal year(3) |
Aggregate earnings in the last fiscal year(4) |
Aggregate withdrawals/ distributions(5) |
Aggregate balance at last fiscal year-end(6) | |||||||
M.K. Wirth |
$ 27,008 |
$ 108,033 |
|
$ 2,132,528 |
|
|
$ 20,603,118 | |||||
P.R. Breber |
$ 14,583 |
$ 58,333 |
|
($ 1,696,579 |
) |
|
$ 4,976,251 | |||||
J.W. Johnson |
$ 18,442 |
$ 73,767 |
|
($ 168,844 |
) |
|
$ 3,116,134 | |||||
J.C. Geagea |
$ 14,583 |
$ 58,333 |
|
($ 128,409 |
) |
|
$ 724,060 | |||||
M.A. Nelson |
$ 310,917 |
$ 52,033 |
|
$ 629,844 |
|
|
$ 5,709,159 |
(1) | Below are the payment elections made by each of the NEOs with respect to their DCP and ESIP-RP plan balances. If deferral years are not noted, elections apply to post-2004 balances and, if applicable, pre-2005 balances. |
Name | Plan | Number of annual installments elected |
Time of first payment | |||
M.K. Wirth |
DCP |
1 |
First quarter that is at least one year following separation from service | |||
ESIP-RP |
1 |
First quarter that is at least one year following separation from service | ||||
P.R. Breber |
DCP |
5 |
First January that is at least one year following separation from service | |||
ESIP-RP |
5 |
First January that is at least one year following separation from service | ||||
J.W. Johnson |
DCP |
1 |
First quarter that is at least one year following separation from service | |||
ESIP-RP |
1 |
First quarter that is at least one year following separation from service | ||||
J.C. Geagea |
DCP |
1 |
First quarter that is at least one year following separation from service | |||
ESIP-RP |
1 |
First quarter that is at least one year following separation from service | ||||
M.A. Nelson |
DCP |
10 |
First quarter that is at least one year following separation from service | |||
ESIP-RP post-2004 |
10 |
First quarter that is at least one year following separation from service | ||||
ESIP-RP pre-2005 |
1 |
First quarter that is at least one year following separation from service |
(2) | Reflects 2020 DCP deferrals of salary, any 2019 performance-year CIP, and LTIP performance shares for the 20172019 performance period. Salary deferrals are also included in the Salary column that is reported in the Summary Compensation Table in this Proxy Statement and are quantified as Total Salary Deferred Under the DCP in Footnote 1 to that table. For Mr. Nelson, the value of the deferred LTIP performance shares was reported in Footnote 2 of the Option Exercise and Stock Vested in Fiscal Year 2019 table in our 2020 Proxy Statement. |
Name | 2020 salary deferrals |
2020 CIP deferrals |
2020 LTIP deferrals | |||
M.K. Wirth |
$ 27,008 |
|
| |||
P.R. Breber |
$ 14,583 |
|
| |||
J.W. Johnson |
$ 18,442 |
|
| |||
J.C. Geagea |
$ 14,583 |
|
| |||
M.A. Nelson |
$ 13,008 |
$ 235,125 |
$ 62,784 |
70 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
(3) | Represents ESIP-RP contributions by the Company for 2020. These amounts are also reflected in the All Other Compensation column in the Summary Compensation Table in this Proxy Statement. |
(4) | Represents the difference between DCP and ESIP-RP balances at December 31, 2020, and December 31, 2019, less CIP, LTIP, and salary deferrals in the DCP and Company contributions in the ESIP-RP. For this purpose, earnings includes dividend equivalents, common stock price appreciation (or depreciation), and other similar items. 2020 earnings in the DCP and ESIP-RP were as follows: |
Name |
DCP earnings |
ESIP-RP earnings | ||||||||
M.K. Wirth |
$ |
2,483,315 |
|
($ 350,787) |
| |||||
P.R. Breber |
($ |
1,565,543 |
) |
|
($ 131,036) |
| ||||
J.W. Johnson |
$ |
22,965 |
|
($ 191,809) |
| |||||
J.C. Geagea |
$ |
28,746 |
|
($ 157,155) |
| |||||
M.A. Nelson |
$ |
751,065 |
|
($ 121,221) |
|
(5) | In-service withdrawals are not permitted from the DCP or the ESIP-RP. |
(6) | Represents DCP and ESIP-RP balances as of December 31, 2020, as follows: |
Name |
DCP balance |
ESIP-RP balance | ||||||||
M.K. Wirth |
$ |
19,466,864 |
|
$ 1,136,254 |
||||||
P.R. Breber |
$ |
4,536,658 |
|
$ 439,593 |
||||||
J.W. Johnson |
$ |
2,481,610 |
|
$ 634,524 |
||||||
J.C. Geagea |
$ |
209,020 |
|
$ 515,040 |
||||||
M.A. Nelson |
$ |
5,304,889 |
|
$ 404,270 |
The amounts reported in the aggregate balance at last fiscal year-end were reported as compensation to the NEOs in the Summary Compensation Table in prior Proxy Statements as follows:
Name |
Salary deferral amounts previously reported |
ESIP-RP amounts previously reported |
CIP amounts previously reported |
LTIP amounts previously reported | ||||||||||||||||
M.K. Wirth |
$ |
175,140 |
$ |
700,562 |
$ |
3,457,080 |
$ |
6,147,430 |
||||||||||||
P.R. Breber |
$ |
27,656 |
$ |
110,623 |
|
|
|
|
||||||||||||
J.W. Johnson |
$ |
79,433 |
$ |
317,733 |
|
|
|
|
||||||||||||
J.C. Geagea |
$ |
54,961 |
$ |
219,842 |
|
|
|
|
||||||||||||
M.A. Nelson |
$ |
11,346 |
$ |
45,383 |
$ |
244,575 |
$ |
111,221 |
Deferrals of the 2020 CIP awards and the LTIP performance shares for the 2018-2020 performance period are not reflected in the DCP balance at December 31, 2020, as they were not deferred until the underlying awards were settled in 2021. They were reported in footnotes to the Summary Compensation Table and the Option Exercises and Stock Vested in Fiscal Year 2020 table in this Proxy Statement, as follows:
Name | CIP amounts previously reported and credited to the DCP in 2021 |
LTIP amounts previously reported and credited to the DCP in 2021 | ||
M.K. Wirth |
|
| ||
P.R. Breber |
|
| ||
J.W. Johnson |
|
| ||
J. C. Geagea |
|
| ||
M.A. Nelson |
|
$ 243,993 |
Chevron Corporation2021 Proxy Statement | 71 |
executive compensation
|
potential payments upon termination or
change-in-control
Our NEOs do not have employment contracts or other agreements or arrangements that provide for enhanced severance, special guaranteed payments, or other benefits upon retirement, termination, or change-in-control. In addition, in the event of a change-in-control, our NEOs are not eligible for accelerated vesting of outstanding equity awards under the LTIP. However, upon termination for reasons other than misconduct (as defined in the LTIP), our NEOs are entitled to accrued and vested interests (and in some cases deemed vesting of unvested interests) in their outstanding equity awards, retirement plan benefits, and certain limited perquisites. Under the LTIP, full or partial vesting of unvested equity grants is a function of the sum of an NEOs age plus his or her time in service and the reason for termination. Our policy reflects our belief that our equity and benefit programs should be designed to encourage retention and support long-term employment. Many of our business decisions have long-term horizons and, to ensure our executives have a vested interest in our future profitability, such programs enable executives with long service to continue to share in our success. The increasing benefits of longer service on equity grants is illustrated by the following table.
Termination
for misconduct(1) |
Termination for date(2) |
Termination for
reasons other than misconduct and grants held for at least one year after grant date(2), and on termination date either: | ||||||||
Are less than age 60 and have less than 75 points (sum of age and service) |
Are at least age 60 or have at least 75 points |
Are at least age 65 or have at least 90 points | ||||||||
Performance shares | Forfeit 100% of grant | Forfeit 100% of grant | Forfeit 100% of grant | Prorated vesting(4) | 100% vested(4) | |||||
RSUs |
Forfeit 100% of grant |
Forfeit 100% of grant |
Forfeit 100% of grant |
Prorated vesting(4) |
100% vested(4) | |||||
Stock options |
Forfeit 100% of grant | Forfeit 100% of grant | Forfeit 100% of
180 days from termination
|
Prorated vesting
5 years from termination
|
100% vested
Remaining term
|
(1) | For grants of awards during or after 2005 that have been exercised, or in the case of performance shares or RSUs, vested and paid, the Board of Directors has the ability to claw back any gains if an NEO engages in certain acts of misconduct, as described in our Compensation Discussion and AnalysisCompensation GovernanceCompensation Recovery Policies in this Proxy Statement. Under the LTIP, misconduct is defined to include, among other things: embezzlement; fraud or theft; disclosure of confidential information or other acts that harm our business, reputation, or employees; misconduct resulting in Chevron having to prepare an accounting restatement; or failure to abide by post-termination agreements respecting confidentiality, noncompetition, or non-solicitation. |
(2) | For the 2017 and later grants, one must remain employed through the January 31 that is one year after the grant date. |
(3) | Or the remaining term, if less. |
(4) | Award based on and paid at the end of the performance or vesting period. |
72 | Chevron Corporation2021 Proxy Statement |
executive compensation
|
|
In the table that follows, we have assumed that each NEO terminated his or her employment for reasons other than for misconduct on December 31, 2020. Amounts reported do not include the value of vested and unexercised stock options reported in the Outstanding Equity Awards at 2020 Fiscal Year-End table, performance shares or RSUs that vested in 2020 as reported in the Option Exercises and Stock Vested in Fiscal Year 2020 table, accrued retirement and other benefits reported in the Pension Benefits Table and Nonqualified Deferred Compensation Table in this Proxy Statement.
