DEF 14A 1 ddef14a.htm DEFINITIVE PROXY STATEMENT Definitive Proxy Statement
Table of Contents
Index to Financial Statements

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

(Amendment No.      )

 

Filed by the Registrant    x

 

Filed by a Party other than the Registrant    ¨

 

Check the appropriate box:

 

¨    Preliminary Proxy Statement  

¨    Confidential, for Use of the Commission Only(as permitted by Rule 14a-6(e)(2))

 

x    Definitive Proxy Statement

 
¨    Definitive Additional Materials    
¨    Soliciting Material Pursuant to §240.14a-12    

 

EXXON MOBIL CORPORATION

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

x   No fee required.

 

¨   Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

 

  (1)   Title of each class of securities to which transaction applies:

 

  

 
  (2)   Aggregate number of securities to which transaction applies:

 

  

 
  (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

  

 
  (4)   Proposed maximum aggregate value of transaction:

 

  

 
  (5)   Total fee paid:

 

  

 

 

¨   Fee paid previously with preliminary materials.

 

¨   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

  (1)   Amount Previously Paid:

 

  

 
  (2)   Form, Schedule or Registration Statement No.:

 

  

 
  (3)   Filing Party:

 

  

 
  (4)   Date Filed:

 

  

 

 

 


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NOTICE OF 2009  
ANNUAL MEETING  
AND PROXY STATEMENT   LOGO
    April 13, 2009

Dear Shareholder:

We invite you to attend the annual meeting of shareholders on Wednesday, May 27, 2009, at the Morton H. Meyerson Symphony Center, 2301 Flora Street, Dallas, Texas 75201. The meeting will begin promptly at 9:00 a.m., Central Time. At the meeting, you will hear a report on our business and vote on the following items:

 

Ÿ  

Election of directors;

 

Ÿ  

Ratification of PricewaterhouseCoopers LLP as independent auditors;

 

Ÿ  

Eleven shareholder proposals contained in this proxy statement; and,

 

Ÿ  

Other matters if properly raised.

Only shareholders of record on April 6, 2009, or their 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, proxy statement, and financial statements. 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.

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.

To attend the meeting in person, please follow the instructions on page 3. A live audiocast of the meeting and a report on the meeting will be available on our Web site at exxonmobil.com.

Sincerely,

 

LOGO

 

     LOGO
David S. Rosenthal      Rex W. Tillerson
Secretary      Chairman of the Board


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Index to Financial Statements

Table of Contents

 

     Page

General Information

   1

Board of Directors

   4

Corporate Governance

   4

Item 1 – Election of Directors

   13

Director Compensation

   16

Director and Executive Officer Stock Ownership

   18

Compensation Committee Report

   19

Compensation Discussion and Analysis

   20

Executive Compensation Tables

   35

Audit Committee Report

   49

Item 2 – Ratification of Independent Auditors

   50

Shareholder Proposals

   51

Item 3 – Cumulative Voting

   51

Item 4 – Special Shareholder Meetings

   53

Item 5 – Incorporate in North Dakota

   54

Item 6 – Board Chairman and CEO

   55

Item 7 – Shareholder Advisory Vote on Executive Compensation

   57

Item 8 – Executive Compensation Report

   59

Item 9 – Corporate Sponsorships Report

   60

Item 10 – Amendment of EEO Policy

   62

Item 11 – Greenhouse Gas Emissions Goals

   63

Item 12 – Climate Change and Technology Report

   65

Item 13 – Renewable Energy Policy

   66

Additional Information

   68

Appendix A – Financial Section

   A1

Stock Performance Graphs

   A64

Directions to 2009 Annual Meeting

  


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GENERAL INFORMATION

Who May Vote

Shareholders of ExxonMobil, as recorded in our stock register on April 6, 2009, 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 Shareholder Meeting to Be Held on May 27, 2009.

 

Ÿ  

The 2009 Proxy Statement and 2008 Summary Annual Report are available at www.edocumentview.com/xom

Electronic Delivery of Proxy Statement and Annual Report

Instead of receiving future copies of these documents by mail, shareholders can elect to receive an e-mail that will provide electronic links to the proxy materials. 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.

