UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x☒
Filed by a Party other than the Registrant ¨☐
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EXXON MOBIL 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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and Proxy Statement | ||||
April |
Dear Shareholder:
We invite you to attend the annual meeting of shareholders currently scheduled on Wednesday, May 25, 2016,27, 2020, at the Morton H. Meyerson SymphonyRenaissance Dallas Hotel Conference Center, 2301 Flora Street,2222 North Stemmons Freeway, Dallas, Texas 75201.75207. The meeting will begin promptly at 9:30 a.m., Central Time. With the evolving concerns of COVID-19 and public health authority recommendations, these plans are subject to change and could evolve to a virtual meeting. We will notify you of any changes prior to the event and provide the latest status on the Investor Relations section of our website atexxonmobil.com/investor. As always, our first priority remains the health and safety of our shareholders, employees, and communities.
At the meeting, you will hear a report on our business and vote on the following items:
Election of directors;
Ratification of PricewaterhouseCoopers LLP as independent auditors;
Advisory vote to approve executive compensation as required by law;compensation;
Six shareholder proposals contained in this proxy statement; and
Other matters if properly raised.
Only shareholders of record on April 6, 2016,2, 2020, or their valid proxy holders may vote at the meeting. Attendance at the meeting is limited to shareholders or their proxy holders and ExxonMobil guests. Only shareholders or their valid proxy holders may address the meeting.
This booklet includes the formal notice of the meeting and proxy statement. The proxy statement tells you about the agenda, procedures, and rules of conduct for the meeting. It also describes how the Board operates, gives information about our director candidates, and provides information about the other items of business to be conducted at the meeting.
This year, we initiated the use of “Notice and Access” for delivery of proxy information to many shareholders, thereby capturing cost and environmental benefits. These shareholders will receive by mail aNotice Regarding the Availability of Proxy Materials on the Internet. The notice will also contain instructions on how to request paper copies of all proxy materials, if desired.
Financial information is provided separately in the booklet, 20152019 Financial Statements and Supplemental Information, enclosed with the proxy materials or made available online to all shareholders.
Your vote is important to us.Evenimportant.Even if you own only a few shares, we want your shares to be represented at the meeting. You can vote your shares by Internet, toll-free telephone call, or proxy card. ASummary of 2020 Proxy Voting Resultswill be available atexxonmobil.com after the annual shareholders meeting.
To attend the meeting in person, please follow the instructions on page 3.6. An audio webcast with slide presentation and a report on the meeting will be available on our website atexxonmobil.comexxonmobil.com..
Sincerely,
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Stephen A. Littleton Secretary | Darren W. | |||
Woods Chairman of the Board |
Table of ContentsTABLE OF CONTENTS
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Item 8 – Report on | ||||
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Shareholders are asked to consider the materials included in this proxy statement and to vote on the following:
ITEM 1: Election of Directors The Board recommends you voteFOR each of the following candidates. |
The Board of Directors has nominated the director candidates below. All of our nominees currently serve as ExxonMobil directors. All director nominees have stated that they are willing to serve if elected. | Personal information about each nominee is provided beginning onPage 20 |
Name, Age, Principal Occupation | Director Since | ExxonMobil Board Committees | Other Public | |||||||||||||
AC | CC | BAC | FC | PICC | EC | |||||||||||
Susan K. Avery, 70 President Emerita, Woods Hole Oceanographic Institution | 2017 | ✓ | ✓ | None | ||||||||||||
Angela F. Braly, 58 Former Chairman of the Board, President, and CEO, WellPoint (now Anthem) | 2016 | ✓ | C | Brookfield Asset Management; Lowe’s; Procter & Gamble | ||||||||||||
Ursula M. Burns, 61 Chairman of the Board, | 2012 | C | ✓ | ✓ | Nestlé; | |||||||||||
Kenneth C. Frazier, 65 LD Chairman of the Board and CEO, Merck & Co. | 2009 | ✓ | C | ✓ | Merck | |||||||||||
Joseph L. Hooley, 63 Former Chairman of the Board, President, and CEO, State Street | 2020 | ✓ | ✓ | Aptiv | ||||||||||||
Steven A. Kandarian, 68 Former Chairman of the Board, | 2018 | ✓ | ✓ | AECOM | ||||||||||||
Douglas R. Oberhelman, 67 Former Chairman of the Board and CEO, Caterpillar | 2015 | ✓ | ✓ | Bombardier | ||||||||||||
Samuel J. Palmisano, 68 Former Chairman of the Board, President, and CEO, IBM | 2006 | C | ✓ | ✓ | None | |||||||||||
William C. Weldon, 71 Former Chairman of the Board and CEO, Johnson & Johnson | 2013 | ✓ | ✓ | CVS Caremark | ||||||||||||
Darren W. Woods, 55 C Chairman of the Board and CEO, Exxon Mobil Corporation | 2016 | C | C | None |
C | Chairman | AC | Audit Committee | FC | Finance Committee | |||||
LD | Lead Director | CC | Compensation Committee | PICC | Public Issues and Contributions Committee | |||||
✓ | Member | BAC | Board Affairs Committee | EC | Executive Committee |
2020 Proxy Statement | 1 |
Director Attendance
During 2019, the ExxonMobil Board met ten times. Directors, on average, attended approximately 96 percent of Board and committee meetings. No director attended less than 75 percent of such meetings. ExxonMobil’snon-employee directors held seven executive sessions in 2019.
10 | 96% | |
Board meetings |
Director average attendance |
Board Tenure
The Board actively refreshes its membership; average tenure fornon-employee director nominees is lower than the applicableStandard & Poor’s 500 average of 8.0 years.
6.1 | ||
Average tenure of non- |
Worldwide Perspectives
The Board nominees have lived and worked around the world and bring broad perspectives to ExxonMobil’s global
businesses.
Additional information:
Director leadership & oversight...Page 8
Director qualifications & competencies...Page 9
Director tenure...Page 12
Board Highlights
The ExxonMobil Board is comprised of directors with a diverse mix of backgrounds, knowledge, and skills.
“ExxonMobil recognizes the strength and effectiveness of the Board reflects the balance, experience, and diversity of the individual directors; their commitment; and importantly, the ability of directors to work effectively as a group in carrying out their responsibilities. ExxonMobil seeks candidates with diverse backgrounds who possess knowledge and skills in areas of importance to the Corporation.”
– ExxonMobil Director Selection Guidelines
ExxonMobil’s director nominee competencies/ profiles include:
Risk Management | 10 of 10 Directors |
Independence | 9 of 10 Directors |
Large / Complex Organizations | 10 of 10 Directors |
Gender and / or Race / Ethnic Diversity | 4 of 10 Directors |
Scientific / Technical / Research | 6 of 10 Directors |
Current / Former CEO / Field Prominence | 10 of 10 Directors |
2 | 2020 Proxy Statement |
ITEM 2: Ratification of Independent Auditors The Board recommends you voteFOR this proposal. |
The ExxonMobil Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”) to audit ExxonMobil’s financial statements for 2020. | Page 29 Additional information about the Audit Committee’s appointment of PwC | |||||
You are asked to ratify that appointment. | ||||||
ITEM 3: Advisory Vote to Approve Executive Compensation The Board recommends you voteFORthis proposal. |
ExxonMobil asks you to vote on anon-binding resolution to approve the compensation of the Named Executive Officers. | Page 30 Additional information about ExxonMobil’s compensation | |||||
ITEMS 4 through 9: Shareholder Proposals The Board recommends you voteAGAINST each of these proposals. |
You will have the opportunity to vote on shareholder proposals submitted to ExxonMobil. | Page 59 The text of these proposals, the proponents’ |
2020 Proxy Statement | 3 |
The annual meeting of shareholders is currently scheduled to take place on Wednesday, May 27, 2020 at 9:30 a.m. Central Time at the Renaissance Dallas Hotel Conference Center. However the Corporation continues to monitor closely the coronavirus pandemic (COVID-19) and public health authority recommendations. It is possible the time, date, location or logistics of the meeting may be changed, including by holding a virtual meeting. In that case, the Corporation will issue additional public disclosure regarding any changes, including on the Investor Relations section of our website atexxonmobil.com/investor.As always, our first priority remains the health and safety of our shareholders, employees, and communities.
Who May Vote
Shareholders of ExxonMobil, as recorded in our stock register on April 6, 2016,2, 2020, may vote at the meeting.
How to Vote
You may vote in person at the meeting or by proxy. We recommend you vote by proxy even if you plan to attend the meeting. You can always change your vote at the meeting.
Important Notice Regarding the Availability of Proxy Materials for the ShareholderShareholders Meeting to be held on May 25, 201627, 2020:
The |
Notice and Access
This year we have elected toWe distribute proxy materials to many shareholders via the Internet under the Securities and Exchange Commission’s (SEC’s)(“SEC’s”) “Notice and Access” rules, thereby capturing cost and environmental benefits. On or about April 13, 2016,9, 2020, we mailed a Notice Regarding the Availability of Proxy Materials (“Notice”) that contains information about our 2016 Annual Shareholders Meeting2020 annual shareholders meeting and instructions on how to view all proxy materials on the Internet. Also included are instructions on how to vote and how to request a paper ore-mail copy of the proxy materials.
Electronic Delivery of Proxy Statement and Annual Report Documents
For shareholders receiving proxy materials by mail, you can elect to receive ane-mail in the future that will provide electronic links to these documents. Opting to receive your proxy materials online will save the Company the cost of producing and mailing documents to your home or business, and will also give you an electronic link to the proxy voting site.
• | Shareholders of Record:If you vote on the Internet atwww.investorvote.com/exxonmobil, |
Beneficial Shareholders:If you hold your shares in a brokerage account, you may also have the opportunity to receive copies of the proxy materials electronically. Please check the information provided in the proxy materials mailed to you by your bank or broker regarding the availability of this service.
How Proxies Work
ExxonMobil’s Board of Directors is asking for your proxy. Giving us your proxy means you authorize us to vote your shares at the meeting in the manner you direct.
4 | 2020 Proxy Statement |
If your shares are held in your name, you can vote by proxy in one of three convenient ways:
Online | Telephone | |||
Follow the instructions at www.investorvote.com/ You will need to have your proxy card or Notice in hand. At this website, you can elect to access future proxy statements and annual reports via the Internet. | Call toll-free1-800-652-8683 or 1-781-575-2300 (outside the United States, Canada, and Puerto Rico), and follow the instructions. You will need to have your proxy card or Notice in hand. | Complete, sign, date, and return your proxy card in the enclosed envelope. If you receive a Notice and would like to vote in writing, please follow the instructions in the Notice to obtain paper proxy materials. |
Your proxy card covers all shares registered in your name and shares held in your Computershare Investment Plan account. If you own shares in the ExxonMobil Savings Plan for employees and retirees, your proxy card also covers those shares.
If you give us your signed proxy but do not specify how to vote, we will vote your shares as follows:
For the election of our director candidates;
For ratification of the appointment of independent auditors;
For approval of the compensation of the Named Executive Officers; and
As recommended by the Board with respect to shareholder proposals.
If you hold shares through someone else, such as a stockbroker, you will receive materialmaterials from that firm asking how you want to vote. Check the voting form used by that firm to see if it offers Internetonline or telephone voting.
Voting Shares in the ExxonMobil Savings Plan
The Trustee of the ExxonMobil Savings Plan will vote Plan shares as participants direct. To the extent participants do not give instructions, the Trustee will vote shares as it thinks best. The proxy card serves to give voting instructions to the Trustee.
Revoking a Proxy
You may revoke your proxy before it is voted at the meeting by:
Submitting a new proxy with a later date via a proxy card, the Internet,online, or by telephone;
Notifying ExxonMobil’s Secretary in writing before the meeting; or
Voting in person at the meeting.
Confidential Voting
Independent inspectors count the votes. Your individual vote is kept confidential from us unless special circumstances exist. For example, a copy of your proxy card will be sent to us if you write comments on the card.
Quorum
In order to carry on the business of the meeting, we must have a quorum. This means at least a majority of the outstanding shares eligible to vote must be represented at the meeting, either by proxy or in person. Treasury shares, which are shares owned by ExxonMobil itself, are not voted and do not count for this purpose.
2020 Proxy Statement | 5 |
Votes Required
Election of Directors Proposal:A plurality Under ExxonMobil’sby-laws, a director nominee must receive a majority of the votes cast is required forin order to be elected to the Board of Directors in anon-contested election. In a contested election (in which the number of directors. This means thatnominees exceeds the number of directors to be elected), the plurality vote standard under New Jersey law applies. Under plurality voting, the director nominee with the most votes for a particular seat is elected for that seat. Only votes FOR or WITHHELD count. Abstentions and brokernon-votes are not counted for purposes of the election of directors. A brokernon-vote occurs when a bank, broker, or other holder of record that is holding shares for a beneficial owner does not vote on a particular proposal because the record holder does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.If you own shares through a broker, you must give the broker instructions to vote your shares in the election of directors. Otherwise, your shares will not be voted.
Our Corporate Governance Guidelines, which can be found in the Corporate Governance section of our website atexxonmobil.com/guidelinesgovernance,, state that all directors will stand for election at the annual meeting of shareholders. In anynon-contested election of directors, any director nominee who receives a greater number of votes WITHHELD fromAGAINST his or her election than votes FOR such election shall tender his or her resignation. Within 90 days after certification of the election results, the Board of Directors will decide, through a process
managed by the Board Affairs Committee and excluding the nominee in question, whether to accept the resignation. Absent a compelling reason for the director to remain on the Board, the Board shall accept the resignation. The Board will promptly disclose its decision and, if applicable, the reasons for rejecting the tendered resignation on Form8-K filed with the Securities and Exchange Commission (SEC).Commission.
Other Proposals:Approval of the ratification of the appointment of independent auditors, the advisory vote to approve executive compensation, and the shareholder proposals requiresrequire the favorable vote of a majority of votes cast. Only votes FOR or AGAINST these proposals count.
Abstentions count for quorum purposes, but not for voting. Brokernon-votes count as votes FOR the ratification of the appointment of independent auditors but do not count for voting on any of the other proposals.
Annual Meeting Admission
Only shareholders or their proxy holders and ExxonMobil guests may attend the meeting.
For safety and security reasons, cameras, smartphones, recording equipment, electronic devices, computers, large bags, briefcases, packages, and firearms or other weapons will not be permitted in the building.buildingIn.In addition, each shareholder and ExxonMobil guest will be asked to present valid government-issued picture identification, such as a driver’s license, before being admitted to the meeting.
For registered shareholders, an admission ticket is the upper part of your proxy card or the full Notice. Please bring the admission ticket with you to the meeting.
If your shares are held in the name of your broker, bank, or other nominee, you must bring to the meeting an account statement or letter from the nominee indicating that you beneficially owned the shares on April 6, 2016,2, 2020, the record date for voting. You may receive an admission ticket in advance by sending a written request with proof of ownership to the address listed on the next pagebelow under Contact Information.
Shareholders who do not present admission tickets at the meeting will be admitted only upon verification of ownership at the admission counter.
Audio Webcast of the Annual Meeting
You are invited to visit our website atexxonmobil.comto hear the audio webcast with slide presentation at 9:30 a.m., Central Time, on Wednesday, May 25, 2016.27, 2020. An archived copy of this audio webcast will be available on our website for one year.
6 | 2020 Proxy Statement |
Conduct of the Meeting
The Chairman has broad responsibility and legal authority to conduct the annual meeting in an orderly and timely manner. This authority includes establishing rules for shareholders who wish to address the meeting. Only shareholders or their valid proxy holders may address the meeting. Copies of these rules will be available at the meeting. The Chairman may also exercise broad discretion in recognizing shareholders who wish to speak and in determining the extent of discussion on each item of business. In light of the number of business items on this year’s agenda and the need to conclude the meeting within a reasonable period of time, we cannot ensure that every shareholder who wishes to speak on an item of business will be able to do so.
Dialogue can usually be better accomplished with interested parties outside the meeting and, for this purpose, we have provided a method on our website atexxonmobil.com/directors for raising issues and contacting thenon-employee directors either in writing or electronically. The Chairman may also rely on applicable law regarding disruptions or disorderly conduct to ensure that the meeting is conducted in a manner that is fair to all shareholders. Shareholders making comments during the meeting must do so in English so that the majority of shareholders present can understand what is being said.
Contact Information
If you have questions or need more information about the annual meeting, write to Mr. Jeffrey J. Woodbury, Secretary, Exxon Mobil Corporation, 5959 Las Colinas Boulevard, Irving, TX 75039-2298. Alternatively, call us at 1-972-444-1157 or send a fax to 1-972-444-1505.
Contact Information If you have questions or need more information about the annual meeting, write to Mr. Stephen A. Littleton, Secretary, Exxon Mobil Corporation, 5959 Las Colinas Boulevard, Irving, TX 75039-2298. Alternatively, call us at1-972-940-6715 or send a fax to1-972-940-6748. For information about shares registered in your name or your Computershare Investment Plan account, call ExxonMobil Shareholder Services at1-800-252-1800 or1-781-575-2058 (outside the United States, Canada, and Puerto Rico), or access your account via the website atwww.computershare.com/exxonmobil. We also invite you to visit ExxonMobil’s website, where investor information can be found atexxonmobil.com/investor.For information about shares registered in your name or your Computershare Investment Plan account, call ExxonMobil Shareholder Services at 1-800-252-1800 or 1-781-575-2058 (outside the United States, Canada, and Puerto Rico), or access your account via the website atwww.computershare.com/exxonmobil. We also invite you to visit ExxonMobil’s website atexxonmobil.com. Investor information can be found atexxonmobil.com/investor. Website materials are not part of this proxy solicitation.
Overview
The Board of Directors and its committees perform a number of functions for ExxonMobil and its shareholders, including:
Overseeing the management of the Company on your behalf, including oversight of risk management;
Reviewing ExxonMobil’s long-term strategic plans;
Exercising direct decision-making authority in key areas, such as declaring dividends;
Selecting the CEOChief Executive Officer (“CEO”) and evaluating the CEO’s performance; and
Reviewing development and succession plans for ExxonMobil’s top executives.executives; and
Gathering insights and sharing perspectives from shareholders during periodic engagements and other communications.
The Board has adopted Corporate Governance Guidelines that govern the structure and functioning of the Board and set out the Board’s position on a number of governance issues. A copy of our current Corporate Governance Guidelines is posted on our website atexxonmobil.com/guidelines.
All ExxonMobil directors stand for election at the annual meeting. Non-employee directors cannot stand for election after they have reached age 72, unlessAt least annually, the Board makes an exception on a case-by-case basis. Employee directors resign fromand each of the Board when theycommittees conduct an evaluation of their performance and effectiveness. Any potential changes to the committees’ charters are no longer employed by ExxonMobil.also considered at least once a year.
2020 Proxy Statement | 7 |
Risk Oversight
Risk oversight is the responsibility of theThe full Board of Directors.Directors provides oversight of key risks to ExxonMobil’s business. The Board throughout the year participates in reviews with management on the Company’s business, including identified risk factors. As a whole, the Board reviews include litigation and other legal matters; political contributions, budget, and policy; lobbying costs; developments in climate science and policy; theOutlook for Energy Outlook, which projects world energy supply and demand to 2040; theEnergy & Carbon Summary; stewardship of business performance; and long-term strategic plans. The Board receives updates and reviews from both internal ExxonMobil and external experts on issues of importance to the Company.
The Board, and/orincluding the Public Issues and Contributions Committee, visitvisits an ExxonMobil operationoperations site each year. These visits allowenable the directors to better understand local issuesobserve and to discussprovide input on safety, operating practices, environmental performance, technology, products, industry and corporate standards, and community involvement associatedengagement.
The Board oversees a broad spectrum of interrelated risks with the Company’s business.assistance from its committees. This integrated risk management approach facilitates recognition and oversight of important risk interdependencies.
In addition, existing committees help the Board carry out its responsibility for risk oversight by focusing on specific key areas of risk:
The Board receives regular updates from the committees, and believes this structure is best suited for overseeing risk.
Board Leadership Structure
The Board believes that the decision as to who should serve as Chairman and/or CEO is the proper responsibility of the Board. The Board retains authority to amend the By-Lawsby-laws to separate the positions of Chairman and CEO at any time and will carefully consider the pros and cons of such separation or combination.At the present time, the Board believes the interests of all shareholders are best served through a leadership model with a combined Chairman/CEO position and an independent PresidingLead Director.
The current CEO possesses anin-depth knowledge of the Company; its integrated, multinational operations; the evolving energy industry supply and demand;demand fundamentals; and the array of challenges to be faced. This knowledge was gained through more than 4027 years of successful experience in progressively more senior positions, including domestic and international responsibilities.
The Board believes that these experiences and other insights put the CEO in the best position to provide broad leadership for the Board as it considers strategy and as it exercises its fiduciary responsibilities to shareholders. Further, the Board has demonstrated its commitment and ability to provide independent oversight of management.
8 | 2020 Proxy Statement |
The Board is comprised entirelysolely of independent directors exceptand the CEO, and President, and 100 percent of the Audit, Compensation, Board Affairs, and Public Issues and Contributions Committee members are independent. Each independent director has access to the CEO and other Company executives on request;upon request, may call meetings of the independent directors;directors, and may request agenda topics to be added or dealt withaddressed in more detail at meetings of the full Board or an appropriate Board committee.
In addition, after considering evolving governance practices and shareholder input regarding Board independence, the Board established the role of Presiding Director. The Board believes the PresidingLead Director can provideprovides effective independent Board leadership. J.S. Fishman Kenneth C. Frazier serves as PresidingLead Director, as of March 2020, and is expected to remain in the position at least through the annual meeting of shareholders. In accordance with the specific duties prescribed in the Corporate Governance Guidelines, the Presiding Director chairs and approves the agenda for executive sessions of the independent directors, which are held several times per year, normally coincident with meetings of the Board and without the CEO or other management present; chairs meetings of the Board in the absence of the Chairman; and works closely with the Chairman in developing Board agendas, topics, schedules, and in reviewing materials provided to the directors.
The Lead Director’s authorities, under the Corporate Governance Guidelines, include: | The Lead Director also serves as Chair of the Board Affairs Committee with authorities that include: | |
✓ Calling, chairing, and setting the agenda for executive sessions of thenon-employee directors ✓ Providing feedback to the Chairman ✓ Chairing meetings of the Board in the ✓ Reviewing and approving the schedule and agenda for all Board meetings and reviewing ✓ Advising the Chairman on the quality, ✓ Reviewing committee meeting schedules ✓ Engaging with shareholders, as appropriate ✓ Leading the annual performance evaluation | ✓ Establishing the criteria for director engagement with shareholders ✓ Providing comments and suggestions to the Board on Board committee structure, operations, member qualification, and member appointment ✓ Overseeing independent director succession planning, remuneration, requests for additions to board memberships, and resignations ✓ Establishing and maintaining procedures for interested parties to communicate withnon-employee directors ✓ Considering Board governance practices and procedures including any changes to governance guidelines ✓ Providing oversight of the performance and effectiveness of the evaluation process for the Board and its committees | |
In addition, the Lead Director, working together with the Compensation Committee, oversees the annual evaluation of the CEO, the communication of resulting feedback to the CEO, and the review of CEO succession plans. |
Director Qualifications
The Board has adopted guidelines outlining the qualifications sought when consideringnon-employee director candidates. These guidelinesGuidelines for the Selection ofNon-Employee Directors (“Selection Guidelines”), which are published on our website atexxonmobil.com/directorguidelines., are reviewed annually and state in part:
In part,“ExxonMobil recognizes the guidelines describestrength and effectiveness of the necessary experiencesBoard reflects the balance, experience, and diversity of the individual directors; their commitment; and importantly, the ability of directors to work effectively as a group in carrying out their responsibilities. ExxonMobil seeks candidates with diverse backgrounds who possess knowledge and skills expectedin areas of importance to the Corporation.”
The qualifications we consider for director candidates as follows:
“Candidates for non-employee director of Exxon Mobil Corporation should beinclude: individuals who have achieved prominence in their fields, withfields; diversity of experiences and backgrounds, including gender and race/ethnic diversity; experience and demonstrated expertise in managing large, relatively complex organizations, and/such as that of CEOs or in a professional or scientific capacity, be accustomed to dealing with complex situations, preferably those with worldwide scope.”
The key qualifications the Board seeks across its membership to achieve a balance of diversity and experiences important to the Corporation include: financial expertise; experience as the CEOnext-level executives of a significant company or organization or as a next-level executive with responsibilities for global operations; experience managing large, complex organizations;responsibilities; financial and other risk management expertise; experience on one or more boards of significant public ornon-profit organizations; and expertise resulting from significant academic, scientific, or research activities. The Board also seeks diversityactivities; and experience with cyclical businesses, such as commodities.
Other considerations for director candidates include: a substantial majority of life experiences and backgrounds, as well as gender and ethnic diversity.
The table below describes the particular experience, qualifications, attributes, and skills of each director nominee that led the Board must meet independence standards as described in the Corporate Governance Guidelines; all candidates must be free from any relationship with management or the Corporation that would interfere with the exercise of independent judgment; candidates should be committed to conclude that such person should serve as a directorrepresenting the interests of all shareholders and not any particular constituency; and the Company.Board must include members who satisfy legal and stock exchange requirements for certain Board committees.
2020 Proxy Statement | ||||||
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The Board is comprised of directors with an effective mix of backgrounds, knowledge, and skills that the Board considers relevant and beneficial in fulfilling its oversight role. The chart below provides a summary of the collective competencies of the Board nominees and explains why these are important:
Director Qualifications | Competencies and Relevance to ExxonMobil | Board Composition | ||||
Individuals who have achieved prominence in their fields | Current CEO / Former CEO / Field Prominence Experience serving as a CEO or other prominent leader provides unique perspectives to help the Board independently oversee ExxonMobil’s CEO and management. Having this experience also increases the Board’s understanding and appreciation of the many facets of modern international organizations, including strategic planning, financial reporting and compliance, and risk oversight. | |||||
Experience and demonstrated expertise in managing large, relatively complex organizations, such as CEOs or next- level executives of a significant company or organization with global responsibilities | Large / Complex Organizations ExxonMobil is among the largest corporations in the world. Experience leading a large organization provides practical insights on the challenges and opportunities complex businesses encounter. | |||||
Global Business Leadership ExxonMobil conducts business around the world. Having a global business perspective aids the Board in understanding diverse business environments, economic conditions, and cultures associated with our global workforce and activities. | ||||||
Operational Experience Our Company operates in many different places and under varied conditions. Having experience with operational matters and requirements assists the Board in understanding the issues that may face ExxonMobil in its worldwide activities, including maintenance needs, labor relations, and regulatory requirements. | ||||||
Financial or other risk management expertise | Financial Experience ExxonMobil’s business involves complex financial management, capital allocation, and reporting issues. An understanding of finance and financial reporting is valuable in order to promote effective capital allocation, robust controls, and oversight. | |||||
Risk Management The scale, scope, and complexity of ExxonMobil’s business raises a multitude of interdependent risks, which can vary over time. Experience in effectively identifying, prioritizing, and managing a broad spectrum of risks can help the | ||||||
Experience on one or more boards of significant publicor non-profit organizations | Public Company Board | |||||
Expertise resulting from significant academic, scientific, or research activities | Scientific / Technical / Research Experience ExxonMobil is a leader in research and technology, from finding and producing oil and natural gas, to developing new products, mitigating emissions, and protecting the | |||||
Experience with cyclical businesses, such as commodities | Commodity / Cyclical Business Experience | |||||
10 | ||||
Director Independence
Our Corporate Governance Guidelines require that a substantial majorityDiversity of experiences and backgrounds, including gender and race/ethnicity, is also an important consideration for Board members. The charts below reflect the gender, race/ethnicity, and age diversity of the Board consist of independent directors. In general, the Guidelines require that an independent director must have no material relationship with ExxonMobil, directly or indirectly, except as a director. Thenominees.
Strong Board determines independence on the basis of the standards specified by the New York Stock Exchange (NYSE), the additional standards referenced in our Gender and Race/Ethnic Diversity
Director Independence The Corporation’s Corporate Governance Guidelines require that a | ||
Corporate Governance Guidelines, and other facts and circumstances the Board considers relevant. |
Under ExxonMobil’s Corporate Governance Guidelines, a director will not be independent if a reportable “related person transaction” exists with respect to that director or a member of the director’s family for the current or most recently completed fiscal year. See the Guidelines for Review of Related Person Transactions posted on the Corporate Governance section of our website and described in more detail under Related Person Transactions and Procedures on pages 14 to 15.13 and 14.
The Board has reviewed relevant relationships between ExxonMobil and eachnon-employee director and director nominee to determine compliance with the NYSE standards and ExxonMobil’s additional standards. The Board has also evaluated whether there are any other facts or circumstances that might impair a director’s independence.Based on that review, the Board has determined that all ExxonMobilnon-employee directors and nominees are independent. The Board has also determined that each member of the Audit, Board Affairs, Compensation, and Public Issues and Contributions Committees (see membership table on page 10)15) is independent.independentbased on both applicable NYSE standards and the Company’s independence standards for each of these committees. The Company’s standards for each committee are included in their respective charters and are posted on our website at exxonmobil.com/guidelines.
In recommending that each director and nominee be found independent, the Board Affairs Committee reviewed the following transactions, relationships, or arrangements. All matters described below fall within the NYSE and ExxonMobil independence standards.
Name | Matters Considered | |
U.M. Burns | Ordinary course business with | |
K.C. Frazier | ||
Ordinary course business with Merck (purchases of pharmaceuticals; sales of chemicals and oils) | ||
S.A. Kandarian | Ordinary course business with |
2020 Proxy Statement | 11 |
Board Succession
As noted in the committee information that follows, the Board Affairs Committee is responsible for identifying director candidates. The Committee seeks new candidates in several ways:
Recommendations made by thenon-employee directors. These recommendations are developed based on the directors’ own knowledge and experience in a variety of fields and on the research conducted by ExxonMobil staff at the Committee’s direction.
Engagement of an executive search firm. The firm brings forward potential director candidates for the Committee to consider and helps research candidates identified by the Committee.
Recommendations made by employee directors, shareholders, and others.
All recommendations, regardless of the source, are evaluated on the same basis against the criteria contained in the Selection Guidelines. The Committee has also instructed its executive search firm to include diversity as part of the candidate search criteria.
Shareholders may send recommendations for director candidates to the Secretary at the address given under Contact Information on page 7. A submission recommending a candidate should include:
Sufficient biographical information to enable the Committee to evaluate the candidate in light of the Selection Guidelines;
Information concerning any relationship between the candidate and the recommending shareholder; and
Material indicating the willingness of the candidate to serve if nominated and elected.
The procedures by which shareholders may recommend nominees have not changed materially since last year’s proxy statement.