We also do not include benefits that would be available generally to all or substantially all salaried employees on the U.S. payroll and do not discriminate in scope, terms or operations in favor of our NEOs, such as accrued vacation, group life insurance, post-retirement health care, and the ESIP.
Benefits and payments upon termination for any reason other than for misconduct(1) |
||||||||||||||||||||||
Name | Base salary | CIP | Severance |
Long-Term incentives unvested and |
Benefits(3) | |||||||||||||||||
Performance shares |
RSUs | Stock options |
||||||||||||||||||||
M.K. Wirth |
|
|
|
$ |
6,177,858 |
|
$ |
6,405,076 |
|
|
|
|
$ |
40,000 |
||||||||
P.R. Breber |
|
|
|
$ |
1,087,819 |
$ |
1,323,772 |
|
|
|
|
|
|
| ||||||||
J.W. Johnson |
|
|
|
$ |
2,120,410 |
|
$ |
2,946,970 |
|
|
|
|
|
| ||||||||
J.C. Geagea |
|
|
|
$ |
1,631,729 |
|
$ |
2,268,352 |
|
|
|
|
|
|
| |||||||
M.A. Nelson |
|
|
|
$ |
1,631,729 |
|
$ |
1,385,732 |
|
|
|
|
|
|
|
(1) | Includes normal or early retirement and voluntary or involuntary (other than for misconduct) termination, including termination following a change-in-control. We do not maintain separate change-in-control programs for our NEOs. |
(2) | Reflects values of deemed vested stock options, performance shares, and standard RSUs under the LTIP, based on the number of points (sum of age and number of years of service) at the time of termination. All awards granted in 2020 are forfeited upon a termination in 2020. |
Termination with more than 90 points |
Messrs. Wirth, Johnson, Geagea and Nelson have more than 90 points. Termination with at least 90 points results in deemed vesting of unvested portions of grants that have met the minimum holding requirement, or the remaining 1/3 of the 2018 stock option grant, the remaining 2/3 of the 2019 stock option grant, 100 percent of the 2019 performance share grant and 100 percent of the outstanding standard RSUs granted in 2017, 2018 and 2019. Vested stock options may be exercised through the remaining term of the option. |
Termination with more than 75 points and less than 90 points |
Mr. Breber has more than 75 points but less than 90 points, which results in pro-rata vesting of all unvested standard LTIP grants that have met the minimum holding requirement. Mr. Brebers stock options vest based on the number of whole months from the grant date to December 31, 2020; vesting of 11/36 of his 2018 and 2019 grants is accelerated. Vested options may be exercised through December 31, 2025 or the 10th anniversary of the grant date, if earlier. Mr. Brebers performance shares vest based on the number of whole months from the performance period start date to December 31, 2020, or 24/36 of his 2019 grant. Mr. Brebers RSUs vest based on the number of whole months from the grant date to December 31, 2020, or 23/60 of his 2019 grant, and 35/60 of his 2018 grant and 47/60 of his 2017 grant, less any RSUs previously released under the grants. |
Valuation of performance shares, RSUs and stock options |
Performance share values for the 2019 grants are calculated based on $84.45, the December 31, 2020 closing price of Chevron common stock, and a performance modifier of 100 percent. Refer to Footnote (2) of the Option Exercises and Stock Vested in Fiscal Year 2020 table for a description of how we calculate the payout value of performance shares, as well as a summary of the amounts paid in February 2021 for the 2018 performance share grants. The modifier for the 2019 grant depends on Chevrons TSR for the three-year performance period relative to the S&P 500 Total Return Index and the TSR for our peer group of major oil competitorswhich consists of BP, ExxonMobil, Royal Dutch Shell, and Total, and range from 0 to 200 percent in increments of 40 percent. |
Restricted stock unit values are calculated based on $84.45, the December 31, 2020 closing price of Chevron common stock. |
Stock option values are calculated based on the difference between $84.45, the December 31, 2020 closing price of Chevron common stock, and the option exercise price as reported in the Outstanding Equity Awards at 2020 Fiscal Year-End table in this Proxy Statement, multiplied by the deemed vested stock options. The value of previously vested stock options is calculated in a similar manner. |
(3) | Mr. Wirth will be provided with post-retirement office and administrative support services during his lifetime. The estimated aggregate incremental cost of these benefits is approximately $40,000 per year, which represents the estimated compensation and benefit cost for administrative support personnel, allocated based on 25 percent time dedicated to providing such services, and no incremental cost for utilizing vacant office space at Chevrons headquarters. |
Our NEOs are eligible to receive early retirement benefits from the CRP and the RRP upon separation from service. Their distribution elections and the present value of accumulated benefits are disclosed in the Pension Benefits Table in this Proxy Statement. |
Our NEOs are also eligible to receive payment from the ESIP-RP and from the DCP upon separation from service. Their distribution elections and the aggregate plan balances as of December 31, 2020 are disclosed in the Nonqualified Deferred Compensation Table in this Proxy Statement. |
Chevron Corporation2021 Proxy Statement | 73 |
The following table provides certain information as of December 31, 2020, with respect to Chevrons equity compensation plans.
Plan category(1) |
Number of securities to be issued upon exercise of outstanding options, warrants, and rights (a) |
Weighted-average exercise price of outstanding options, warrants, and rights (b) |
Number of securities remaining available for future issuance under equity compensation plan (excluding securities reflected in column (a)) (c) | ||||||||||||
Equity compensation plans approved by security holders(2) |
89,252,033 | (3) | $ | 104.38 | (4) | 67,851,933 | (5) | ||||||||
Equity compensation plans not approved by security holders(6) |
288,801 | (7) | | (8) | | (9) | |||||||||
Total |
89,540,834 | $ | 104.38 | (4) | 67,851,933 |
(1) | The table does not include information for employee benefit plans of Chevron and subsidiaries intended to meet the tax qualification requirements of section 401(a) of the Internal Revenue Code and certain foreign employee benefit plans that are similar to section 401(a) plans or information for equity compensation plans assumed by Chevron in mergers and securities outstanding thereunder at December 31, 2020. The number of shares to be issued upon exercise of outstanding stock options, warrants, and rights under plans assumed in mergers and outstanding at December 31, 2020, was 1,228,454, and the weighted-average exercise price (excluding RSUs and other rights for which there is no exercise price) was $374.92. The weighted average remaining term of the stock options is 3.31 years. No further grants or awards can be made under these assumed plans. |
(2) | Consists of two plans: the LTIP and the NED Plan. Stock options and RSUs may be awarded under the LTIP, and shares may be issued under the subplans of the LTIP for certain non-U.S. locations. Restricted stock, RSUs, and retainer stock options may be awarded under the NED Plan. |
(3) | Consists of 88,946,322 shares subject to stock options (granted under the LTIP or the NED Plan), 53,745 shares subject to RSUs granted under the LTIP, and 251,966 shares subject to RSUs and stock units awarded prior to 2007 under the NED Plan. Does not include grants that are payable in cash only, such as performance shares, stock appreciation rights, and RSUs granted under the LTIP. |
(4) | The price reflects the weighted average exercise price of stock options under both the LTIP and the NED Plan. The weighted average remaining term of the stock options is 4.1 years. |
(5) | An amended and restated LTIP was approved by the stockholders on May 29, 2013. The maximum number of shares that can be issued under the amended and restated LTIP is 260,000,000. The LTIP has 67,207,557 shares that remain available for issuance pursuant to awards. An aggregate of 3,539,534 shares issued under the employee stock purchase plans for non-U.S. locations was counted against the limit. Awards granted under the LTIP that are settled in cash or that are deferred under the DCP will not deplete the maximum number of shares that can be issued under the plan. The maximum number of shares that can be issued under the NED Plan is 1,600,000, pursuant to Amendment Number One to the NED Plan that was approved by stockholders on May 25, 2016. The NED Plan has 644,376 shares that remain available for issuance pursuant to awards. |
(6) | Consists of the DCP, which is described in the Nonqualified Deferred Compensation Table in this Proxy Statement. |
(7) | Reflects the number of Chevron Common Stock Fund units allocated to participant accounts in the DCP as of December 31, 2020. |
(8) | There is no exercise price for outstanding rights under the DCP. |
(9) | Current provisions of the DCP do not provide for a limitation on the number of shares available under the plan. The total actual distributions under the DCP in the last three years were 31,860 shares in 2020, 46,976 shares in 2019, and 27,530 shares in 2018. |
74 | Chevron Corporation2021 Proxy Statement |
The ratio of the annual total compensation for the CEO to the annual total compensation of our median compensated employee was 184:1 for 2020, calculated by dividing our CEO 2020 annual total compensation of $29,016,686 by the 2020 annual total compensation of our median compensated employee of $157,572.1
The SECs rules for identifying the median compensated employee and calculating the pay ratio based on that employees annual total compensation allow companies to choose from a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable with our pay ratio reported above.