 

Ÿ  

Shareholders of Record: If you vote on the Internet at www.investorvote.com/exxonmobil, simply follow the prompts for enrolling in the electronic proxy delivery service. You may enroll in the electronic proxy delivery service at any time in the future by going directly to www.computershare.com/exxonmobil. You may also revoke an electronic delivery election at this site at any time.

 

Ÿ  

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. You may vote for all, some, or none of our director candidates. You may also vote for or against the other proposals, or abstain from voting.

If your shares are held in your name, you can vote by proxy in one of three convenient ways:

 

Ÿ  

Via Internet: Go to www.investorvote.com/exxonmobil and follow the instructions. You will need to have your proxy card in hand. At this Web site, you can elect to access future proxy statements and annual reports via the Internet.

 

Ÿ  

By Telephone: Call toll-free 1-800-652-8683 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 in hand.

 

Ÿ  

In Writing: Complete, sign, date, and return your proxy card in the enclosed envelope.

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.

 

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If you give us your signed proxy but do not specify how to vote, we will vote your shares in favor of our director candidates; in favor of the ratification of the appointment of independent auditors; and against the shareholder proposals.

If you hold shares through someone else, such as a stockbroker, you will receive material from that firm asking how you want to vote. Check the voting form used by that firm to see if it offers Internet 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:

 

Ÿ  

Submitting a new proxy with a later date via a proxy card, the Internet, or by telephone;

 

Ÿ  

Notifying ExxonMobil’s Secretary in writing before the meeting; or,

 

Ÿ  

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.

Votes Required

 

Ÿ  

Election of Directors Proposal: A plurality of the votes cast is required for the election of directors. This means that the director nominee with the most votes for a particular seat is elected for that seat. Only votes FOR or WITHHELD count. Abstentions are not counted for purposes of the election of directors.

Our Corporate Governance Guidelines, which can be found in the Corporate Governance section of our Web site at exxonmobil.com/governance, state that all directors will stand for election at the annual meeting of shareholders. In any non-contested election of directors, any director nominee who receives a greater number of votes WITHHELD from 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 Form 8-K filed with the Securities and Exchange Commission (SEC).

 

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Other Proposals: Approval of the Ratification of Independent Auditors proposal and the shareholder proposals requires the favorable vote of a majority of the votes cast. Only votes FOR or AGAINST these proposals count. Abstentions and broker non-votes count for quorum purposes, but not for the voting of these proposals. A “broker non-vote” occurs when a bank, broker, or other

 

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holder of record holding shares for a beneficial owner does not vote on a particular proposal because that holder does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.

Annual Meeting Admission

Only shareholders or their proxy holders and ExxonMobil guests may attend the meeting. For safety and security reasons, cameras, camera phones, recording equipment, electronic devices, large bags, briefcases, or packages will not be permitted in the meeting. In addition each shareholder and ExxonMobil guest will be asked to present a valid government-issued picture identification, such as a driver’s license, before being admitted to the meeting.

For registered shareholders, an admission ticket is attached to your proxy card. Please detach and 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, 2009, 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 under “Contact Information” below.

Shareholders who do not present admission tickets at the meeting will be admitted only upon verification of ownership at the admission counter.

Audiocast of the Annual Meeting

You are invited to visit our Web site at exxonmobil.com to hear the live audiocast of the meeting at 9:00 a.m., Central Time, on Wednesday, May 27, 2009. An archived copy of this audiocast will be available on our Web site for one year.

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 assure that every shareholder who wishes to speak on an item of business will be able to do so.

Dialogue can be better accomplished with interested parties outside the meeting and, for this purpose, we have provided a method for raising issues and contacting the non-employee directors either in writing or electronically on our Web site at exxonmobil.com/directors. 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. David S. Rosenthal

Secretary

Exxon Mobil Corporation

5959 Las Colinas Boulevard

Irving, TX 75039-2298

call us at 1-972-444-1157,

or send a fax to 1-972-444-1505.