The Company seeks to have a diverse Board representing a range of backgrounds, knowledge, and skills relevant to the Company’s business and the needs of the Board, and as part of the search process, considers highly qualified candidates, including women and minorities. The Committee does not use quotas, but considers diversity along with the other requirements of the Selection Guidelines when evaluating potential new directors.
The recommendation to elect Mr. Hooley was made by the incumbent directors.
Board Tenure
The Board does not impose tenure limits on its directors, other than a mandatory retirement age of 72 and the requirement to stand for election annually. Given the complexity and breadth of our business and its long-term investment horizons, the Board considers longevity of service and experience of great value. The Board also believes that its director compensation approach, which limits the vesting of restricted shares until retirement, closely aligns directors with the interests of long-term shareholders.
All ExxonMobil directors stand for election at the annual meeting.Non-employee directors cannot stand for election after they have reached age 72, unless the Board makes an exception on acase-by-case basis. Employee directors resign from the Board when they are no longer employed by ExxonMobil.
As of April 1, 2020, the average tenure ofnon-employee directors standing for election is 6.1 years, well below the average of S&P 500 companies of 8.0 years (per2019 Spencer Stuart Board Index).
12 | 2020 Proxy Statement |
Related Person Transactions and Procedures
In accordance with SEC rules, ExxonMobil maintains Guidelines for Review of Related Person Transactions (“Related Person Transaction Guidelines”). These guidelines are available on the Corporate Governance section of our website.
In accordance with the Related Person Transaction Guidelines, all executive officers, directors, and director nominees are required to identify, to the best of their knowledge after reasonable inquiry, business and financial affiliations involving themselves or their immediate family members that could reasonably be expected to give rise to a reportable related person transaction. Covered persons must also advise the Secretary of the Corporation promptly of any change in the information provided, and will be asked periodically to review and reaffirm their information.
For the above purposes, “immediate family member” includes a person’s spouse, parents, siblings, children,in-laws, and step-relatives.
Based on this information, the Company’s own records are reviewed andfollow-up inquiries are made as may be necessary to identify potentially reportable transactions. A report summarizing such transactions and including a reasonable level of detail is then provided to the Board Affairs Committee. The Committee oversees the Related Person Transaction Guidelines generally and reviews specific items to assess materiality.
In assessing materiality for this purpose, information will be considered material if, in light of all circumstances, there is a substantial likelihood that a reasonable investor would consider the information important in deciding whether to buy or sell ExxonMobil stock or in deciding how to vote shares of ExxonMobil stock. A director will abstain from the decision on any transactions involving that director or his or her immediate family members.
Under SEC rules, certain transactions are deemed not to involve a material interest (including transactions in which the amount involved in any12-month period is less than $120,000 and transactions with entities where a related person’s interest is limited to service as anon-employee director). In addition, based on a consideration of ExxonMobil’s facts and circumstances, the Committee will presume that the following transactions do not involve a material interest for purposes of reporting under SEC rules:
• | Transactions in the ordinary course of |
• | Grants or membership payments in the ordinary course of business to nonprofit organizations,provided: (1) the affected director or executive officer did not participate in the decision on the part of ExxonMobil to make such payments; and (2) the amount of general purpose grants in a12-month period is less than 1 percent of the recipient’s gross revenues; |
Payments under ExxonMobil plans and arrangements that are available generally to U.S. salaried employees (including contributions under the ExxonMobil Foundation’s Educational and Cultural Matching Gift Programs and payments to providers under ExxonMobil health care plans); and
• | Employment by ExxonMobil of a family member of an executive officer,provided the executive officer does not participate in decisions regarding the hiring, performance evaluation, or compensation of the family member. |
Transactions or relationships not covered by the above standards will be assessed by the Board Affairs Committee on the basis of the specific facts and circumstances.
Unless otherwise noted, the following disclosures are made as of February 26, 2020, which is the date of the most recent Board Affairs Committee review of potential related person transactions.
ExxonMobil and its affiliates have more than 70,000 employees around the world and employees related by birth or marriage may be found at all levels of the organization. ExxonMobil employees do not receive preferential treatment by reason of being related to an executive officer, and executive officers do not participate in hiring, performance
2020 Proxy Statement | 13 |
evaluation, or compensation decisions for family members. ExxonMobil’s employment guidelines state, “Relatives of Company employees may be employed on anon-preferential basis. However, an employee should not be employed by or assigned to work under the direct supervision of a relative, or to report to a supervisor who in turn reports to a relative of the employee.”
Several current ExxonMobil executive officers and retirees who served as executive officers in 2019 have family members who are employed by the Corporation or its affiliates and whose current annualized compensation (including benefits) exceeds the SEC disclosure threshold: L.D. DuCharme (President – Upstream Integrated Solutions Company) has a spouse employed by ExxonMobil Upstream Oil & Gas Company; N.A. Hansen (Vice President – Investor Relations and Secretary to March 15, 2020) has abrother-in-law employed by ExxonMobil Upstream Integrated Solutions Company; L.M. Mallon (President – ExxonMobil Upstream Oil & Gas Company) has a son employed by ExxonMobil Upstream Integrated Solutions Company; K.T. McKee (President – ExxonMobil Chemical Company) has a spouse employed by ExxonMobil Chemical Company; R.N. Schleckser (retired former Vice President and Treasurer) has a brother formerly employed by (now retired from) ExxonMobil Research and Engineering Company; J.M. Spellings, Jr. (Vice President, Treasurer and General Tax Counsel) has a son employed by ExxonMobil Pipeline Company; A.P. Swiger (Senior Vice President – Exxon Mobil Corporation) has adaughter-in-law employed by Exxon Mobil Corporation; and T.J. Wojnar, Jr. (Vice President – Corporate Strategic Planning) has ason-in-law employed by ExxonMobil Fuels & Lubricants Company. Consistent with ExxonMobil’s Related Person Transaction Guidelines as described above, these relationships are not considered to be material within the meaning of the related person transaction disclosure rules.
S.N. Ortwein (retired former President, XTO Energy Inc.) had abrother-in-law who served as Chief Executive Officer of Oracle Corporation. In the ordinary course of our business, ExxonMobil purchases a variety of computer technology and services from Oracle. Ms. Ortwein had no involvement in decisions regarding ExxonMobil’s business with Oracle and the annual volume of such business is well below the categorical threshold established in ExxonMobil’s Related Person Transaction Guidelines. R.M. Ebner (Vice President and General Counsel) has abrother-in-law who is a partner of a law firm that performs limited work for ExxonMobil. Mr. Ebner’sbrother-in-law does not work on ExxonMobil’s account and Mr. Ebner is recused from any involvement in decisions to retain the firm. Therefore, these relationships are not considered to be material within the meaning of the related person transaction disclosure rules.
The Board Affairs Committee also reviewed ExxonMobil’s ordinary course business with companies for whichnon-employee directors or their immediate family members serve as executive officers. The Committee determined that, in accordance with the categorical standards described above, none of those matters represent reportable related person transactions. See Director Independence on page 11.
The Committee also determined that no related person transactions occurred during the year involving any of the investors who have reported ownership of more than 5 percent of ExxonMobil’s outstanding common stock. See Certain Beneficial Owners on page 27.
ExxonMobil is not aware of any related person transactions required to be reported under applicable SEC rules since the beginning of the last fiscal year where our policies and procedures did not require review, or where such policies and procedures were not followed.
The Corporation’s Related Person Transaction Guidelines are intended to assist the Corporation in complying with its disclosure obligations under SEC rules. These procedures are in addition to, not in lieu of, the Corporation’s Code of Ethics and Business Conduct.
Code of Ethics and Business Conduct
The Board maintains policies and procedures (referred to in this proxy statement as the “Code”) that represent both the code of ethics for the principal executive officer, principal financial officer, and principal accounting officer under SEC rules, and the code of business conduct and ethics for directors, officers, and employees under NYSE listing standards. The Code applies to all directors, officers, and employees. The Code includes a Conflicts of Interest Policy under which directors, officers, and employees are expected to avoid any actual or apparent conflict between their own personal interests and the interests of the Corporation.
The Code is posted on the ExxonMobil website atexxonmobil.com/code. The Code is also included as an exhibit to ourAnnual Report on Form10-K. Any amendment of the Code will be posted promptly on ExxonMobil’s website.
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The Corporation maintains procedures for administering and reviewing potential issues under the Code, including procedures that allow employees to make complaints without identifying themselves. The Corporation also conducts periodic mandatory business practice training sessions, and requires regular employees andnon-employee directors to complete annual compliance certifications.
The Board Affairs Committee will initially review any suspected violation of the Code involving an executive officer or director and will report its findings to the Board. The Board does not envision that any waiver of the Code will be granted. Should such a waiver occur, it will be promptly disclosed on ExxonMobil’s website.
Board Meetings and Committees; Annual Meeting Attendance
The Board met 11ten times in 2015.2019. ExxonMobil’s incumbent directors, on average, attended approximately 9296 percent of Board and committee meetings during 2015.2019. No director attended less than 75 percent of such meetings. ExxonMobil’snon-employee directors held sixseven executive sessions in 2015.2019.
As specified in our Corporate Governance Guidelines, it is ExxonMobil’s policy that directors should make every effort to attend the annual meeting of shareholders. All incumbent directors in 2019 attended last year’s meeting except Mr. Brabeck-Letmathe.meeting.
Board Committees
The Board appoints committees to help carry out its duties. Board committees work on key issues in greater detail than would be possible at full Board meetings. Onlynon-employee directors may serve on the Audit, Compensation, Board Affairs, and Public Issues and Contributions Committees. Each committee has a written charter. The charters are posted on the Corporate Governance section of our website atexxonmobil.com/governance.
The tabletables below showsshow the current membership of each Board committee and the number of meetings each committee held in 2015.2019.
Director | Audit | Compensation | Board Affairs | Finance | Public Issues and Contributions | Executive(1) | ||||||||||||||||||||||||
M.J. Boskin | • | • | • | |||||||||||||||||||||||||||
P. Brabeck-Letmathe | • | • | ||||||||||||||||||||||||||||
U.M. Burns | • | • | ||||||||||||||||||||||||||||
L.R. Faulkner | C | • | • | |||||||||||||||||||||||||||
J.S. Fishman | • | • | ||||||||||||||||||||||||||||
H.H. Fore | • | • | ||||||||||||||||||||||||||||
K.C. Frazier | C | • | ||||||||||||||||||||||||||||
D.R. Oberhelman | • | • | ||||||||||||||||||||||||||||
S.J. Palmisano | C | • | • | |||||||||||||||||||||||||||
S.S Reinemund | • | C | • | |||||||||||||||||||||||||||
R.W. Tillerson | C | C | ||||||||||||||||||||||||||||
W.C. Weldon | • | • | ||||||||||||||||||||||||||||
2015 Meetings | 11 | 7 | 7 | 2 | 5 | 0 |
Director | Audit | Compensation | Board Affairs | Finance | Public Issues and Contributions | Executive(1) | ||||||||||||||||||||||||||
S.K. Avery | ✓ | ✓ | ||||||||||||||||||||||||||||||
A.F. Braly | ✓ | C | ||||||||||||||||||||||||||||||
U.M. Burns | C | ✓ | ✓ | |||||||||||||||||||||||||||||
K.C. Frazier | ✓ | C | ✓ | |||||||||||||||||||||||||||||
J.L. Hooley | ✓ | ✓ | ||||||||||||||||||||||||||||||
S.A. Kandarian | ✓ | ✓ | ||||||||||||||||||||||||||||||
D.R. Oberhelman | ✓ | ✓ | ||||||||||||||||||||||||||||||
S.J. Palmisano | C | ✓ | ✓ | |||||||||||||||||||||||||||||
S.S Reinemund | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||
W.C. Weldon | ✓ | ✓ | ||||||||||||||||||||||||||||||
D.W. Woods | C | C |
C = Chair •✓ = Member (1) Other directors serve as alternate members on a rotational basis.basis
BelowMeetings in 2019:
2020 Proxy Statement | 15 |
Following is additional information about each Board committee.
Board Affairs Committee
The Board Affairs Committee, chaired by the independent Lead Director, serves as ExxonMobil’s nominating and corporate governance committee. The Committee recommendsIts responsibilities include:
Recommendation on director candidates reviews non-employeeand requests for participation on other boards;
Maintain procedures for director compensation,engagement with shareholders;
Provide comments and reviews othersuggestions to the Board on committee structure and committee assignments;
Review of corporate governance practices, including the Corporate Governance Guidelines. The Committee also reviewsGuidelines;
Review of any issue involving an executive officer or director under ExxonMobil’s Codethe Code; and
Administration of Ethics and Business Conduct and administers ExxonMobil’s Related Person Transaction Guidelines.
The Committee has adopted Guidelines for the Selection of Non-Employee Directors that describe the qualifications the Committee looks for in director candidates. These Selection Guidelines, as well as the Committee’s charter, are posted on the Corporate Governance section of our website, and are described in more detail below and in the section titled Director Qualifications on pages 6 to 8.
A substantial majority of the Board must meet the independence standards described in the Corporate Governance Guidelines, and all candidates must be free from any relationship with management or the Corporation that would interfere with the exercise of independent judgment. Candidates should be committed to representing the interests of all shareholders and not any particular constituency. The Board must include members with the particular experience required for service on key Board committees, as described in the committee charters.
The Guidelines for the Selection of Non-Employee Directors state:
“ExxonMobil recognizes the strength and effectiveness of the Board reflect the balance, experience, and diversity of the individual directors; their commitment; and importantly, the ability of directors to work effectively as a group in carrying out their responsibilities. ExxonMobil seeks candidates with diverse backgrounds who possess knowledge and skills in areas of importance to the Corporation.”
In addition to seeking a diverse set of business or academic experiences, the Committee seeks a mix of nominees whose perspectives reflect diverse life experiences and backgrounds, as well as gender and ethnic diversity. The Committee does not use quotas but considers diversity along with the other requirements of the Selection Guidelines when evaluating potential new directors. The Committee has also instructed its executive search firm to include diversity as part of the candidate search criteria.
The Committee identifies director candidates primarily through recommendations made by the non-employee directors. These recommendations are developed based on the directors’ own knowledge and experience in a variety of fields, and research conducted by ExxonMobil staff at the Committee’s direction. The Committee has also engaged an executive search firm to help the Committee identify new director candidates. The firm identifies potential director candidates for the Committee to consider and helps research candidates identified by the Committee. Additionally, the Committee considers recommendations made by employee directors, shareholders, and others. All recommendations, regardless of the source, are evaluated on the same basis against the criteria contained in the Selection Guidelines.
The recommendation of Ms. Braly was made by incumbent directors and the executive search firm.
Shareholders may send recommendations for director candidates to the Secretary at the address given under Contact Information on page 4. A submission recommending a candidate should include:
The procedures by which shareholders may recommend nominees have not changed materially since last year’s proxy statement.
The Committee also administers provisions of the Corporate Governance Guidelines that require a director to tender a resignation when there is a substantial change in the director’s circumstances. The Committee reviews the relevant facts to determine whether the director’s continued service would be appropriate and makes a recommendation to the Board.
Another responsibility of the Committee is to review and make recommendations to the Board regarding the compensation of thenon-employee directors. The Committee uses an independent consultant, Pearl Meyer & Partners, LLC (“Pearl Meyer”), to provide information on current developments and practices in director compensation. Pearl Meyer & Partners is the same consultant retained by the Compensation Committee to advise on executive compensation, but performs no other work for ExxonMobil.
The Guidelines for the Selection ofNon-Employee Directors describe the qualifications the Committee looks for in director candidates. These Selection Guidelines, as well as the Committee’s charter, are posted on the Corporate Governance section of our website.
Audit CommitteeCode of Ethics and Business Conduct
The Audit Committee oversees accounting and internal control matters. Its responsibilities include oversight of:
The Committee has direct authority and responsibility to appoint (subject to shareholder ratification), compensate, retain, and oversee the independent auditors.
The Committee also prepares the report that SEC rules require be included in the Corporation’s annual proxy statement. This report is on pages 23 to 24.
The Audit Committee has adopted specificBoard maintains policies and procedures for pre-approving fees paid(referred to in this proxy statement as the independent auditors. Under“Code”) that represent both the Audit Committee’s approach, an annual programcode of work is approved each Octoberethics for the following categoriesprincipal executive officer, principal financial officer, and principal accounting officer under SEC rules, and the code of services: Audit, Audit-Related,business conduct and Tax. Additional engagements may be brought forward from timeethics for directors, officers, and employees under NYSE listing standards. The Code applies to time for pre-approval byall directors, officers, and employees. The Code includes a Conflicts of Interest Policy under which directors, officers, and employees are expected to avoid any actual or apparent conflict between their own personal interests and the Audit Committee. Pre-approvals apply to engagements within a category of service, and cannot be transferred between categories. If fees might otherwise exceed pre-approved amounts for any category of permissible services, the incremental amounts must be reviewed and pre-approved prior to commitment. The complete textinterests of the Audit Committee’s pre-approval policies and proceduresCorporation.
The Code is posted on the Corporate Governance sectionExxonMobil website atexxonmobil.com/code. The Code is also included as an exhibit to ourAnnual Report on Form10-K. Any amendment of the Code will be posted promptly on ExxonMobil’s website.
The Board has determined that all members of the Committee are financially literate within the meaning of the NYSE standards, and that Mr. Brabeck-Letmathe, Ms. Burns, Dr. Faulkner, and Mr. Oberhelman are “audit committee financial experts” as defined in the SEC rules.
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Compensation Committee
The Compensation Committee is comprised exclusively of non-employee directors and oversees compensation for ExxonMobil’s senior executives, including salary, bonus, and equity awards; and, succession planning for key executive positions. The Committee’s charter is available on the Corporate Governance section of our website.
During 2015, the Committee took the following actions:
The Committee does not delegate its responsibilities with respect to ExxonMobil’s executive officers and other senior executives (currently 27 positions). For other employees, the Committee delegates authority to determine individual salaries and incentive awards to a committee consisting of the Chairman, the President, and the Senior Vice Presidents of the Corporation. That committee’s actions are subject to a salary budget and aggregate annual ceilings on short-term and long-term incentive awards established by the Compensation Committee.
For more information on the compensation decisions made by the Committee for 2015, refer to the Compensation Discussion and Analysis (CD&A) beginning on page 28.
The Compensation Committee’s report is available on page 26.
The Compensation Committee utilizesCorporation maintains procedures for administering and reviewing potential issues under the expertise of an external independent consultant, Pearl Meyer & Partners. At the direction of the Committee, Pearl Meyer & Partners:
In addition, at the direction of the Chair of the Board Affairs Committee, Pearl Meyer & Partners provides an requires regular employees andnon-employee directors to complete annual survey of non-employee director compensation for use by that Committee.
The Compensation Committee is solely and directly responsible for the appointment, compensation, and oversight of the consultant. The Committee considers factors that could affect Pearl Meyer & Partners’ independence, including that the consultant provides no other services for ExxonMobil other than its engagement by the Committee and the Board Affairs Committee as described above. Based on this review, the Committee has determined the consultant’s work for the Committee to be free from conflicts of interest.
Finance Committee
The Finance Committee reviews ExxonMobil’s financial policies and strategies, including our capital structure, dividends, and share purchase program. The Committee authorizes the issuance of corporate debt subject to limits set by the Board. The Committee’s charter is available on the Corporate Governance section of our website.
Public Issues and Contributions Committee
The Public Issues and Contributions Committee reviews the effectiveness of the Corporation’s policies, programs, and practices with respect to safety, security, health, the environment, and social issues. The Committee hears reports from operating units on safety and environmental activities, and also visits operating sites to observe and comment on current operating practices. In addition, the Committee reviews the level of ExxonMobil’s support for education and other public service programs, including the Company’s contributions to the ExxonMobil Foundation. The Foundation works to improve the quality of education in the United States at all levels, with special emphasis on math and science. The Foundation also supports the Company’s other cultural and public service giving. The Committee’s charter is available on the Corporate Governance section of our website.
Executive Committee
The Executive Committee has broad power to act on behalf of the Board. In practice, the Committee meets only when it is impractical to call a meeting of the full Board.
Shareholder Engagement
We believe ongoing engagement with our shareholders is vitally important. ExxonMobil understands the importance of keeping shareholders informed about our business and issues of concern. The Company does so through a variety of means, including publications we issue throughout the year; our website (including thePerspectives blog); the annual shareholders meeting; webcasts including our annual executive compensation and governance webcast during which any shareholder can submit comments or questions; and through direct interface. We welcome and value input from all shareholders, and such input is taken seriously by the Company.compliance certifications.
The Board Affairs Committee has approvedwill initially review any suspected violation of the Code involving an executive officer or director and implemented procedures for shareholderswill report its findings to the Board. The Board does not envision that any waiver of the Code will be granted. Should such a waiver occur, it will be promptly disclosed on ExxonMobil’s website.
Board Meetings and other interested personsAnnual Meeting Attendance
The Board met ten times in 2019. ExxonMobil’s incumbent directors, on average, attended approximately 96 percent of Board and committee meetings during 2019. No director attended less than 75 percent of such meetings. ExxonMobil’snon-employee directors held seven executive sessions in 2019.
As specified in our Corporate Governance Guidelines, it is ExxonMobil’s policy that directors should make every effort to send written or electronic communicationsattend the annual meeting of shareholders. All directors in 2019 attended last year’s meeting.
Board Committees
The Board appoints committees to individual directors, including the Presiding Director,help carry out its duties. Board committees orwork on key issues in greater detail than would be possible at full Board meetings. Onlynon-employee directors may serve on the non-employee directors asAudit, Compensation, Board Affairs, and Public Issues and Contributions Committees. Each committee has a group.
Additional instructions and procedures for communicating with the directorswritten charter. The charters are posted on the Corporate Governance section of our website atexxonmobil.com/proceduresdircomgovernance.
The tables below show the current membership of each Board committee and the number of meetings each committee held in 2019.
Director | Audit | Compensation | Board Affairs | Finance | Public Issues and Contributions | Executive(1) | ||||||||||||||||||||||||||
S.K. Avery | ✓ | ✓ | ||||||||||||||||||||||||||||||
A.F. Braly | ✓ | C | ||||||||||||||||||||||||||||||
U.M. Burns | C | ✓ | ✓ | |||||||||||||||||||||||||||||
K.C. Frazier | ✓ | C | ✓ | |||||||||||||||||||||||||||||
J.L. Hooley | ✓ | ✓ | ||||||||||||||||||||||||||||||
S.A. Kandarian | ✓ | ✓ | ||||||||||||||||||||||||||||||
D.R. Oberhelman | ✓ | ✓ | ||||||||||||||||||||||||||||||
S.J. Palmisano | C | ✓ | ✓ | |||||||||||||||||||||||||||||
S.S Reinemund | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||
W.C. Weldon | ✓ | ✓ | ||||||||||||||||||||||||||||||
D.W. Woods | C | C |
C = Chair ✓ = Member (1) Other directors serve as alternate members on a rotational basis
Meetings in 2019:
2020 Proxy Statement | 15 |
Following is additional information about each Board committee.
Board Affairs Committee
The Board Affairs Committee, chaired by the independent Lead Director, serves as ExxonMobil’s nominating and corporate governance committee. Its responsibilities include:
Recommendation on director candidates and requests for participation on other boards;
Maintain procedures for director engagement with shareholders;
Provide comments and suggestions to the Board on committee structure and committee assignments;
Review of corporate governance practices, including the Corporate Governance Guidelines;
Review of any issue involving an executive officer or director under the Code; and
Administration of ExxonMobil’s Related Person Transaction Guidelines.
The Committee also administers provisions of the Corporate Governance Guidelines that require a director to tender a resignation when there is a substantial change in the director’s circumstances. The Committee reviews the relevant facts to determine whether the director’s continued service would be appropriate and makes a recommendation to the Board.
Another responsibility of the Committee is to review and make recommendations to the Board regarding the compensation of thenon-employee directors. The Committee uses an independent consultant, Pearl Meyer & Partners, LLC (“Pearl Meyer”), to provide information on current developments and practices in director compensation. Pearl Meyer is the same consultant retained by the Compensation Committee to advise on executive compensation, but performs no other work for ExxonMobil.
The Guidelines for the Selection ofNon-Employee Directors describe the qualifications the Committee looks for in director candidates. These Selection Guidelines, as well as the Committee’s charter, are posted on the Corporate Governance section of our website.
Code of Ethics and Business Conduct
The Board maintains policies and procedures (which we refer(referred to in this proxy statement as the “Code”) that represent both the code of ethics for the principal executive officer, principal financial officer, and principal accounting officer under SEC rules, and the code of business conduct and ethics for directors, officers, and employees under NYSE listing standards. The Code applies to all directors, officers, and employees. The Code includes a Conflicts of Interest Policy under which directors, officers, and employees are expected to avoid any actual or apparent conflict between their own personal interests and the interests of the Corporation.
The Code is posted on the ExxonMobil website atexxonmobil.com/code. The Code is also included as an exhibit to ourAnnual Report on Form 10-K.10-K. Any amendment of the Code will be posted promptly on ourExxonMobil’s website.
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The Corporation maintains procedures for administering and reviewing potential issues under the Code, including procedures that allow employees to make complaints without identifying themselves. The Corporation also conducts periodic mandatory business practice training sessions, and requires regular employees andnon-employee directors to makecomplete annual compliance certifications.
The Board Affairs Committee will initially review any suspected violation of the Code involving an executive officer or director and will report its findings to the Board. The Board does not envision that any waiver of the Code will be granted. Should such a waiver occur, it will be promptly disclosed on ExxonMobil’s website.
Board Meetings and Annual Meeting Attendance
The Board met ten times in 2019. ExxonMobil’s incumbent directors, on average, attended approximately 96 percent of Board and committee meetings during 2019. No director attended less than 75 percent of such meetings. ExxonMobil’snon-employee directors held seven executive sessions in 2019.
As specified in our Corporate Governance Guidelines, it is ExxonMobil’s policy that directors should make every effort to attend the annual meeting of shareholders. All directors in 2019 attended last year’s meeting.
Board Committees
The Board appoints committees to help carry out its duties. Board committees work on key issues in greater detail than would be possible at full Board meetings. Onlynon-employee directors may serve on the Audit, Compensation, Board Affairs, and Public Issues and Contributions Committees. Each committee has a written charter. The charters are posted on the Corporate Governance section of our website atexxonmobil.com/governance.
The tables below show the current membership of each Board committee and the number of meetings each committee held in 2019.
Director | Audit | Compensation | Board Affairs | Finance | Public Issues and Contributions | Executive(1) | ||||||||||||||||||||||||||
S.K. Avery | ✓ | ✓ | ||||||||||||||||||||||||||||||
A.F. Braly | ✓ | C | ||||||||||||||||||||||||||||||
U.M. Burns | C | ✓ | ✓ | |||||||||||||||||||||||||||||
K.C. Frazier | ✓ | C | ✓ | |||||||||||||||||||||||||||||
J.L. Hooley | ✓ | ✓ | ||||||||||||||||||||||||||||||
S.A. Kandarian | ✓ | ✓ | ||||||||||||||||||||||||||||||
D.R. Oberhelman | ✓ | ✓ | ||||||||||||||||||||||||||||||
S.J. Palmisano | C | ✓ | ✓ | |||||||||||||||||||||||||||||
S.S Reinemund | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||
W.C. Weldon | ✓ | ✓ | ||||||||||||||||||||||||||||||
D.W. Woods | C | C |
C = Chair ✓ = Member (1) Other directors serve as alternate members on a rotational basis
Meetings in 2019:
2020 Proxy Statement | 15 |
Following is additional information about each Board committee.
Board Affairs Committee
The Board Affairs Committee, chaired by the independent Lead Director, serves as ExxonMobil’s nominating and corporate governance committee. Its responsibilities include:
Recommendation on director candidates and requests for participation on other boards;
Maintain procedures for director engagement with shareholders;
Provide comments and suggestions to the Board on committee structure and committee assignments;
Review of corporate governance practices, including the Corporate Governance Guidelines;
Review of any issue involving an executive officer or director under the Code; and
Administration of ExxonMobil’s Related Person Transaction Guidelines.
The Committee also administers provisions of the Corporate Governance Guidelines that require a director to tender a resignation when there is a substantial change in the director’s circumstances. The Committee reviews the relevant facts to determine whether the director’s continued service would be appropriate and makes a recommendation to the Board.
Another responsibility of the Committee is to review and make recommendations to the Board regarding the compensation of thenon-employee directors. The Committee uses an independent consultant, Pearl Meyer & Partners, LLC (“Pearl Meyer”), to provide information on current developments and practices in director compensation. Pearl Meyer is the same consultant retained by the Compensation Committee to advise on executive compensation, but performs no other work for ExxonMobil.
The Guidelines for the Selection ofNon-Employee Directors describe the qualifications the Committee looks for in director candidates. These Selection Guidelines, as well as the Committee’s charter, are posted on the Corporate Governance section of our website.
Related Person TransactionsAudit Committee
The Audit Committee oversees accounting and Proceduresinternal control matters. Its responsibilities include oversight of:
In accordance
Management’s conduct of the Corporation’s financial reporting process;
The integrity of the financial statements and other financial information provided by the Corporation to the SEC and the public;
The Corporation’s system of internal accounting and financial controls;
The Corporation’s compliance with legal and regulatory requirements;
The performance of the Corporation’s internal audit function;
The independent auditors’ qualifications, performance, and independence; and
The annual independent audit of the Corporation’s financial statements.
The Committee has direct authority and responsibility to appoint (subject to shareholder ratification), compensate, retain, and oversee the independent auditors.
The Committee also prepares the report that SEC rules ExxonMobil maintains Guidelinesrequire be included in the Corporation’s annual proxy statement. This report is on pages 28 and 29.
The Audit Committee has adopted specific policies and procedures for Reviewpre-approving fees paid to the independent auditors. Under the Audit Committee’s approach, an annual program of Related Person Transactions. These Guidelineswork is approved each October for the following categories of services: Audit, Audit-Related, and Tax. Additional engagements may be brought forward from time to time forpre-approval by the Audit Committee.Pre-approvals apply to engagements within a category of service, and cannot be transferred between categories. If fees might otherwise exceedpre-approved amounts for any category of permissible services, the incremental amounts must be reviewed andpre-approved prior to commitment. The complete text of the Audit Committee’spre-approval policies and procedures, as well as the Committee’s charter, is posted on the Corporate Governance section of ExxonMobil’s website.
16 | 2020 Proxy Statement |
The Board has determined that all members of the Committee are financially literate within the meaning of the NYSE standards, and that Ms. Burns, Mr. Hooley, Mr. Oberhelman, and Mr. Weldon are “audit committee financial experts” as defined in the SEC rules.