Our CEO to median compensated employee pay ratio is a reasonable estimate calculated in a manner that is consistent with SEC rules based on a combination of compensation data from global payroll and human resources records and using the methodology, assumptions, and estimates described below.
We identified the median employee using our employee population as of October 1, 2020, which included approximately 46,395 individuals located in 46 countries, of which 21,600 employees were on U.S. payroll and 24,795 were on non-U.S. payrolls. Utilizing the de minimis exemption as permitted by SEC rules, we excluded approximately 4.87% of the total employee population in the non-U.S. jurisdictions with the smallest employee populations. As a result, we excluded 2,261 individuals in 31 non-U.S. countries. The excluded countries and their employee populations were as follows: Bahrain (6), Belgium (116), Brazil (212), Cambodia (38), Colombia (219), Republic of Congo (45), Egypt (46), El Salvador (104), Germany (15), Greece (10), Guatemala (53), Honduras (36), Hong Kong (97), India (7), Italy (2), Japan (145), Kazakhstan (156), Korea (11), Malaysia (185), Mexico (56), Myanmar (4), Netherlands (113), Norway (2), Pakistan (108), Panama (50), Russian Federation (32), Sri Lanka (73), Taiwan (1), United Arab Emirates (54), Venezuela (198), and Vietnam (67). As a result of these exclusions, the employee population used to identify the median employee comprised 44,134 individuals. We included employees from the following non-U.S. countries: Angola, Argentina, Australia, Bangladesh, Canada, China, France, Indonesia, Kuwait, Nigeria, Philippines, Singapore, Thailand and the United Kingdom. As also permitted by SEC rules, we excluded 2,237 Puma Energy (Australia) Holdings Pty Ltd (Puma Energy) and 1,877 Noble Energy, Inc. (Noble Energy) employees who were added to our employee population in the Puma Energy and Noble Energy acquisitions that closed on June 30, 2020 and October 5, 2020, respectively.
We identified the median employee using 2020 total cash compensation as our consistently applied compensation measure, calculated for employees as the sum of (i) 2020 annual base salary determined as of October 1, 2020, and (ii) the actual annual cash bonus paid in the first quarter of 2020; provided, however, that for hourly employees who work for Chevron Stations Inc., their total cash compensation was instead based on actual wages and bonus paid during 2020. The compensation in non-U.S. currencies was converted to U.S. dollars using an average foreign exchange rate for the month of October 2020.
Our pay philosophy is to pay our workforce competitively and equitably; we offer competitive pay packages across all geographies based on industry-specific compensation in the local market, job responsibilities, and individual performance. In general, our compensation programs are applied consistently across the workforce, and compensation targets are set using a consistent methodology regardless of job function, with a higher percentage of pay-at-risk provided to executives. We believe both our CEO and our employee compensation packages are appropriately structured to attract and retain the talent needed to deliver on our business plan and to drive long-term stockholder value.
1 | The annual total compensation of the median compensated employee is calculated in the same manner as CEO annual total compensation in the Summary Compensation Table. |
Chevron Corporation2021 Proxy Statement | 75 |
board proposal to ratify PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2021
|
|
PwC audited Chevrons consolidated financial statements and effectiveness of internal control over financial reporting during the years ended December 31, 2020 and 2019. During these periods, PwC provided both audit and non-audit services. Aggregate fees for professional services rendered to Chevron by PwC for the years ended December 31, 2020 and 2019, were as follows (millions of dollars):
Services provided |
2020 |
2019 | ||||||||
Audit |
$ |
28.3 |
$ |
28.2 |
||||||
Audit Related |
$ |
1.0 |
$ |
1.1 |
||||||
Tax |
$ |
0.5 |
$ |
0.6 |
||||||
All Other |
$ |
1.2 |
$ |
0.3 |
||||||
Total |
$ |
31.0 |
$ |
30.2 |
audit committee preapproval policies and procedures
PwCs attendance at the annual meeting
Representatives of PwC will be present at the Annual Meeting. They will have an opportunity to make a statement if they desire and will be available to respond to appropriate questions.
This proposal is ratified if the number of shares voted FOR exceeds the number of shares voted AGAINST. Any shares not voted on this proposal (whether by abstention or otherwise) will have no impact on this proposal. If you are a street name stockholder and do not vote your shares, your bank, broker, or other holder of record can vote your shares at its discretion on this proposal.
Your Board recommends that you vote FOR the ratification of the appointment of PricewaterhouseCoopers LLP as Chevrons independent registered public accounting firm.
Chevron Corporation2021 Proxy Statement | 77 |
security ownership of certain beneficial owners and management
The following table shows the ownership interest in Chevron common stock as of March 15, 2021 (unless otherwise noted), for (i) holders of more than 5 percent of our outstanding common stock; (ii) each non-employee Director; (iii) each NEO; and (iv) all current non-employee Directors and executive officers as a group. As of that date, there were 1,927,949,021 shares of Chevron common stock outstanding.
Name (+ denotes a non-employee Director) |
Shares
beneficially owned(1) |
Stock units(2) | Total | Percent of class | ||||||||||||||||
BlackRock, Inc.(3) |
|
126,822,239 |
|
|
|
126,822,239 |
|
6.60 |
% | |||||||||||
State Street Corporation(4) |
|
127,943,370 |
|
|
|
127,943,370 |
|
6.65 |
% | |||||||||||
The Vanguard Group(5) |
|
157,790,935 |
|
|
|
157,790,935 |
|
8.20 |
% | |||||||||||
Wanda M. Austin+ |
|
18,835 |
|
2,514 |
|
21,349 |
|
* |
||||||||||||
Pierre R. Breber |
|
668,851 |
|
54,338 |
|
723,189 |
|
* |
||||||||||||
John B. Frank+ |
|
11,998 |
|
7,998 |
|
19,996 |
|
* |
||||||||||||
Alice P. Gast+ |
|
2,706 |
|
17,260 |
|
19,966 |
|
* |
||||||||||||
Joseph C. Geagea |
|
796,295 |
|
|
|
796,295 |
|
* |
||||||||||||
Enrique Hernandez, Jr.+ |
|
102,410 |
|
21,198 |
|
123,608 |
|
* |
||||||||||||
Marillyn A. Hewson+ |
|
3,200 |
|
1,169 |
|
4,369 |
|
* |
||||||||||||
Jon M. Huntsman Jr.+ |
|
|
|
2,100 |
|
2,100 |
|
* |
||||||||||||
James W. Johnson |
|
976,813 |
|
7,087 |
|
983,900 |
|
* |
||||||||||||
Charles W. Moorman IV+ |
|
35,030 |
|
33,789 |
|
68,819 |
|
* |
||||||||||||
Dambisa F. Moyo+ |
|
7,567 |
|
2,514 |
|
10,081 |
|
* |
||||||||||||
Mark A. Nelson |
|
301,141 |
|
|
|
301,141 |
|
* |
||||||||||||
Debra Reed-Klages+ |
|
4,275 |
|
6,740 |
|
11,015 |
|
* |
||||||||||||
Ronald D. Sugar+ |
|
2,843 |
|
66,603 |
|
69,446 |
|
* |
||||||||||||
D. James Umpleby III+ |
|
4,470 |
|
2,514 |
|
6,984 |
|
* |
||||||||||||
Michael K. Wirth |
|
1,245,835 |
|
6,937 |
|
1,252,772 |
|
* |
||||||||||||
All current non-employee Directors and executive officers as a group (19 persons) |
|
5,287,147 |
(6) |
|
232,761 |
|
5,519,908 |
|
* |
* | Less than 1 percent. |
(1) | Amounts shown include shares that may be acquired upon exercise of stock options that are currently exercisable or will become exercisable within 60 days of March 15, 2021, as follows: 11,432 shares for Dr. Austin, 622,699 shares for Mr. Breber, 9,348 shares for Mr. Frank, 767,999 shares for Mr. Geagea, 84,291 shares for Mr. Hernandez, Jr., 958,833 shares for Mr. Johnson, 22,436 shares for Mr. Moorman, 285,099 shares for Mr. Nelson, 1,212,699 shares for Mr. Wirth, and 5,009,534 shares for all current non-employee Directors and executive officers as a group. For executive officers, the amounts shown include shares held in trust under the ESIP. For non-employee Directors, the amounts shown include shares of restricted stock awarded under the NED Plan. |
(2) | Stock units do not carry voting rights and may not be sold. They do, however, represent the equivalent of economic ownership of Chevron common stock, since the value of each unit is measured by the price of Chevron common stock. For non-employee Directors, these are stock units (awarded prior to 2007) and RSUs awarded under the NED Plan, as well as stock units representing deferral of the annual cash retainer that may ultimately be paid in shares of Chevron common stock. For executive officers, these include stock units deferred under the DCP that may ultimately be paid in shares of Chevron common stock. |
(3) | Based on information set forth in a Schedule 13G/A filed with the SEC on January 29, 2021, by BlackRock, Inc., 55 East 52nd Street, New York, NY 10055, BlackRock reports that as of December 31, 2020, it and its subsidiaries listed on Exhibit A of the Schedule 13G/A had sole voting power for 109,345,661 shares, sole dispositive power for 126,822,239 shares, and no shared voting and dispositive powers. |
(4) | Based on information set forth in a Schedule 13G filed with the SEC on February 8, 2021, by State Street Corporation, State Street Financial Center, One Lincoln Street, Boston, MA 02111, State Street reports that as of December 31, 2020, it and its subsidiaries listed on Exhibit 1 of the Schedule 13G had no sole voting and dispositive powers, shared voting power for 116,177,620 shares, and shared dispositive power for 127,915,455 shares. |
(5) | Based on information set forth in a Schedule 13G/A filed with the SEC on February 10, 2021, by The Vanguard Group23-1945930, 100 Vanguard Blvd., Malvern, PA 19355, Vanguard reports that as of December 31, 2020, it and its subsidiaries listed on Appendix A of the Schedule 13G/A had sole dispositive power for 149,799,146 shares, shared voting power for 3,053,654 shares, shared dispositive power for 7,991,789 shares, and no sole voting power. |
(6) | Includes 4,532 shares held by The Lindsey H. Pate 2019 Irrevocable Trust for which Mr. Pate disclaims beneficial ownership. |
78 | Chevron Corporation2021 Proxy Statement |
board proposal to approve, on an advisory basis,
named executive officer compensation
(item 3 on the proxy card)
This proposal is approved if the number of shares voted FOR exceeds the number of shares voted AGAINST. Any shares not voted on this proposal (whether by abstention or otherwise) will have no impact on this proposal. If you are a street name stockholder and do not vote your shares, your bank, broker, or other holder of record cannot vote your shares at its discretion on this proposal.