 

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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 Web site at www.computershare.com/exxonmobil. We also invite you to visit ExxonMobil’s Web site at exxonmobil.com. Investor information can be found at exxonmobil.com/investor. Web site materials are not part of this proxy solicitation.

BOARD OF DIRECTORS

CORPORATE GOVERNANCE

Overview

The Board of Directors and its committees perform a number of functions for ExxonMobil and its shareholders, including:

 

Ÿ  

Overseeing the management of the Company on your behalf;

 

Ÿ  

Reviewing ExxonMobil’s long-term strategic plans;

 

Ÿ  

Exercising direct decision-making authority in key areas, such as declaring dividends;

 

Ÿ  

Selecting the CEO and evaluating the CEO’s performance; and,

 

Ÿ  

Reviewing development and succession plans for ExxonMobil’s top executives.

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 Web site at exxonmobil.com/governance. The Guidelines are also available to any shareholder on request to the Secretary at the address given under “Contact Information” on page 3.

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 a case-by-case basis. Employee directors resign from the Board when they are no longer employed by ExxonMobil.

Director Independence

Our Corporate Governance Guidelines require that a substantial majority 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. The Board determines independence on the basis of the standards specified by the New York Stock Exchange (NYSE), the additional categorical standards referenced in our Corporate Governance Guidelines, and other facts and circumstances the Board considers relevant.

The NYSE standards generally provide that a director will not be independent if: (1) the director is, or in the past three years has been, an employee of ExxonMobil; or a member of the director’s immediate family is, or in the past three years has been, an executive officer of ExxonMobil; (2) the director or a member of the director’s immediate family has received more than $120,000 per year in direct compensation from ExxonMobil other than for service as a director; (3) the director is a current partner or employee, or an immediate family member is a current partner, of PricewaterhouseCoopers LLP (PwC), our independent auditors; or an immediate family member is a current employee of PwC and personally works on ExxonMobil’s audit; or within the past three years the director or an immediate family member has been a PwC partner or employee who worked on ExxonMobil’s audit; (4) the director or a member of the director’s immediate family is, or in the past three years has been, employed as an executive officer of a company where an ExxonMobil executive officer serves on the compensation committee; or, (5) the director or a member of the director’s immediate family is an executive officer of a company that

 

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makes payments to, or receives payments from, ExxonMobil in an amount which, in any 12-month period during the past three years, exceeds the greater of $1 million or 2 percent of that other company’s consolidated gross revenues.

ExxonMobil’s Corporate Governance Guidelines also provide that 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 Web site and described in more detail under “Related Person Transactions and Procedures” on pages 11-12. The categorical standards provided in the Related Person Transaction Guidelines also serve as ExxonMobil’s additional categorical standards for determining director independence.

The Board has reviewed relevant relationships between ExxonMobil and each non-employee director and director nominee to determine compliance with the NYSE standards and ExxonMobil’s additional categorical 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 ExxonMobil non-employee directors and director nominees (M.J. Boskin, L.R. Faulkner, K.C. Frazier, W.W. George, J.R. Houghton, R.C. King, M.C. Nelson, S.J. Palmisano, S.S Reinemund, W.V. Shipley, and E.E. Whitacre, Jr.) 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 below) is independent.

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

K.C. Frazier

   Ordinary course business with Merck (purchases of pharmaceutical products; sales of chemicals and oils)

M.C. Nelson

   Ordinary course business with Carlson (purchases of travel services; sales of lubricants)

S.J. Palmisano

   Ordinary course business with IBM (purchases of consulting and IT maintenance services)

Presiding Director

Mr. Palmisano currently serves as ExxonMobil’s Presiding Director. The Presiding Director is selected annually by the other independent members of the Board of Directors. It is normally expected that the same director will serve as Presiding Director for at least two years. The Presiding Director acts as a liaison with the Chairman, in consultation with the other directors.

Specific duties of the Presiding Director include: chairing executive sessions of the non-employee directors and providing feedback from such sessions to the Chairman as appropriate; chairing meetings of the Board in the absence of the Chairman and President; and reviewing in advance and consulting with the Chairman regarding the schedule and agenda for all Board meetings as well as reviewing in advance the materials to be distributed to the directors for Board meetings.