Compensation Committee
The Compensation Committee is comprised exclusively ofnon-employee, independent directors, and oversees compensation for ExxonMobil’s senior executives (including salary, bonus, and performance share awards), as well as succession planning for key executive positions. The Committee’s charter is available on the Corporate Governance section of our website.
In accordanceDuring 2019, the Committee took the following actions:
Reviewed and approved the corporate goals and objectives relevant to the compensation of the CEO;
Reviewed the Corporation’s business results and progress on strategic plans during the year with ExxonMobil’s CEO and other senior executives;
Considered the Related Person Transaction Guidelines, allresults of the 2019 advisory vote on executive compensation;
Assessed each element of the Company’s compensation program and practices, and confirmed that they do not create any material adverse risks for the Company. The key design features of the compensation program that discourage executives from taking inappropriate risk are described in detail in this proxy statement (see pages 33, 46, and 47);
Discussed the Company’s executive compensation program with its independent consultant;
Established the aggregate annual ceilings for the 2019 short-term and long-term incentive award programs taking into account input received from the CEO and other senior executives;
Approved the salary program for 2020;
Reviewed the performance and contributions of, and granted incentive awards and salary for, the CEO. The CEO does not participate in or provide input to decisions regarding his own compensation;
Reviewed the individual performance and contributions of, and granted individual incentive awards and set salaries for, other senior executives based on recommendations to the Committee by the CEO; and
Reviewed progress on executive development and succession planning for senior-level positions with input from the CEO.
The Committee does not delegate its responsibilities with respect to ExxonMobil’s executive officers directors, and director nomineesother senior executives (currently 20 positions). For other employees, the Committee delegates authority to determine individual salaries and incentive awards to a committee consisting of the Chairman and the Senior Vice Presidents of the Corporation. That committee’s actions are requiredsubject to identify,a salary budget and aggregate annual ceilings on short-term and long-term incentive awards established by the Compensation Committee.
For more information on the compensation decisions made by the Committee for 2019, refer to the bestCompensation Discussion and Analysis beginning on page 31.
The Compensation Committee’s report is available on page 30.
The Compensation Committee utilizes the expertise of their knowledge after reasonable inquiry, business and financial affiliations involving themselves or their immediate family members that could reasonably be expected to give rise to a reportable related person transaction. Covered persons must also advisean external independent consultant, Pearl Meyer. At the Secretarydirection of the Corporation promptlyCommittee, Pearl Meyer:
Attends Committee meetings;
Informs the Committee regarding general trends in executive compensation across industries;
Prepares the analysis of any changecomparator company compensation used by the Committee; and
Participates in the information provided, and will be asked periodically to review and reaffirm their information.Committee’s deliberations regarding compensation for Named Executive Officers.
ForIn addition, at the above purposes, “immediate family member” includes a person’s spouse, parents, siblings, children, in-laws, and step-relatives.
Based on this information, we reviewdirection of the Company’s own records and make follow-up inquiries as may be necessary to identify potentially reportable transactions. A report summarizing such transactions and including a reasonable levelChair of detail is then provided to the Board Affairs Committee. The Committee, oversees the Related Person Transaction Guidelines generally and reviews specific items to assess materiality.
In assessing materialityPearl Meyer provides an annual survey ofnon-employee director compensation for this purpose, information will be considered material if, in light of all circumstances, there is a substantial likelihood a reasonable investor would consider the information important in deciding whether to buy or sell ExxonMobil stock or in deciding how to vote shares of ExxonMobil stock. A director will abstain from the decision on any transactions involvinguse by that director or his or her immediate family members.
Under SEC rules, certain transactions are deemed not to involve a material interest (including transactions in which the amount involved in any 12-month period is less than $120,000 and transactions with entities where a related person’s interest is limited to service as a non-employee director). In addition, based on a consideration of ExxonMobil’s facts and circumstances, the Committee will presume that the following transactions do not involve a material interest for purposes of reporting under SEC rules:Committee.
2020 Proxy Statement | 17 |
The Compensation Committee is solely and directly responsible for the appointment, compensation, and oversight of the consultant. The Committee considers factors that could affect Pearl Meyer’s independence, including that the consultant provides no other services for ExxonMobil other than its engagement by the Committee and the Board Affairs Committee as described above. Based on this review, the Committee has determined the consultant’s work for the Committee to be free from conflicts of interest.
Finance Committee
The Finance Committee reviews ExxonMobil’s financial policies and strategies, including our capital structure, dividends, and share purchase program. The Committee authorizes the issuance of corporate debt subject to limits set by the Board. The Committee’s charter is available on the Corporate Governance section of our website.
Public Issues and Contributions Committee
The Public Issues and Contributions Committee reviews the effectiveness of the Corporation’s policies, programs, and practices with respect to safety, security, health, the environment, including climate-related matters, and social issues. The Committee hears reports from operating units on safety and environmental activities, and also visits operating sites to observe and comment on current operating practices. In addition, the Committee reviews the level of ExxonMobil’s support for education and other public service programs, including the Company’s contributions to the ExxonMobil Foundation. The Foundation works to improve the quality of education in the United States at all levels, with special emphasis on math and science. The Foundation also supports the Company’s other cultural and public service giving. The Committee’s charter is available on the Corporate Governance section of our website.
Executive Committee
The Executive Committee has broad power to act on behalf of the Board. In practice, the Committee meets only when it is impractical to call a meeting of the full Board.
Shareholder Engagement in 2019
The Board and management believe ongoing engagement with our shareholders is vitally important and understand the importance of keeping shareholders informed about the business, understanding shareholders’ perspectives, and addressing areas of interest. The Board and management welcome and value input from all shareholders.
Engaged with: ✓ Institutional Investors ✓ Retail Shareholders ✓ Pension Funds ✓ Labor Unions ✓ Religious Organizations ✓ Nongovernmental Organizations ✓ Proxy Advisory Firms ✓ ESG Rating Firms ✓ Industry Thought Leaders |
Engaged through: ✓ Investor Day ✓ Quarterly Earnings Calls ✓ Investor Conferences ✓ Spotlight Events ✓ Individual Investor Meetings ✓ Annual Shareholder Meeting ✓ Shareholder Webcast ✓ Stakeholder Outreach | Engagements include: ✓ Non-employee Directors ✓ Chairman / CEO / Management Committee ✓ Senior Management ✓ Subject Matter Experts ✓ Other Employees |
Engagements increased: > 200% since 2014 |
Engaged with shareholders representing: | Information shared through: | |||
1.4 billion shares 34% of total outstanding shares and 58% of institutional shareholdings | • SEC Filings • Press Releases • Annual Report • Company Website • Energy Factor | •Energy & Carbon •Outlook for Energy • Sustainability Report • Perspectives Blog |
18 | 2020 Proxy Statement |
Insights into the Boardroom
The Board provides oversight of key risks, including strategic, reputational, financial, operational, SSHE (safety, security, health and environment) and legal compliance matters. The Board routinely reviews environmental stewardship and discusses issues related to the Company’s business, including the risks related to climate change. The process includes briefings on scientific and technical research, public policy positions and analysis, and ongoing progress on Company initiatives and actions with internal and external subject-matter experts.
At least annually, the Board and each of the Board committees conduct an evaluation of their performance and effectiveness, as well as potential changes to the committees’ charters. The Board acts as a collective body, representing the interests of all shareholders. While individual directors leverage their experience and knowledge in Board and committee deliberations, Board decisions and perspectives reflect the collective wisdom of the group. As new directors join the ExxonMobil Board, there is an established process for onboarding and education. This orientation process includes detailed information about ExxonMobil’s history, culture, practices, risk framework and approach to important issues, including the risks related to climate change, among other topics.
The Board has a well-established and rigorous enterprise risk framework in place to oversee risks faced by the Company, including those related to climate change. This integrated risk management approach facilitates recognition and oversight of important risk interdependencies.
The Board considers climate change throughout the year as it assesses research and development efforts, operating strategies, business and corporate planning, technology, current events, shareholder engagements, and Company performance. The Board evaluates climate risks in the context of other operational, market, and financial risks and considers the interactions with these additional factors. It also includes at least one session each year when the full Board engages on the latest developments in climate science and policy.
The Board of Directors, including the Public Issues and Contributions Committee, makes annual site visits to operating locations to observe and provide input on operating practices and external engagement. In 2019, the Board visited ExxonMobil’s largest manufacturing complex, the integrated refining and petrochemical facilities on Jurong Island, Singapore. The visit included an overview of operations, including the fuels, lubricants and chemicals value chains, and the gas and power marketing business. The directors also met with employees responsible for operations and other commercial and business support activities. Additionally, directors met with senior government officials to discuss issues important to the Company and the country of Singapore, including the risks related to climate change. In April, the Board of Directors traveled to the Company’s Spring, Texas, campus to review advances in subsurface technology and gain perspectives from employees. Through these site visits, the directors reviewed the effectiveness of the risk management process and received additional insight into how the Operations Integrity Management System protects ExxonMobil’s employees and physical assets, as well as the community and the environment.
Directors participate in engagements with shareholders periodically throughout the year, in addition to receiving shareholder and stakeholder feedback through other avenues of communication including letters and emails. The Board values these communications and takes such perspectives into consideration in its deliberations, as appropriate.
The Board Affairs Committee has approved and implemented procedures for shareholders and other interested persons to •Written Communications:Written correspondence should be addressed to the director or directors in •Electronic Communications:You may send email to individualnon-employee directors, Board committees, or thenon-employee directors as a group by using the form provided for that purpose on our website atexxonmobil.com/directors. |
2020 Proxy Statement |
Transactions or relationships not covered by the above standards will be assessed by the Committee on the basis of the specific facts and circumstances.
The following disclosures are made as of February 24, 2016, the date of the most recent Board Affairs Committee review of potential related person transactions.
ExxonMobil and its affiliates have about 73,500 regular employees around the world and employees related by birth or marriage may be found at all levels of the organization. ExxonMobil employees do not receive preferential treatment by reason of being related to an executive officer, and executive officers do not participate in hiring, performance evaluation, or compensation decisions for family members. ExxonMobil’s employment guidelines state, “Relatives of Company employees may be employed on a non-preferential basis. However, an employee should not be employed by or assigned to work under the direct supervision of a relative, or to report to a supervisor who in turn reports to a relative of the employee.”
Several current ExxonMobil executive officers have family members also employed by the Corporation or its affiliates: M.W. Albers (Senior Vice President) has a daughter employed by ExxonMobil Global Services Company; R.N. Schleckser (Vice President and Treasurer) has a brother employed by ExxonMobil Refining & Supply Company; S.M. Greenlee (Vice President) has a son employed by ExxonMobil Development Company; and J.J. Woodbury (Vice President – Investor Relations and Secretary) has a son employed by XTO Energy Inc. In each case, the total value of the family member’s current annualized compensation (including benefits) exceeds the SEC threshold for disclosure. However, consistent with ExxonMobil’s Related Person Transaction Guidelines, we do not consider any of the relationships noted above to be material within the meaning of the related person transaction disclosure rules.
The Board Affairs Committee also reviewed ExxonMobil’s ordinary course business with companies for which non- employee directors or their immediate family members serve as executive officers. The Committee determined that, in accordance with the categorical standards described above, none of those matters represent reportable related person transactions. See Director Independence on page 9.
The Committee also determined that no related person transactions occurred during the year involving any of the investors who have reported ownership of 5 percent or more of ExxonMobil’s outstanding common stock. See “Certain Beneficial Owners” on page 22.
We are not aware of any related person transactions required to be reported under applicable SEC rules since the beginning of the last fiscal year where our policies and procedures did not require review, or where such policies and procedures were not followed.
The Corporation’s Related Person Transaction Guidelines are intended to assist the Corporation in complying with its disclosure obligations under SEC rules. These procedures are in addition to, not in lieu of, the Corporation’s Code of Ethics and Business Conduct.
ITEMItem 1 – ELECTION OF DIRECTORSElection of Directors
The Board of Directors has nominated the director candidates named on the following pages. Personal information onabout each of our nominees, including public company directorships during the past five years, is provided. Also included are the particular qualifications and competencies of each director nominee that led the Board to conclude that such person should serve as a director of the Company.All of our nominees currently serve as ExxonMobil directors, except for Ms. Braly, who has been nominated by the Board for first election as a director at the annual meeting.directors.
All director nominees have stated they are willing to serve if elected. If a nominee becomes unavailable before the election, your proxy authorizes the people named as proxies to vote for a replacement nominee if the Board names one. Alternatively, the Board may reduce its size to equal the number of remaining nominees.
The Board recommends you vote FOR each of the following candidates:
Susan K. Avery
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President Emerita, Woods Hole Oceanographic Institution Age 70 Director since Independent director Committees: Board Affairs, Public Issues and Contributions |
Background:
•Achieved prominence in her fieldat the Woods Hole Oceanographic Institution, a global research organization, as President and Director from 2008 to 2015. In the course of her lengthy and varied experience with matters of climate science, Dr. Avery has been involved with areas of policy, carbon pricing, renewable energy, and adaptation. •Academic leadership at the University of Colorado Boulder as interim dean of the graduate school and vice chancellor for research, interim provost, and executive vice chancellor for academic affairs from 2004 to 2008 •Government / scientific research experience as past member of the United Nations Scientific Advisory Board and the National Research Council Global Change Research Program Advisory Committee •Scientific and research advisory committee memberships held or recently held at NASA, NOAA, National Science Foundation, Lawrence Berkeley National Laboratory, National Park System, Independent Advisory Committee on Applied Climate Risk, Center for Southern Hemisphere Ocean Research, Qingdao National Laboratory for Marine Science and Technology, and Japan Agency for Marine-Earth Science and Technology •Scientific and environmental affiliations: University Corporation for Atmospheric Research (Chair of Board), Consortium for Ocean Leadership (senior fellow), American Geophysical Union, American Meteorological Society (fellow), American Association for the Advancement of Science (fellow), and Institute of Electrical and Electronics Engineers (fellow) Current public company directorships: None Previous public company directorships in last five years: None |
20 | 2020 Proxy Statement |
Angela F. Braly | ||
Principal occupation: Former Chairman of the Board, President, and Chief Executive Officer, WellPoint (now Anthem) Age 58 Director since 2016 Independent director Committees: Compensation, Public Issues and Contributions | Background: •Business
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•Business and public policy affiliations: The Policy Circle(Co-Founder, Director, and Secretary), Indiana Economic Development Corporation (former Director), Business Council (former member), Business Roundtable (former member), Harvard Advisory Council on Health Care Policy (former member), and Blue Cross Blue Shield Association (former Director) Current
Other board experience: former Director of WellPoint, | |
Inc. (prior to 2015) |
Ursula M. Burns
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Chairman of the Board, VEON Ltd. Age Director since 2012 Independent director Committees: Audit, Executive, Finance |
Background: •Global business leadershipwith operational experienceat Xerox as Chairman
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•Government and public policy experience as Vice Chair and Chair of the President’s Export Council (2010 to 2016) •Scientific, academic, andnon-profit affiliations: Ford Foundation (Trustee), National Academy Foundation, Mayo Clinic (counsel/advisor), MIT Corporation (Trustee), National Academy of Engineers (member), American Academy of Arts and Sciences (member), Cornell Technology Board of Overseers (counsel/advisor), and New York City Ballet Inc. (Director) Current
Other board experience: former Director of Boston Scientific (prior to 2015) | |
2020 Proxy Statement | 21 |
Kenneth C. Frazier
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Chairman of the Board and Chief Executive Officer, Merck & Co., Inc. Age Director since Independent director Lead Director since 2020 Committees: Board Affairs, Compensation, Executive |
Background:
•Legal and business affiliations: American Law Institute, Business Council and American Bar Association •Scientific and research affiliations:Pharmaceutical Research and Manufacturers of America, Weill Cornell Medicine, and American Academy of Arts and Sciences Current
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Joseph L. Hooley | ||||
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State Street Corporation
Director since 2020 Independent director Committees: Audit, Finance | Background: •Global business leadership with operational experience at State Street Corporation as Chairman from 2011 to 2019; as Chief Executive Officer from 2010 to 2018; as President and Chief Operating Officer from 2008 to 2014; as Executive Vice President and head of Investor Services Division from 2002 to 2008; and, in 2006, as Vice Chairman and Global Head of Investment Servicing and Investment Research and Trading. He also served as President and Chief Executive Officer of •Charitable affiliations: Boys & Girls Clubs of Boston (Trustee of Youth Services) Current public company directorships: Aptiv PLC (January 2020 to Present) Previous public company directorships in last five years: State Street Corporation (2009 to December 2019) Other board experience: Liberty Mutual Insurance (April 2019 to Present) |
22 | 2020 Proxy Statement |
Steven A. Kandarian | ||
Principal occupation: Former Chairman of the Board, President, and Chief Executive Officer, MetLife Age 68 Director since 2018 Independent director Committees: Compensation, Public Issues and Contributions | Background: •Global business leadership with operational experience at MetLife, Inc. as Chairman from 2012 to 2019; as President and Chief Executive Office from 2011 to 2019; and
•Business and cultural affiliations: Business Council, Business Roundtable (former member), Partnership for New York City (former Director), Institute of International Finance (former Director and Chair, Insurance Regulatory Committee), and the Lincoln Center for the Performing Arts (former Director) •Scientific and research affiliations:Damon Runyon Cancer Research Foundation (Director) Current
Other board experience: Director of Neuberger Berman (March 2015 to Present) |
Douglas R. Oberhelman | ||||
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Officer, Caterpillar Inc.
Director since 2015 Independent director Committees: Audit, Finance | Background: •Global business leadership with operational and commodity business experience at Caterpillar Inc. as Chairman
•Business and charitable affiliations: Business Roundtable (former Chairman), National Association of Manufacturers (former Chairman), Easter Seals Foundation of Central Illinois (Chairman), Gilmore Foundation (Chairman), and Intersect Illinois (Director) •Environmental conservation:Wetlands America Trust (Vice President), Max McGraw Wildlife Foundation (Director) Current
Other board experience: Director of Peter Kiewit Sons’, Inc. (August 2017 to Present); Chairman and Director of Switch Rail Safety Systems, LLC (June 2018 to Present); former Director of Eli Lilly and Company (December | ||
2020 Proxy Statement | 23 |
Samuel J. Palmisano
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Former Chairman of the Board, President, and Chief Executive Officer, IBM Age Director since 2006 Independent director Committees: Board Affairs, Compensation, Executive |
Background:
•Business and public policy affiliations: The Center for Global Enterprise (Chairman), Business Roundtable (former member), Executive Committee of the Council on Competitiveness, Commission on Enhancing National Cybersecurity (former Vice Chair), andco-chair of an independent task force of the Council on Foreign Relations on cybersecurity Current Previous public company directorships in last five years:American Express (March
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William C. Weldon | ||
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Former Chairman of the Board and Chief Executive Officer, Johnson & Johnson Age Director since Independent director Committees: Audit, Finance |
Background:
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•Business affiliations:Business Council (former Vice Chairman), Business Roundtable (former member), and Healthcare Leadership Council •Scientific, research and academic affiliations:Pharmaceutical Research and Manufacturers of America (former Chairman), Quinnipiac University Board of Trustees (Chairman), and CEO Roundtable on Cancer (former Chairman) Current Previous public company directorships in last five years: JPMorgan Chase (March
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24 | 2020 Proxy Statement |
Darren W. Woods | ||||
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Exxon Mobil Corporation
Director Committees: Finance, Executive | Background: •Global business leadership at Exxon Mobil Corporation •Operational and commodity businessexperience with positions of increasing responsibility in •Business affiliations: Business Roundtable, American Petroleum Institute (former Chair), Business Council, Center for Strategic and •Scientific and environmental experience:ExxonMobil Chemical Company and ExxonMobil Refining & Supply
Current
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Director compensation elements are designed to:
Ensure alignment with long-term shareholder interests;
Ensure the Company can attract and retain outstanding director candidates who meet the selection criteria outlined in the Guidelines for Selection ofNon-Employee Directors, which can be found on the Corporate Governance section of our website;
Recognize the substantial time commitmentscommitment necessary to oversee the affairs of the Corporation; and
Support the independence of thought and action expected of directors.
Non-employee director compensation levels are reviewed by the Board Affairs Committee each year, and resulting recommendations are presented to the full Board for approval. The Committee uses an independent consultant, Pearl Meyer, & Partners, to provide information on current developments and practices in director compensation. Pearl Meyer & Partners is the same consultant retained by the Compensation Committee to advise on executive compensation, but performs no other work for ExxonMobil.
ExxonMobil employees receive no additional pay for serving as directors.
Non-employee directors receive compensation consisting of cash and equity in the form of restricted stock. Non- employeeNon-employee directors are also reimbursed for reasonable expenses incurred to attend Board meetings or other functions relating to their responsibilities as a director of Exxon Mobil Corporation.
The annual cash retainer for non-employee directors in 2015 wasis $110,000 per year. The Chairs of the Audit and Compensation Committees and the Presiding Director receive an additional $10,000 per year. The Lead Director receives an additional $50,000 per year.
A significant portion of director compensation is granted in the form of restricted stock to align director interests with the interests of our long-term shareholders. The annual restricted stock award grant for incumbentnon-employee directors is 2,500 shares. A newnon-employee director receives aone-time grant of 8,000 shares of restricted stock upon first being elected to the Board.
2020 Proxy Statement | 25 |
While on the Board, thenon-employee director receives the same cash dividends on restricted shares as a holder of regular common stock, but the shares remain unvested and, thus, cannot be sold.sold or pledged. The restricted shares are subject to forfeiture if thenon-employee director leaves the Board early, i.e., before the retirement age of 72, as specified fornon-employee directors.
Current and formernon-employee directors of Exxon Mobil Corporation are eligible to participate in the ExxonMobil Foundation’s Educational and Cultural Matching Gift Programs under the same terms as the Corporation’s U.S. employees.
Non-employeeDirector Compensation for 20152019
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(a) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in
Deferred ($) | Other Compensation
| Total ($) |
Fees ($)
|
Stock
|
Option ($)
|
Non-Equity ($)
|
Change in and Nonqualified Deferred Compensation Earnings ($)
|
Other ($)(c)
|
Total ($)
| ||||||||||||||||||||||||||||||||||
M.J. Boskin | 110,000 | 231,075 | 0 | 0 | 0 | 340 | 341,415 | |||||||||||||||||||||||||||||||||||||||||
P. Brabeck-Letmathe | 110,000 | 231,075 | 0 | 0 | 0 | 340 | 341,415 | |||||||||||||||||||||||||||||||||||||||||
S.K. Avery |
| 110,000 |
|
| 171,413 |
| 0 | 0 | 0 | 283 |
| 281,696 |
| |||||||||||||||||||||||||||||||||||
A.F. Braly |
| 110,000 |
|
| 171,413 |
| 0 | 0 | 0 | 283 |
| 281,696 |
| |||||||||||||||||||||||||||||||||||
U.M. Burns | 110,000 | 231,075 | 0 | 0 | 0 | 340 | 341,415 |
| 120,000 |
|
| 171,413 |
| 0 | 0 | 0 | 283 |
| 291,696 |
| ||||||||||||||||||||||||||||
L.R. Faulkner | 120,000 | 231,075 | 0 | 0 | 0 | 340 | 351,415 | |||||||||||||||||||||||||||||||||||||||||
J.S. Fishman | 120,000 | 231,075 | 0 | 0 | 0 | 340 | 351,415 | |||||||||||||||||||||||||||||||||||||||||
H.H. Fore | 110,000 | 231,075 | 0 | 0 | 0 | 340 | 341,415 | |||||||||||||||||||||||||||||||||||||||||
K.C. Frazier | 110,000 | 231,075 | 0 | 0 | 0 | 340 | 341,415 |
| 110,000 |
|
| 171,413 |
| 0 | 0 | 0 | 283 |
| 281,696 |
| ||||||||||||||||||||||||||||
W.W. George (ret.) | 44,726 | 231,075 | 0 | 0 | 0 | 142 | 275,943 | |||||||||||||||||||||||||||||||||||||||||
S.A. Kandarian |
| 110,000 |
|
| 171,413 |
| 0 | 0 | 0 | 283 |
| 281,696 |
| |||||||||||||||||||||||||||||||||||
D.R. Oberhelman | 65,274 | 682,640 | 0 | 0 | 0 | 193 | 748,107 |
| 110,000 |
|
| 171,413 |
| 0 | 0 | 0 | 283 |
| 281,696 |
| ||||||||||||||||||||||||||||
S.J. Palmisano | 120,000 | 231,075 | 0 | 0 | 0 | 340 | 351,415 |
| 120,000 |
|
| 171,413 |
| 0 | 0 | 0 | 283 |
| 291,696 |
| ||||||||||||||||||||||||||||
S.S Reinemund | 110,000 | 231,075 | 0 | 0 | 0 | 340 | 341,415 |
| 120,000 | (a) |
| 171,413 |
| 0 | 0 | 0 | 283 |
| 291,696 |
| ||||||||||||||||||||||||||||
W.C. Weldon | 110,000 | 231,075 | 0 | 0 | 0 | 340 | 341,415 |
| 110,000 |
|
| 171,413 |
| 0 | 0 | 0 | 283 |
| 281,696 |
|
(a) | During 2019, S.S Reinemund served as Presiding Director, entitled to an additional cash retainer of $10,000. |
(b) | In accordance with SEC rules, the valuation of stock awards in this table represents fair value on the date of grant. Dividends on stock awards are not shown in the table because those amounts are factored into the grant date fair value. |
Each director (other than Mr. Oberhelman, who joined the Board in May 2015) received an annual grant of 2,500 restricted shares in January 2015.2019. The valuation of these awards is based on a market price of $92.43$68.565 on the date of grant.
Mr. Oberhelman received a one-time grant of 8,000 restricted shares upon first being elected to the Board in May 2015. The valuation of this award is based on the market price of $85.33 on the date of the grant.
Atyear-end 2015, 2019, the aggregate number of restricted shares held by each director was as follows:
Name | Restricted Shares | |||||
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| 13,000 | |||||
A.F. Braly | 15,500 | |||||
U.M. Burns | ||||||
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K.C. Frazier | 33,000 | |||||
S.A. Kandarian | 10,500 | |||||
D.R. Oberhelman | 18,000 | |||||
S.J. Palmisano | 42,000 | |||||
S.S Reinemund | 38,000 | |||||
W.C. Weldon | 23,000 |
The amount shown for each director is the cost of travel accident insurance covering death, dismemberment, or loss of sight, speech, or hearing under a policy purchased by the Corporation with a maximum benefit of $500,000 per individual. |
Thenon-employee directors are not entitled to any additional payments or benefits as a result of leaving the Board or death except as described above. Thenon-employee directors are not entitled to any payments or benefits resulting from a change in control of the Corporation.
26 | 2020 Proxy Statement |
Based on our review of ownership reports filed with the SEC, the firms listed below are the only beneficial owners of more than 5 percent of ExxonMobil’s outstanding common stock as of December 31, 2015.2019.
Name and Address of Beneficial Owner | Shares Owned | Percent of Class | ||||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | 261,953,264 | 6.3 | % | |||||
BlackRock Inc. 55 East 52nd Street New York, NY 10055 | 242,628,716 | 5.8 | % |
Name and Address of Beneficial Owner
| Shares Owned | Percent of Class | ||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355
|
|
353,531,191 |
|
8.4% | ||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055
|
|
282,620,834 |
|
6.7% |
DIRECTOR AND EXECUTIVE OFFICER STOCK OWNERSHIP
These tables show the number of ExxonMobil common shares each executive named in the Summary Compensation Table on page 4750 and eachnon-employee director or director nominee owned on February 29, 2016.2020. In these tables, ownership means the right to direct the voting or the sale of shares, even if those rights are shared with someone else. None of these individuals owns more than 0.050.02 percent of the outstanding shares.
Named Executive Officer | Shares Owned(1) | Shares Covered by Exercisable Options | Shares Owned(1) | Shares Covered by Exercisable Options | ||||||||||
R.W. Tillerson | 1,809,121 | 0 | ||||||||||||
M.W. Albers | 443,023 | 0 | ||||||||||||
M.J. Dolan | 555,611 | (2) | 0 | |||||||||||
D.W. Woods |
| 98,128 |
| 0 | ||||||||||
A.P. Swiger | 502,093 | 0 |
| 526,425 |
| 0 | ||||||||
D.W. Woods | 82,247 | 0 | ||||||||||||
N.A. Chapman | 107,129(2) | 0 | ||||||||||||
J.P. Williams, Jr. |
| 96,813 |
| 0 | ||||||||||
N.W. Duffin | 290,095(3) | 0 |
(1) | Does not include unvested restricted stock units, which do not carry voting rights prior to the issuance of shares on settlement of the awards. |
(2) | Includes |
(3) | Co-trustee andco-beneficiary with spouse in family trust for 132,097 shares. |
| Shares Owned | |||||||
S.K. Avery | 15,500 | |||||||
| ||||||||
A.F. Braly | 20,075 | (1) | ||||||
U.M. Burns | 28,206 | |||||||
| ||||||||
| ||||||||
| ||||||||
K.C. Frazier | 35,500 | |||||||
J.L. Hooley | 8,000 | (2) | ||||||
S.A. Kandarian | 13,000 | |||||||
D.R. Oberhelman | 20,500 | |||||||
S.J. Palmisano | 44,500 | |||||||
S.S Reinemund | 50,625 | |||||||
W.C. Weldon | 26,767 |
(1) | Includes |
(2) | Mr. Hooley joined the Board in January 2020 and received aone-time grant of |
On February 29, 2016,2020, ExxonMobil’s incumbent directors and executive officers (32(26 people) together owned 5,960,2812,164,631 shares of ExxonMobil stock and zero shares covered by exercisable options, representing about 0.140.05 percent of the outstanding shares.
2020 Proxy Statement | 27 |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934 requires our executive officers and directors to file reports of their ownership and changes in ownership of ExxonMobil stock on Forms 3, 4, and 5 with the SEC. We are not aware of any unfiled or late reports for 2015.2019.
The primary function of ourthe Audit Committee is oversight of the Corporation’s financial reporting process, public financial reports, internal accounting and financial controls, and the independent audit of the annual consolidated financial statements. OurThe Committee acts under a charter, which can be found on the ExxonMobil website atexxonmobil.com/auditcharterauditcommitteecharter.. We review the The adequacy of the charter is reviewed at least annually. All members of our membersthe Audit Committee are independent directors and all are audit committee financial experts under SEC rules. We heldthe Committee met 11 meetingstimes in 2015 at which,2019. In these meetings, as discussed in more detail below, weit had extensive reports and discussions with the independent auditors, internal auditors, and members of management.