This vote is nonbinding. The Board and the Management Compensation Committee, which is composed solely of independent Directors, expect to take into account the outcome of the vote when considering future executive compensation decisions to the extent they can determine the cause or causes of any significant negative voting results.
Your Board recommends that you vote FOR the approval, on an advisory basis, of the compensation of our Named Executive Officers as disclosed in the Compensation Discussion and Analysis, the accompanying compensation tables, and the related narrative disclosure in this Proxy Statement.
Chevron Corporation2021 Proxy Statement | 79 |
Stockholder proposals are approved if the number of shares voted FOR exceeds the number of shares voted AGAINST. Any shares not voted on these proposals (whether by abstention or otherwise) will have no impact on these proposals. If you are a street name stockholder and do not vote your shares, your bank, broker, or other holder of record cannot vote your shares at its discretion on these proposals.
Your Board recommends that you vote AGAINST each of the stockholder proposals on the following pages.
80 | Chevron Corporation2021 Proxy Statement |
stockholder proposals
|
|
stockholder proposal to reduce scope 3 emissions
(item 4 on the proxy card)
SUPPORTING STATEMENT:
Chevron Corporation2021 Proxy Statement | 81 |
stockholder proposals
|
board of directors response
Chevron shares the view that managing climate change-related risks and energy transition opportunities is vital to delivering superior long-term value. Chevron is taking actions that support a global approach to achieving the goals of the Paris Agreement as efficiently and cost-effectively as possible for society.
Chevron has established Scope 1 and Scope 2 metrics for Upstream oil, gas, flaring and methane and believes that the most appropriate approach for measuring the emissions performance of an Upstream asset is greenhouse gas (GHG) intensity by commodity on an equity basis. This approach ensures Chevron is accountable for all Upstream GHG emissions, irrespective of who is the operator, unlike many others who account only for emissions from a subset of assets in which they have invested. Consistent with the timing of the global stock-takes under the Paris Agreement, Chevron has set metrics for 2023 and 2028 and intends to do so every five years thereafter. Successfully achieving these emissions intensity reduction metrics is linked to most Chevron employees variable compensation, as reflected in the Chevron Incentive Plan (CIP) scorecard. Below is a table of the Companys adopted metrics:
Chevron Upstream emissions intensity reduction metrics for 2028: | ||||
24 | kg CO2e/boe* for oil (global industry averages 46) | 40% reduction from 2016 | ||
24 | kg CO2e/boe* for gas (global industry averages 71) | 26% reduction from 2016 | ||
2 | kg CO2e/boe* for methane and a global methane detection campaign | 53% reduction from 2016 | ||
0 | routine flaring by 2030 and 3 kg CO2e/boe* for overall flaring | 66% reduction from 2016 |
* | CO2e/boe = carbon dioxide equivalent/barrels of oil-equivalent |
The Company leverages its capabilities, assets, and expertise to focus on these three action areas that aim to deliver measurable progress: (1) lower carbon intensity cost efficiently, (2) increase renewables and offsets in support of our own business, and (3) invest in low-carbon technologies to enable commercial solutions. Chevron believes the worlds continued demand for oil and gas should be supplied by the cleanest and most efficient producers. Chevron addresses Scope 3 emissions by taking the following actions:
1. | Supporting a price on carbon through well-designed policies; |
2. | Transparently reporting Scope 3 emissions from the use of our products; and |
3. | Enabling customers to lower their emissions through increasing our renewable products, offering offsets, and investing in low-carbon technologies. |
These contributions support a global approach to achieve the goals of the Paris Agreement as efficiently and cost-effectively as possible for society.
Chevron also prioritizes the most cost efficient and effective emissions reductions - an approach that is good for stockholders and good for society. Through 2028, Chevron plans to spend approximately $2 billion in carbon reduction projects. Further, Chevron has increased renewable fuels and products in its value chains over the last decade and plans to spend $750 million by 2028 in investments in renewables and offsets. Chevron also recently increased its commitment to invest in low-carbon technologies that address Scope 3 emissions, such as carbon capture utilization and storage and lower carbon energies by committing $300 million to the Future Energy Fund II.
Chevrons employees are proud of their role in providing affordable, reliable, and ever-cleaner energy that people around the world depend on every day.
Your Board believes that Chevrons actions and reporting are appropriate and that the Companys strategy and method for setting emissions intensity reduction metrics effectively position Chevron to address future opportunities and risks. The Companys strategies, such as those outlined above, are intended to drive higher returns and lower carbon.
Therefore, your Board recommends that you vote AGAINST this proposal.
82 | Chevron Corporation2021 Proxy Statement |
stockholder proposals
|
|
stockholder proposal regarding report on impacts of
net zero 2050 scenario
(item 5 on the proxy card)
WHEREAS:
SUPPORTING STATEMENT:
1 | https://www.cftc.gov/sites/default/files/2020-09/9-9-20%20Report%20of%20the%20Subcommittee%20on%20Climate-Related%20Market%20Risk%20-%20Managing%20 Climate%20Risk%20in%20the%20U.S.%20Financial%20System%20for%20posting.pdf |
2 |
https://www.reuters.com/article/climate-change-carbon-targets/factbox-big-oils-climate-targets-idUSL8N2HO1B4 |
3 | https://carbontracker.org/reports/fault-lines/ |
4 | https://www.iigcc.org/news/investor-groups-call-on-companies-to-reflect-climate-related-risks-in-financial-reporting/ |
5 |
https://www.unpri.org/sustainability-issues/accounting-for-climate-change |
6 |
https://www.iigcc.org/download/investor-expectations-for-paris-aligned-accounts/?wpdmdl=4001&masterkey=5fabc4d15595d |
7 |
https://cdn.ifrs.org/-/media/feature/news/2019/november/in-brief-climate-change-nick-anderson.pdf?la=en |
8 | https://www.iea.org/reports/world-energy-outlook-2020/achieving-net-zero-emissions-by-2050 |
9 |
https://www.climatechangenews.com/2019/06/14/countries-net-zero-climate-goal/ |
Chevron Corporation2021 Proxy Statement | 83 |
stockholder proposals
|
board of directors response
Chevron believes the future of energy is lower carbon and aims to equip stockholders with data and facts so that they can make informed choices as the world moves toward the global net-zero ambitions of the Paris agreement. In March 2021, the Company published its third Climate Change Resilience Report aligned with the Task Force for Climate-related Financial Disclosures. The report outlines Chevrons approach to the energy transition, including testing the resiliency of Chevrons portfolio against the International Energy Agencys Sustainable Development Scenario (SDS) and Net Zero Scenario.
At its Investor Day on March 9, 2021, Chevron outlined the steps it is taking, and the challenges it faces, in working toward a net-zero future. This includes changes in portfolio, execution of projects identified through marginal abatement cost curves, and the policy, innovations, and offsets necessary to achieve net-zero.
Chevron uses long-term energy demand scenarios and a range of commodity prices to test its portfolio, guide investment strategies, and evaluate business risks to ensure it can deliver results under a range of potential futures. Chevron analyzes how various factors may combine to create alternative scenarios to stress-test its portfolio and integrate learnings into its decision making to remain competitive and resilient under multiple scenarios.