Executive sessions may be convened by the Presiding Director at his or her discretion and will be convened if requested by any other director. Any non-employee director may raise issues for discussion at an executive session.

Board Meetings and Committees; Annual Meeting Attendance

The Board met 10 times in 2008. ExxonMobil’s incumbent directors, on average, attended approximately 96 percent of Board and committee meetings during 2008; and no director attended less than 75 percent of such meetings. ExxonMobil’s non-employee directors held four executive sessions in 2008.

 

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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 attended last year’s meeting except Mr. Whitacre, who was first elected to the Board in May 2008.

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. Only non-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 Web site and are available free of charge on request to the Secretary at the address given under “Contact Information” on page 3.

The table below shows the current membership of each Board committee and the number of meetings each committee held in 2008.

 

Director   Audit   Compensation  

Board

Affairs

  Finance  

Public

Issues and
Contributions

  Executive(1)

M.J. Boskin

  Ÿ           Ÿ       Ÿ

L.R. Faulkner

  Ÿ           Ÿ        

W.W. George

      C   Ÿ            

J.R. Houghton

  C           Ÿ       Ÿ

R.C. King

      Ÿ           C   Ÿ

M.C. Nelson

          Ÿ       Ÿ   Ÿ

S.J. Palmisano

      Ÿ   Ÿ            

S.S Reinemund

  Ÿ           Ÿ        

W.V. Shipley

          C       Ÿ    

R.W. Tillerson

              C       C

E.E. Whitacre, Jr.

      Ÿ           Ÿ    

2008 Meetings

  11   7   9   2   4   0

 

C = Chair
Ÿ = Member
(1) Other directors serve as alternate members on a rotational basis.

Below is additional information about each Board committee.

Board Affairs Committee

The Board Affairs Committee serves as ExxonMobil’s nominating and corporate governance committee. The Committee recommends director candidates, reviews non-employee director compensation, and reviews other corporate governance practices, including the Corporate Governance Guidelines. The Committee also reviews any issue involving an executive officer or director under ExxonMobil’s Code 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 Web site.

The Selection Guidelines provide that candidates for non-employee director of ExxonMobil should be individuals who have achieved prominence in their fields, with experience and demonstrated expertise in managing large, relatively complex organizations, and/or, in a professional or scientific capacity, be accustomed to dealing with complex situations preferably with worldwide scope.

A substantial majority of the Board must meet the independence standards described in the Corporation’s Corporate Governance Guidelines, and all candidates must be free from any relationship with

 

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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 believes a director should be able to serve for several years. Candidates should bring integrity, insight, energy, and analytical skills to Board deliberations, and must have a commitment to devote the necessary time and attention to oversee the affairs of a corporation as large and complex as ExxonMobil. ExxonMobil recognizes that 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. The Board must include members with particular experience required for service on key Board committees, as described in the committee charters on our Web site.

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 the 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.

Mr. Frazier was initially suggested as a candidate by the executive search firm, Heidrick & Struggles, and subsequently recommended for nomination by the incumbent non-employee directors on the Board Affairs Committee.

Shareholders may send recommendations for director candidates to the Secretary at the address given under “Contact Information” on page 3. A submission recommending a candidate should include:

 

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Sufficient biographical information to allow the Committee to evaluate the candidate in light of the Selection Guidelines;

 

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Information concerning any relationship between the candidate and the shareholder recommending the candidate; and,

 

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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 Committee is also responsible for reviewing and making recommendations to the Board regarding the compensation of the non-employee directors. 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.

Audit Committee

The Audit Committee oversees accounting and internal control matters. Its responsibilities include oversight of:

 

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Management’s conduct of the Corporation’s financial reporting process;

 

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The integrity of the financial statements and other financial information provided by the Corporation to the SEC and the public;

 

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Ÿ  

The Corporation’s system of internal accounting and financial controls;

 

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The Corporation’s compliance with legal and regulatory requirements;

 

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The performance of the Corporation’s internal audit function;

 

Ÿ  

The independent auditors’ qualifications, performance, and independence; and,

 

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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 require be included in the Corporation’s annual proxy statement. This report is on pages 49-50.