In performing ourits oversight function, wethe Committee reviewed and discussed the consolidated financial statements with management and PricewaterhouseCoopers LLP (PwC)(“PwC”), the independent auditors. Management and PwC indicated that the Corporation’s consolidated financial statements were fairly stated in accordance with generally accepted accounting principles. WeThe Committee discussed significant accounting policies applied by the Corporation in its financial statements, as well as alternative treatments. WeIt also discussed with PwC matters covered by Public Company Accounting Oversight Board (PCAOB)(“PCAOB”) standards, including PCAOB AS 161301Communication with Audit Committees. In addition, wethe Committee reviewed and discussed management’s report on internal control over financial reporting and the related audits performed by PwC, which confirmed the effectiveness of the Corporation’s internal control over financial reporting.
WeThe Audit Committee also discussed with PwC its independence from the Corporation and management, including the communications PwC is required to provide us under applicable PCAOB rules. WeThe Committee considered thenon-audit services provided by PwC to the Corporation, and concluded that the auditors’ independence has been maintained.
WeThe Committee discussed with the Corporation’s internal auditors and PwC the overall scope and plans for their respective audits. Weaudits; furthermore, it met with the internal auditors and PwC at each meeting, both with and without management present. Discussions included the results of their examinations, their evaluations of the Corporation’s internal controls, and the overall quality of the Corporation’s financial reporting.
We discussedThe Audit Committee met with the Corporation’s management to discuss the comprehensive, long-standing risk management and compliance processes of the Corporation, and reviewed several topics of interest.
Based on the reviews and discussions referred to above, in reliance on management and PwC, and subject to the limitations of ourits role described below, wethe Audit Committee recommended to the Board, and the Board approved, the inclusion of the audited financial statements in the Corporation’sAnnual Report on Form10-K for the year ended December 31, 2015,2019, for filing with the SEC.
We have also appointed PwC to audit the Corporation’s financial statements for 2016, subject to shareholder ratification of that appointment.
In carrying out ourits responsibilities, we lookthe Audit Committee looks to management and the independent auditors. Management is responsible for the preparation and fair presentation of the Corporation’s financial statements and for maintaining effective internal control. Management is also responsible for assessing and maintaining the effectiveness of internal control over the financial reporting process in compliance with Sarbanes-Oxley Section 404 requirements. The independent auditors are responsible for auditing the Corporation’s annual financial statements, and expressing an opinion as to whether the statements are fairly stated in conformity with generally accepted accounting principles. In addition, the independent auditors are responsible for auditing the Corporation’s internal control over financial reporting and for expressing an opinion on the effectiveness of internal control over financial reporting. The independent auditors perform their responsibilities in accordance with the standards of the PCAOB. OurAudit Committee members are not professionally engaged in the practice of accounting or auditing, and are not experts under the Securities Act of 1933 in either of those fields or in auditor independence.
| 2020 Proxy Statement |
The Audit Committee has also appointed PwC to audit the Corporation’s financial statements for 2020, subject to shareholder ratification of that appointment. The Committee, along with the other members of the Board, management, the Controller, and the General Auditor, annually evaluates PwC’s qualifications, performance, and independence, including the performance of the lead audit partner, in deciding whether or not to retain PwC. That evaluation includes consideration of:
PwC’s quality control, including any material issues identified by that quality control or a governmental/professional authority along with PwC’s plan to deal with any such issues;
All relationships between PwC and ExxonMobil covered by the PCAOB;
PwC’s expertise in the global oil and gas industry; and
The quality of PwC’s audit plans.
The Committee believes that PwC’s tenure as ExxonMobil’s independent registered public accounting firm is a benefit to audit quality given PwC’s experience with ExxonMobil and knowledge of the business, as well as the effectiveness of their audit plans, which build on that established knowledge.
Based on its annual evaluation of PwC’s qualifications, performance, and independence, as well as frequent private meetings with the lead partner, the Audit Committee believes that the continued retention of PwC as ExxonMobil’s independent registered public accounting firm is in the best interest of the Corporation and its stockholders.
Ursula M. Burns, Chair Joseph L. Hooley | Douglas R. Oberhelman William C. Weldon |
ITEMItem 2 – RATIFICATION OF INDEPENDENT AUDITORSRatification of Independent Auditors
The Audit Committee has appointed PricewaterhouseCoopers LLP (PwC) to audit ExxonMobil’s financial statements for 2016.2020. We are asking you to ratify that appointment.
Total Fees
The total fees for PwC professional services rendered to ExxonMobil for the year ended December 31, 2015,2019, were $34.4$42.5 million, an increase of $1.2$1.3 million from 2014.2018. The Audit Committee reviewed andpre-approved all services in accordance with the servicepre-approval policies and procedures, which can be found on the ExxonMobil website atexxonmobil.com/pre-approvalpre-approval.. The Audit Committee did not use the “de minimis” exception topre-approval that is available under SEC rules. The following table summarizes the fees, which are described in more detail below.
2015 | 2014 | |||||||
(millions of dollars) | ||||||||
Audit Fees | 27.9 | 27.3 | ||||||
Audit-Related Fees | 5.7 | 5.1 | ||||||
Tax Fees | 0.8 | 0.8 | ||||||
All Other Fees | — | — | ||||||
|
|
|
| |||||
Total | 34.4 | 33.2 |
2019 | 2018 | |||||||||
(millions of dollars) | ||||||||||
Audit Fees |
| 34.6 |
| 31.4 | ||||||
Audit-Related Fees |
| 6.9 |
| 8.8 | ||||||
Tax Fees |
| 1.0 |
| 1.0 | ||||||
All Other Fees |
| — |
| — | ||||||
|
|
|
| |||||||
Total | 42.5 | 41.2 |
Audit Fees
The aggregate fees for PwC professional services rendered for the annual audits of ExxonMobil’s financial statements for the year ended December 31, 2015,2019, and for the reviews of the financial statements included in our quarterly reports on Form10-Q for that year were $27.9$34.6 million (versus $27.3$31.4 million for 2014)2018).
Audit-Related Fees
The aggregate fees for PwC Audit-Related services rendered to ExxonMobil for the year ended December 31, 2015,2019, were $5.7$6.9 million (versus $5.1$8.8 million in 2014)for 2018). TheseAudit-related services were mainly related to asset dispositions, benefit plan audits and other attestation procedures related to cost certifications.procedures.
2020 Proxy Statement | 29 |
Tax Fees
The aggregate fees for PwC Tax services rendered to ExxonMobil for the year ended December 31, 2015,2019, were $0.8$1.0 million (versus $0.8$1.0 million for 2014)2018). These services arewere mainly related to assisting various ExxonMobil affiliates with the preparation of local tax filings and related services.
All Other Fees
The aggregate fees for PwC services rendered to ExxonMobil, other than the services described above under “Audit Fees,” “Audit-Related Fees,” and “Tax Fees,” for the year ended December 31, 2015,2019, were zero (also zero in 2014)for 2018).
We believe PwC is well qualified to perform this work. A PwC representative will be at the annual meeting to answer appropriate questions and to make a statement if desired.
The Audit Committee recommends you vote FOR this proposal.
The Compensation Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis with management of the Corporation. Based on that review and discussion, we recommended to the Board that the Compensation Discussion and Analysis be included in the Corporation’s proxy statement for the 20162020 annual meeting of shareholders, and also incorporated by reference in the Corporation’sAnnual Report on Form10-K for the year ended December 31, 2015.2019.
Samuel J. Palmisano, Chair | ||
Kenneth C. Frazier |
ITEMItem 3 – ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATIONAdvisory Vote to Approve Executive Compensation
At the meeting, shareholders will be asked to vote on anon-binding resolution to approve the compensation of the Named Executive Officers (NEOs), listed in the Summary Compensation Table.
ExxonMobil’s business model is reflectiveWhen casting your vote, we encourage you to consider the detailed information in the Compensation Discussion and Analysis beginning on page 31.
The Board continues to support the overall design of a capital-intensive industry requiring long investment lead times and a significant focus on risk management. The structure of ourthe compensation program, fully supports thison the basis that the program:
Is aligned with the Company’s business model and alignsshareholder returns over the interests of our executives with those of our long-term shareholders. Thislong term;
Delivers pay that is particularly relevant givenhighly performance based and tied to company performance; and
Enables the current state of the industry.
ExxonMobil conducts business in a volatile commodity price environmentCompensation Committee to leverage its experience and positions itselfjudgment to achieve industry-leading returns regardless of industry conditions. deliver market competitive pay.
We continue to create value for our shareholders by confidentlylisten and prudently investing through the price cycle to meet long-term energy demand growth. Our integrated business enables us to optimize economic returns across the oil and gas value chain. The Corporation’s success requires a strong culture of performance, a long-term orientation, and constancy of purpose among senior executives, all of which are reinforced by the design of our compensation program.
Our compensation program is developed and approved by the Compensation Committee of the Board, which is comprised exclusively of non-employee directors.
Aligned with Shareholder Interests
A substantial portion of annual compensation is in the form ofrestricted stock or stock units with a grant level determined by the performance award matrix described on page 33. Half of the equity award vests in five years from grant date and the other half vests in 10 years from grant date or retirement, whichever is later. These stock holding requirements are not accelerated upon retirement. During these long restriction periods, which far exceed most companies across all industries, the equity award cannot be used as collateral for any purpose and is at risk of forfeiture for resignation or detrimental activity, even beyond retirement.
This design ensures that the majority of compensation and the shareholding net worth of senior executives are linkedrespond to the performance of ExxonMobil stock and resultingfeedback we receive from shareholders during our shareholder returns. The executives’ inability to monetize equity earlier ensures that they experience the impact of commodity price cycles much like our long-term shareholders, as describedengagement process. As in more detail on page 36.
Theannual bonus also aligns the interests of executives with the priority of sustainable growthprevious years, we enhanced disclosures in shareholder value. The size of the bonus pool is determined by annual earnings performance and the level of individual awards is determined by the performance award matrix described on page 33. Fifty percent of the payout of the annual bonus award is delayed based on the pace of Corporate earnings performance, as described on pages 34 and 39. The entire annual bonus is subject to recoupment (“clawback”).
Linked to Business Results
The performance award matrix described on page 33 illustrates that industry-leading performance over the investment lead times of the business is required in the following seven key areas to achieve a top performance category (quintile) bonus and long-term stock award: Safety and Operations Integrity, Return on Average Capital Employed, Total Shareholder Return, Free Cash Flow, Shareholder Distributions, Strategic Business Results, and Project Execution. Moreover, all 21 executive officers – including the CEO and other Named Executive Officers – are expected to perform at the highest level or they are replaced.
A combination of these seven key performance metrics reflects the overall relative performance of the Corporation, as demonstrated on pages 30 and 31. Furthermore, a requirement to demonstrate leadership in all seven key performance areas establishes a significant performance standard at grant (versus vest) that allows the Corporation to maintain its uniquely long vesting periods. The more traditional alternative with performance criteria at vest requires greater line of sight resulting in shorter vesting periods, which would not be aligned with ExxonMobil’s business model.
Supported by Sound Governance Practices
The compensation program excludes pay practices that the Compensation Committee believes are contraryresponse to shareholder interests and do not encourage the highest performance standards. Specifically, our executives are“at-will” employees and do not have employment contracts, severance agreements, or change-in-control arrangements, as detailed on page 43.feedback.
Shareholder Engagement
The Compensation Committee has carefully considered shareholder feedback on executive compensation received through wide-ranging dialogue between management and numerous shareholders, many of whom have held ExxonMobil stock for over a decade. The Committee also evaluated the results of the 2015 advisory vote on executive compensation, in which 90.1 percent of votes cast were FOR the compensation of the Named Executive Officers, and discussed the Company’s executive compensation program with its independent consultant.
On this basis, and in combination with a periodic assessment of alternate methods of granting compensation as outlined on pages 36 and 37, the Compensation Committee confirmed that the current compensation program best ensures an unwavering focus on the long-term performance of the business, which the Committee expects will continue generating strong operating and financial results for the benefit of the Company’s long-term shareholders.
The Committee respects all shareholder votes, both FOR and AGAINST the compensation program, and is committed to continued engagement between shareholders and the Company to fully understand the diverse viewpoints and discuss the important connections between ExxonMobil’s compensation program, business strategy, and long-term financial and operating performance.
Summary
For the reasons summarized above and discussed in more detail in this proxy statement, the Board recommends an advisory vote FOR the following resolution:
RESOLVED: That shareholders approve the compensation of the Named Executive Officers as disclosed pursuant to Item 402 of SEC RegulationS-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion on pages 2831 to 5658 of this proxy statement.
COMPENSATION DISCUSSION AND ANALYSIS
The Compensation Discussion and Analysis (CD&A) and Executive Compensation Tables are organized as follows:
EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS Executive Summary Letter to Shareholders 32 Response to Shareholder Feedback 32 Why Vote FOR Say-on-Pay? 33 Strong Governance Practices 33 Compensation Design Business Context 34 Program Design 34 Salary Program 35 Bonus Program 35 Performance Share Program 36 Compensation Determination Process for Determining Compensation 38 Performance and Experience 39 Annual Benchmarking 42 2019 CEO Pay 43 Other Compensation Elements Retirement Plans 44 Share Utilization 45 Granting Practices 45 Tax Matters 45 Risk and Governance Stock Ownership 46 Forfeiture Provisions 46 Clawback Policy 46 Anti-Hedging Policy 46 Employment Arrangements 47 Change in Control 47 Definitions and Footnotes 48 EXECUTIVE COMPENSATION TABLES Summary Compensation Table 50 Grants of Plan-Based Awards 53 Outstanding Equity Awards 54 Stock Vested 54 Pension Benefits 55 Nonqualified Deferred Compensation 57 Other Compensation Elements 58 The Compensation Discussion and Analysis and Executive Compensation Tables outline ExxonMobils executive compensation program and process for determining pay as it applies to the Named Executive Officers (NEOs). For 2019, Named Executive Officers were: Darren W. Woods Chairman and CEO Andrew P. Swiger Senior Vice President and Principal Financial Officer Neil A. Chapman Senior Vice President Jack P. Williams, Jr. Senior Vice President Neil W. Duffin President, ExxonMobil Global Projects Company
2015 Say-On-Pay
Key Messages
Why Vote “For” Say-On-Pay?
Industry-leading performance across companies within the oil and gas industry of similar scale and complexity formed the basis for compensation decisions made by the
EXECUTIVE SUMMARY LETTER TO SHAREHOLDERS Fellow Shareholders, The Compensation Committee reviews the effectiveness and competitiveness of the executive compensation program on an annual basis and continues to support the design of the program. ExxonMobils business involves large investments over long periods of time that require executives to maintain a long-term view when making business decisions. The Companys executive compensation program design reflects this. The executive compensation program allows the Committee to leverage the experience and judgment of its members, across a mix of critical performance factors, to grant pay to executives that is performance based, aligned with the returns of our long-term shareholders, and market competitive. We encourage you to review the information included in 2015this disclosure and vote FOR Item 3. Samuel J. Palmisano Chair, ExxonMobil Compensation Committee RESPONSE TO SHAREHOLDER FEEDBACK ENGAGEMENT Conducted 30 shareholder engagements throughout the year with holders of about half of outstanding institutionally held shares; included independent director engagements Held webinar to gather input from all shareholders Provided opportunity for dialogue on shareholder perspectives and rationale for program design FEEDBACK Strong support for design and its alignment with business model and interests of long-term shareholders Long restriction periods coupled with performance differentiation at grant recognized as key design features Pay for CEO position aligned with Company performance Positive feedback on continual engagements and ongoing disclosure enhancements Interest for increased transparency on how at risk component of pay is determined 92% FOR SAY-ON-PAY RESPONSE Disclosure enhancements provide a comprehensive view of program intent, its key design features, and 2019 Compensation Committee deliberations Further clarified process and considerations used by Compensation Committee to determine CEO pay STRONG COMMITMENT TO ONGOING SHAREHOLDER DIALOGUE TO UNDERSTAND AND ADDRESS ALL VIEWS
(1) Employees and contractors; includes XTO Energy Inc. data beginning in 2011. (2) Workforce safety data from participating American Petroleum Institute (API) companies; 2015 industry data not available at time of publication. (3) Competitor data estimated on a consistent basis with ExxonMobil and based on public information. For definitions and more information, see page 44 of theSummaryAnnual Report included with the 2016 Proxy Statement. (4) Cumulative (chart 3) and Annualized (chart 4) returns assuming dividends are reinvested when paid. (5) Chevron, Royal Dutch Shell, Total, and BP weighted by market capitalization; shareholder return data for Total available from 1992. (6) Annual data calculated as average of daily prices from U.S. Energy Information Administration (EIA).
For the following footnotes, competitor data estimated on a consistent basis with ExxonMobil and based on public information.
(7) BP excludes impact of GOM spill, TNK-BP divestment, and 2013 Rosneft investment. For definitions and more information, see page 45 of the Summary Annual Report included with the 2016 Proxy Statement. (8) Total shareholder distributions divided by market capitalization. Shareholder distributions consist of cash dividends and share buybacks. For more information, see page 45 of theSummary Annual Report included with the 2016 Proxy Statement. (9) More information on Strategic Business Results is included on page 45. (10) Total Capitalization defined as “Net Debt + Market Capitalization”; and Leverage defined as “Net Debt / Total Capitalization.”
32 | | 2020 Proxy Statement |
WHY VOTE FOR SAY-ON-PAY? PROGRAM ALIGNED WITH BUSINESS MODEL AND SHAREHOLDER RETURNS Over 70 percent of CEO direct compensation in performance shares, with longest restriction periods in any industry Long-term incentive program results in executives holding much higher percentage of performance shares through full business and commodity price cycles Incentivizes executives to maximize shareholder value over the long term while effectively managing longer-term risks, including those related to climate change PAY HIGHLY PERFORMANCE BASED AND TIED TO COMPANY PERFORMANCE Significant progress in advancing the Companys strategic objectives that will generate sustainable growth in shareholder value Maintained industry-leading performance across 3 of 4 pre-established financial and operating metrics; continued lagging relative TSR performance Results impacted overall level of stock grant Bonus program decreased as a result of lower 2019 earnings COMPENSATION COMMITTEE DELIVERED MARKET COMPETITIVE PAY Deliberation on overall level of CEO pay based on Company and individual performance, experience, and results of annual benchmarking 10-year combined realized and unrealized pay for CEO position is at 47th percentile of CEO compensation benchmarks1 SUPPORTED BY STRONG GOVERNANCE PRACTICES Key design features that discourage executives from taking inappropriate risk include: Extensive stock ownership Significant pay at risk Strong forfeiture provisions Bonus clawback policy Anti-hedging policy Annual assessment of compensation design Independent compensation consultant No employment contracts No severance agreements No change-in-control arrangements No guaranteed bonuses No additional stock grants to balance losses in value No accelerated vesting at retirement
Design Objectives
Compensation
COMPENSATION DESIGN BUSINESS CONTEXT The decisions that our executives make and the risks they manage play out over time horizons that are often decades in length. The compensation program is designed to incentivize long-term decision making based on careful consideration of longer-term risks, and to align executives pay with the results of their decisions and the returns of our shareholders over the long term. The Companys strategies provide the framework for the organization to deliver on its commitments, create shareholder value throughout the commodity price cycle, and address the dual challenge of meeting the growing demand for energy while mitigating environmental impacts. This long-term orientation also underpins the Companys philosophy of talent development. It begins with recruiting exceptional talent and continues with individually planned experiences that rewards outstanding performance, promotes retention,lead to broad development and encourages long-terma deep understanding of our business decisions
Performance Differentiation
Career Orientation
34 | 2020 Proxy Statement |
SALARY PROGRAM Base salary represents 10 percent or less of total reported pay, and retaining best talent available foris intended to provide competitive base pay and directly affect the level of retirement benefits, as salary is included in benefit formulas. Named Executive Officers participate in the same salary program as all U.S.-dollar-paid executives. The overall size of the program is determined by annual benchmarking. Individual salary increases are the result of individual performance, experience, and pay grade.BONUS PROGRAM Annual bonus program represents 10 to 20 percent of total reported pay, and is intended to link executive pay to annual Company earnings performance and provide a lifelong career
2020 Proxy Statement | 35 |
Succession Planning
PERFORMANCE SHARE PROGRAM Performance shares represent over 50 percent of total reported pay, and Continuityare intended to link executive pay to the returns of Leadershiplong-term shareholders and encourage a long-term view through the commodity price cycle. PROGRAM DESIGN BUSINESS MODEL ALIGNMENT Investment lead times in the oil and gas industry are often 10 years and longer SHAREHOLDER ALIGNMENT Majority of CEO pay is delivered in performance shares, aligning pay level with returns of long-term shareholders LONG-TERM DECISION MAKING Restriction periods and risk of forfeiture encourage focus on risk management and long-term shareholder value LONGEST RESTRICTION PERIODS IN ANY INDUSTRY Applying performance metrics at grant enables restriction periods of 10 years and longer HIGHEST STANDARDS OF PERFORMANCE Industry-leading performance across all pre-established metrics is required to maximize award level ABILITY TO RETAIN KEY TALENT Executive is unable to monetize significant portion of pay, creating large buyout hurdle LONG RESTRICTION PERIODS ExxonMobils business involves large investments over long periods of time, requiring executives to maintain a long-term view when making business decisions Long restriction periods ensure that a significant portion of pay reflects the outcome of these decisions and the experience of long-term shareholders An alternate formula-based program would require a shorter time horizon to set meaningful, credible targets. The Compensation Committee continues to review such a program and concluded that this would encourage short-term thinking, not aligned with the long investment lead times and the capital-intensive nature of the business Example below shows project net cash flow of a typical ExxonMobil project and performance share program design. It illustrates that short-term vesting occurs prior to determination of project financial success or failure and that longer-term vesting better aligns with shareholder returns resulting from investment decisions LONGER RESTRICTION PERIODS ALIGN WITH OIL AND GAS PROJECT NET CASH FLOW YEARS STOCK GRANT PROJECT TIMELINE 3 5 10 Profitability ExxonMobil Program Restriction Period Alternate Program Restriction Period Investment
36 | 2020 Proxy Statement |
2020 Proxy Statement ExxonMobil conducts business in a cyclical commodity price environment and positions itself to generate sustainable growth in shareholder value over the long term Longer restriction periods also ensure that executive talent should be developedexecutives are required to hold shares through these commodity price cycles An alternate program with shorter-term target setting and promoted from within
vesting would enable executives to monetize and diversify realized pay at a much faster pace, encouraging shorter-term decision making SHARE-DENOMINATED BASIS The Compensation Committee Decisionsdoes not adjust share grants to offset changes in share price; this results in executives seeing a one-for-one change in compensation through share price, aligned with the experience of long-term shareholders A share-denominated approach coupled with long restriction periods defines the risk/reward profile of stock-based performance awards PERFORMANCE METRICS AT GRANT Uniquely long restriction periods result in a need to apply performance metrics at grant, versus at vest Key factors in determining performance share award levels include both forward-looking (progress toward strategic objectives) and backward-looking (relative business performance against pre-established financial and operating metrics) performance measures STOCK OWNERSHIP It is ExxonMobils policy that executives maintain significant stock ownership Long restriction periods, three times longer than those at compensation benchmark companies, result in stock ownership far exceeding standard ownership guidelines THROUGH LONG RESTRICTION PERIODS, EXXONMOBIL EXECUTIVES ARE INCENTIVIZED TO TAKE A LONG-TERM VIEW IN DECISION MAKING 6x VS. 38x 90 PERCENT OF CEO STOCK OWNERSHIP CONSISTS OF UNVESTED SHARES Standard Guideline ExxonMobil CEO Base Salary Base Salary 37
2020 Proxy Statement | 37 |
COMPENSATION DETERMINATION PROCESS FOR DETERMINING COMPENSATION The Compensation Committee considers progress toward the Companys strategic objectives, Company performance relative to industry peers over the investment lead times of the business, individual performance, and the results of annual benchmarking, taking into account experience in the position. INPUTS TO COMPENSATION COMMITTEE Performance Dimension 2019 Input Performance Shares Progress Toward Strategic Objectives Demonstrated leadership and accomplishments in progressing strategic goals and objectives Financial and Operating Performance Industry leadership over investment lead times (10 years) required in each pre-established metric Significant accomplishments in 2019, see page 40 Leading industry peers in 3 of 4 financial and operating metrics, see page 41 Leading Safety and Operations Integrity " Return on Average Capital Employed " Cash Flow from Operations and Asset Sales Lagging Total Shareholder Return Annual Bonus Estimated Earnings Company earnings performance Earnings Per Share (EPS) Threshold set for Earnings Bonus Units to pay out within 3-year time horizon Lower 2019 year-end estimated earnings, see page 35 EPS threshold maintained at $6.50, see page 35 Base Salary Performance, Experience, and Pay Grade Demonstrated leadership and experience in position Significant accomplishments in 2019, see page 40 ANNUAL COMPENSATION BENCHMARKING 10-year combined realized and unrealized pay for CEO position at 47th percentile of compensation benchmark companies1 COMPENSATION COMMITTEE DELIBERATIONS 2019 PAY DECISIONS FOR CEO Performance Shares 180,000 Annual Bonus $2,216,000 Base Salary $1,615,000 January 1, 2020 2019 CEO pay reflects strong leadership in progressing the Companys strategic objectives and continued industry leadership in 3 of 4 financial and operating performance metrics. This is balanced against lagging TSR performance and takes into account annual benchmarking given experience in position. COMPENSATION COMMITTEE GRANTS MARKET-COMPETITIVE PAY THAT IS HIGHLY PERFORMANCE BASED AND TIED TO COMPANY PERFORMANCE
38 | 2020 Proxy Statement |
PERFORMANCE AND EXPERIENCE The Compensation Committee considers Company and individual performance, and experience in its pay deliberations. COMPANY PERFORMANCE The Committee reviews forward- and backward-looking measures, see pages 40 and 41 for 2019 results. Forward looking: Companys progress toward strategic objectives Backward looking: Performance against industry peers based on pre-established financial and operating metrics over investment lead times of the business required(10 years) Highest priority is given to progress toward strategic objectives, safety and operations integrity, and return on average capital employed (ROCE) over the business cycle. INDIVIDUAL PERFORMANCE CEO. The Committee assesses the CEOs performance based on pre-established goals and objectives of which the Companys performance in progressing strategic objectives and financial and operating metrics are indicative. Senior Executives. The CEO assesses the following 7accomplishments of all senior executives in key areas to achieveperformance dimensions, such as strengthening the underlying fundamentals that drive superior business performance over the long term and leadership. Performance assessments are reviewed with the Board during the annual executive development review in October. The Board also assesses the performance of all senior executives throughout the year during specific business reviews and Board meetings. In addition, the Committee takes into account demonstrated leadership in sustaining sound business controls and a top quintile bonusstrong ethical and corporate governance environment. A violation of the Companys code of business conduct could result in elimination of an officers incentive award for the year, as well as termination of employment and/or cancellation of all unvested awards. See page 46 for forfeiture provisions. EXPERIENCE Given the complex and long-term stock award: Safety and Operations Integrity, ROCE, TSR, Free Cash Flow, Shareholder Distributions, Strategic Business Results, and Project Execution
BenchmarkingVice President of Exxon Mobil Corporation from 2015 through 2017 J.P. Williams, Jr. Senior Vice President since June 2014 N.W. Duffin President of ExxonMobil Global Projects Company since April 2019; President of ExxonMobil Production Company and Vice President of Exxon Mobil Corporation from 2017 to March 2019
2020 Proxy Statement | 39 |
PROGRESS TOWARD STRATEGIC OBJECTIVES: 2019 KEY HIGHLIGHTS Leadership and progress toward the Companys strategic objectives that will generate sustainable growth in shareholder value over the long term are key factors in the Compensation Committees determination of CEO pay. For more information, see page 38. STRENGTHENING THE UPSTREAM PORTFOLIO Value driven by attractive growth opportunities, including Permian, Guyana, Brazil, Mozambique, and Papua New Guinea Executing industry-leading exploration opportunities, with additional discoveries in Guyana and the Eastern Mediterranean Progressing asset divestment program to highgrade portfolio UPGRADING DOWNSTREAM PRODUCTION Delivering on 2019 plans; focus on upgrading to higher-value products and value capture across fuels and lubes value chains Maximizing contribution from 3 major investment projects in Beaumont, Rotterdam, and Antwerp Advantaged projects, logistics, and new markets drive earnings growth LEADING IN CHEMICAL GROWTH Significant progress in executing portfolio of critical growth projects Completed 8 strategic growth projects, including North America Growth initiative, Newport, and Beaumont Leveraging competitive advantages of integration, scale, and technology together with customer relationships REDUCING ENVIRONMENTAL IMPACTS Actively investing in development of lower-emission technologies with highest potential for large-scale deployment Leadership and partnership across broad spectrum of science-based organizations in both public and private sectors, including new key research partnerships National Labs, Global Thermostat, and Mosaic Materials On plan to meet 2020 external Corporate target of 25 percent reduction from 2016 flaring levels For more information on ExxonMobils holistic approach to addressing environmental performance, see the Energy and Carbon Summary2 INVESTING WITH DISCIPLINE Financial capacity to maintain long-term capital allocation priorities, even in cyclical downturns Recent Downstream and Chemical start-ups accretive to earnings and cash flow in current price environment Dividend increased by 6 percent in 2019, marking 37th consecutive year of dividend growth COMPENSATION COMMITTEE NOTED SIGNIFICANT PROGRESS IN ADVANCING STRATEGIC OBJECTIVES IN 2019
PROGRESS TOWARD STRATEGIC OBJECTIVES: 2019 KEY HIGHLIGHTS Leadership and progress toward the Companys strategic objectives that will generate sustainable growth in shareholder value over the long term are key factors in the Compensation Committees determination of CEO pay. For more information, see page 38. STRENGTHENING THE UPSTREAM PORTFOLIO Value driven by attractive growth opportunities, including Permian, Guyana, Brazil, Mozambique, and Papua New Guinea Executing industry-leading exploration opportunities, with additional discoveries in Guyana and the Eastern Mediterranean Progressing asset divestment program to highgrade portfolio UPGRADING DOWNSTREAM PRODUCTION Delivering on 2019 plans; focus on upgrading to higher-value products and value capture across fuels and lubes value chains Maximizing contribution from 3 major investment projects in Beaumont, Rotterdam, and Antwerp Advantaged projects, logistics, and new markets drive earnings growth LEADING IN CHEMICAL GROWTH Significant progress in executing portfolio of critical growth projects Completed 8 strategic growth projects, including North America Growth initiative, Newport, and Beaumont Leveraging competitive advantages of integration, scale, and technology together with customer relationships REDUCING ENVIRONMENTAL IMPACTS Actively investing in development of lower-emission technologies with highest potential for large-scale deployment Leadership and partnership across broad spectrum of science-based organizations in both public and private sectors, including new key research partnerships National Labs, Global Thermostat, and Mosaic Materials On plan to meet 2020 external Corporate target of 25 percent reduction from 2016 flaring levels For more information on ExxonMobils holistic approach to addressing environmental performance, see the Energy and Carbon Summary2 INVESTING WITH DISCIPLINE Financial capacity to maintain long-term capital allocation priorities, even in cyclical downturns Recent Downstream and Chemical start-ups accretive to earnings and cash flow in current price environment Dividend increased by 6 percent in 2019, marking 37th consecutive year of dividend growth COMPENSATION COMMITTEE NOTED SIGNIFICANT PROGRESS IN ADVANCING STRATEGIC OBJECTIVES IN 2019
2020 Proxy Statement | 41 |
ANNUAL BENCHMARKING COMPANY PERFORMANCE Assessing business performance is most relevant against companies of similar scale and complexity that operate within the same industry. These include Chevron, Royal Dutch Shell, Total, and BP. See page 41. COMPENSATION BENCHMARKING Evaluating level of compensation requires comparisonis most relevant against other U.S. companies that generally have large scale and complexity, capital intensity, international operations, and proven sustainability over time
| 2020 Proxy Statement |
COMPENSATION COMMITTEE DECISIONS ON 2019 CEO PAY 2019 CEO pay decisions reflect strong leadership in progressing the Companys strategic objectives and continued industry leadership in 3 of 4 financial and operating performance metrics. This is balanced against lagging TSR performance, and takes into account annual benchmarking given experience in position. See page 38 for a description of this process. The Committee reviews one-year reported and realized pay, total direct compensation which excludes the volatility that results from changes in pension value and other compensation and results of the 10-year combined realized and unrealized pay analysis in its pay deliberations. 2019 CEO COMPENSATION Reported Pay Salary Bonus Stock-Based Awards All Other Compensation Change in Pension Value (millions) $17.5 $18.8 $23.5 Total Direct Compensation 2017 2018 2019 Realized Pay Total Cash Vesting of Previous Awards (millions) $50. $6.6 $5.5 2017 2018 2019 Total reported pay includes $7.1 million in pension value change, close to half resulting from changes in interest rates, see page 51 Over 70 percent of CEO total direct compensation delivered in the form of performance shares with long restriction periods Realized pay is 23 percent of total reported pay 10-YEAR COMBINED REALIZED AND UNREALIZED PAY1 (2009 to 2018) ExxonMobil Compensation Benchmark Companies10 1 2 3 4 5 6 7 8 9 10 11 12 13 (rank position) 47th Percentile 10-YEAR REALIZED PAY (2009 to 2018) ExxonMobil Compensation Benchmark Companies10 Relative rank position in 10-year realized pay demonstrative of long restriction periods in program design
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OTHER COMPENSATION ELEMENTS RETIREMENT PLANS The Companys approach to talent development stems from the need to develop future leaders broadly and deeply given the complexity and long-term nature of businessour business. Retirement plans are designed to attract and retain exceptional talent. Retirement plans include: Defined contribution plans, such as the Companys savings plans, that are attractive to new hires who can begin building an account balance immediately, and Defined benefit plans, such as the Companys pension plans, that help retain mid- and late-career employees until retirement age. Retirement plans also strengthen commitment to high performance standards. Salary and bonus amounts that form the basis for these plans are determined by individual performance requires comparison against companies of similar scale and complexityperformance. Named Executive Officers participate in the same industry
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Highest Performance Standards
Scale and Complexity
Programs applied consistently
RISK AND GOVERNANCE Executive Stock Ownership Policy Executives maintain significant stock ownership during employment and for many years into retirement Long restriction periods on performance shares result in stock ownership that far exceeds the past 14 years totypical standard ownership guideline of 6 times base salary CEO stock ownership is 38 times salary resulting from 90 percent of unvested shares Average of all executives worldwide,U.S.-dollar-paid executive officers, including other Named Executive Officers, is 29 times salary resulting from 83 percent of unvested shares Significant Pay at Risk Uniquely long vesting periods on performance shares substantially increase the CEO
Bonus Program
Threepercentage of career compensation at risk well into retirement Unvested performance factors determineshare awards cannot be used as collateral for any purpose Strong Forfeiture Provisions Delayed portion of the annual bonus and focus executivesunvested performance share awards are at risk of forfeiture in the event of early retirement and/or detrimental activity, even if such activity occurs or is discovered after retirement In the event of retirement prior to age 65 but after eligibility for early retirement (i.e., at least 55 years of age with at least 15 years of service), the Compensation Committee, in the case of an executive officer, must approve the retention of awards Bonus Clawback Policy In the event of a material negative restatement of ExxonMobils reported financial or operating results, the Board is authorized to take actions as it deems necessary and appropriate, including the recoupment (clawback) of any bonus (cash and earnings bonus units) paid to an executive officer Policy reflects the Companys high ethical standards and strict compliance with accounting and other regulations applicable to public companies Anti-Hedging/ Derivative Policy Company policy prohibits all active executive, management, professional, or technical employees and directors from being a party to a derivative or similar financial instrument, including puts, calls, or other options, future or forward contracts, or equity swaps or collars, on sustainable growthExxonMobil common stock or trading in the oil or gas futures markets Annual Assessment of Compensation Design Compensation Committee reviews the effectiveness and competitiveness of the compensation program design annually, including an assessment of alternate methodologies During this annual review, the Committee also considers the insights gained from extensive shareholder value:dialogue during and off proxy season Independent Compensation Consultant Compensation Committee utilizes the expertise of an external independent consultant For more information, see page 17 2020 Proxy Statement
2015 bonus represents 9 percent of CEO’s reported pay and is down 35 percent versus 2014, in line with change in earnings in 2015
Equity Program
Three design principles in combination result in performance and risk profiles aligned with the returns of long-term shareholders:
Vesting periods for senior executives far exceed typical three-year vesting that is common across most industries
Example – Stock Award Grant vs. Vest Period for CEO, assuming retirement in 2017
Performance criteria at grant allow ExxonMobil to have long vesting periods while maintaining a significant award performance basis
2015 stock award represents 67 percent of CEO’s reported pay; number of shares granted is consistent with 2014, reflective of ExxonMobil’s industry-leading performance in all 7 key areas over investment lead times of the business
CEO Compensation
For definitions of the terms “Reported Pay,” “Realized Pay,” and “Unrealized Pay” as used in this Overview, as well as a list of our compensation benchmark companies, see Frequently Used Terms on page 38. (1) Interest rate changes: from 2.5% for 2012 to 3.5% for 2013; to 3.0% for 2014; to 2.75% for 2015. (2) In 2013, the change in pension value was negative (–$6.24 million), but under SEC reporting rules, a negative change in pension value must be shown in the Summary Compensation Table as zero. (3) Exercised last stock options granted in 2001 that would have expired in 2011. No stock options granted since 2001. (4) 2015 benchmark company data not available at time of publication.