For longer-term scenarios, Chevron routinely uses external views to both inform and challenge its internal analysis. Chevrons analysis includes scenarios forecasting emissions pathways that keep global warming to well below 2o C above pre-industrial levels, as well as scenarios forecasting net-zero emissions by 2050.1 One example of a lower carbon scenario tested against Chevrons portfolio is the SDS. The SDS outlines one potential path to 2040 that achieves the objectives of recent clean energy policies, including the Paris Agreement, keeping global average temperatures well below 2o C above pre-industrial levels and putting the world on track to achieve net-zero emissions by 2070.
In 2020, more than 60 percent of Chevrons total Scope 1 and Scope 2 equity GHG emissions were in regions with existing or developing carbon pricing policies.2 Chevron uses carbon prices and derived carbon costs in business planning, investment decisions, impairment reviews, reserves calculations, and assessment of carbon reduction opportunities. We believe that the Companys portfolio is resilient, and that its governance structure, risk management, strategy, actions, and asset mix enable it to be flexible in response to potential changes in supply and demand, even in lower carbon scenarios.
The Company leverages its capabilities, assets, and expertise to focus on these three action areas that aim to deliver measurable progress: (1) lower carbon intensity cost efficiently, (2) increase renewables and offsets in support of our own business, and (3) invest in low-carbon technologies to enable commercial solutions.
Chevrons employees are proud of their role in providing affordable, reliable, and ever-cleaner energy that people around the world depend on every day.
Given Chevrons current disclosures and robust strategy, planning, and risk management processes, your Board believes that the requested report is unnecessary.
Therefore, your Board recommends that you vote AGAINST this proposal.
1 | International Energy Agency (IEA), World Energy Outlook 2020, SDS, NZE2050, Oct. 2020, https://www.iea.org/reports/world-energy-outlook-2020; Network for Greening the Financial System (NGFS), Guide to Climate Scenario Analysis, Jun. 2020, https://www.ngfs.net/sites/default/files/medias/documents/ngfs_guide_scenario_analysis_final.pdf; Principles for Responsible Investment (PRI), Inevitable Policy Response, Jun. 2020, https://www.unpri.org/inevitable-policy-response/what-is-the-inevitable-policy-response/4787.article. |
2 | Scope 1 includes direct emissions from sources within a facility. Scope 2 includes indirect emissions from electricity and steam that Chevron imports. |
84 | Chevron Corporation2021 Proxy Statement |
stockholder proposals
|
|
stockholder proposal regarding shift to
public benefit corporation
(item 6 on the proxy card)
Chevron Corporation2021 Proxy Statement | 85 |
stockholder proposals
|
board of directors response
The Business Roundtable Statement on the Purpose of a Corporation sets forth commitments in five key areas: delivering value to customers; investing in employees; dealing fairly and ethically with suppliers; supporting communities in which we work; and generating long-term value for stockholders. Chevron has a long track record of success in each of these five areas and remains dedicated to these principles because they have always contributed to the long-term, sustainable health of our Company.
Chevron engages with stakeholders, including investors, civil society organizations, customers, and others, to inform its approach to its social and environmental responsibilities. Expectations continue to rise, and responding to these expectations is a responsibility Chevron takes seriously. Our ability to continue to create value for stakeholders depends on maintaining financial, operational, and cultural strength and we are committed to doing so.
Chevrons social investments strive to empower people to improve their lives and meet their full potential. Partnerships in health, education, and economic development advance progress and strengthen communities. Moreover, our employees, retirees, and contractors apply their skills, and contribute their resources, in volunteer activities that help improve education, provide basic needs, foster new business opportunities, and ultimately strengthen the communities in which we operate.
Chevron addresses the risks and opportunities presented by the global transition toward a lower-emissions energy system through its three strategic action areas: (1) lower carbon intensity cost efficiently, (2) increase renewables and offsets in support of our own business, and (3) invest in low-carbon technologies to enable commercial solutions.
Chevron has established equity-basis greenhouse gas (GHG) emissions reduction metrics to achieve goals related to activities over which it has financial or operational influence. Chevron believes in establishing metrics on an equity-basis, per commodity, and on an intensity basis, up to the point of sale, in a verifiable, tradable manner to transparently measure the efficiency of production for each product. Chevron set Upstream equity net GHG intensity reduction goals for 2028 for Scope 1 and Scope 2 emissions of 24 kg of carbon dioxide equivalent (CO2e) per barrels of oil-equivalent (boe) for oil or gas production carbon intensity, zero routine flaring by 2030, 3 kg CO2e/boe for flaring intensity, and 2 kg CO2e/boe for methane intensity, along with a methane detection plan.1 Successfully achieving these metrics is linked to most Chevron employees variable compensation.
Chevron has a strong corporate governance structure to enable the Company to meet the rising expectations of stakeholders. Chevrons Board of Directors conducts an annual review with executive management that identifies significant financial, operational, market, political, environmental, and other risks. The Board oversees Chevrons risk management policies and practices to assess whether the appropriate systems are employed. The Boards Public Policy and Sustainability Committee monitors the social, political, environmental, human rights, and public policy aspects of Chevrons business and the communities in which it operates.
Your Board believes that Chevron operates in a responsible and sustainable manner, furthering the interests of many stakeholders, which directly contributes to the long-term health and growth of our business. Converting to a public benefit corporation is unnecessary and not an appropriate way to ensure the Company meets its social and environmental responsibilities.
Therefore, your Board recommends that you vote AGAINST this proposal.
1 | Scope 1 emissions are direct emissions from sources within a facility. Scope 2 emissions are indirect emissions from imported electricity and steam. Scope 3 emissions include all other indirect emissions, of which the combustion of product (e.g. gasoline or diesel in cars and natural gas in electricity generation and industrial use) is considered the largest component. |
86 | Chevron Corporation2021 Proxy Statement |
stockholder proposals
|
|
stockholder proposal regarding report on lobbying
(item 7 on the proxy card)
Supporting Statement:
1 | https://thehill.com/policy/energy-environment/436117-top-oil-firms-spend-millions-on-lobbying-to-block-climate-change |
2 | https://readsludge.com/2019/08/27/these-ceos-promised-to-be-socially-responsible-but-their-companies-are-pushing-alecs-right- wing-agenda/ |
3 | https://www.reuters.com/article/us-shell-afpm-idUSKCN1RE0VB |
Chevron Corporation2021 Proxy Statement | 87 |
stockholder proposals
|
board of directors response
Chevron advocates on behalf of its employees and stockholders to support its commitment to deliver affordable, reliable and cleaner energy. Chevron strives to maintain positive, constructive relationships with policymakers and their staffs to help inform them about the impacts of potential legislation or rule changes. Chevron does this with the highest ethical standards and in compliance with all laws governing lobbying activities and disclosure. Chevron believes it is essential to engage with policymakers and express the Companys views on pending policy proposals through direct and indirect lobbying and participation in a diverse range of business and policy organizations that advocate for free markets and responsible energy legislation and regulations. Chevron lobbies ethically, constructively, and in a non-partisan manner.
To further these efforts, Chevron holds membership in trade associations that provide expert perspectives on many issues. Trade associations also provide a venue for Chevron to engage with other companies and industry experts. Chevron does not agree with all positions of every industry, trade, or policy organization in which it participates. However, Chevron believes that participation in these organizations provides the Company with the best opportunity to influence their positions in a manner that aligns with the long-term interests of Chevron stockholders.
Chevron agrees that transparency and accountability are important aspects of corporate political activity. That is why Chevron provides extensive disclosure of these activities on its website by listing all jurisdictions where we are registered to lobby with links to access our reports. This disclosure goes beyond what is required by law. The Companys lobbying activities in the United States are strictly regulated by federal, state, and local lobbying laws. Each governing jurisdiction determines its own laws and regulations regarding lobbying compliance and what activities must be reported. Chevron also discloses on its website not just lobbying activities, but all political contributions. The information on the website includes:
Chevrons lobbying activities, political contributions, philosophy, and oversight mechanisms
U.S. trade association memberships
Federal and state lobbying reports |
Federal lobbying contributions |
Chevrons most recent annual Corporate Political Contributions report and the Chevron Employee Political Action Committee contribution report. |
In addition, in December 2020, in response to stockholder interest, Chevron published a special report on climate lobbying. This report further describes Chevrons lobbying strategies and governance to ensure its trade association memberships are in alignment with Chevrons interests with respect to climate change issues.
All of Chevrons political and lobbying activities are subject to thorough review and oversight. The Public Policy and Sustainability Committee of the Board of Directors annually reviews Chevrons lobbying activities and budget to assess the value of these activities and ensure alignment with Chevrons positions and interests. Senior Chevron staff annually review trade association memberships to consider their value to the business. They also review policies, procedures, and expenditures for political activities. Chevrons employees are required to complete political and lobbying compliance training. We also take the extra step to review any contributions and lobbying through the lens of current and past events. We are committed to supporting strong energy allies who promote democracy.
Chevron has, for many years now, provided significant disclosure on its lobbying activities and expenditures and has a practice of periodically evaluating and improving the scope and quality of disclosure. Chevron will continue this practice of transparency. Your Board is confident that the Companys political activities are aligned with Chevrons goals and the long-term interests of our stockholders. Your Board encourages you to review the reports and other materials described above.
