On January 29, 2025, Chevron Corporation (CVX, Financial) announced the results of its annual executive compensation review conducted by the independent Directors of the Board. The review included assessments of the compensation packages for key executives, including Chairman and CEO Michael K. Wirth, Vice President and CFO Eimear P. Bonner, and other named executive officers.
The Board decided to maintain Mr. Wirth's annual base salary at $1,900,000. However, the Management Compensation Committee approved increases for other executives: Ms. Bonner's salary will rise by $50,000 to $1,050,000, Mr. Nelson's salary will increase by $50,000 to $1,325,000, and Mr. Pate's salary will also see a $50,000 increase to $1,200,000. Mr. Hearne's salary remains unchanged at $1,075,000 due to his upcoming retirement. These salary adjustments will take effect on March 1, 2025.
In terms of incentives, the Board confirmed no changes to the 2025 target percentages under the Chevron Incentive Plan for Mr. Wirth (165 percent) and other executives, maintaining Ms. Bonner at 110 percent, Mr. Nelson at 120 percent, and Mr. Pate at 110 percent. Mr. Hearne will not receive a CIP award for 2025 due to his retirement.
The Board also approved significant equity awards under the 2022 Long-Term Incentive Plan. Mr. Wirth will receive an equity grant target value of $17,500,000. Ms. Bonner, Mr. Nelson, and Mr. Pate will receive equity grants valued at $4,329,000, $6,902,500, and $4,329,000, respectively. These awards, effective February 4, 2025, will consist of performance shares, restricted stock units, and stock options.
The performance shares will be evaluated over a three-year period, with payouts contingent on Chevron's performance relative to peers and the S&P 500 Index. The stock options will have a ten-year term, vesting in thirds annually from 2026 to 2028. Restricted stock units will also vest in thirds over the same period, with a two-year post-vesting holding period for executive officers.
This comprehensive compensation strategy reflects Chevron's commitment to aligning executive incentives with shareholder interests and long-term company performance.
Should you invest in Chevron Corp (CVX, Financial) right now? Before you do it, it’s important to understand the business profitability and stock valuations, and find out what the warning signs are about. See the in-depth Chevron Corp (CVX) stock research here.