Long
No Employment Contracts No Severance Agreements No Change-in-Control Arrangements CEO and other Named Executive Officers are at-will employees and as such do not have employment contracts, severance agreements, or change-in-control arrangements with the Company Eliminates any real or perceived safety net with respect to job security and increases the risk and consequences to the individual for performance that does not meet the highest standards No Guaranteed Bonuses " Bonus program subject to year-on-year change in earnings performance and remains at risk No Additional Stock Grants to Balance Losses in Value Compensation Committee sets the size of the performance share program and does not support a practice of offsetting a loss or gain in the value of prior performance share grants by the value of current-year grants Such a practice would minimize the risk/reward profile of stock-based awards and undermine the long-term view that executives are expected to adopt No Accelerated Vesting Periods
ExxonMobil’s vesting periods far exceed competitors, are strongly integrated with our business model, and are aligned with long-term shareholder interests
Resulting in extensive stock holding through the commodity cycle
Reflective of long investment lead times and well aligned with ExxonMobil’s business model
For both examples, and in both programs, 100at Retirement Performance shares are granted each year from 2006not subject to 2016.
(1) ExxonMobil equity program: 50 percentacceleration, not even at retirement, except in the case of an annual grant of restricted stock or restricted stock units vests in 5 years and the other 50 percent vests in 10 years or retirement, whichever is later. (2) Hypothetical alternate formula-based program: percent of targetdeath Unvested performance shares that pay out depending on ExxonMobil’s relative three-year TSR rank versus our primary competitors: Chevron, Royal Dutch Shell, Total, and BP. TSR ranking has been determined by a Monte Carlo simulation that applies equal probability to each rank position. The Monte Carlo simulation method is consistent with U.S. GAAP accounting principlescannot be used as collateral for valuing performance stock awards. Payout factors as follows: 200% of target if ranked 1; 150% of target if ranked 2; 75% of target if ranked 3; and 0% of target if ranked 4 or 5. (3) Annual data calculated as average of daily prices from U.S. Energy Information Administration (EIA).
Periodic Assessment of Program Design
The Compensation Committee periodically evaluates alternate long-term equity programs, including a methodology based on three-year relative TSR
A requirement to demonstrate leadership in all 7 key performance areas establishes a significant performance standard at grant which in turn allows ExxonMobil to maintain its uniquely long vesting periods
Sound Governance Practices
How our program encourages the highest performance standards:any purpose COMPENSATION PROGRAM UNDERPINNED BY STRONG GOVERNANCE PRACTICES THAT DISCOURAGE INAPPROPRIATE RISK TAKING 2020 Proxy Statement
2020 Proxy Statement |
How our program discourages inappropriate risk taking:
Our program is applied consistently to all executives, including the CEO
Shareholder Engagement and Prior Say-On-Pay Vote
Frequently Used Terms
FREQUENTLY USED TERMS Please also read the footnotes contained throughout this Overviewon page 49 for additional definitions of terms we use and other important information.
Performance Share Program is the terminology used to describe our equity program to better reflect the strong connection between performance and pay. Compensation Benchmark Companies consist of AT&T, Boeing, Chevron, Ford, General Electric, General Motors, IBM, Johnson & Johnson, Pfizer, Procter & Gamble, United Technologies, and Verizon. These are the same companies noted in the 2019 Proxy Statement. For consistency, CEO compensation on page 43, in the Combined Realized and Unrealized Pay chart, is based on compensation as disclosed in the Summary Compensation Table of the proxy statements as of July 31, 2019. Reported Payis Total Compensation as reported in the Summary Compensation Table, except for years 2006 to 2008, whereTable. Total Direct Compensation is compensation granted during the year, including salary, current bonus, and the grant date fair value of restricted stock as provided under current SEC rules is used to put all years of compensation on the same basis.
performance shares. Realized Payis compensation actually received by the CEO during the year, including salary, currentcash bonus, payouts of previously granted Earnings Bonus Units (EBUs)earnings bonus units (EBU), net spread on stock option exercises, market value at vesting of previously granted stock-based awards, and All Other Compensation amounts realized during the year. It excludes unvested grants, change in pension value, and other amounts that will not actually be received until a future date. Amounts for compensation benchmark companies include salary, bonus, payouts of non-equity incentive plan compensation, and All Other Compensation as reported in the Summary Compensation Table, plus value realized on option exercise or stock vesting as reported in the Option Exercises and Stock Vested table. It excludes unvested grants, change in pension value, and other amounts that will not actually be received until a future date, as well as any retirement-related payouts from pension or nonqualified compensation plans.
Unrealized Payis calculated on a different basis fromthan the grant date fair value of awards used in the Summary Compensation Table. Unrealized Pay includes the value based on each compensation benchmark company’scompanys closing stock price at fiscal year-end 20142018 of unvested restricted stock awards; unvested long-term shareshare- and cash performancecash-performance awards, valued at target levels; and the “inin the money”money value of unexercised stock options (both vested and unvested). If a CEO retired during the period, outstanding equity is included assuming that unvested awards, as of the retirement date, continued to vest pursuant to the original terms of the award.
Compensation Benchmark Companiesconsist Cash Flow from Operations and Asset Sales is the sum of AT&T, Boeing, Caterpillar, Chevron, Ford Motor Company, General Electric, IBM, Johnson & Johnson, Pfizer, Procter & Gamble, United Technologies,the net cash provided by operating activities and Verizon. For consistency, CEO compensation is based on compensation as disclosed inproceeds associated with sales of subsidiaries, property, plant and equipment, and sales and returns of investments from the Summary Compensation Tablestatement of cash flows. For additional information, see page 50 of the proxy statements asSummary Annual Report included with the Corporations 2020 Proxy Statement. Return on Average Capital Employed (ROCE) for the Corporation is net income attributable to ExxonMobil excluding the after-tax cost of August 31, 2015.
financing, divided by total corporate average capital employed. For this purpose, capital employed means the Corporations net share of property, plant and equipment, and other assets less liabilities, excluding both short-term and long-term debt. For additional information, see page 49 of the Summary Annual Report included with the Corporations 2020 Proxy Statement. Total Shareholder Return (TSR) measures the change in value of an investment in stock over a specified period of time, assuming dividend reinvestment. TSR is subject to many different variables, including factors beyond the control of management. For additional information, see page 48 of the Summary Annual Report included with the Corporations 2020 Proxy Statement. Statements regarding future events or conditions are forward-looking statements. Actual future results, including achievement of strategic objectives; future financial and operating results; and project plans, schedules, and results, as well as the impact of compensation incentives, could differ materially due toto: changes in oil and gas prices, petroleum product margins and other market factors affecting our industry,industry; the outcome of exploration and development projects; timely completion of production and construction projects; technical or operating conditions,conditions; the outcome of commercial negotiations; political and regulatory factors including changes in environmental and tax laws and international treaties; and other factors described in Item 1A “Risk Factors”Risk Factors in our most recent Form 10-K. References to oil-equivalent barrels and other quantities of oil and gas herein include amounts not yet classified as proved reserves under SEC rules, but which we believe will ultimately be moved into the proved category and produced.
The term “project”project can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports. 2020 Proxy Statement
KEY ELEMENTS OF THE COMPENSATION PROGRAM
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FOOTNOTES 1 Pay means the overall sizesum of Realized Pay and Unrealized Pay as discussed on page 43 and defined in the related Frequently Used Terms on page 48. The Frequently Used Terms also define Total Direct Compensation and Reported Pay and identify the compensation benchmark companies. See also footnote 10 below. 2 For more information, see the Summary Annual Report included with ExxonMobils 2020 Proxy Statement available on our website at exxonmobil.com/annualreport. See also the Sustainability Report and Energy and Carbon Summary available on our website at exxonmobil.com. These reports are for information only and are not incorporated as part of the salary program.
Vesting and Restriction Periods
Retirement plans include defined contribution plans, such as the Company’s savings plans, that are attractive to new hires as they can begin building an account balance immediately, and defined benefit plans, such as the Company’s pension plans, that are valuable in retaining mid- and late-career employees. The Named Executive Officers participate in the same savings and pension plans as other U.S. executives.
Change in control is not a triggering event under any ExxonMobil benefit plan.
Savings Plans
Pension Plans
KEY ADDITIONAL FEATURES OF THE COMPENSATION PROGRAM
publication.
Name | Dollar Value of Stock Ownership as a Multiple of Salary | Percent of Shares/Units Restricted | ||||||
R.W. Tillerson | 64 | 77 | ||||||
D.W. Woods | 28 | 89 | ||||||
A.P. Swiger | 50 | 73 | ||||||
M.W. Albers | 46 | 90 | ||||||
M.J. Dolan | 53 | 83 | ||||||
All Other U.S.-Dollar-Paid Executive Officers (Average) | 29 | 80 |
Clawback Policy and Forfeiture Provisions
The above discussion of tax consequences is based on the Company’s interpretation of current U.S. tax laws.
COMPENSATION COMMITTEE 2015 DECISIONS
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Pay Awarded to Named Executive Officers
Upstreamdetails. Total Direct Salary Bonus Stock Awards Compensation Name Year ($)1 ($)2 ($)3 ($) D.W. Woods 2019 1,500,000 2,216,000 12,371,850 16,087,850 2018 1,400,000 2,464,000 11,648,250 15,512,250 2017 1,200,000 1,848,000 10,809,810 13,857,810 A.P. Swiger 2019 1,469,500 1,478,000 7,670,547 10,618,047 2018 1,395,750 1,848,000 8,666,298 11,910,048 2017 1,337,500 1,603,000 8,123,736 11,064,236 N.A. Chapman 2019 895,000 1,270,000 6,584,574 8,749,574 2018 833,000 1,276,000 5,979,435 8,088,435 J.P. Williams, Jr. 2019 986,167 1,231,000 5,849,136 8,066,303 2018 929,167 1,276,000 5,979,435 8,184,602 N.W. Duffin 2019 1,165,500 981,000 5,031,219 7,177,719 2018 1,107,000 1,175,000 5,381,492 7,663,492 2017 1,063,250 1,021,000 5,675,150 7,759,400 2020 Proxy Statement
50 |
2020 Proxy Statement |
Downstream
Chemical
More details on ExxonMobil’s strategic business results and strategies are available in theSummary Annual Report included with the 2016 Proxy Statement.
2015 Compensation for Named Executive Officers
Salary
Bonus (Cash plus full value of EBU award)
Equity Awards
Pension (Change in Pension Value)
All Other Compensation
Summary Compensation Table for 2015
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non- Equity sation ($) | Change in Pension Value and Nonqualified Deferred Compen- sation Earnings ($) | All Other Compen- sation ($) | Total ($) | |||||||||||||||||||||||||
R.W. Tillerson Chairman and CEO |
| 2015 2014 2013 |
|
| 3,047,000 2,867,000 2,717,000 |
| 2,386,000 3,670,000 3,670,000 |
| 18,288,000 21,420,000 21,254,625 |
|
| 0 0 0 |
|
| 0 0 0 |
|
| 3,036,167 4,683,892 0 |
|
| 540,291 455,420 496,704 |
|
| 27,297,458 33,096,312 28,138,329 |
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D.W. Woods President(1) | 2015 | 736,667 | 1,219,000 | 7,241,492 | 0 | 0 | 954,492 | 143,221 | 10,294,872 | |||||||||||||||||||||||||
A.P. Swiger Senior Vice President; PFO |
| 2015 2014 2013 |
|
| 1,228,750 1,142,500 1,052,500 |
| 1,409,000 1,876,000 1,876,000 |
| 8,648,192 8,644,160 8,577,422 |
|
| 0 0 0 |
|
| 0 0 0 |
|
| 3,489,861 4,355,277 640,703 |
|
| 126,559 116,619 112,596 |
|
| 14,902,362 16,134,556 12,259,221 |
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M.W. Albers Senior Vice President |
| 2015 2014 2013 |
|
| 1,232,500 1,162,500 1,092,500 |
| 1,409,000 1,876,000 1,876,000 |
| 8,648,192 8,644,160 8,577,422 |
|
| 0 0 0 |
|
| 0 0 0 |
|
| 3,277,380 4,337,214 0 |
|
| 129,265 135,215 111,791 |
|
| 14,696,337 16,155,089 11,657,713 |
| |||||||||
M.J. Dolan Senior Vice President |
| 2015 2014 2013 |
|
| 1,322,500 1,252,500 1,175,000 |
| 1,635,000 2,168,000 2,168,000 |
| 10,078,720 10,129,280 10,051,076 |
|
| 0 0 0 |
|
| 0 0 0 |
|
| 1,565,725 2,360,606 395,472 |
|
| 147,587 139,827 126,600 |
|
| 14,749,532 16,050,213 13,916,148 |
|
Terms of Employment Agreements
Salary
Bonus
in 2019, see pages 35 and 38. Stock Awards
For more details on the design of the performance share program and determinations made by the Compensation Committee in 2019, see pages 36 to 38. 4 Change in Pension Value and Nonqualified Deferred Compensation Earnings
Compensation. The amounts shown in this column in the Summary Compensation Table solely represent the positive change in pension value. The Corporation’sCorporations nonqualified deferred compensation plan (Supplemental Savings Plan) does not permit accrual of above-market or preferential earnings.
Pension Value
Factors | Change in Pension Value (Percent) | Change in Present Value ($) | ||||
Lower Lump Sum Interest Rate | 2.6 | 1,693,212 | ||||
Change in Final Average Bonus | 0 | 0 | ||||
Change in Final Average Salary | 2.3 | 1,536,996 | ||||
Age and Service | –0.3 | –194,041 | ||||
Total | 4.6 | 3,036,167 |
2020 Proxy Statement | 51 |
5 All Other Compensation
Compensation. The following table breaks down the amounts included in the All Other Compensation column of the Summary Compensation Table for 2015.
Name | Life Insurance ($) | Savings Plan ($) | Personal ($) | Personal Use of Company | Financial ($) | Relocation ($) | Total ($) | |||||||||||||||||||||||||
Aircraft ($) | Properties/Car ($) | |||||||||||||||||||||||||||||||
R.W. Tillerson | 96,054 | 213,290 | 122,675 | 73,856 | 23,726 | 10,690 | 0 | 540,291 | ||||||||||||||||||||||||
D.W. Woods | 0 | 51,567 | 15,184 | 0 | 61 | 9,363 | 67,046 | 143,221 | ||||||||||||||||||||||||
A.P. Swiger | 25,215 | 86,013 | 4,641 | 0 | 0 | 10,690 | 0 | 126,559 | ||||||||||||||||||||||||
M.W. Albers | 25,319 | 86,275 | 961 | 0 | 6,020 | 10,690 | 0 | �� | 129,265 | |||||||||||||||||||||||
M.J. Dolan | 41,712 | 92,575 | 1,757 | 0 | 853 | 10,690 | 0 | 147,587 |
2019. Personal Use Life Insurance
individual. Savings Plan
57. Personal Security
52 | 2020 Proxy Statement |
For Mr. Tillerson,Woods, the amount shown includes $84,310includes: $33,589 for residential security, and $27,013$31,879 for the cost of his car provided for security reasons as described above. The remainder isabove, and $49,860 for security costs relatingrelated to personal travel and other communications equipment to conduct business in a secure manner.
Aircraft
Properties/Car
Financial Planning
Relocation
Grants GRANTS OF PLAN-BASED AWARDS FOR 2019 All Other All Other Estimated Estimated Stock Option Future Payouts Future Payouts Awards: Awards: Exercise Grant Date Under Non-Equity Under Equity Number of Plan-BasedNumber of or Base Fair Value Incentive Plan Awards for 2015
Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Stock Awards: Number of of Stock or Units (#) | All Other Option Awards: Number Securities Under- lying Options (#) | Exercise Base of Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | |||||||||||||||||||||||||||||||||||||
Thresh ($) | Tar- get ($) | Maxi- mum ($) | Thresh -old (#) | Tar- get (#) | Maxi- mum (#) | |||||||||||||||||||||||||||||||||||||||
R.W. Tillerson | 11/24/2015 | 0 | 0 | 0 | 0 | 0 | 0 | 225,000 | 0 | 0 | 18,288,000 | |||||||||||||||||||||||||||||||||
D.W. Woods |
| 11/24/2015 12/09/2015 |
|
| 0 0 |
|
| 0 0 |
|
| 0 0 |
|
| 0 0 |
|
| 0 0 |
|
| 0 0 |
|
| 64,400 26,400 |
|
| 0 0 |
|
| 0 0 |
|
| 5,234,432 2,007,060 |
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A.P. Swiger | 11/24/2015 | 0 | 0 | 0 | 0 | 0 | 0 | 106,400 | 0 | 0 | 8,648,192 | |||||||||||||||||||||||||||||||||
M.W. Albers | 11/24/2015 | 0 | 0 | 0 | 0 | 0 | 0 | 106,400 | 0 | 0 | 8,648,192 | |||||||||||||||||||||||||||||||||
M.J. Dolan | 11/24/2015 | 0 | 0 | 0 | 0 | 0 | 0 | 124,000 | 0 | 0 | 10,078,720 |
Incentive Plan Awards Shares of Securities Price of of Stock and Stock or Underlying Option Option Threshold Target Maximum Threshold Target Maximum Units Options Awards Awards Name Grant Date ($) ($) ($) (#) (#) (#) (#) (#) ($/Sh) ($) D.W. Woods 11/26/2019 0 0 0 0 0 0 180,000 0 0 12,371,850 A.P. Swiger 11/26/2019 0 0 0 0 0 0 111,600 0 0 7,670,547 N.A. Chapman 11/26/2019 0 0 0 0 0 0 95,800 0 0 6,584,574 J.P. Williams, Jr. 11/26/2019 0 0 0 0 0 0 85,100 0 0 5,849,136 N.W. Duffin 11/26/2019 0 0 0 0 0 0 73,200 0 0 5,031,219 In 2015, equity2019, performance share grants were made in the form of restricted stock units (RSUs).units. Each RSUstock unit represents one share of ExxonMobil common stock. RSUsPerformance shares granted to the Named Executive Officers may only be settled only in shares.stock. During the restricted period, for RSUs, the executive receives a cash payment on each RSUperformance share corresponding to the cash dividends paid on an outstanding share of ExxonMobil stock. Unlike common stock, performance shares of restrictedgranted in stock RSUsunits do not carry voting rights prior to settlement.
Restrictions and Forfeiture Risk
Grant Date
Outstanding Equity Awards at Fiscal Year-End for 201551. For details regarding ExxonMobils restrictions and forfeiture provisions, see pages 36, 37, and 46. 2020 Proxy Statement
Name | Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price | Option Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of | Equity Awards: | Equity Incentive Awards: Market or Rights That Vested ($) | ||||||||||||||||||||||||||||
R.W. Tillerson | 0 | 0 | 0 | 0 | — | 1,913,500 | 149,157,325 | 0 | 0 | |||||||||||||||||||||||||||
D.W. Woods | 0 | 0 | 0 | 0 | — | 237,500 | 18,513,125 | 0 | 0 | |||||||||||||||||||||||||||
A.P. Swiger | 0 | 0 | 0 | 0 | — | 575,750 | 44,879,713 | 0 | 0 | |||||||||||||||||||||||||||
M.W. Albers | 0 | 0 | 0 | 0 | — | 661,150 | 51,536,643 | 0 | 0 | |||||||||||||||||||||||||||
M.J. Dolan | 0 | 0 | 0 | 0 | — | 744,400 | 58,025,980 | 0 | 0 |
2020 Proxy Statement | 53 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2019 Option Awards Stock Awards (RestrictedEquity Equity Incentive Incentive Plan Awards: Equity Incentive Plan Awards: Market or Plan Awards: Number of Payout Value Number of Number Market Value Unearned of Unearned Number of Number of Securities of Shares of Shares Shares, Units Shares, Units Securities Securities Underlying or Units of or Units of or Other or Other Underlying Underlying Unexercised Option Stock and RSUs)awardsThat Rights That Rights That Unexercised Unexercised Unearned Exercise Option Have Not Have Not Have Not Have Not Options (#) Options (#) Options Price Expiration Vested Vested Vested Vested Name Exercisable Unexercisable (#) ($) Date (#) ($) (#) ($) D.W. Woods 0 0 0 0 - 748,450 52,226,841 0 0 A.P. Swiger 0 0 0 0 - 833,250 58,144,185 0 0 N.A. Chapman 0 0 0 0 - 420,850 29,366,913 0 0 J.P. Williams, Jr. 0 0 0 0 - 418,700 29,216,886 0 0 N.W. Duffin 0 0 0 0 - 571,150 39,854,847 0 0 Performance shares shown in the table above include both restricted stock and RSUs. Restricted stock awardsunits. The market value is based on the 2019 year-end closing stock price of $69.78. This value has not been risk adjusted. These performance shares have the same terms as RSUs,stock, except that restricted stock awardsunits do not include voting rights. For more information regarding the terms of RSUs,performance share program, see page 40.
Date Restrictions Lapse and Number of Performance Shares 10 Years or Retirement, Name 2020 2021 2022 2023 2024 Whichever Occurs Later D.W. Woods 45,400 68,500 66,000 75,000 90,000 403,550 A.P. Swiger 53,200 53,200 49,600 55,800 55,800 565,650 N.A. Chapman 23,400 23,400 24,750 38,500 47,900 262,900 J.P. Williams, Jr. 32,200 32,200 25,750 38,500 42,550 247,500 N.W. Duffin 32,200 38,500 34,650 34,650 36,600 394,550 OPTION EXERCISES AND STOCK VESTED FOR 2019 Option Awards Stock Awards Number of Shares Value Realized Number of Shares Value Realized Name Acquired on Exercise (#) on Exercise ($) Acquired on Vesting (#) on Vesting ($) D.W. Woods 0 0 23,400 1,616,238 A.P. Swiger 0 0 45,400 3,135,778 N.A. Chapman 0 0 19,550 1,350,319 J.P. Williams, Jr. 0 0 23,400 1,616,238 N.W. Duffin 0 0 32,200 2,224,054 2020 Proxy Statement
Name | Date Restrictions Lapse and Number of Shares/Units | |||||||||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | 10 Years or Retirement, Whichever Occurs Later | Retirement(1) | ||||||||||||||||||||||
R.W. Tillerson | 112,500 | 112,500 | 112,500 | 112,500 | 112,500 | 1,333,000 | 18,000 | |||||||||||||||||||||
D.W. Woods | 7,350 | 25,350 | 31,950 | 23,400 | 45,400 | 104,050 | 0 | |||||||||||||||||||||
A.P. Swiger | 38,500 | 42,000 | 45,400 | 45,400 | 53,200 | 351,250 | 0 | |||||||||||||||||||||
M.W. Albers | 42,000 | 45,400 | 45,400 | 45,400 | 53,200 | 429,750 | 0 | |||||||||||||||||||||
M.J. Dolan | 45,400 | 49,300 | 53,200 | 53,200 | 62,000 | 481,300 | 0 |
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Name | Option Awards | Stock Awards | ||||||||||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares (#) | Value Realized on Vesting ($) | |||||||||||||
R.W. Tillerson | 0 | 0 | 112,500 | 8,986,500 | ||||||||||||
D.W. Woods | 0 | 0 | 6,450 | 526,578 | ||||||||||||
A.P. Swiger | 0 | 0 | 34,250 | 2,735,890 | ||||||||||||
M.W. Albers | 0 | 0 | 38,500 | 3,075,380 | ||||||||||||
M.J. Dolan | 0 | 0 | 42,000 | 3,354,960 |
Stock Awards/Restriction Lapse in 2015
ExxonMobil Pension Benefits for 2015
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In the event of termination prior to early retirement eligibility, the pension benefit payable from the qualified Pension Plan is actuarially reduced and payable only as an annuity; there is no benefit payable under the Supplemental Pension Plan or Additional Payments Plan, and the pension benefit payable from the ExxonMobil Pension Plan is actuarially discounted.