Therefore, your Board recommends that you vote AGAINST this proposal.
88 | Chevron Corporation2021 Proxy Statement |
stockholder proposals
|
|
stockholder proposal regarding independent chair
(item 8 on the proxy card)
SUPPORTING STATEMENT
Chevron Corporation2021 Proxy Statement | 89 |
stockholder proposals
|
board of directors response
As required by Chevrons By-Laws, the independent members of your Board elect the Board Chairman annually after reviewing whether to elect the CEO or another Director to serve as Chairman. The Board thus has great flexibility to choose the optimal leadership for the Board depending upon Chevrons particular needs and circumstances at the time.
Currently, the Board has appointed Michael K. Wirth to serve as CEO and as Chairman of the Board. Your Board believes that Chevron and its stockholders benefit from the resulting unity of leadership and companywide strategic alignment. For example, as a global energy company that negotiates concessions and leases with host-country governments around the world, we believe it is generally advantageous to the Company for the CEO to represent the Chevron Board as its Chairman in such dialogues. Your Board does recognize the importance of independent oversight of the CEO and management, and it has instituted structures and practices to enhance such oversight. When the CEO is elected Chairman, the independent Directors annually elect a Lead Director from among themselves. The role of the Lead Director is highly empowered, as described in the Independent Lead Director section of this Proxy Statement on page 22. See also Board Leadership Structure on page 21.
As part of each Board meeting, the independent Directors meet in executive session without members of management present. They use this opportunity to discuss any matters they deem appropriate, including evaluation of senior management, CEO and management succession, Chevrons operating and financial performance and returns to stockholders, and Board priorities, among others.
A fixed policy requiring a separation of the roles of Chairman and CEO is also unwarranted because of Chevrons many other strong corporate governance practices, including the following: the annual election of all Directors; a majority vote requirement in uncontested elections of Directors; an overwhelming majority of independent Directors; proxy access; independent Director access to employees; and publicly available Corporate Governance Guidelines. The independent oversight of Chevrons Board leadership is further supported by strong Board refreshment, multidimensional diversity among its Directors, and regular rotation of Committee chairpersons and of the Lead Director, all of which ensures that new perspectives are brought to the selection of Chevrons Chairman and to other critical Board decisions.
Although the proposal purports to relate to the Boards leadership structure, its supporting statement shows that it is a vehicle to discuss the Ecuador litigation. Yet, the $9.5 billion Ecuadorian judgment against Chevron has been thoroughly discredited by every court and tribunal outside Ecuador that has reviewed the matter. In 2014, a federal court in New York found that the Ecuadorian judgment had been procured through fraud, bribery, and corruption, and was unenforceable in the United States. The U.S. Second Circuit Court of Appeals unanimously affirmed that finding, and the U.S. Supreme Court denied review, rendering the federal courts ruling final.
In a separate action, in 2018, an international tribunal administered by the Permanent Court of Arbitration in The Hague issued a unanimous award in favor of Chevron, finding that the Ecuadorian judgment was procured through fraud, bribery, and corruption, and that it was based exclusively on environmental claims settled and released by the Republic of Ecuador years earlier. The tribunal concluded that as a matter of international law, the judgment should not be recognised or enforced by the courts of other States. In September 2020, the District Court of The Hague upheld the award, highlighting that Ecuador acknowledges that the Ecuadorian judgment is fraudulent ([t]he fraudulent character of the judgment and the proceedings preceding it is common ground between [Chevron and Ecuador]), a fact Ecuador also admitted in a public filing with the Office of the United States Trade Representative in July 2020 (referring to the Ecuadorian judgment as fraudulent). Finally, plaintiffs recognition and enforcement proceedings outside Ecuador have failed in every jurisdiction in which they have been attempted to date, namely Argentina, Brazil, and Canada. Your Board expects Chevrons management to continue vigorously defending against this fraud.
Given strong independent Board oversight of the CEO and management and the Companys corporate governance practices, including an empowered and effective independent Lead Director, your Board does not believe that a fixed policy requiring an independent Chairman is in the best interests of stockholders. Rather, your Board believes that stockholder interests are best served when Directors have the flexibility to determine the best person to serve as Chairman, recognizing that no single leadership model is appropriate in all circumstances.
Therefore, your Board recommends that you vote AGAINST this proposal.
90 | Chevron Corporation2021 Proxy Statement |
stockholder proposals
|
|
stockholder proposal regarding special meetings
(item 9 on the proxy card)
Supporting Statement:
Chevron Corporation2021 Proxy Statement | 91 |
stockholder proposals
|
board of directors response
Chevrons By-Laws permit stockholders owning 15 percent of Chevrons outstanding common stock to call for a special meeting. Your Board continues to believe that Chevrons 15 percent threshold ensures that a reasonable number of stockholders considers a matter important enough to merit a special meeting. Preparing for and holding a special meeting is time-consuming and expensive. The 15 percent threshold helps avoid waste of Company and stockholder resources to address narrow or special interests.
In addition to a lower threshold, the proposal would permit a special meeting without appropriate and reasonable limitations. Chevrons By-Laws currently contain two important limitations. A special meeting cannot be called (1) if the Board has already called or will call an Annual Meeting of stockholders for the same purpose specified in the special meeting request or (2) if an annual or special meeting was held not more than 12 months before the request for a special meeting was received and included the purpose specified in the special meeting request. Given the time and cost associated with special meetings, your Board believes that these are appropriate and reasonable limitations. Moreover, the issues raised in support of this proposal already are consistently discussed at Chevrons Annual Meetings.
Stockholders can be assured that their right to be apprised of and vote on significant matters is protected not only by their existing right to call for special meetings and participate in Chevrons Annual Meetings, but also by state law and other regulations. Chevron is incorporated in Delaware, which requires that major corporate actions, such as a merger or a sale of all or substantially all of Chevrons assets, be approved by stockholders. Chevron is also listed on the New York Stock Exchange (NYSE), and the NYSE requires, among other things, that listed companies obtain stockholder approval for equity compensation plans and significant issuances of equity securities to related parties and for when such issuances represent more than 20 percent of an issuers voting power. Chevron has robust corporate governance practices to protect stockholder interests, including a declassified Board; proxy access; no supermajority voting provisions in its By-Laws and Certificate of Incorporation; and a strong independent Board structure.
Finally, although the proposal purports to relate to special meetings, its supporting statement shows that it is a vehicle to discuss the Ecuador litigation and related actions against Chevron. The proponent implies that special meetings are an appropriate vehicle for pressuring the Company to succumb to the demands in the Ecuador litigation and pay a judgment secured through fraud and corruption. Your Board believes, and several prominent courts and international tribunals have now confirmed, that the Ecuador litigation is the product of fraud, bribery, and corruption.
In 2014, a federal court in New York found that the Ecuadorian judgment had been procured through fraud, bribery, and corruption, and was unenforceable in the United States. The U.S. Second Circuit Court of Appeals unanimously affirmed that finding, and the U.S. Supreme Court denied review, rendering the federal courts ruling final.
In a separate action, in 2018, an international tribunal administered by the Permanent Court of Arbitration in The Hague issued a unanimous award in favor of Chevron, finding that the Ecuadorian judgment was procured through fraud, bribery, and corruption, and that it was based exclusively on environmental claims settled and released by the Republic of Ecuador years earlier. The tribunal concluded that as a matter of international law, the judgment should not be recognised or enforced by the courts of other States. In September 2020, the District Court of The Hague upheld the award, highlighting that Ecuador acknowledges that the Ecuadorian judgment is fraudulent ([t]he fraudulent character of the judgment and the proceedings preceding it is common ground between [Chevron and Ecuador]), a fact Ecuador also admitted in a public filing with the Office of the United States Trade Representative in July 2020 (referring to the Ecuadorian judgment as fraudulent).Finally, plaintiffs recognition and enforcement proceedings outside Ecuador have failed in every jurisdiction in which they have been attempted to date, namely, Argentina, Brazil and Canada. Your Board expects Chevrons management to continue vigorously defending against this fraud.
Your Board continues to believe its current By-Law is in the stockholders best interests and provides appropriate and reasonable limitations on the right to call special meetings.
Therefore, your Board recommends that you vote AGAINST this proposal.
92 | Chevron Corporation2021 Proxy Statement |
Stockholders owning Chevron common stock at the close of business on Monday, March 29, 2021, the Record Date, or their legal proxy holders, are entitled to vote at the Annual Meeting. At the close of business on the Record Date, there were 1,927,958,623 shares of Chevron common stock outstanding. Each outstanding share of Chevron common stock is entitled to one vote.
A quorum, which is a majority of the outstanding shares of Chevron common stock as of the Record Date, must be present to hold the Annual Meeting. A quorum is calculated based on the number of shares represented at the meeting, either by the stockholders attending in person or by the proxy holders. If you indicate an abstention as your voting preference in any matter, your shares will be counted toward a quorum, but will not be voted on any such matter.
Chevron Corporation2021 Proxy Statement | 93 |
voting and additional information
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Stockholders can vote by mail, telephone, Internet, or in person at the Annual Meeting.