The Committee has adopted specific policies and procedures for pre-approving fees paid to the independent auditors. These policies and procedures, as well as the Committee’s charter, are posted on the Corporate Governance section of our Web site.

The Board has determined that all members of the Committee are financially literate within the meaning of the NYSE standards, and that Dr. Boskin, Dr. Faulkner, Mr. Houghton, and Mr. Reinemund are “audit committee financial experts” as defined in the SEC rules.

Compensation Committee

The Compensation Committee oversees compensation for ExxonMobil’s senior executives, including their salary, bonus, incentive awards, and succession plans for key executive positions. The Committee’s charter is available on the Corporate Governance section of our Web site.

During 2008 the Committee established the ceiling for the 2008 short term and long term incentive award programs, endorsed the salary program for 2009, reviewed the individual performance and contributions of each senior executive, granted individual incentive awards and set salaries for the senior executives, and reviewed progress on executive development and succession planning for senior positions.

The Compensation Committee’s report is on page 19.

The Committee does not delegate its responsibilities with respect to ExxonMobil’s executive officers and other senior executives (approximately 25 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 subject to a salary budget and aggregate annual ceilings on cash and equity incentive awards established by the Compensation Committee.

The Committee utilizes the expertise of an external independent consultant, Pearl Meyer & Partners, whom the Committee retains and works with during the year. At the direction of the Chair of the Compensation Committee, the consultant provides the following services:

 

Ÿ  

Attends meetings of the Compensation Committee.

 

Ÿ  

Makes an annual presentation to the Compensation Committee regarding:

 

   

General trends in executive compensation across industries, particularly trends that reflect a change in compensation practices. The consultant advises the Committee on whether changes in compensation practices are relevant to ExxonMobil’s compensation programs.

 

   

A perspective on the structure and competitive standing of ExxonMobil’s compensation program for senior executives.

 

Ÿ  

Participates in the Committee’s deliberations regarding compensation for Named Executive Officers that include items such as:

 

   

How to interpret the level of compensation of each Named Executive Officer compared to similar positions across industries.

 

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The appropriate level of each element of compensation for individual Named Executive Officers considering their career experience and tenure in their positions, as well as general performance of the Company within the industry.

 

   

The pace at which compensation levels should be adjusted over future years.

 

   

How to weigh or consider the impact of a compensation change today on future retirement income.

 

   

The interpretation of issues involving executive compensation raised by shareholders and the appropriate responses from management.

 

   

The relationship between compensation and executive succession planning.

 

   

How the Committee should emphasize or weigh one element of compensation versus another to address the long-term nature of the business and long planning lead times.

 

Ÿ  

Prepares the analysis of comparator company compensation used by the Compensation Committee.

The input of the independent consultant is given serious consideration as part of the Committee’s decision-making process but is not assigned a weight versus the other matters considered by the Committee as described in the “Compensation Discussion and Analysis” beginning on page 20.

In addition at the direction of the Chair of the Board Affairs Committee, Pearl Meyer & Partners provides an annual survey of non-employee director compensation for use by that Committee.

ExxonMobil management does not use Pearl Meyer & Partners to advise on ExxonMobil’s general employee compensation and benefit programs. The Compensation Committee retains sole discretion to hire and fire the independent consultant and to negotiate the terms of the consultant’s engagement.

The Committee meets with ExxonMobil’s CEO and other senior executives during the year to review the Corporation’s business results and progress against strategic plans. The Committee uses this input to help determine the aggregate annual ceilings to be set for the Corporation’s cash and equity incentive award programs. The CEO also provides input to the Committee regarding performance assessments for ExxonMobil’s other senior executives and makes recommendations to the Committee with respect to salary and incentive awards for these executives and succession planning for senior positions.

The Committee uses tally sheets to assess total compensation for the Corporation’s senior executives under different scenarios. The tally sheets value all elements of cash compensation; incentive awards, including restricted stock grants; the annual change in pension value; and other benefits and perquisites. The tally sheets also display the value of outstanding awards and lump sum pension estimates. For tally sheet purposes, the Committee considers restricted stock awards on the basis of grant date fair value as shown in the “Grants of Plan-Based Awards” table, not on the financial accounting method used for the “Summary Compensation Table.”