Nonqualified Deferred Compensation NONQUALIFIED DEFERRED COMPENSATION FOR 2019 Executive Registrant Aggregate Aggregate Aggregate Contributions Contributions Earnings Withdrawals/ Balance in Last FY in Last FY in Last FY Distributions1 at Last FYE Name ($) ($) ($) ($) ($) D.W. Woods 0 85,400 14,316 20,146 532,001 A.P. Swiger 0 83,265 31,791 0 1,151,842 N.A. Chapman 0 44,687 10,371 0 389,577 J.P. Williams, Jr. 0 49,432 10,718 218 405,323 N.W. Duffin 0 61,985 18,526 0 681,988 1 Represents a partial distribution of plan benefits for 2015
Name | Executive ($) | Registrant ($) | Aggregate Earnings in Last FY ($) | Aggregate ($) | Aggregate Balance at Last FYE ($) | |||||||||||||||
R.W. Tillerson | 0 | 194,740 | 55,232 | 74,711 | 1,981,903 | |||||||||||||||
D.W. Woods | 0 | 33,017 | 5,874 | 0 | 226,598 | |||||||||||||||
A.P. Swiger | 0 | 67,463 | 20,171 | 20,098 | 729,958 | |||||||||||||||
M.W. Albers | 0 | 67,725 | 15,835 | 21,351 | 579,737 | |||||||||||||||
M.J. Dolan | 0 | 74,025 | 22,466 | 23,931 | 810,870 |
2020 Proxy Statement | 57 |
OTHER COMPENSATION ELEMENTS Termination and Change in Control Named Executive Officers are not entitled to any additional payments or benefits relating to termination of employment other than the retirement benefits previously described Named Executive Officers do not have employment contracts, a severance program, or any benefits or payments triggered by a change in control, see page 47 Administrative Services for Retired Employee Directors
Termination and Change in Control
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We expect Items 4 through 149 to be presented by shareholders at the annual meeting. Following SEC rules, other than minor formatting changes, we are reprinting the proposals and supporting statements as they were submitted to us. We take no responsibility for them. Upon oral or written request to the Secretary at the address listed under Contact Information on page 4,7, we will provide information about the sponsors’ shareholdings, as well as the names, addresses, and shareholdings of anyco-sponsors.
The Board recommends you vote AGAINST Items 4 through 149 for the reasons we give after each one.
ITEMItem 4 – INDEPENDENT CHAIRMANIndependent Chairman
This proposal was submitted by the Ellen M. HigginsOlga Monks Pertzoff Trust 1959,1945, 111 Commercial Street, Suite 302, Portland, ME 04101, the beneficial holder of 150 shares.400 shares and lead proponent of a filing group.
“RESOLVED:That the The shareholders request the Board of Directors of ExxonMobil to adopt as policy, and amend the bylaws as necessary, to require the Chair of the Board of Directors, whenever possible, to be an independent member of the Board. This policy shouldwould be phased in for the next CEO transition.
If the Board determines that a Chair who was independent when selected is no longer independent, the Board shall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as Chair.
SUPPORTING STATEMENT:Supporting Statement:
We believe:
The role of the CEO and management is to run the company;company.
The role of the Board of Directors is to provide independent oversight of management and the CEO;CEO.
There is a potential conflict of interest for a CEO to be her/his own overseer as Chair while managing the business.
ExxonMobil’sExxon Mobil’s CEO Rex Tillerson presentlyDarren Woods serves both as CEO and Chair of the Company’s Board of Directors. We believe the combination of these two roles in a single person weakens a corporation’s governance structure, which can harm shareholder value.structure.
Chairing and overseeing the Board is a time intensive responsibility, and aresponsibility. A separate independent Chair leavesalso frees the CEO free to manage the company and build effective business strategies.
As Andrew Grove, Intel’s former chair, Andrew Grove stated, ‘The“The separation of the two jobs goes to the heart of the conception of a corporation. Is a company a sandbox for the CEO, or is the CEO an employee?employee? If he’s an employee, he needs a boss, and that boss is the Board. The Chairman runs the Board. How can the CEO be his own boss?’boss?”
In our view, shareholders are best served by a separate independent Board Chair who provides a balance of power between the CEO and the Board. The primary duty of a Board of Directors is to oversee the management of a company on behalf of shareholders. A combined CEO / Chair creates a potential conflict of interest, resulting in excessive management influence on the Board and weaker oversight of management.
Numerous institutional investors recommend separation. For example, California’s Retirement System CalPERS’ Principles & Guidelines encourages separation, even with a lead director in place.
Shareholder resolutions urging separation of CEOthese two roles and Chair averaged approximately 36%the number of votes in favor in 2014 and 30% in 2015, an indication of strong investor support.companies separating these roles is growing.
ManyWith the unprecedented climate change challenges facing global energy companies have separate and/or independent Chairs. By 2014, 46.4% of the S&P 500 companies had boards that were not chaired by their CEO. An independent Chairas they face important transitions to a low carbon economy, it is important to ensure our company’s governance is the prevailing practice in the United Kingdom and many international markets.
An independent Chair and vigorous Boardbest it can improve focus on important ethical and governance matters, strengthen accountability to shareowners and help forge long-term business strategies that best serve the interests of shareholders, consumers, employeesbe, and the company.board is
2020 Proxy Statement | 59 |
empowered to provide strong direction and leadership. Exxon Mobil and the industry faces numerous and significant climate related challenges from decisions about developing new oil and gas fields for the market to revising its climate related lobbying.
This resolution to ExxonMobilExxon Mobil received 34%a vote in favor last year.
support of approximately 41% in 2019, a significant showing. To foster a simplesimplify the transition, we propose this new policy would be phased in when Mr. Tillerson retires and thea next CEO is chosen.
We urge a vote FOR this resolution.”
The Board recommends you vote AGAINST this proposal for the following reasons:
The Board believesagrees effectively representing the interests of shareholders requires a strong, independent Board responsible for oversight of management, including the CEO. The Board, however, disagrees that separating the decision as to who should serve as Chairman and/orand CEO is the proper responsibility of the Board. Directors possess considerable experience and understand the unique challenges and opportunities the Company faces, and arepositions would be in the best positioninterest of shareholders or improve its ability to evaluate the needs of the Company and how best to organize the capabilities of the directors and senior managers to meet those needs.provide effective oversight.
The Board carefully considers the pros and consmerits of separating or combining the Chairman and CEO positions, andincluding whether the Chairmanship should be held by an independent director should hold the Chairmanship, whenever the circumstances require.a CEO change occurs. The Board must retainbelieves it is important to preserve the flexibility to determineimplement the particular governanceleadership structure the Board believesthat will best serve the long-term interests of shareholders atshareholders. Adoption of a singular approach without the timeflexibility to adapt to company-specific circumstances would compromise the Board’s ability to assess and should not be compelled to take a particular position that may be contrary to its best judgment.implement the optimal oversight framework.
Empirical studies are inconclusive on the benefits of separatingThe Board currently believes having the Chairman and CEO roles and recent third-party research suggests cautioncombined results in adopting an inflexible, one-size-fits-all approach, which may explain why the approach remains a distinct minority position among U.S. companies. According to the2015 Spencer Stuart Board Index, only 29 percent of S&P 500 companies have a truly independent chairman, and only 4 percent have a policy that mandates the separation of thesignificant benefits for shareholders. A combined Chairman and CEO roles.role ensures items of greatest importance for the business are brought to the attention of, and reviewed by, the Board on a timely basis. As new issues arise, market dynamics change, or risk exposures evolve, the Chairman/CEO is best positioned, with deep Company knowledge and industry experience, to highlight those issues with the Board, ensuring appropriate oversight and discussion.
The Board is also comprised entirely of independent directors, exceptwith the CEO and President.exception of the CEO. Each independent director has access to the CEO and other Company executives on request; mayexecutives. Independent directors also have the authority to call meetings of the independent directors;directors, and may request agenda topics to be added or dealt with in more detail at meetings of the full Board or an appropriate Board committee.committees.
At the present time, the Board believes thatFurther independent Board leadershipoversight is effectively provided by the PresidingCompany’s appointing of an independent Lead Director who:whose broad oversight responsibilities include:
Calling, chairing, and determinesetting the agenda for executive sessions of thenon-employee directors and provide directors;
Providing feedback to the Chairman;
Chairing meetings of the Board meetings in the absence of the Chairman; and
Reviewing and approving the schedule and agenda for all Board meetings and reviewing associated materials distributed to the directors, in consultation with the Chairman;
Advising the Chairman reviews scheduleson the quality, quantity, and agendas for Board meetings.timeliness of information flow;
Reviewing committee meeting schedules;
Engaging with shareholders, as appropriate; and
Leading the annual performance evaluation of the Board.
The CompensationLead Director also concurrently serves as Chair of the Board Affairs Committee, which is comprised entirely of independent directors, reviewsto direct other key activities including:
Establishing the CEO’scriteria for director engagement with shareholders;
Providing comments and suggestions to the Board on Board committee structure, committee operations, committee member qualifications, and committee member appointment;
Overseeing independent director succession planning and remuneration;
60 | 2020 Proxy Statement |
Reviewing the service of independent directors on boards of other companies, including requests to accept a seat on any additional company board;
Establishing and maintaining procedures for interested parties to communicate with independent directors;
Considering Board governance practices and procedures including any changes to governance guidelines; and
Providing oversight of the performance and establishes hiseffectiveness of the annual evaluation process for the Board and its committees.
The Board’s Compensation Committee also independently reviews CEO performance and compensation the result of which is reviewedand conducts a review with the full Board, absent the Chairman.
ITEM 5 – CLIMATE EXPERT ON BOARD
This proposal was submitted byIn addition, the Province of St. JosephLead Director, working together with the Compensation Committee, oversees the annual evaluation of the Capuchin Order, 1015 North Ninth Street, Milwaukee, WI 53233,CEO, the beneficial ownercommunication of at least $2,000resulting feedback to the CEO, and the review of CEO succession plans.
Importantly, only a minority of S&P 500 companies have adopted an independent chairman. This was evidenced in market valuethe 2019Spencer Stuart Board Index, which examines the latest data and trends among the S&P 500 for board composition, governance practices, and director compensation. The Index noted that only 34 percent of S&P 500 boards have a chairman that meets the New York Stock Exchange rules for independence.
To maintain alignment with the substantial majority of S&P 500 boards, ensure continuation of the Company’s stock and lead proponentsignificant shareholder benefits of a filing group.
“Climate change expertise at both managementcombined Chairman/CEO role, and board levels is criticalpreserve the Board’s flexibility to companies’ success indetermine the energy industry because of significant environmental issues associated with their operations. These impactappropriate leadership and oversight structure, shareholders lenders, host country governments and regulators, as well as affected communities. Companies’ ability to demonstrate policies and best practices reflecting internationally accepted environmental standards can lead either to successful business planning or difficulties in raising new capital and obtaining the necessary licenses from regulators.
We believe ExxonMobil’s Board of Directors would benefit by addressing the impact of climate change on its business at its most strategic level by electing to its Board independent specialists versed in all business aspects of climate change. Just one authoritative figure with acknowledged expertise and standing could perform a valuable role in ways that would enable the Board to more effectively address the environmental issues and risks inherent in its present business model regarding climate change. It would also help ensure that the highest levels of attention are focused on developing environmental standards for new projects. In comparison, banks which had inadequate expertise on their boards to deal with risks related to new financial instruments and transactions often paid a huge price with a major impact on shareholder value.
Since the Exxon Valdez incident, the public’s perception of ExxonMobil represents a company with questionable environmental practices. For years some shareholders concerned about ExxonMobil’s approach to climate change have asked to engage directly with members of its Board; consistently they have been deniedshould reject this access to dialogue on matters of critical concern regarding climate change.
RESOLVED, shareholders request that, as elected board directors’ terms of office expire, the Exxon Mobil Corporation’s Board’s Nominating Committee nominate for Board election at least one candidate who:
* a director shall not be considered ‘independent’ if, during the last three years, she or he –
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil’s current process, as reflected in itsGuidelines for the Selection of Non-Employee Directors, requires director candidates to have a breadth of experience and demonstrated expertise in managing large, relatively complex organizations and be accustomed to dealing with complex situations with worldwide scope.
The Board must possess the capabilities to address the full range of business risks, from financial to social to environmental, including climate risk. In doing so, the Board leverages subject matter experts, both internally and externally, to share the latest science, analysis, and insights.
Because each director must possess a breadth of expertise and experience, setting aside a seat for an environmental specialist or other single-issue candidate who lacks other important attributes would, in our view, not be in the best interests of the Company or its shareholders because it would dilute the breadth needed by all directors to make informed decisions for the Company. Board members have fiduciary duties to the Company’s shareholders which require them to be informed on multiple issues and work together with other Board members to make decisions on a collaborative basis.
The Board is comprised of members with the credentials, proficiencies, and experience that enable the Board to effectively address climate-related issues. Board members hold nine science and engineering degrees and have relevant experience and leadership in a range of environmental matters, such as water, alternative energies, energy conservation, global climate issue management, and environmental innovation. Further, the Board has access to environmental and climate expertise via periodic briefings by Company professionals whose primary expertise is in the area of environmental management and stewardship. This includes sharing external perspectives on the status of science, research and development, and public policy.
The Company’s core value to ‘Protect Tomorrow, Today’ serves as a foundation for sound environmental management. OurOperations Integrity Management System is an effective and proven framework that aligns our environmental priorities with our business objectives, and has brought about improved environmental performance for many years.proposal.
ITEM 6 — HIRE AN INVESTMENT BANKItem 5 – Special Shareholder Meetings
This proposal was submitted by Kenneth Steiner, 14 Stoner Ave., 2M, Great Neck, NY 11021, the beneficial owner of 500 shares.
“[XOM: Rule 14a-8 Proposal December 30, 2015]
Proposal [6]5 – Hire an investment bankEnable Special Shareholder Meeting without the Need to go to Court
Shareholders recommendask our company hire an investment bank to explore the sale of our company. This would include a sale by dividing the company into major pieces to facilitate such a sale.
I believe the sale of XOM would release significantly more value to the shareholders than the current share price. Our stock was trading above $100 in 2014 and it went below $75 in 2015.
Hire an investment bank – Proposal [6]”
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil pursues business strategies that maximize long-term shareholder value. The Company also manages its assets and business segments with a focus on profitability to ensure that acceptable financial performance is achieved. This asset management discipline includes considering the sale of assets or businesses when such divestments yield the highest value for shareholders. This financial discipline has led to the sale of over $45 billion of assets and businesses over the past 10 years.
On an ongoing basis, ExxonMobil considers a wide range of strategies and business structures, as a fundamental responsibility of the Corporation’s management.
Since the Exxon-Mobil merger, the Company has returned $357 billion to shareholders through dividends and share purchases, which is greater than the market capitalization of 496 of the S&P 500 companies. This has been done in a sustainable manner without having to dismantle the Company or undermine its business model, and has rewarded long-term shareholders with returns in excess of the S&P 500.
This proposal was submitted by the New York City Employees’ Retirement System, the New York City Fire Department Pension Fund, the New York City Teachers’ Retirement System, the New York City Police Pension Fund,
and the New York City Board of Education Retirement System (the “Systems”), One Centre Street, Room 629, New York, NY 10007, the beneficial owners of 7,168,317 shares.
“RESOLVED: Shareholders of Exxon Mobil Corporation (the ‘Company’) ask the board of directors (the ‘Board’) to take the steps necessary to adoptamend our bylaws and appropriate governing documents to give the owners of a ‘proxy access’ bylaw. Suchtotal of 10% of our outstanding common stock the power to call a bylaw shallspecial shareholder meeting (or the closest percentage to 10% according to state law) without the current requirement to petition a court in order to do so. The Board of Directors would continue to have its existing power to call a special meeting.
Exxon Mobil is in a small minority of companies that require the Companyshareholders to includego to court in proxy materials preparedorder to call for a special shareholder meeting. Plus Exxon Mobil has an unlimited budget to oppose such a request in court and shareholders do not have any such a budget.
This proposal topic won 42%-support at our 2019 annual meeting. This was a significant increase from 36%-support in 2018.
A more accessible shareholder ability to call a special meeting at which directors arewould put shareholders in a better position to be electedgive continuing input on improving the name, Disclosure and Statement (as defined herein)makeup of any person nominated forour board of directors. Calling a special meeting is also a means shareholders can use to raise important matters outside the normal annual meeting cycle like the election toof a new director.
This topic is more important since we have no oversight of our CEO by an independent Board Chairman. Our combined Chairman/CEO, Darren Woods was rejected by the board by a shareholder or group (the ‘Nominator’) that meets the criteria established below. The Company shall allow shareholders to vote on such nominee on the Company’s proxy card.
The3rd highest number of shareholder-nominated candidates appearingshares in proxy materials shall2019. Meanwhile Mr. Woods’ total pay was $15 million. Ursula Burns, who chaired the Exxon audit committee, was rejected by 27% of shares in 2019 and Steven Reinemund was rejected by 14% of shares.
Mark Zuckerberg, Jeff Immelt, Elon Musk and Dennis Muilenburg are examples of problems with concentrating too much power in one person. Plus we apparently do not exceed one quarter of the directors then serving. This bylaw, which shall supplement existing rights under Company bylaws, should provide thathave a Nominator must:Lead Director as this title does not even appear in our 2019 proxy. Our stock price is down from $100 in 2013.
2020 Proxy Statement | 61 |
The Nominator may submit with the DisclosureA more accessible shareholder ability to call a statement not exceeding 500 words in support of each nominee (the ‘Statement’). The Board shall adopt procedures for promptly resolving disputes over whether notice of a nomination was timely, whether the Disclosure and Statement satisfy the bylaw and applicable federal regulations, and the priorityspecial meeting is more important because our right to be given to multiple nominations exceeding the one-quarter limit.
SUPPORTING STATEMENT
We believeshareholder proxy access may be out of reach since it can only be used by 20 shareholders who have owned a total of $30 billion of Exxon Mobil stock continuously for3-years. If a group of 20 shareholders is a fundamental shareholder right that will make directors more accountable and enhance shareholder value. A 2014 CFA Institute study concluded that proxy access would ‘benefit both$1 short of meeting this enormous $30 billion requirement – the markets and corporate boardrooms, with little cost or disruption’ and could raise overall US market capitalization by upgroup is totally out of luck.
Please vote yes:
Enable Special Shareholder Meeting without the Need to $140.3 billion if adopted market-wide. (http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2014.n9.1)
The proposed terms are similargo to those in vacated SEC Rule 14a-11 (https://www.sec.gov/rules/final/2010/33-9136.pdf). The SEC, following extensive analysis and input from companies and investors, determined that those terms struck the proper balance of providing shareholders with a viable proxy access right while containing appropriate safeguards.
A similar proposal received 49.40% of votes cast at the Company’s 2015 annual meeting and similar bylaws have been adopted by more than 80 companies.
We urge shareholders to vote FOR this proposal.Court – Proposal 5”
The Board recommends you vote AGAINST this proposal for the following reasons:
The Board agrees with the underlying objective of maintaining a highly qualified and independent Board by accessing a broad pool of candidates who have experiences and capabilities that are complementarybelieves it is important for shareholders to the scope and complexity of the Company’s business. While the Board is fully aligned with the underlying objective, it believes that the long proven processes currently in place provide a more effective outcome than what is being proposed by the proponents and that the proposal presents potential risks to the Company and its shareholders.
The Board takes its duty as a fiduciary of the Company seriously and has processes in place to ensure that all shareholder interests are well represented. Twelve out of the fourteen Board nominees are independent and have
been selected based upon Board-adopted, published guidelines and processes that are intended to yield a Board comprised of the most highly qualified business and professional leaders. The high voter tallies that our directors receive year-on-year suggest that shareholders are pleased with the quality of our Board members and demonstrate the effectiveness of the established processes.
The proposal risks undercutting the critical role that the independent Board Affairs Committee plays in ensuring that, through well-established, rigorous processes, the Board is comprised of personnel with required skills, backgrounds and competencies. Introducing a novel selection process, as the proposal seeks to do, risks diminishing the caliber and effectiveness of the Board over time and the ability of the Company to attract the kinds of leaders to its Board that shareholders have come to expect. Furthermore, directors who recommend candidates for election each year under these processes do so with a legal duty to all shareholders and act in the best interests of the Company. It is unclear what duty applies to the selection of proxy candidates under the proposal.
The proposal additionally risks introducing non-constructive and destabilizing dynamics into the Board election process. Some whom the Company has spoken with as result of its expansive engagement with shareholders on the issue say that a nomination under proxy access does not necessarily mean that the candidate will be elected. However, there is little experience in the United States with how proxy access will work, and the practice here may vary considerably from other jurisdictions where proxy access currently exists. At a minimum, the process may result in a proxy contest, which history suggests can be costly, fractious, distracting, and lead to results that are not in the best interests of the Company or its shareholders. Further, we do not believe that there is any meaningful evidence that proxy access would improve corporate governance or enhance market capitalization.
Perhaps most concerning is the potential risk for the proposal to increase the influence of special interest groups and lead to single-issue participants on the Board. The Board believes that directors should represent all of the Company’s shareholders, not just those who propose them for election. The proposal, however well intentioned, may be misused by shareholder groups to address various single issues that individually or collectively could undermine a business model that has long served the interests of our shareholders well. The potential for a series of directors who rotate from one single issue to another can also undermine the long-term focus the Company seeks to foster in its management and Board, consistent with its business strategy and required investment horizons.
It is also important to reinforce that shareholders already have an important role in determining who is on the Board. Directors are required to stand for election each year and shareholders can evidence their support or concern regarding individual Board members by vote during the annual shareholders meeting, and the Company has a stringent resignation policy required of any director who fails to receive a majority of “for” votes. Also, shareholders have the right to suggest non-employeecall a special shareholder meeting, a right ExxonMobil currently provides. ExxonMobil shareholders holding at least 15 percent of shares outstanding may call a special meeting in accordance with recently amended Corporate Governance Guidelines. No court petition is required.
Shareholder interests are further protected by a strong, independent Board candidatesresponsible for consideration,the oversight of management, including the CEO. Effective leadership is also provided by an independent Lead Director with expansive oversight responsibilities. In each of the last two years, shareholders recognized the strong leadership and these suggestions are considered in the same manner as other candidate recommendations, whether from Board members,independence of the Board Affairs Committee’s independent search firm, or from other sources. Throughwith an average vote in favor of all directors of more than 93 percent.
ExxonMobil’s current Corporate Governance Guidelines allow for shareholders of at least 15 percent of common stock outstanding to call a special meeting without the Company’s ongoing engagement process,need for a court petition, which provides a meaningful and more advantageous shareholder right than mostlarge-cap companies. Many companies that provide shareholders also have an opportunitythe right to share their views and to influence Company policies and approaches.call a special shareholder meeting do so at a much higher threshold. The most common threshold among S&P 500 companies is 25 percent.
ExxonMobil has demonstrated a track record of engagement with and responsiveness to shareholders, established strong Board and governance practices, and continues to maintain long-term industry-leading returns for our shareholders. Our current governance practices provide strong Board accountability and important shareholder rights. We believe that instead of strengthening our existing practices, the proposal could undermine the rigorous and effective processes we have in place.
Through the Company’s ongoing engagement with shareholders this past year,Therefore, the Board has heard a broad range of views regardingbelieves this proposal. The Board appreciates all shareholder views on the matter, and while it continues to consider the merits of the proposal in light of the Company’s ongoing engagement, it believes, for the reasons discussed above, that the proposal is not in the best interests of the Company at this time.unnecessary.
ITEM 8Item 6 – REPORT ON COMPENSATION FOR WOMENReport on Environmental Expenditures
This proposal was submitted by Eve S. Sprunt, PhD, 3753 Oakhurst Way, Dublin, CA 94568,Steven Milloy, 12309 Briarbush Lane, Potomac, MD 20854, the beneficial owner of at least $2,000250 shares.
“Greenwashing Audit
Resolved:
Shareholders request that, beginning in market value2020, ExxonMobil publish an annual report of the Company’s stock.incurred costs and associated significant and actual benefits that have accrued to shareholders, the public health and the environment, including the global climate, from the company’s environment-related activities that are voluntary and that exceed U.S. and foreign compliance and regulatory requirements. The report should be prepared at reasonable cost and omit proprietary information.
“RESOLVED,Supporting Statement:
The resolution is intended to help shareholders monitor and evaluate whether the company’s voluntary activities and expenditures touted as protecting the public health and environment are producing actual and meaningful benefits to shareholders, the public health and the environment, including global climate.
Corporate managements sometimes engage in the practice of ‘greenwashing,’ which is defined as the expenditure of shareholder assets on ostensibly environment-related activities but actually undertaken merely for the purpose of improving the company’s or management’s public image.
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Such insincere ‘green’ posturing and associated touting of hypothetical or imaginary benefits to public health and the environment may harm shareholders by wasting corporate assets, and deceiving shareholders and the public by accomplishing nothing real and significant for the public health and environment.
For example, ExxonMobil claimed in its 2019 ‘Energy and Carbon Summary’ report that it:
Plays ‘an essential role in protecting the environment and addressing the risks of climate change’;
Reduced its operational emissions by an average of about 20 MILLION tons annually since 2000.
Spent $9 billion since 2000 on efforts to reduce emissions.
None of these emissions reduction activities are required by law or regulation.
But in 2018 alone:
Exxon produced about 1.4 BILLION barrels of oil which, when burned, produced about 588 MILLION tons of carbon dioxide (CO2).
Global emissions ofCO2-equivalents in 2018 were about 55.3 BILLION tons.
So:
While ExxonMobil touts its operational reductions in CO2, it sells products that, when burned by consumers, emit almost 30 times more CO2.
ExxonMobil’s products when burned produce CO2 emissions that amount to a mere one percent (1%) of global manmade emissions.
Although ExxonMobil’s operational emissions cuts and the emissions from its products are both meaningless in larger context ExxonMobil bizarrely, if not falsely claims that it plays ‘an essential role in... addressing the risks of climate change.’
So, what are the actual benefits to shareholders and the climate of ExxonMobil’s multibillion-dollar bid to reduce its CO2 emissions. By how much, in what way, and when will any of these activities reduce, alter or improve transparency regarding compensation earnedclimate change, for example?
The information and honesty requested by female employees relative to their male peers,this proposal is not already contained in any ExxonMobil will annuallyreport. As none of them present the actual and significant cost-benefit details requested here, they may all be reasonably suspected of being examples ofdon’t-look-behind-the-curtain corporate greenwashing propaganda.
ExxonMobil should report to shareholders what are the percentageactual benefits being produced by its voluntary and highly touted environmental activities. Are they real and worthwhile, or just greenwashing?”
The Board recommends you vote AGAINST this proposal for the following reasons:
The Board believes transparency and accurate disclosure are important for shareholders to adequately assess potential risks and benefits of female employeesinvestments. The Company works to ensure the information it provides is timely, factual, vetted by subject matter experts, and compliant with regulations.
All opportunities inclusive of those undertaken to address the risks of climate change are rigorously evaluated to support the objective of generating long-term shareholder value.
For example, safe, reliable, and responsible operations, including steps to reduce emissions, are correlated with strong financial and operating performance. Investments that result in eachan increase in sales of ten
equally-sized fractionshigher value and more sustainable products, which generally yield higher margins, expand the earnings and cash flow potential of its workforce by total compensation, namely, the lowest 10% by total compensationCompany. Developing and so on, continuing with each increasingly compensated group, up throughdeploying proprietary technologies, such as biofuel and carbon capture, will position the tenth and final group that includes the 10% of employees who receive the highest total compensation.
STATEMENT OF SUPPORT
Women on averageCompany to participate in the United States still earn lesstransition to a lower-carbon energy system consistent with the goals of the Paris Agreement. Engaging with governments to implement effective climate-related policies leads to a more efficient regulatory environment and a level playing field for market participants, including ExxonMobil.
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ExxonMobil has invested nearly $10 billion in technology and programs to reduce emissions since 2000. Of this amount, approximately $4 billion is related to oil and gas operations, including energy efficiency and flare mitigation efforts, which help to reduce emissions and minimize costly waste. The Company also invested $3 billion in cogeneration facilities to more efficiently produce electricity and further reduce greenhouse gas (“GHG”) emissions across its operations. Additional investments in refining and chemical facilities around the world, and research to identify additional emission reduction opportunities, accounted for the remaining $3 billion. These investments were key in eliminating or reducing CO2 emissions by more than 79%400 million tonnes, which is equivalent to the average annual energy demand of what men earnmore than 46 million U.S. homes.
The Company also announced, and often face more barriersis on track to advancement thanmeet, goals to further reduce emissions from its operations, including a15-percent decrease in methane emissions and a25-percent reduction in flaring byyear-end 2020, as well as a10-percent reduction in GHG intensity for the ImperialOil-operated oil sands operations by 2023. These measures build upon established programs to deliver sustainable GHG reductions that help meet society’s ambition for a lower-carbon future.
Details related to these major investments are available in existing reports published by the Company including theOutlook for Energy, Energy & Carbon Summary and other publications and regulatory filings. The Board believes the proposal, therefore, is unnecessary.
Item 7 – Report on Risks of Petrochemical Investments
This proposal was submitted by the Park Foundation, a client of As You Sow, 2150 Kittredge St., Suite 450, Berkeley, CA 94704, the beneficial owner of 117 shares and lead proponent of a filing group.
“Resolved:Shareholders request that ExxonMobil, with board oversight, publish a report, omitting proprietary information and prepared at reasonable cost, assessing the public health risks of expanding petrochemical operations and investments in areas increasingly prone to climate change-induced storms, flooding, and sea level rise.
Supporting Statement:Investors request the company assess, among other related issues at management and Board discretion: The adequacy of measures the company is employing to prevent public health impacts from associated chemical releases.
Whereas:Investors are concerned about the financial, health, environmental, and reputational risks associated with operating andbuilding-out new chemical plants and related infrastructure in Gulf Coast locations increasingly prone to catastrophic storms and flooding associated with climate change. Civil society groups have mobilized to oppose the expansion of petrochemical facilities in their male counterparts. Greater transparency concerning compensationcommunities due to concerns regarding direct health and livelihood impacts from air and water pollutant releases. Such opposition threatens to jeopardize ExxonMobil’s social license to operate in the region.
Petrochemical facilities like ethane crackers and polyethylene processing plants produce dangerous pollutants including benzene (a known carcinogen), Volatile Organic Compounds, and sulfur dioxide. These operations can become inundated and pose significant chemical release risks during extreme weather events. Flooding from Hurricane Harvey in 2017 resulted in ExxonMobil plant shut downs and the release of unpermitted, unsafe levels of pollutants. Nearby Houston residents reported respiratory and other health problems following ExxonMobil’s releases during Hurricane Harvey.
Growing storms and the costs they bring our company are predicted to increase in frequency and intensity as global warming escalates. Recent reports show that greenhouse gas emissions throughout the petrochemical and plastic supply chain contribute significantly to climate change, exacerbating the threat of physical risks like storms. Flood-related damage is essentialprojected to identifying and eliminating remaining obstacles that impede progress towards gender pay equity.