Stockholders of record
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Street name stockholders
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Employee plan participants
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If you hold your shares in your own name as reflected in the records of Chevrons transfer agent, Computershare Shareowner Services LLC, you can most conveniently vote by telephone, Internet, or mail. Please review the voting instructions on your proxy card.
If you vote by telephone or on the Internet, you do not need to return your proxy card. Telephone and Internet voting is available 24 hours a day and will close at 11:59 p.m. EDT on Tuesday, May 25, 2021.
You can vote virtually at the Annual Meeting by visiting www.virtualshareholdermeeting.com /CVX2021 and using your 16-digit control number.
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If you own your shares through a bank, broker, or other holder of record, you can most conveniently vote by telephone, Internet, or mail. Please review the voting instructions on your voting instruction form.
If you vote by telephone or on the Internet, you do not need to return your voting instruction form. Telephone and Internet voting is available 24 hours a day and will close at 11:59 p.m. EDT on Tuesday, May 25, 2021.
If your shares are held in street name and your voting instruction form or Notice Regarding the Availability of Proxy Materials indicates that you may vote those shares through the www.proxyvote.com website, then you may vote at the Annual Meeting by visiting www.virtualshareholdermeeting.com /CVX2021 and using the 16-digit control number indicated on that voting instruction form or Notice Regarding the Availability of Proxy Materials. Otherwise, stockholders who hold their shares in street name should contact their bank, broker or other nominee (preferably at least 5 days before the annual meeting) and obtain a legal proxy in order to be able to attend, participate in or vote at the Annual Meeting. |
If you own your shares through participation in a Chevron employee stock or retirement benefit plan, you can most conveniently vote by telephone, Internet, or mail. Please review the voting instructions contained in the email sent to your work address or in the materials you receive through the mail.
All votes must be received by the plan trustee or fiduciary by 11:59 p.m. EDT on Sunday, May 23, 2021, or other cutoff date as determined by the plan trustee or fiduciary. |
We encourage you to vote by telephone or Internet. Both are designed to record your vote immediately and enable you to confirm that your vote has been properly recorded.
revoking your proxy or voting instructions
Stockholders can revoke their proxy or voting instructions as follows.
Stockholders of record
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Street name stockholders
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Employee plan participants
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Send a written statement revoking your proxy to: Chevron Corporation, Attn: Corporate Secretary and Chief Governance Officer, 6001 Bollinger Canyon Road, San Ramon, CA 94583-2324;
Submit a proxy card with a later date and signed as your name appears on your account;
Vote at a later time by telephone or the Internet; or
Vote virtually at the Annual Meeting.
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Notify your bank, broker, or other holder of record in accordance with that entitys procedures for revoking your voting instructions. |
Notify the trustee or fiduciary of the plan through which you hold your shares in accordance with its procedures for revoking your voting instructions. |
94 | Chevron Corporation2021 Proxy Statement |
voting and additional information
|
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Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on May 26, 2021:
The Notice of 2021 Annual Meeting, 2021 Proxy Statement, and 2020 Annual Report are available at www.proxyvote.com.
method and cost of soliciting and tabulating votes
Chevron Corporation2021 Proxy Statement | 95 |
voting and additional information
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email delivery of future proxy materials
You can elect to receive future Proxy Materials by email, which will save us the cost of producing and mailing documents to you, by enrolling at www.icsdelivery.com/cvx. If you choose to receive future Proxy Materials by email, you will receive an email with instructions containing a link to the website where those materials are available and where you can vote.
stockholder of record account maintenance
96 | Chevron Corporation2021 Proxy Statement |
voting and additional information
|
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submission of stockholder proposals for 2022 annual meeting
Proposals for inclusion in next years Proxy Statement (SEC Rule 14a-8)
SEC Rule 14a-8 permits stockholders to submit proposals for inclusion in our Proxy Statement if the stockholders and the proposals meet certain requirements specified in that rule.
| When to send these proposals. Any stockholder proposal submitted in accordance with SEC Rule 14a-8 must be received at our principal executive offices no later than the close of business (6:00 p.m. Pacific Standard Time) on December 9, 2021. |
| Where to send these proposals. Proposals should be submitted by overnight mail and addressed to Mary A. Francis, Corporate Secretary and Chief Governance Officer, Chevron Corporation, 6001 Bollinger Canyon Road, San Ramon, CA 94583-2324. |
| What to include. Proposals must conform to and include the information required by SEC Rule 14a-8. |
Director nominees for inclusion in next years Proxy Statement (proxy access)
Article IV, Section 7, of our By-Laws permits a stockholder or group of stockholders (up to 20) who have owned at least 3 percent of Chevron common stock for at least three years to submit director nominees (up to the greater of two nominees or 20 percent of the Board) for inclusion in our Proxy Statement if the nominating stockholder(s) satisfies the requirements specified in our By-Laws. Additional information about these proxy access requirements can be found in our By-Laws, available at www.chevron.com/investors/corporate-governance.
| When to send these proposals. Notices of director nominees submitted pursuant to our proxy access By-Laws must be received no earlier than November 9, 2021, and no later than the close of business on December 9, 2021. |
| Where to send these proposals. Notices should be submitted by overnight mail and addressed to Mary A. Francis, Corporate Secretary and Chief Governance Officer, Chevron Corporation, 6001 Bollinger Canyon Road, San Ramon, CA 94583-2324. |
| What to include. Notices must include the information required by our proxy access By-Laws. |
Other proposals or nominees for presentation at next years Annual Meeting (advance notice)
Article IV, Section 6, of our By-Laws requires that any stockholder proposal, including director nominations, that is not submitted for inclusion in next years Proxy Statement (either under SEC Rule 14a-8 or our proxy access By-Laws), but is instead sought to be presented directly at the 2022 Annual Meeting, must be received at our principal executive offices no earlier than the 120th day and no later than the close of business on the 90th day prior to the first anniversary of the 2021 Annual Meeting. Additional information about these advance notice requirements can be found in our By-Laws, available at www.chevron.com/investors/corporate-governance.
| When to send these proposals. Proposals and nominations submitted pursuant to our advance notice By-Laws must be received no earlier than January 26, 2022, and no later than the close of business on February 25, 2022. |
| Where to send these proposals. Proposals and nominations should be submitted by overnight mail and addressed to Mary A. Francis, Corporate Secretary and Chief Governance Officer, Chevron Corporation, 6001 Bollinger Canyon Road, San Ramon, CA 94583-2324. |
| What to include. Proposals and nominations must include the information required by our advance notice By-Laws. |
Chevron Corporation2021 Proxy Statement | 97 |
voting and additional information
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rules for admission for the virtual annual meeting
You are entitled to attend and participate in the Annual Meeting only if you were a stockholder as of the close of business on March 29, 2021, or if you are a valid legal proxy holder for the Annual Meeting. If you plan to attend the Virtual Annual Meeting, please be aware of what you will need to gain admission, as described below. If you do not comply with the procedures described here for attending the Virtual Annual Meeting, you will not be able to participate in the annual meeting.
| Stockholders of record will need to use their control number available in their proxy materials to log into www.virtualshareholdermeeting.com/CVX2021. |
| Beneficial stockholders who do not have a control number may access the meeting by logging into their bank or brokerage firms website and selecting the stockholder communications mailbox to link through to the annual meeting. Instructions are also available on the voting instruction card provided by the bank or broker. |
See below attending the virtual annual meetingWe encourage participation for additional information.
attending the virtual annual meeting
The Annual Meeting will be held on Wednesday, May 26, 2021, online by live audio webcast. The meeting will begin promptly at 8:00 a.m. PDT.
important notice regarding admission to the 2021 annual meeting
Virtual Annual Meeting
We are pleased to announce that the Company will conduct its 2021 Annual Meeting of Stockholders (Annual Meeting) on the above date and time solely by live audio webcast in lieu of an in-person meeting. Your Board believes this format will enhance and facilitate attendance by providing convenient access for all of our stockholders. In addition, this meeting format will eliminate public health concerns around the COVID-19 pandemic and the significant costs associated with holding an in-person meeting. We have planned and designed the meeting to encourage stockholder participation, protect stockholder rights, and promote transparency.
We encourage participation
Stockholders of record owning Chevron common stock at the close of business on Monday, March 29, 2021, are entitled to participate in and vote at the Annual Meeting. To participate in the Annual Meeting, including to vote, ask questions, and view the list of registered stockholders as of the record date during the meeting, stockholders should go to the meeting website at www.virtualshareholdermeeting.com/CVX2021, enter the 16-digit control number found on your proxy card, voting instruction form, or Notice Regarding the Availability of Proxy Materials, and follow the instructions on the website. If your voting instruction form or Notice Regarding the Availability of Proxy Materials does not indicate that you may vote those shares through the www.proxyvote.com website and it does not include a 16-digit control number, you should contact your bank, broker, or other nominee (preferably at least 5 days before the annual meeting) and obtain a legal proxy in order to be able to attend, participate in, or vote at the Annual Meeting. The Annual Meeting will be opened for access beginning at 7:45 a.m. PDT on May 26, 2021. Proponents of the stockholder proposals included in this Proxy Statement will be given the option to prerecord or call in live through a dedicated line to ensure their ability to present their proposals.