See pages 28-30 for additional information on tally sheets and other analytical tools used by the Committee to facilitate compensation decisions.

For more information on the Committee’s approach to executive compensation and the decisions made by the Committee for 2008, refer to the “Compensation Discussion and Analysis” beginning on page 20.

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 Web site.

 

9


Table of Contents
Index to Financial Statements

Public Issues and Contributions Committee

The Public Issues Committee and the Advisory Committee on Contributions were combined in 2008. This Committee reviews the effectiveness of the Corporation’s policies, programs, and practices with respect to safety, 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 Web site.

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 Communications

The Board Affairs Committee has approved and implemented procedures for shareholders and other interested persons to send communications to individual directors, including the Presiding Director, Board Committees, or the non-employee directors as a group.

 

Ÿ  

Written Communications: Written correspondence should be addressed to the director or directors in care of the Secretary at the address given under “Contact Information” on page 3. All correspondence either is forwarded to the intended recipient and/or to the Chair of the Board Affairs Committee, as appropriate, or held for review by the Board Affairs Committee at its next regular meeting. A log of all correspondence addressed to the directors is also kept for periodic review by the Board Affairs Committee and any other interested director.

 

Ÿ  

Electronic Communications: You may send e-mail to individual non-employee directors, Board Committees, or the non-employee directors as a group by using the form provided for that purpose on our Web site at exxonmobil.com/directors. These communications are sent directly to the specified director’s or the Committee Chair’s electronic mailbox. E-mail can be viewed by staff of the Office of the Secretary, but can only be deleted by the director to whom it is addressed. More information about our procedures for handling communications to non-employee directors is posted on the Corporate Governance section of our Web site.

Code of Ethics and Business Conduct

The Board maintains policies and procedures (which we refer 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 Web site at exxonmobil.com/governance and is available free of charge on request to the Secretary at the address given under “Contact Information” on page 3. The Code is also included as an exhibit to our Annual Report on Form 10-K. Any amendment of the Code will be posted promptly on our Web site.

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 each regular employee and non-employee director to make an annual compliance certification.

 

10


Table of Contents
Index to Financial Statements

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 our Web site.

Related Person Transactions and Procedures

In accordance with SEC rules, ExxonMobil maintains Guidelines for Review of Related Person Transactions. These Guidelines are available on the Corporate Governance section of our Web site.

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 re-affirm 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, we review 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 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 the 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 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 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:

 

Ÿ  

Transactions in the ordinary course of business with an entity for which a related person serves as an executive officer, provided (1) the affected director or executive officer did not participate in the decision on the part of ExxonMobil to enter into such transactions; and, (2) the amount involved in any related category of transactions in a 12-month period is less than 1 percent of the entity’s gross revenues.

 

Ÿ  

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 a 12-month period is less than 1 percent of the recipient’s gross revenues.

 

Ÿ  

Payments under ExxonMobil plans and arrangements that are available generally to U.S. salaried employees (including contributions under ExxonMobil’s Educational and Cultural Matching Gift Programs and payments to providers under ExxonMobil health care plans).

 

Ÿ  

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 Committee on the basis of the specific facts and circumstances.

 

11


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Index to Financial Statements

The following disclosures are made as of February 25, 2009, the date of the most recent Board Affairs Committee review of potential related person transactions.

ExxonMobil and its affiliates have about 80,000 employees around the world and employees related by birth or marriage may be found at all levels of the organization. Two retired executive officers have family members who are employed by the Corporation: J.S. Simon (formerly Senior Vice President and Director) has a son-in-law who works for ExxonMobil Fuels Marketing Company, and H.H. Hubble (formerly Vice President, Investor Relations and Secretary) has a son who works for ExxonMobil Development Company.

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.” Accordingly, consistent with ExxonMobil’s Related Person Transaction Guidelines, we do not consider the relationships noted above to be material within the meaning of the related person transaction disclosure rules.