Publicly held companiesbe highest in Texas, where many ExxonMobil petrochemical plants are required to report sensitive financial information so that stockholders are appropriately informed. Since employees play a critical roleconcentrated. Houston alone has seen three500-year floods in a company’s successthree-year span. Hurricane Harvey contributed to decreased earnings of approximately $40 million for ExxonMobil in 2017 and womendecreasing social license from surrounding communities.
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Historically, releases from ExxonMobil’s petrochemical operations have exceeded legal limits, exposing the company to liability and millions in payment for violations of environmental laws including the Clean Air and Clean Water Acts. As climate change intensifies flooding and storm strength, the potential for unplanned chemical releases grows.
In spite of these risks, ExxonMobil continues to accelerate its petrochemical activity in the Gulf Coast, investing heavily to expand in flood-prone areas of Texas and Louisiana. The company has generally disclosed that risks from storms may impact its business and that climate risks like extreme storms are a large percentage of the workforce, it is important for stockholders and potential employees to have access to financial information that documents how well women are succeeding relative to their male counterparts.
ExxonMobil should be proud to release the information on women’s compensation relative to men’s. Annual reports would show how women rank, and over time would reveal the effectiveness of ExxonMobil’s programs in providing equal opportunities for women. If the requested data reveal that ExxonMobil ranks among the best employers for women, this would improvefactors it considers in construction and operation of assets. The impacts to ExxonMobil’s operations from Hurricane Harvey, however, indicate the corporation’s competitive position by enhancing attractioncompany’s level of preparedness is insufficient. As the Company rapidly expands its petrochemical assets in climate-impacted areas, investors seek improved disclosure to understand whether ExxonMobil is adequately evaluating and retention of top female talent.mitigating public health risks associated with climate-related impacts and the dangerous chemicals it uses.”
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil values diversity,works in remote and challenging environments around the world, including gender,flood-prone areas, and as a result has extensive experience operating facilities in a wide range of challenging physical environments. The Company’s history of design, construction, and operations provides a solid foundation to address the risks associated with different environments. The Company designs and operates its facilities in consideration of those risks.
ExxonMobil uses a rigorous and comprehensive assessment process, which includes the collection of extensive data from measurements and advanced computer modeling to consider the full range of potential environmental, socioeconomic, and health risks associated with its operations, prior to pursuing a new development. Importantly, ExxonMobil works closely with governments and regulatory agencies, for permitting and other requirements, to ensure appropriate operating procedures and response measures are in place to minimize potential impacts. These external professionals, working on behalf of governments, regulatory bodies, and residents, are trained to identify risk factors that may affect projects, facilities, and local communities. This collaborative approach enables the Company to gain a holistic view of issues that may affect a specific project, and implement measures to eliminate, avoid, or remedy potential concerns.
As the Company undertakes its risk assessments, it carefully considers the unique factors faced by its facilities. For example, offshore facilities are potentially impacted by changes in wave and wind intensity, loop currents, and ice floe patterns. Onshore facilities, including petrochemical operations, are exposed to potentialsea-level changes, storm surge, flooding, wind, seismicity, or geotechnical considerations. In each case, environmental assessments, as described above, are conducted in advance to ensure protective measures and response procedures are in place prior to building and commissioning facilities.
ExxonMobil’s Operations Integrity Management System is the backbone of this process and has proven effective at ensuring readiness for and resiliency to extreme weather conditions.
ExxonMobil’s participation in Gulf Coast Growth Ventures, a world-scale ethane steam cracker and derivative units in San Patricio County, Texas, is an excellent example of the Company’s risk management processes in practice. ExxonMobil, through the joint venture, worked with government regulators and local communities to address four key priorities expressed by local residents: health and safety, education and workforce development, quality of life, and environmental stewardship. The Company held approximately 150 meetings with local residents, community groups, and other organizations to gather stakeholder perspectives and ensure that identified risks and concerns were appropriately addressed. Through this process, the Company received comments related to wastewater disposal and air quality and, following review by the Texas Commission on Environmental Quality, modified facility design to mitigate community concerns.
Once facilities are in operation, the Company maintains disaster preparedness, response and business continuity plans. Detailed, well-practiced, and frequently updated emergency response plans tailored to each facility help prepare for unplanned events, including extreme weather. Regular emergency response drills are practiced in coordination with appropriate government agencies and community coalitions to help ensure readiness and minimize the impacts of such events. ExxonMobil has also established strategic emergency support groups around the world to develop and practice response strategies and assist field responders. Each facility and business unit has access to readily available trained responders, including regional response teams, to provide rapid tactical support.
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We also monitor and manage ongoing integrity through periodic checks on key aspects of facility structures, including adopting learnings from recent extreme weather events as part of ongoing engineering evaluations. These evaluations include the use of engineering assessments to identify potential impacts on critical systems, such as facilities for storm water handling and upgrades of electrical systems. Enhancements could involve procedural revisions and / or changes in equipment design to help ensure resiliency.
The Company publicly shares its guidelines, measures, and practices to assess and mitigate risk factors, and includes the information requested by the proponent in itsEnergy & Carbon Summary publication.
Based on the Company’s extensive experience and well-established processes, that have allowed us to successfully advance women on a global basis.
Within ExxonMobil, compensation, developmentprocedures, and advancement are highly integrated. As an individual advances through various career stages, pay grade and total compensation will advance accordingly. The program compensates each individual at a level commensurate with individual performance, experience, and pay grade, independent of gender. This ensures alignment of compensation among employees with similar performance who are in jobs of similar scope and complexity.
Withindisclosures, the Board believes this context, metrics that measure the progress in development and advancement of women are more meaningful.
ExxonMobil develops future leaders from within the Company worldwide, drawing upon our diverse employee population. We promote leadership opportunities for women and work to improve the gender balance within the Company through all aspects of the employment relationship, including recruitment, training, advancement and salary administration.
At multiple times during the year, management discusses efforts in the area of diversity talent development, which includes both stewardship of metrics and a review of specific development plans. These reviews take place at multiple levels within the organization and include representatives of senior management.
Robust development processes and rigorous management reviews, scheduled throughout the year, allow us to advance our goal of drawing from the most diverse and most qualified pool of candidates for each position at each level within the organization.
TheCorporate Citizenship Report (CCR), published by the Company on an annual basis, includes detailed information on our workforce demographics and provides additional information on our comprehensive diversity and inclusion efforts.
Key headlines from the 2015CCR:
We believe that a focus on all aspects of the development path supported by a consistently applied compensation program will continue to result in a strong and diverse pool of highly qualified talent. We view the metrics that are disclosed in ourCorporate Citizenship Report to be more meaningful to shareholders as they better represent our development model.unnecessary.
ITEM 9Item 8 – REPORT ON LOBBYINGReport on Political Contributions
This proposal was submitted by the Unitarian Universalist Association, 24 Farnsworth Street, Boston, MA 02210, the beneficial owners of 87 shares and lead proponent of a filing group.
“Resolved, that the shareholders of Exxon Mobil Corp. (‘Exxon’ or ‘Company’) hereby request that the Company prepare and semiannually update a report, which shall be presented to the pertinent board of directors committee and posted on the Company’s website, disclosing the Company’s:
(a) | Policies and procedures for making electoral contributions and expenditures (direct and indirect) with corporate funds, including the board’s role (if any) in that process; and |
(b) | Monetary andnon-monetary contributions or expenditures that could not be deducted as an ‘ordinary and necessary’ business expense under section 162(e)(1)(B) of the Internal Revenue Code, including (but not limited to) contributions or expenditures on behalf of candidates, parties, and committees and entities organized and operating under section 501(c)(4) of the Internal Revenue Code, as well as the portion of any dues or payments made to anytax-exempt organization (such as a trade association) used for an expenditure or contribution that, if made directly by the Company, would not be deductible under section 162(e)(1)(B) of the Internal Revenue Code. |
The report shall be made available within 12 months of the annual meeting and identify all recipients and the amount paid to each recipient from Company funds. This proposal does not encompass lobbying spending.
Supporting Statement
As long-term Exxon shareholders, we support transparency and accountability in corporate electoral spending. Disclosure is in the best interest of the Company and its shareholders. The Supreme Court recognized this in its 2010 Citizens United decision, which said, ‘[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.’
Publicly available records show Exxon has contributed at least $12,900,000 in corporate funds since the 2010 election cycle. (CQMoneyLine:http://moneyline.cq.com; National Institute on Money in State Politics:http://www.followthemoney.org).
We acknowledge that Exxon publicly discloses a policy on corporate political spending and its direct contributions to candidates, parties, and committees. We believe this is deficient because Exxon does not disclose the following:
A full list of trade associations to which it belongs and thenon-deductible portion under section 162(e)(1)(B) of the dues paid to each; and
Payments to other third-party organizations, including those organized under section 501(c)(4) of the Internal Revenue Code, that could be used for election-related purposes.
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Information on indirect electoral spending through trade associations and 501(c)(4) groups cannot be obtained by shareholders unless the Company discloses it. This proposal asks the Company to disclose all of its electoral spending, both direct and indirect. This would bring our company in line with a growing number of leading companies, including AT&T, United Technologies, and ConocoPhillips, which present this information on their websites. The Company’s Board and shareholders need comprehensive disclosure to be able to fully evaluate the use of corporate assets in elections. We urge your support for this critical governance reform.”
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil is committed to full compliance with applicable regulations, and publicly shares its policy on corporate political spending and its direct contributions to candidates, parties, and committees. The Company believes disclosure requirements outlined by federal and state laws are both adequate and equitable, in that they require the same level of disclosure from all participants in the political process.
In addition to federal and state regulations, ExxonMobil’s political contributions are subject to a strict internal review process that requires approval by the Chairman as directed by the Company’s Political Activities Guidelines, available onexxonmobil.com/company/policy/political-contributions-and-lobbying. The political contributions of the Corporation, as well as the contributions of the political action committees established by the Corporation, are reviewed with the Board of Directors of the Corporation annually, and procedures are routinely verified during internal audits of the Company’s political activities.
With respect to contributions to third-party organizations, the Company publishes its Worldwide Contributions and Community Investment: Public Policy report on its website, atexxonmobil.com/community-engagement/worldwide-giving. The most recent listing includes contributions to more than 100 U.S.-based,non-profit organizations that in many cases contribute to informed policy discussions.
Therefore, for the reasons stated above, the Board believes current federal and state oversight are sufficient to ensure disclosure and transparency, and to provide a consistent standard for all reporting entities. Any desire for additional disclosure would be more appropriately addressed to Congress, the Executive Branch, and/or relevant state and local governments. In the Board’s view, this proposal is unnecessary.
This proposal was submitted by the United Steelworkers, Five Gateway Center,60 Boulevard of the Allies, Pittsburgh, PA 15222, the beneficial owner of 116 shares and lead proponent of a filing group.
“Whereas, we believe in full disclosure of our company’sExxonMobil’s direct and indirect lobbying activities and expenditures to assess whether our company’sExxonMobil’s lobbying is consistent with ExxonMobil’sits expressed goals and in the best interest of shareholders.shareholder interests.
Resolved,, the shareholders of ExxonMobil request the preparation of a report, updated annually, disclosing:
1. | Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications. |
2. | Payments by ExxonMobil used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, including in each case |
3. |
Description of management’s and the Board’s |
For purposes of this proposal, a ‘grassroots lobbying communication’ is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. ‘Indirect lobbying’ is lobbying engaged in by a trade association or other organization of which ExxonMobil is a member.
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Both ‘direct and indirect lobbying’ and ‘grassroots lobbying communications’ include efforts at the local, state and federal levels.
The report shall be presented to the Audit Committee or other relevant oversight committees and posted on ExxonMobil’s website.
Supporting Statement
As shareholders, we encourage transparency and accountability in ExxonMobil’s use of corporate funds to influence legislation and regulation. ExxonMobil spent $26.07 million in 2013 and 2014$110,700,000 from 2010 – 2018 on federal lobbying (opensecrets.org). These figures dolobbying. This does not include state lobbying expenditures, to influence legislation in states, where ExxonMobil also lobbies but disclosure is uneven or absent. For example, ExxonMobil spent $699,362$4,055,093 on lobbying in California from 2010 – 2018. Exxon also lobbies abroad, spending between€3,250,000 –€3,499,999 on lobbying in Europe for 2014 (http://cal-access.ss.ca.gov/). ExxonMobil’s lobbying on climate change has attracted media attention (‘Exxon Knew about Climate Change Decades Ago, Spent $30M to Discredit It,’ Christian Science Monitor, Sep. 17, 2015).2018.
ExxonMobil is a member ofbelongs to the American Petroleum Institute, Business Roundtable (BRT), Chamber of Commerce and National Association of Manufacturers (NAM), which togetheraltogether spent over $65 million$260,638,048 on lobbying for 20132017 and 2014. ExxonMobil is also a member of2018. Both the Western States Petroleum Association, which spent $13,553,942 onBRT and NAM are lobbying in California for 2013 and 2014.against shareholder rights to file resolutions. ExxonMobil does not disclose its memberships in, or payments to, trade associations, or the
portions of such amounts used for lobbying. Transparent reporting would reveal whether
We are concerned that ExxonMobil’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions. For example, ExxonMobil supports the Paris climate agreement, yet a 2019 InfluenceMap report found Exxon has spent millions lobbying to undermine it.1
Investors participating in the Climate Action 100+ representing more than $34 trillion in assets are being used for objectives contraryasking companies to ExxonMobil’s long-term interests.
And ExxonMobil does not disclose membership in or contributions to tax-exempt organizations that write and endorse model legislation, such as being a memberalign their lobbying, including through their trade associations, with the goals of the American Legislative Exchange Council (ALEC). ExxonMobil’s ALEC membership has drawn press scrutiny (‘Paris agreement. Peer Shell produced an ‘Industry Associations Climate Review’ report to ensure its trade association participation aligned with its views.2ExxonMobil Gave Millionsuses the Global Reporting Initiative (GRI) for sustainability reporting, yet fails to Climate-Denying Lawmakers despite Pledge,’ The Guardian, Jul. 15, 2015). More than 100 companies have publicly left ALEC, including BP, ConocoPhillips, Occidental Petroleumreport ‘any differences between its lobbying positions and Shell.any stated policies, goals, or other public positions’ under GRI Standard 415.
We believe the reputational damage stemming from this misalignment between general policy positions and actual direct and indirect lobbying efforts harms long-term value creation by ExxonMobil. Thus, we urge ExxonMobil to expand its lobbying disclosure.”
1 | https://thehill.com/policy/energy-environment/436117-top-oil-firms-spend-millions-on-lobbying-to-block-climate-change |
2 | https://www.reuters.com/article/us-shell-afpm-idUSKCN1RE0VB |
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil, like many U.S. companies, labor unions,The Board fully supports accountability, appropriate transparency, and other entities, engagesdisclosure of lobbying activities and expenditures. Lobbying and political engagements are addressed as part of the Board’s oversight of the Company’s enterprise-risk framework, including potential reputational risk.The Company follows a strict internal review and oversight process to ensure its public policy positions are aligned with lobbying activities. Regular reviews of public-policy issues of significance are provided to the Management Committee and to the Board. Positions on key issues and grassroots lobbying communications are made publicly available on ExxonMobil’s corporate website, atexxonmobil.com/company/policy/political-contributions-and-lobbying, andexxchange.com, the Company’s advocacy community portal. Without exception, the Company’s lobbying efforts are aligned with its publicly available positions.
The Company’s Political Activities Policy and Guidelines, which is available to the public on its website, atexxonmobil.com/company/policy/political-contributions-and-lobbying, provide clear guidance that only certain employees may act on behalf of the Company to execute the political activities of the corporation, including lobbying. Therefore, a well-established process is in place to authorize individual employee engagement in lobbying in the United States at both the federal and state levels to explain or advocate the Corporation’s position when necessary. ExxonMobil complies fully with all state and federal requirements concerning lobbying activity and related disclosures. Pursuant to the federal Lobby Disclosure Act, activities.
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ExxonMobil publicly reports, on a quarterly basis, to the U.S. Congress its federal lobbying expenses and the specific issues lobbied. The reports are accessible to the general public on the U.S. Senate’s website atsenate.gov. Lobby reports are also filed with state and local jurisdictions as required by law.
ExxonMobil also provides support to a variety of think tanks, trade associations, and coalitions in order to promote informed dialogue and sound public policy on matters pertinent to the Corporation’s interests. Some of the support provided to these organizations may be used by the firms for lobbying. The total figure reported in ExxonMobil’s public LobbyLobbying Disclosure Act filings includes expenses associated with the costs of employee federal lobbying, as well as those portions of payments to trade associations, coalitions and think tanks that are spent on federal lobbying.
The Corporation believes the rigor of these requirements provides sufficient transparency and accountability of our public advocacy activities All reports are accessible to the general public including shareholders. The Congresson the U.S. Senate website atwww.senate.gov. More recently filed reports are also posted on the Company website atexxonmobil.com/company/policy/political-contributions-and-lobbying. Furthermore, ExxonMobil, and Executive Branch areits employees involved in lobbying, file lobby disclosure reports at the appropriate recipients of the proponent’s specific positions on our nation’s policyfederal, state and local level, in accordance with all applicable disclosure laws, and any reforms they seek.laws. Requiring additional disclosure would hold ExxonMobil to a different standard than other groups engaging in similar lobbying activities.
The Corporation has an established practiceCompany’s contributions to determine which public policy issues are important to ExxonMobil, which includes gaining input from affected business linestrade associations and functional departments such as Law and Public and Government Affairs. Key issues are reviewed by the Management Committee and Board of Directors of the Corporation. ExxonMobil’s position on key policy issues are posted in the Current Issues section atexxonmobil.com, and our lobbying activities are aligned with those positions. In addition, our policy and procedures governing lobbying, including oversight, can be found in the Accountability section of the same website. We believe detailed disclosures concerning internal deliberations on public policy issues could be competitively harmful, and would be of questionable utility to shareholders.
ExxonMobil promotes discussion on issues of direct relevance to the Company. We contribute to a wide range of academic and policyother organizations that research and promote dialogue on significant domestic and foreign policy issues. Our contributions do not constitute an endorsement of every public policy position or point of view expressed by a recipient organization. As is true of all non-profits we support, we conductnonprofit groups the Company supports, an annual evaluation of the merits of each organization is conducted, and reservethe Company reserves the right to initiate, sustain, or withdraw support at any time.
ExxonMobil believes that the risks of climate change are serious and warrant thoughtful action. Managing these risks requires innovation and collaboration. We are dedicated to working to reduce the risks of climate changeExisting disclosure laws provide consistent transparency for all parties involved in the political process. As such, the Board believes the proponent’s specific positions on lobbying disclosure included in this proposal are more appropriately addressed to the U.S. Congress, the Executive Branch, and state and local governments. For this reason, and others stated above, the Board recommends voting against this proposal.
Annual total CEO compensation for 2019 was $23,529,292. The median of annual total compensation of all employees of the Corporation, except the CEO, for 2019 was $173,712. The ratio of annual total CEO compensation to the median of annual total compensation of all employees was 135:1.
The median employee was identified as of October 1, 2019, based on total taxable wages for the most efficient wayrecently completed prior fiscal year as shown in the Corporation’s records. No estimates or sampling methodologies were used for society, while recognizing the importance of reliable and affordable energy in supporting economic growth. We actively engage in constructive dialogue on climate change policy with a wide variety of stakeholders, including governments, non-governmental organizations, academiathis purpose. Nocost-of-living adjustments were made and the public.taxable wages of employees employed for less than the full fiscal year were not annualized. “Employees” were defined based on applicable employment and tax laws.
Policymakers around the world currently are considering a varietyFor purposes of legislative proposals and regulatory options related to climate policies. ExxonMobil advocates an approach that ensures a uniform and predictable cost of carbon; allows market prices to drive solutions; maximizes transparency to stakeholders; reduces administrative complexity; promotes global participation; and is easily adjusted to future developments in climate science and policy impacts. We continue to believe a revenue-neutral carbon tax is better able to accommodate these key criteria.
ExxonMobil updates shareholders annually on our views on climate change and how the Company plans capital expenditures, assesses and plans for policies limiting greenhouse gas emissions, and works to reduce emissionsthis disclosure, as part of theCorporate Citizenship Report. The Company also periodically responds to specific shareholder requests. Currently available reports and responses are viewable onexxonmobil.com.
A robust civil society requires the airing of different voices and perspectives as part of the nation’s ongoing public policy debate. In light of the importance and implications of sound public policies, ExxonMobil will continue to engage actively with stakeholders who have an interest in key issues that affect the Company and industry.
ITEM 10 – INCREASE CAPITAL DISTRIBUTIONS
This proposal was submittedpermitted by Eric McCallum, a client of Arjuna Capital/Baldwin Brothers Inc., 204 Spring Street, Marion, MA 02738, the beneficial owner of 200 shares.
“Capital Distributions
WHEREAS:
In the face of global climate change, we believe investor capital is at risk from investments in projects that may prove economically stranded and unburnable if fossil fuel demand is reduced through public policy carbon restrictions, pricing and competition from renewables.
Global governments have agreed ‘the increase in global temperature should be below 2 degrees Celsius.’ The International Energy Agency states, ‘No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2º C goal.’
In 2015 Citigroup estimatedSEC rules, the value of unburnable fossil fuel reserves could amount to over 100 trillion dollars out to 2050:non-discriminatory benefits is included in annual total compensation of both the median employee and the CEO. Thesenon-discriminatory benefits are long-term disability plan; basic life insurance and accidental death and dismemberment; medical plan; and dental plan.
‘Lessons learned from the strandingIncluding these benefits provides a more accurate compensation ratio. Since SEC rules do not require inclusion of assets via the recent fallthese generally available benefits in the oil price gives food for thought about whatSummary Compensation Table, annual total CEO compensation shown above is slightly higher than the impact of the introduction of carbon pricing (or similar measures from Paris COP21) on higher-cost fossil fuel reserves might be.’
The industry cancelled approximately 200 billion dollars of capexTotal CEO Compensation shown in 2015 (Wood Mackenzie). The Carbon Tracker Initiative (CTI) estimates 2 trillion dollars of industry capex and 72.9 percent of ExxonMobil’s capex is ‘unneeded’ if we are to achieve a 2 degree pathway.
Massive production cost inflation over the past decade has made the industry vulnerable to a downturn in demand and oil prices.
Analysts indicate companies may not be adequately accounting for or disclosing downside risks from lower than expected demand and prices.
Investors are concerned ExxonMobil risks eroding shareholder value through investments in what may prove stranded, uneconomical assets in a low carbon demand scenario. Exxon’s capital expenditures grew at a
compound annual growth rate of 9 percent from 2005 to 2014, coinciding with a 1 percent net income decline. Exxon cut total capital distributions (summing dividends and share buybacks) to shareholders approximately 25 percent over the last twelve months.
RESOLVED:Shareholders hereby approve, on an advisory basis, a proposal that ExxonMobil commit to increasing the total amount authorized for capital distributions (summing dividends and share buybacks) to shareholders as a prudent use of investor capital in light of the climate change related risks of stranded carbon assets.”
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil published the report,Energy and Carbon – Managing the Risks, to address questions raised on the topic of global energy demand and supply, climate change policy and carbon asset risks. This report further described how the Company integrates consideration of climate change risks into planning processes and investment evaluation. The Board is confident that the Company’s robust planning and investment processes adequately contemplate and address climate change related risks.
Each year, we update our long-term energy demand projection in ourOutlook for Energy – taking into account the most up-to-date demographic, economic, technological, and climate policy information available. This analysis serves as a foundation for our long-term business strategies and investments, and is generally consistent with other forecasting organizations such as the International Energy Agency. OurOutlook by no means represents a “business as usual” case and it includes a significant reduction in projected energy use and greenhouse gas (GHG) emissions due to energy efficiency initiatives. Because we assume policy action will become increasingly more stringent over time, ourOutlook projects lower future energy-related CO2 emissions through 2040 than would be implied by a “no policy scenario” where limited GHG reduction policies and regulations are implemented.
ExxonMobil maintains a disciplined capital allocation approach with a long-term horizon. Our commitment to shareholders is to invest in attractive business opportunities and pay a reliable and growing dividend. Across the business cycle, we manage cash by returning excess to shareholders through share repurchases or borrowing to fund our investments.
From 2000 through 2015, the Company returned $357 billion of value to shareholders through dividend payments and share purchases, which reduced outstanding shares by 40 percent. ExxonMobil remains committed to a reliable and growing dividend, which has been increased 33 consecutive years. Despite a nearly 40 percent drop in crude prices in 2015, the dividend was increased by 5.8 percent and $3 billion of stock was repurchased, further enhancing the underlying value of all remaining shares and demonstrating the resiliency of our integrated business model. This value was delivered to shareholders while maintaining a robust capital investment program.
ExxonMobil is committed to disciplined investing in attractive opportunities across normal fluctuations in business cycles. Projects are evaluated under a wide range of possible economic conditions and commodity prices that are reasonably likely to occur. The Company does not publish the economic bases upon which we evaluate investments due to competitive considerations; however, it applies prudent and substantial safety margins in our planning assumptions to help ensure robust returns.
The Company also stress tests its oil and natural gas capital investment opportunities, which provides an added margin of safety against uncertainties, such as those related to technology, regulation/legislation, costs, geopolitics, availability of required materials, services, and labor. Such stress testing differs from alternative scenario planning, which we do not develop, but stress tests provide us an opportunity to fully consider a wide range of market conditions in the planning and investment process.
The Company addresses the potential for future climate-related policy, including the potential for restriction on emissions, through the use of a proxy cost of carbon. The proxy cost seeks to reasonably reflect the types of actions and policies that governments may take over the outlook period relating to the exploration, development, production, transportation or use of carbon-based fuels. This proxy cost of carbon is embedded in ourOutlook for Energy, and has been a feature of the report since 2007. All business segments are required to include, where appropriate, an estimate of the costs associated with greenhouse gas emissions in their economics when seeking funding for capital investments.
The scale and integrated nature of our operating cash flows along with prudent cash management provide unmatched financial strength, enabling the Company to invest in attractive projects throughout the business cycle.
A key strategy to ensure investment selectivity under a wide range of economic assumptions is to maintain a diverse portfolio of oil, gas, and petrochemical investment opportunities. This diversity, in terms of resource type and corresponding development options (oil, gas, natural gas liquids, onshore, offshore, deepwater, conventional, unconventional, liquefied natural gas) and geographic dispersion, is unparalleled in the industry.
These factors have positioned ExxonMobil consistently as an industry leader in return on capital employed and underpin our ability to continue leading shareholder distributions and maintain a long-term investment program that creates significant shareholder value.table.
2020 Proxy Statement | 69 |
This proposal was submitted by the Sisters of St. Dominic of Caldwell New Jersey, 40 South Fullerton Avenue, Montclair, NJ 07042, the beneficial owner of 200 shares and lead proponent of a filing group.
“Whereas:
Pope Francis, in his encyclical letter Laudato Si’, states that ‘the climateExxonMobil is a common good, belonging to all and meantglobal company with employees in many countries around the world. As permitted by thede minimisexemption under the SECrules, for all.’1 Numerous faith traditionspurposes of identifying the median employee, we have issued statements highlighting the moral responsibility to address climate change and care for creation and calling for urgent action.2 They join expertsexcluded employees from 44 countries which represent in science, business, and politics who have stated that global warming is unequivocal, that climate change is human-induced, and that its decisive mitigation is a moral imperative for humanity.3
The poor and most vulnerable are the first to suffer, while future generations, holding no responsibility, will live with greater impacts of global warming.
World leaders in the 2010 Cancun Agreement agreed to limit warmingaggregate less than 5 percent of the average global atmospheric temperature to less than 2 degrees Centigrade (2°C) above pre-industrial levels in order to prevent the worst impacts of climate change, including extreme weather, drought, rising sea levels, crop failure, and accelerated species loss. These impacts will likely have societal consequences including migration, food insecurity, and conflict. The World Bank and the Intergovernmental Panel on Climate Change warnCorporation’s total employees. As required, where any employees from a jurisdiction were excluded, all employees from that if warming exceeds 2°C, there are risks of ‘triggering nonlinear tipping elements’ thus producing ‘irreversible’ impacts.
The emissions profile of ExxonMobil’s 2015Outlook for Energy report approximates scenarios that would entail warming in excess of 2°C.4
ExxonMobil claims that its energy production responds to a ‘moral imperative’5 to meet growing energy demand and eradicate poverty, but this does not offset the necessity to mitigate climate change or the moral imperative to limit warming to 2°C. Further, World Bank and energy analyst reports conclude that renewable energy provides a better pathway to energy access.6 Billions of people living in energy poverty are not only the least responsible for greenhouse gas (GHG) emissions, but also likely to be most adversely impacted by climate change.7
As a large GHG emitter with carbon intensive products, ExxonMobil should robustly support the global framework to address climate change resulting from the 21st Conference of Parties of the United Nations Framework Convention on Climate Change in December 2015. Constructive engagement on climate policy is especially important given Exxon’s historical role in financing climate denial and misinformation campaigns on climate change.8 Failing to address this could present reputational risk for ExxonMobil.jurisdiction were excluded. In contrast to ExxonMobil, ten oil industry peers including Total, Shell, BP, and Saudi Aramco, and business leaders in other industries, support an international agreement to limit warming to 2°C.9
Resolved: Shareholders request that the Board of Directors adopt a policy acknowledging the imperative to limit global average temperature increases to 2°C above pre-industrial levels, which includes committing the Company to support the goal of limiting warming to less than 2°C.
SUPPORTING STATEMENT
We believe that ExxonMobil should assert moral leadership with respect to climate change. This policy would supplement ExxonMobil’s existing positions on climate policy.
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil takes the risks of global climate change seriously and believes these risks warrant thoughtful action. The long-term objective of climate change policy should be to reduce the risks of serious harm to humanity and ecosystems at minimum societal cost, while recognizing additional shared humanitarian necessities, including providing reliable and affordable energy to improve global living standards.
The Board believes the Company has an obligation to shareholders to continue to invest in economically attractive energy sources in an environmentally responsible manner. The Board further believes the Company’s capabilities are best utilized finding practical, achievable solutions to address climate change risks consistent with the Company’s mandate, rather than focusing on a future global temperature stabilization outcome that ultimately will be dictated by many variables beyond the Company’s control.
Recognizing that reducing greenhouse gas emissions across the global economy is a shared objective, the Company remains focused on finding practical, prudent, and affordable solutions to address the dual challenge of expanding energy supplies to support economic growth, improve living standards, alleviate poverty, and improve resilience while simultaneously addressing the societal and environmental risks posed by rising greenhouse gas emissions and climate change.