We welcome questions from stockholders
Questions may be submitted in advance of the meeting at www.proxyvote.com or live during the meeting at www.virtualshareholdermeeting.com/CVX2021. If we are not able to get to every question submitted, we will post a summary of the remaining questions and answers on www.chevron.com/investors/stockholder-services.
Technical difficulties and additional questions
If you have difficulty accessing the Annual Meeting, please call 844-976-0738 (toll free) or 303-562-9301 (international). Technicians will be available to assist you. Please submit any additional questions, comments, or suggestions by email at corpgov@chevron.com or by telephone by calling 1-877-259-1501.
In the event of a technical malfunction or other situation that the meeting Chair determines may affect the ability of the meeting to satisfy the requirements for a stockholder meeting to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the meeting, the Chair will convene the Annual Meeting at 8:30 a.m. PDT on the date specified above at the Companys headquarters in San Ramon, California, solely for the purpose of adjourning the meeting to reconvene at a date, time, and physical or virtual location announced by the meeting Chair. Under either of the foregoing circumstances, we will post information regarding the announcement on the investor relations page of the Companys website at www.chevron.com/investors/stockholder-services.
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98 | Chevron Corporation2021 Proxy Statement |
the chevron way
getting results the right way
The Chevron Way explains our beliefs, vision, purpose and values. It guides how we work and establishes a common understanding of our culture and aspirations.
the human energy company
Human ingenuity has the power to solve any challenge and overcome any obstacle. Meeting the worlds growing energy needs demands pursuit of innovations and advancements that deliver a better future for all.
This is our past, our present and our future.
our vision
To be the global energy company most admired for its people, partnership and performance. |
our purpose
We develop the affordable reliable, ever-cleaner energy that enables human progress. |
our beliefs
energy is essential to modern life
We work to provide the energy that enables human progress around the world. We live this purpose every day.
human ingenuity fuels innovation
The imagination and perseverance of people will deliver solutions to energys greatest challenges.
the future is lower carbon
Our actions will make energy and global supply chains more sustainable, helping industries and customers who use our products advance a lower carbon world.
leadership carries great responsibility
Meeting rising expectations demands performance and accountability at the highest level. We aim to deliver industry-leading results. |
our values
diversity and inclusion
We learn from and respect the cultures in which we operate. We have an inclusive work environment that values the uniqueness and diversity of individual talents, experiences and ideas.
leading performance
We develop leaders and collaborate as one team to deliver industry-leading performance. We continually raise the bar on actions and outcomes that meet the high expectations of our stakeholders.
partnership
We build trusting, mutually beneficial relationships. We work together and with our partners to achieve solutions and breakthroughs that benefit our shareholders and society.
protect people and the environment
We aim to lead our industry in health, safety and environmental performance. The protection of people, assets, communities and the environment is our highest priority.
trust and integrity
We earn trust and respect by acting with integrity and operating with the highest ethical standards. Our culture and reputation are built upon these principles. |
©2021 Chevron. All rights reserved.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
D46292-P52734-Z79456 KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Dear Stockholder:
The lower portion of this form is your proxy card for voting at Chevron Corporations 2021 Annual Meeting of Stockholders. It is important that you vote. You may vote by telephone, Internet, or mail by following the instructions printed on this form. If you vote by mail, please mark, sign, date, and return the proxy card (the lower portion of this form) using the enclosed postage-paid envelope or return it to Chevron Corporation, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. You must sign, date, and return the proxy card for your vote to be counted.
Important Notice Regarding Admission to the 2021 Annual Meeting
Virtual Annual Meeting
We are pleased to announce that Chevron will conduct its 2021 Annual Meeting of Stockholders (Annual Meeting) on the below date and time solely by live audio webcast in lieu of an in-person meeting. Your Board believes this format will enhance and facilitate attendance by providing convenient access for all of our stockholders. In addition, this meeting format will eliminate public health concerns around the COVID-19 pandemic and the significant costs associated with holding an in-person meeting. We have planned and designed the meeting to encourage stockholder participation, protect stockholder rights, and promote transparency.
We encourage participation
Stockholders of record owning Chevron common stock at the close of business on Monday, March 29, 2021, are entitled to participate in and vote at the Annual Meeting. To participate in the Annual Meeting, including to vote, ask questions, and view the list of registered stockholders as of the record date during the meeting, stockholders should go to the meeting website at www.virtualshareholdermeeting.com/CVX2021, enter the 16-digit control number found on your proxy card, voting instruction form, or Notice Regarding the Availability of Proxy Materials, and follow the instructions on the website. If your voting instruction form or Notice Regarding the Availability of Proxy Materials does not indicate that you may vote those shares through the www.proxyvote.com website and it does not include a 16-digit control number, you should contact your bank, broker, or other nominee (preferably at least 5 days before the annual meeting) and obtain a legal proxy in order to be able to attend, participate in, or vote at the Annual Meeting. The Annual Meeting will be opened for access beginning at 7:45 a.m. PDT on May 26, 2021. Proponents of the stockholder proposals included in this Proxy Statement will be given the option to prerecord or call in live through a dedicated line to ensure their ability to present their proposals.
We welcome questions from stockholders.
Questions may be submitted in advance of the meeting at www.proxyvote.com or live during the meeting at www.virtualshareholdermeeting.com/CVX2021. If we are not able to get to every question submitted, we will post a summary of the remaining questions and answers on www.chevron.com/investors/stockholder-services.
Technical difficulties and additional questions
If you have difficulty accessing the Annual Meeting, please call 844-976-0738 (toll free) or 303-562-9301 (international). Technicians will be available to assist you. Please submit any additional questions, comments, or suggestions by email at corpgov@chevron.com or by telephone by calling 1-877-259-1501. In the event of a technical malfunction or other situation that the meeting Chair determines may affect the ability of the meeting to satisfy the requirements for a stockholder meeting to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the meeting, the Chair will convene the Annual Meeting at 8:00 a.m. PDT on the date specified below at the Companys headquarters in San Ramon, California, solely for the purpose of adjourning the meeting to reconvene at a date, time, and physical or virtual location announced by the meeting Chair. Under either of the foregoing circumstances, we will post information regarding the announcement on the investor relations page of the Companys website at www.chevron.com/investors/stockholder-services.
Sincerely,
Mary A. Francis
Corporate Secretary and Chief Governance Officer
Annual Meeting of Stockholders
Meeting Date: |
Wednesday, May 26, 2021 | |
Meeting Time: |
8:00 a.m. PDT (open for access beginning at 7:45 a.m.) | |
Meeting Location: |
Online by live audio webcast (www.virtualshareholdermeeting.com/CVX2021) |
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on Wednesday, May 26, 2021:
The Notice of the 2021 Annual Meeting, 2021 Proxy Statement, and 2020 Annual Report are available at www.proxyvote.com.
D46293-P52734-Z79456
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CHEVRON CORPORATION
The undersigned stockholder of Chevron Corporation hereby appoints Michael K. Wirth, R. Hewitt Pate, and Mary A. Francis, and each of them, proxy holders of the undersigned, each with full power of substitution, to represent and to vote all the shares of Chevron Corporation common stock held of record by the undersigned on Monday, March 29, 2021, at Chevron Corporations Annual Meeting of Stockholders, to be held on Wednesday, May 26, 2021, and any adjournment or postponement thereof. The proxy holders will vote as directed by the undersigned. If the undersigned signs, dates, and returns this proxy card but gives no directions for voting, the proxy holders will vote in accordance with the Boards recommendations. The proxy holders will vote in accordance with their discretion on such other matters as may properly come before the meeting and any adjournment or postponement thereof, including, without limitation, any proposal to adjourn the meeting to a later time and place for the purpose of soliciting additional proxies, unless the undersigned strikes out this sentence.
If shares of Chevron Corporation common stock are issued to or held for the account of the undersigned under employee stock or retirement benefit plans and voting rights are attached to such shares (an Employee Voting Plan), the undersigned hereby directs the respective fiduciary of each applicable Employee Voting Plan to vote all shares of Chevron Corporation common stock held in the undersigneds name and/or account under such Voting Plan in accordance with the instructions given herein, at Chevron Corporations Annual Meeting of Stockholders and any adjournment or postponement thereof, on all matters properly coming before the meeting, including but not limited to the matters set forth on the reverse side. If the undersigned has shares in an Employee Voting Plan and does not vote those shares, the Employee Voting Plan fiduciary may or may not vote the shares, in accordance with the terms of the Employee Voting Plan. All votes of Employee Voting Plan shares must be received by the respective fiduciary by 11:59 p.m. EDT, Sunday, May 23, 2021, or other Employee Voting Plan cutoff date determined by the Employee Voting Plan fiduciary, in order to be counted. Employee Voting Plan shares may not be voted at the meeting.
Your telephone or Internet vote authorizes the named proxy holders and/or the respective Employee Voting Plan fiduciary to vote the shares in the same manner as if you marked, signed, and returned your proxy form.
If you vote your proxy via telephone or Internet, you do not need to mail back your proxy card.
If you vote by mail, please mark, sign, date, and return the proxy card on the reverse side and return it using the enclosed postage-paid envelope or return it to Chevron Corporation, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.