P.T. Mulva (Vice President and Controller) has a brother serving as Chairman and CEO of ConocoPhillips. As is the case with most other major companies in the oil and gas industry, ExxonMobil has a variety of business transactions with ConocoPhillips. These transactions include routine purchases and sales of crude oil, petroleum products, and pipeline transportation capacity. Affiliates of ExxonMobil and ConocoPhillips have joint ownership of a refinery in Germany and a number of pipelines, terminals, emergency response companies, and service companies, and also have undivided interests in a variety of exploration, development, and production projects. All of these transactions are entered into in the ordinary course of business without influence from P.T. Mulva. Neither P.T. Mulva nor, to our knowledge after reasonable inquiry, his brother, has any interest in these transactions different from the general interest of other employees and shareholders. Accordingly, consistent with ExxonMobil’s Related Person Transaction Guidelines, we do not consider these transactions to be material within the meaning of the related person transaction disclosure rules.

S.R. LaSala (Vice President and General Tax Counsel) has a son who is a partner of a law firm that performs work for ExxonMobil. Mr. LaSala is not involved in decisions to retain the firm, and, therefore, we do not consider the relationship to be material within the meaning of the related person transaction disclosure rules.

S.J. Glass, Jr. (Vice President) has a brother who is a partner of a law firm that performs work for ExxonMobil. Mr. Glass is not involved in decisions to retain the firm, and, therefore, we do not consider the relationship 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 serve as executive officers and determined that, in accordance with the categorical standards described above, none of those matters represent reportable related person transactions. See “Director Independence” on page 4.

We are not aware of any related person transaction 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.

 

12


Table of Contents
Index to Financial Statements

ITEM 1 – ELECTION OF DIRECTORS

The Board of Directors has nominated the director candidates named on the following pages. Personal information on each of our nominees is also provided. All of our nominees currently serve as ExxonMobil directors except Mr. Frazier, who has been nominated by the Board for first election as a director at the annual meeting. Messrs. Houghton and Shipley, who previously reached the usual retirement age, are not standing for re-election this year.

If a director 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.

The Board recommends you vote FOR each of the following candidates:

 

 

Michael J. Boskin

LOGO

Age 63

Director since 1996

 

Principal Occupation: T.M. Friedman Professor of Economics and Senior Fellow, Hoover Institution, Stanford University

 

Business Experience: Dr. Boskin is also a Research Associate, National Bureau of Economic Research; and serves on the Panel of Advisors of the Congressional Budget Office. He is Chief Executive Officer and President of Boskin & Co., an economic consulting company.

 

Public Company Directorships: Oracle; Shinsei Bank

 

Larry R. Faulkner

LOGO

Age 64

Director since 2008

 

Principal Occupation: President, Houston Endowment; President Emeritus, the University of Texas at Austin

 

Business Experience: Dr. Faulkner served as President of the University of Texas at Austin from 1998 to 2006. He also served on the chemistry faculties of the University of Texas, the University of Illinois, and Harvard University. At the University of Illinois, he also held a number of positions in academic administration including Provost and Vice Chancellor for Academic Affairs.

 

Public Company Directorships: Guaranty Financial Group; Temple-Inland

 

Kenneth C. Frazier

LOGO

Age 54

Director nominee

 

Principal Occupation: Executive Vice President and President, Global Human Health, Merck & Co.

 

Business Experience: Mr. Frazier was elected Executive Vice President and President, Global Human Health, at Merck in 2007, and Executive Vice President and General Counsel in 2006. He served as Senior Vice President and General Counsel at Merck from 1999 to 2006.

 

Public Company Directorships: None

 

 

13


Table of Contents
Index to Financial Statements
 

William W. George

LOGO

Age 66

Director since 2005

 

Principal Occupation: Professor of Management Practice, Harvard University

 

Business Experience: Mr. George was elected Chairman of Medtronic in 1996, and retired in 2002; Chief Executive Officer in 1991; and President and Chief Operating Officer in 1989.