Through effective solutions, progress can and has been made. For example, according to the U.S. Energy Information Agency, CO2 emissions in the U.S. power sector are down 15 percent since 2005, with 60 percent of this reduction reflecting the benefit of shifting from coal to natural gas. Also, per the U.S. Environmental Protection Agency, net methane emissions from natural gas have fallen 38 percent since 2005, during which time U.S. natural gas production has increased by 26 percent. Looking forward, we believe more progress will be made in the development of low greenhouse gas emissions technology, such as advanced carbon capture and sequestration (CCS).
As the policy and regulatory landscape has continued to develop, we have proactively addressed this global challenge. We have long taken action by increasing energy efficiency and reducing greenhouse gas emissions in our operations, providing products that help consumers reduce their emissions, supporting research into technology breakthroughs, and participating in constructive dialogue on policy options with non-governmental organizations, industry, and policy makers.
Each year, we update our long-term energy demand projection in ourOutlook for Energy – taking into account the most up-to-date demographic, economic, technological, and climate policy information available. This analysis serves as a foundation for our long-term business strategies and investments, and is generally consistent with other forecasting organizations such as the International Energy Agency. OurOutlook by no means represents a “business as usual” case and it includes a significant reduction in projected energy use and GHG emissions due to energy efficiency initiatives. Because we assume policy action will become increasingly more stringent over time,
ourOutlook projects lower future energy-related CO2 emissions through 2040 than would be implied by a ‘no policy scenario’ where limited GHG reduction policies and regulations are implemented.
ExxonMobil believes that effective policies to address climate change should put a price on greenhouse gas emissions that will:
ExxonMobil has for many years held the view that a revenue-neutral carbon tax is the best option to fulfill these key principles. Instead of subsidies and mandates that distort markets, stifle innovation, and needlessly raise energy costs, a carbon tax could help create the conditions to reduce greenhouse gas emissions in a way that spurs new efficiency and technology solutions at the lowest cost to society and consumers.
This proposal was submitted by the New York State Common Retirement Fund, 59 Maiden Lane – 30th Floor, New York, NY 10038, the beneficial owner of 10,926,248 shares and lead proponent of a filing group.
“RESOLVED: Shareholders request that by 2017 ExxonMobil publish an annual assessment of long term portfolio impacts of public climate change policies, at reasonable cost and omitting proprietary information. The assessment can be incorporated into existing reporting and should analyze the impacts on ExxonMobil’s oil and gas reserves and resources under a scenario in which reduction in demand results from carbon restrictions and related rules or commitments adopted by governments consistent with the globally agreed upon 2 degree target. The reporting should assess the resilience of the company’s full portfolio of reserves and resources through 2040 and beyond and address the financial risks associated with such a scenario.
Supporting Statement:
It is our intention that this be a supportive but stretching resolution that ensures the long-term success of the company.
Recognizing the severe and pervasive economic and societal risks associated with a warming climate, global governments have agreed that increases in global temperature should be held below 2 degrees Celsius from pre-industrial levels (Cancun Agreement). Pursuant to the Durban Platform, 184 parties submitted plans to reduce greenhouse gas emissions in advance of the 21st Conference of the Parties. In November 2014 the United States and China agreed to policy and regulatory actions to reduce greenhouse gas emissions and re-affirmed and expanded those actions in September 2015.
ExxonMobil recognized in its 2014 10-K that ‘a number of countries have adopted, or are considering adoption of, regulatory frameworks to reduce greenhouse gas emissions,’ and that such policies, regulations, and actions could make its ‘products more expensive, lengthen project implementation timelines and reduce demand for hydrocarbons,’ but ExxonMobil has not presented any analysis of how its portfolio performs under a 2 degree scenario.
In response to a previous shareholder resolution regarding Carbon Asset Risk, ExxonMobil asserted ‘that an artificial capping of carbon-based fuels to levels in the ‘low carbon scenario’ [such as IEA 450ppm] is highly unlikely’ and did not test its portfolio against a 2 degree scenario.
However, ExxonMobil’s peers, Shell, BP, and Statoil have recognized the importance of assessing the impacts of these scenarios by endorsing the ‘Strategic Resilience for 2035 and beyond’ resolutions that received almost
unanimous investor support in 2015. BHP Billiton now publishes a ‘Climate Change: Portfolio Analysis’ evaluating its assets against 2 degree scenarios, and ConocoPhillips states that it stress tests its portfolio against 2 degree scenarios. More recently, ten major oil and gas companies have announced that they will support the implementation of clear stable policy frameworks consistent with a 2 degree future.
This resolution aims to ensure that ExxonMobil fully evaluates and mitigates risks to the viability of its assets as a result of public climate change policies, including in a 2 degrees scenario.”
The Board recommends you vote AGAINST this proposal for the following reasons:
In 2014, ExxonMobil published the report, Energy and Carbon – Managing the Risks, to provide shareholders an enhanced description of global energy demand and supply, climate change policy and carbon asset risks. This report further described how the Company integrates consideration of climate change risks into planning processes and investment evaluation. The Board is confident that the Company’s robust planning and investment processes adequately contemplate and address climate change related risks, ensuring the viability of its assetstotal, as detailed in the above report. This report is found atexxonmobil.com intable below, 3,569 employees out of a total number of 75,927 worldwide employees were excluded under theClimatede minimis section.
ExxonMobil believes that producing our existing hydrocarbon resources is essential to meeting growing global energy demand. We enable consumers – especially those in the least-developed and most-vulnerable economies – to pursue higher living standards and greater economic opportunity. We believe all economic energy sources will be necessary to meet growing demand, and the transition of the energy system to lower carbon sources will take many decades due to its enormous scale, capital intensity and complexity. As such, we believe that none of our proven hydrocarbon reserves are, or will become, stranded. This is further detailed in the aforementioned report.
Each year, we update our long-term energy demand projection in ourOutlook for Energy – taking into account the most up-to-date demographic, economic, technological, and climate policy information available. This analysis serves as a foundation for our long-term business strategies and investments, and is generally consistent with other forecasting organizations such as the International Energy Agency. OurOutlook, which can be foundat exxonmobil.com/energyoutlook, by no means represents a “business as usual” case and it includes a significant reduction in projected energy use and GHG emissions due to energy efficiency initiatives. TheOutlook projects lower future energy-related CO2 emissions through 2040 than would be implied by a “no policy scenario” where limited GHG reduction policies and regulations are implemented.
In December 2015, parties to the United Nations Framework Convention on Climate Change (UNFCCC) convened in Paris for the 21st Conference of the Parties (COP 21). COP 21 resulted in a global compact, which for the first time, directs all parties to undertake action on climate change and report on related progress. For many years, ourOutlook has taken into account the potential for climate polices to become increasingly stringent over time by imposing higher costs on energy-related carbon dioxide emissions. Preliminary analysis of the aggregation of intended nationally determined contributions, which were submitted by governments as part of the COP 21 process, indicates a greenhouse gas emissions trajectory similar to that anticipated in ourOutlook.
We address the potential for future climate change policy, including the potential for restrictions on emissions, by estimating a proxy cost of carbon. This cost, which in some geographies may approach $80 per ton by 2040, has been included in ourOutlook since 2007. This approach seeks to reflect potential policies governments may employ related to the exploration, development, production, transportation or use of carbon-based fuels. We believe our view on the potential for future policy action is realistic and we require all of our business lines to include, where appropriate, an estimate of GHG-related emissions costs in their economics when seeking funding for capital investments.
We evaluate potential investments and projects using a wide range of economic conditions and commodity prices. We apply prudent and substantial margins in our planning assumptions to help ensure competitive returns over a wide range of market conditions. We also financially “stress test” our investment opportunities, which provides an added margin against uncertainties, such as those related to technology development, costs, regulation/legislation, geopolitics, availability of required materials, services, and labor. Stress testing, which differs from alternative scenario planning, further enables us to consider a wide range of market environments in our planning and investment process.
We maintain our long-standing commitment to energy efficiency, progressing the benefits of natural gas, research and development in alternative energies, providing access to energy, and constructive engagement with industry, governments, academic institutions, trade associations, and known external experts. We are an active participant in the International Petroleum Industry Environmental Conservation Association (IPIECA), an association that advances ideas and potential solutions for the industry concerning the risk of climate change.
In summary, while the Board agrees with the importance of assessing the resiliency of the Company’s resource portfolio, it believes the current processes as described above sufficiently test the portfolio to ensure long-term shareholder value. Framed by the 2014 report and assessed annually through stress testing in ourOutlookand in investment planning, we remain confident in the commercial viability of our portfolio. Furthermore, all proved reserves fully comply with SEC definitions and requirements as detailed in our annual 10-K.exemption.
| Countries Excluded / Number of Employees | |||||||||||||||||||||||||||||
| 1. |
| Angola |
| 529 |
| 12. | New Zealand |
| 93 |
| 23. | South Korea |
| 28 |
| 34. | Mauretania | 4 | |||||||||||
| 2. |
| Norway |
| 391 |
| 13. | Sweden |
| 68 |
| 24. | Colombia |
| 22 |
| 35. | Ukraine | 4 | |||||||||||
| 3. |
| Egypt |
| 358 |
| 14. | Taiwan |
| 65 |
| 25. | Vietnam |
| 21 |
| 36. | Azerbaijan | 3 | |||||||||||
| 4. |
| Chad |
| 327 |
| 15. | United Arab Emirates |
| 64 |
| 26. | N. Mariana Island |
| 21 |
| 37 | Cameroon | 3 | |||||||||||
| 5. |
| Mexico |
| 292 |
| 16. | Mozambique |
| 61 |
| 27. | Romania |
| 18 |
| 38. | Ghana | 3 | |||||||||||
| 6. |
| Equatorial Guinea |
| 272 |
| 17. | Cyprus |
| 43 |
| 28. | Saudi Arabia |
| 13 |
| 39. | Luxembourg | 3 | |||||||||||
| 7. |
| Guyana |
| 169 |
| 18. | Guam |
| 41 |
| 29. | Spain |
| 11 |
| 40. | Peru | 2 | |||||||||||
| 8. |
| Qatar |
| 150 |
| 19. | Poland |
| 34 |
| 30. | South Africa |
| 11 |
| 41. | Namibia | 2 | |||||||||||
| 9. |
| Turkey |
| 116 |
| 20. | Kazakhstan |
| 31 |
| 31. | Micronesia |
| 9 |
| 42. | Switzerland | 2 | |||||||||||
| 10. |
| Japan |
| 114 |
| 21. | New Caledonia |
| 29 |
| 32. | Greece |
| 7 |
| 43. | Pakistan | 1 | |||||||||||
| 11. |
| Finland |
| 97 |
| 22. | Fiji |
| 29 |
| 33. | Denmark |
| 7 |
| 44. | Tanzania | 1 |
This proposal was submitted by Adelaide Gomer, c/o As You Sow, 1611 Telegraph Ave., Suite 1450, Oakland, CA 94612, the beneficial ownerTotal number of 150 shares and lead proponent of a filing group.employees excluded: 3,569
“Whereas:The current accounting system for oil and gas reserve replacement has inherent limitations that impede ExxonMobil’s ability to adapt to a climate constrained global energy market.
A primary metric the market uses to assess the value of an oil and gas company is its reserve replacement ratio. (Cambridge Energy Policy Forum, March 2015). Reserve replacement is currently denominated in oil and gas units, incentivizing the production and development of new oil and gas reserves. Where annual oil and gas reserve replacement is not fully achieved, a company’s stock market value is likely to be impaired and top company executives may not receive full incentive packages. This fuel specific reporting metric does not allow management the latitude needed to optimize enterprise goals in a carbon constrained environment.
Global governments recognize severe risks associated with a warming climate and the need to limit warming to 2 degrees Celsius or less. At the Conference of the Parties in Paris, world leaders made significant commitments to reduce greenhouse emissions and initiated discussions to implement carbon pricing policies. As worldwide energy needs grow, it is becoming increasingly likely that such demand will be met with a much greater amount of renewable energy. Climate change induced transitions are already occurring in energy markets in the form of rapid energy efficiency increases, decreasing costs of renewables, and disruptive technology development such as electric vehicles.
The need for Exxon to develop new pathways in response to these transitions is highlighted by Citi, Statoil, and other analysts, which predict that global oil demand could peak in the next 10 to 15 years. As the 2015 oil market decline demonstrates, even a relatively small global oversupply of oil can substantially decrease the value of oil companies.
Company management must have maximum flexibility to optimize production and development of energy reserves in line with these changing market conditions and opportunities. Further, management should be incentivized to adopt a stable, long-term revenue path that includes replacing carbon holdings with renewable energy. The current system of oil and gas reserve replacement accounting hampers such flexibility and creates inappropriate incentives. Moving to a system that accounts for resources in energy units, such as the internationally accepted standard British Thermal Units, instead of oil and gas, will create a new measure of successful operation and incentivize a stable transition to a climate appropriate resource mix. It will also help foster better company valuations by investors, creditors, and analysts, thus improving capital allocation and reducing investment risk.
Resolved:Proponents request that, by February 2017 and annually thereafter in a publication such as its annual or Corporate Social Responsibility report, Exxon quantify and report to shareholders its reserve replacements in British Thermal Units, by resource category, to assist the Company in responding appropriately to climate change induced market changes. Such reporting shall be in addition to reserve reporting required by the Securities and Exchange Commission, and should encompass all energy resources produced by the company.”
The Board recommends you vote AGAINST this proposal for the following reasons:
The current practice of reporting annual reserves replacement on an Oil-Equivalent Basis is the industry standard and compliant with the requirements of the Securities and Exchange Commission. Supplementing that statutory reporting with a BTU-based equivalent would not fundamentally provide the investment community with additional information nor influence investment choices. Importantly, the Company’s success as measured by the stock market is not, as the proposal suggests, driven by reserve replacement, but primarily by financial performance over a period consistent with investment horizons.
ExxonMobil executives are not compensated on the basis of a reserves replacement ratio. As detailed in ourExecutive Compensation Overview (ECO) and our Proxy Statement, the Compensation Committee assesses ExxonMobil’s leadership position in seven key areas in determining the appropriateness of total compensation. These seven metrics include Safety and Operations Integrity, Return on Average Capital Employed, Strategic Initiatives, Free Cash Flow, Shareholder Distributions, Total Shareholder Return and Project Execution. TheECO demonstrates how outstanding performance is required in all seven of these areas to result in a top award.
ExxonMobil’s long-termOutlook for Energy (exxonmobil.com/energyoutlook) is updated annually to reflect global economic and demographic trends as well as emerging technologies and policies that will impact energy supply and demand. As in past years, theOutlook continues to assume governments will place significant costs on greenhouse gas (GHG) emissions. TheOutlook also anticipates that even with substantial gains in efficiency, and strong growth in nuclear and modern renewable energy supplies, demand for oil will continue to rise through 2040, driven by developing nations. Credible third-party outlooks, including those developed by the International Energy Agency (IEA) and the U.S. Department of Energy, share this view. Also consistent with theOutlook, the IEA sees natural gas growing more than any other energy type through 2040, reflecting its ability to meet a wide variety of needs and provide one of the most cost-effective ways to reduce GHG emissions. The rising use of natural gas is a key factor in theOutlook’s view that by 2040 the carbon intensity of the global economy is likely to fall by half.
We address the potential for future climate change policy, including the potential for restrictions on emissions, by estimating a proxy cost of carbon. This cost, which in some geographies may approach $80 per ton by 2040, has been included in ourOutlook since 2007. This approach seeks to reflect potential policies governments may employ related to the exploration, development, production, transportation or use of carbon-based fuels. We believe our view on the potential for future policy action is realistic and, by no means represents a “business as usual” case. We require all of our business lines to include, where appropriate, an estimate of GHG-related emissions costs in their economics when seeking funding for capital investments.
ExxonMobil monitors the business environment, including long-term supply and demand fundamentals. The Company is structured to capture shareholder value throughout the commodity price cycle and is well positioned for the future. Moving to a system that accounts for reserves in energy units will not enhance ExxonMobil’s ability to create shareholder value.
This proposal was submitted by the Park Foundation, P.O. Box 550, Ithaca, NY 14851, the beneficial owner of 117 shares.
“WHEREAS:
Extracting oil and gas from shale formations using hydraulic fracturing and horizontal drilling technology has become a controversial public issue. Leaks, spills, explosions and community impacts have led to bans and moratoria in New York State and elsewhere in the U.S., putting the industry’s social license to operate at risk. Hydraulic fracturing has also become a topic of controversy in many locations across the world, including in Germany which has impacted ExxonMobil’s unconventional oil and gas development in the region.
Disclosure of management practices and their impacts is the primary means by which investors can assess how companies are managing the risks of their operations. The Department of Energy’s Shale Gas Production Subcommittee recommended that companies ‘adopt a more visible commitment to usingquantitative measures as a means of achieving best practice and demonstrating to the public that there is continuous improvement in reducing the environmental impact of shale gas production.’
ExxonMobil has become a laggard in the oil and gas industry in its disclosure practices. In a 2015 report ‘Disclosing the Facts: Transparency and Risk in Hydraulic Fracturing Operations’, which ranked companies on disclosure of quantitative information to investors, Exxon scored only 4 out of 39 points for its disclosure practices. Two thirds of the companies reviewed earned higher scores for their disclosures.
Exxon’s subsidiary, XTO Energy, was cited for having 113 hydraulic fracturing environmental and health violations, from January 2011 to August 2014, in Pennsylvania alone (Environment America, Fracking Failures, 2015). These violations have increased shareholder concern about Exxon’s practices.
Due to Exxon’s poor disclosure performance, investors call for the Company to provide detailed, quantitative, comparable data about how it is managing the risks and reducing the impacts of its hydraulic fracturing extraction operations. ItsOperations Integrity Management System fails to provide such reporting to investors; as a generalized framework for companywide operations, it provides no specific information on the company’s shale energy operations.
THEREFORE BE IT RESOLVED:
Shareholders request the Board of Directors report to shareholders, using quantitative indicators, by December 31, 2016, and annually thereafter, the results of company policies and practices above and beyond regulatory requirements, to minimize the adverse environmental and community impacts from the company’s hydraulic fracturing operations associated with shale formations. Such report should be prepared at reasonable cost, omitting confidential information.
SUPPORTING STATEMENT:
Proponents suggest the report provide quantitative information for each play in which the company has substantial extraction operations, on issues including, at a minimum:
The Board recommends you vote AGAINST this proposal for the following reasons:
The Board believes the Company has provided a comprehensive and sufficient discussion of its policies and practices on risk management of unconventional resource development, including hydraulic fracturing. Additional quantitative reporting at the “play level” will not improve our risk management or community engagement efforts.
The Company details its risk management practices in several public documents in order to inform key stakeholders. In September 2014, ExxonMobil prepared the report,Unconventional Resources Development – Managing theRisks, which describes in detail how the Company assesses and manages risks associated with developing unconventional resources. This report is available atexxonmobil.com/hfreport. Further, the Company’s annualCorporate Citizenship Report also discusses risk management issues associated with unconventional resource development.
The Company continually engages with communities in which we operate regarding upcoming and ongoing operations. We learn of community concerns directly and address them in a timely and proactive manner.
Modern drilling technologies and adherence to appropriate safety protocols allow unconventional oil and gas resources to be developed in a manner that protects human health and the environment, and we are committed to environmentally responsible operations. Our Environment Policy and Operations Integrity Management System commit us to continuous efforts to improve environmental performance. The reports cited by the proposal including the Proponent’s report do not credibly represent the Company’s performance.
This is the seventh year such a proposal has been filed. The proposal fails to recognize the continued operational enhancements and disclosures made by industry, and the significant expansion of federal and state regulatory requirements that govern industry operations.
A subset of detailed “by play” data as suggested by the proposal, all of which are managed by industry best practices and federal and state regulation, will not meaningfully inform the shareholder. Informing shareholders of the risks and how these risks are effectively managed is important, which we have done through the 2014 report mentioned above and through our annualCorporate Citizenship Report.
Other Business
We are not currently aware of any other business to be acted on at the annual meeting. Under the laws of New Jersey, where ExxonMobil is incorporated, no business other than procedural matters may be raised at the meeting unless proper notice has been given to the shareholders. If other business is properly raised, your proxies have authority to vote as they think best, including to adjourn the meeting.
People withWith Disabilities
We can provide reasonable assistance to help you participate in the meeting if you tell us about your disability and your plans to attend. Please call or write the Secretary at least two weeks before the meeting at the telephone number, address, or fax number listed under Contact Information on page 4.7.
Outstanding Shares
On February 29, 2016,2020, there were 4,150,241,2794,230,430,398 shares of common stock outstanding. Each common share has one vote.
How We Solicit Proxies
In addition to this mailing, ExxonMobil officers and employees may solicit proxies personally, electronically, by telephone, or with additional mailings. ExxonMobil pays the costs of soliciting this proxy. We are paying D.F. King & Co. a fee of $30,000 plus expenses to help with the solicitation. We also reimburse brokers and other nominees for their expenses in sending these materials to you and getting your voting instructions.
Shareholder Proposals and Director Nominations for Next Year
Any shareholder proposal for the annual meeting in 20172021 must be sent to the Secretary at the address or fax number of ExxonMobil’s principal executive office listed under Contact Information on page 4.7. The deadline for receipt of a proposal to be considered for inclusion in the 20172021 proxy statement is 5:005 p.m., Central Time, on December 14, 2016.10, 2020. The deadline for notice of a proposal for which a shareholder will conduct his or her own solicitation is February 27, 2017.23, 2021. Upon request, the Secretary will provide instructions for submitting proposals.
70 | 2020 Proxy Statement |
Submissions of nominees for director under the proxy access provisions of ourby-laws for the 2021 annual meeting must be submitted in compliance with thoseby-laws no later than December 10, 2020, and no earlier than November 10, 2020. Notice of a director nomination other than under proxy access must be submitted in compliance with the advance notice provisions of ourby-laws no later than January 27, 2021, and no earlier than December 28, 2020.
Duplicate Annual Reports
Registered shareholders with multiple accounts may authorize ExxonMobil to discontinue mailing annual reports on an account by calling ExxonMobil Shareholder Services at the toll-free telephone number listed on page 47 at any time during the year. Beneficial holders should contact their banks, brokers, or other holders of record to discontinue duplicate mailings. At least one account must continue to receive an annual report. Eliminating these duplicate mailings will not affect receipt of future proxy statements and proxy cards.
Shareholders withWith the Same Address
If you share an address with one or more ExxonMobil shareholders, you may elect to “household” your proxy mailing. This means you will receive only one set of proxy materials at that address unless one or more shareholders at that address specifically elect to receive separate mailings. Shareholders who participate in householding will
continue to receive separate proxy cards. Householding will not affect dividend check mailings. We will promptly send separate proxy materials to a shareholder at a shared address on request. Shareholders with a shared address may also request us to send separate proxy materials in the future, or to send a single copy in the future, if we are currently sending multiple copies to the same address.
Requests related to householding should be made by calling ExxonMobil Shareholder Services at the telephone number listed on page 4.7. Beneficial shareholders should request information about householding from their banks, brokers, or other holders of record.
SEC Form10-K
Shareholders may obtain a copy of the Corporation’sAnnual Report on Form10-K to the Securities and Exchange Commission without charge by writing to the Secretary at the address listed under Contact Information on page 4,7, or by visiting ExxonMobil’s website atexxonmobil.com/secfilings.
DIRECTIONS
ExxonMobil 2016 Annual Meeting
Wednesday, May 25, 2016
9:30 a.m., Central Time
Morton H. Meyerson Symphony Center
2301 Flora Street
Dallas, Texas 75201
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ExxonMobil 2020 Annual Meeting
Wednesday, May 27, 2020
9:30 a.m. Central Time
Renaissance Dallas Hotel Conference Center
2222 North Stemmons Freeway
Dallas, Texas 75207
Free self-parking is provided at the Renaissance Hotel in the parking garage and in the hotel’s uncovered ground-level parking lot.
FromI-45/Hwy. 75 – TakeI-345, Exit 286A,TX-366 Spur West (Woodall Rodgers Freeway) andI-35E North to North Stemmons Freeway. Take exit 430B-430C fromI-35E North toward Market Center Boulevard/Wycliff Avenue. Merge onto North Stemmons Freeway. Hotel is located at North Stemmons Freeway and Wycliff Avenue.
FromI-35 – Take exit 430B-430C toward Market Center Boulevard/Wycliff Avenue. Merge onto North Stemmons Freeway. Hotel is located at North Stemmons Freeway and Wycliff Avenue.
From DFW Airport – Take South exit to Hwy. 183 East. Follow 183 East to Interstate 35/Stemmons Freeway South. Continue on the freeway to exit 430C for Wycliff Avenue. Turn left off exit. Travel under the bridge then turn left onto North Stemmons Freeway. The hotel entrance is on the right.
From Love Field – Take first right turn onto West Mockingbird Lane. Merge onto southbound Harry Hines Boulevard then make a slight right onto Market Center Boulevard. Take the second right turn onto North Stemmons Freeway. The hotel entrance is on the right.
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. Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Online If no electronic voting, Go to www.investorvote.com/exxonmobil delete QR code and control # or scan the QR code — login details are Δ≈ located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) or 1-781-575-2300 outside the US, Canada, and Puerto Rico. Save paper, time, and money Sign up for electronic delivery at Using a black ink pen, mark your votes with an X as shown in X this example. Please do not write outside the designated areas. www.investorvote.com/exxonmobil 2020 Annual Meeting Proxy Card q IF VOTING BY MAIL, SIGN THE REVERSE SIDE, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
1. Election of Directors (page 16):
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ENVELOPE.q The Directors recommend a vote FOR proposal items 2 and 3. VOTING ITEMS — The Directors recommend a vote FOR all the nominees For Against Abstain listed. (page 20) 2. Ratification of Independent Auditors (page 29) + 1. Election of Directors: For Against Abstain 3. Advisory Vote to Approve Executive Compensation (page 30) 01 - Susan K. Avery The Directors recommend a vote AGAINST shareholder proposal items 4 through 14.
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c/o Computershare Investor Services
P.O. Box 43105
Providence, RI 02940-5076
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. 2020 Annual Meeting of Shareholders Admission Ticket TIME Wednesday, May 27, 2020 9:30 a.m. Central Time PLACE Renaissance Dallas Hotel Conference Center 2222 North Stemmons Freeway Dallas, TX 75207 WEBCAST A presentation with audio will be available on the Internet at exxonmobil.com. Instructions will appear on the website prior to the event. ADMISSION This ticket will admit shareholder. A ticket for one guest can be requested at the Admissions desk at the annual meeting. A valid admission ticket and government-issued picture identification are required for each of the shareholder and the guest. For safety and security reasons, cameras, smartphones, recording equipment, electronic devices, computers, large bags, briefcases, packages, and firearms or other weapons will not be permitted in the building. With the evolving concerns of COVID-19, these plans are subject to change and could evolve to a virtual meeting. We will notify you of any changes prior to the event. Please refer to your proxy statement for more information. As always, our first priority remains the health and safety of our shareholders, employees, and communities. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/exxonmobil q IF VOTING BY MAIL, SIGN BELOW, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.ENVELOPE.q PROXY/VOTING INSTRUCTIONS + Solicited by the Board of Directors The undersigned hereby appoints, and instructs the appropriate account trustee(s), if any, to appoint, U.M. Burns, K.C. Frazier, S.J. Palmisano, S.S Reinemund, and D.W. Woods, or each or any of them, with power of substitution, proxies to act and vote shares of common stock of the undersigned at the 2020 annual meeting of shareholders of Exxon Mobil Corporation and at any adjournments thereof, as indicated, upon all matters referred to on the reverse side and described in the proxy statement for the meeting and, at their discretion, upon any other matters that may properly come before the meeting. This proxy covers shares of ExxonMobil common stock registered in the name of the undersigned (whether certificated or book entry) and shares held in the name of the undersigned in the Computershare Investment Plan. This card also provides voting instructions to the applicable trustees for any shares held in the name of the undersigned in the ExxonMobil Savings Plan and/or a Computershare Investment Plan IRA. If no other indication is made on the reverse side of this form, the proxies/trustees shall vote: (a) for the election of the director nominees; and (b) in accordance with the recommendations of the Board of Directors on the other matters referred to on the reverse side. NON-VOTING ITEMS Change of Address — Please print new address below. Comments — Please print your comments below. AUTHORIZED SIGNATURES — This section must be completed for your vote to be counted. Date and sign below. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. +. 2020 Annual Meeting of Shareholders Admission Ticket TIME Wednesday, May 27, 2020 9:30 a.m. Central Time PLACE Renaissance Dallas Hotel Conference Center 2222 North Stemmons Freeway Dallas, TX 75207 WEBCAST A presentation with audio will be available on the Internet at exxonmobil.com. Instructions will appear on the website prior to the event. ADMISSION This ticket will admit shareholder. A ticket for one guest can be requested at the Admissions desk at the annual meeting. A valid admission ticket and government-issued picture identification are required for each of the shareholder and the guest. For safety and security reasons, cameras, smartphones, recording equipment, electronic devices, computers, large bags, briefcases, packages, and firearms or other weapons will not be permitted in the building. With the evolving concerns of COVID-19, these plans are subject to change and could evolve to a virtual meeting. We will notify you of any changes prior to the event. Please refer to your proxy statement for more information. As always, our first priority remains the health and safety of our shareholders, employees, and communities. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/exxonmobil q IF VOTING BY MAIL, SIGN BELOW, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q PROXY/VOTING INSTRUCTIONS + Solicited by the Board of Directors The undersigned hereby appoints, and instructs the appropriate account trustee(s), if any, to appoint, U.M. Burns, K.C. Frazier, S.J. Palmisano, S.S Reinemund, and D.W. Woods, or each or any of them, with power of substitution, proxies to act and vote shares of common stock of the undersigned at the 2020 annual meeting of shareholders of Exxon Mobil Corporation and at any adjournments thereof, as indicated, upon all matters referred to on the reverse side and described in the proxy statement for the meeting and, at their discretion, upon any other matters that may properly come before the meeting. This proxy covers shares of ExxonMobil common stock registered in the name of the undersigned (whether certificated or book entry) and shares held in the name of the undersigned in the Computershare Investment Plan. This card also provides voting instructions to the applicable trustees for any shares held in the name of the undersigned in the ExxonMobil Savings Plan and/or a Computershare Investment Plan IRA. If no other indication is made on the reverse side of this form, the proxies/trustees shall vote: (a) for the election of the director nominees; and (b) in accordance with the recommendations of the Board of Directors on the other matters referred to on the reverse side. NON-VOTING ITEMS Change of Address — Please print new address below. Comments — Please print your comments below. AUTHORIZED SIGNATURES — This section must be completed for your vote to be counted. Date and sign below. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. +
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