 

Public Company Directorships: Goldman Sachs

 

Reatha Clark King

LOGO

Age 71

Director since 1997

 

Principal Occupation: Former Chairman, Board of Trustees, General Mills Foundation

 

Business Experience: Dr. King was elected Chairman, Board of Trustees, General Mills Foundation in 2002, and retired in 2003; President and Executive Director, General Mills Foundation; and Vice President, General Mills, Inc. from 1988 to 2002. Prior to joining the General Mills Foundation, Dr. King held a variety of positions in chemical research, education, and academic administration.

 

Company Directorships: Lenox Group

 

Marilyn Carlson Nelson

LOGO

Age 69

Director since 1991

 

Principal Occupation: Chairman of the Board, Carlson

 

Business Experience: Mrs. Nelson was elected Chairman and Chief Executive Officer of Carlson in 1998, and relinquished the role of CEO in 2008. She has held a number of other management positions at Carlson including President, Chief Operating Officer, Vice Chair and Senior Vice President.

 

Company Directorships: Carlson

 

Samuel J. Palmisano

LOGO

Age 57

Director since 2006

Presiding Director since 2008

 

Principal Occupation: Chairman of the Board, President, and Chief Executive Officer, IBM

 

Business Experience: Mr. Palmisano was elected Chairman, President, and Chief Executive Officer of IBM in 2003. Mr. Palmisano also served as President, Senior Vice President, and Group Executive for IBM’s Enterprise Systems Group, IBM Global Services, and IBM’s Personal Systems Group.

 

Public Company Directorships: IBM

 

 

14


Table of Contents
Index to Financial Statements
 

Steven S Reinemund

LOGO

Age 61

Director since 2007

 

Principal Occupation: Dean of Business, Wake Forest University

 

Business Experience: Mr. Reinemund served as Executive Chairman of the Board of PepsiCo from 2006 to 2007, and retired in 2007; was elected Chief Executive Officer and Chairman of the Board in 2001; President and Chief Operating Officer in 1999; and Director in 1996. He was also elected President and CEO of Frito-Lay in 1992 and Pizza Hut in 1986.

 

Public Company Directorships: American Express; Marriott

 

Rex W. Tillerson

LOGO

Age 57

Director since 2004

 

Principal Occupation: Chairman of the Board and Chief Executive Officer, Exxon Mobil Corporation

 

Business Experience: Mr. Tillerson was elected Chairman and Chief Executive Officer of ExxonMobil in 2006; President and Director in 2004; and Senior Vice President in 2001. Mr. Tillerson has held a variety of management positions in domestic and foreign operations since joining the Exxon organization in 1975, including President, Exxon Yemen Inc. and Esso Exploration and Production Khorat Inc.; Vice President, Exxon Ventures (CIS) Inc.; President, Exxon Neftegas Limited; and Executive Vice President, ExxonMobil Development Company.

 

Public Company Directorships: None

 

Edward E. Whitacre, Jr.

LOGO

Age 67

Director since 2008

 

Principal Occupation: Chairman Emeritus, AT&T

 

Business Experience: Mr. Whitacre was elected Chairman and Chief Executive Officer of AT&T upon its merger with SBC Communications in 2005, and retired in 2007. He was elected Chairman and Chief Executive Officer of SBC in 1990; and President and Chief Operating Officer in 1988.

 

Public Company Directorships: Burlington Northern Santa Fe

 
 

 

15


Table of Contents
Index to Financial Statements

DIRECTOR COMPENSATION

Director compensation elements are designed to:

 

Ÿ  

Ensure alignment with long-term shareholder interests;

 

Ÿ  

Ensure the Company can attract and retain outstanding director candidates who meet the selection criteria outlined in the Guidelines for Selection of Non-Employee Directors, which can be found on the Corporate Governance section of our Web site;

 

Ÿ  

Recognize the substantial time commitments necessary to oversee the affairs of the Corporation; and,

 

Ÿ  

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-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 is $100,000 per year. Committee and Committee Chair fees were eliminated in 2007, except for the Chairs of the Audit and Compensation Committees (who receive an additional $10,000 per year). The purpose of this change was to simplify the non-employee director compensation package.

As of year-end 2007, the program in which non-employee directors could defer their cash compensation was terminated. Accrued deferred account balances were returned to participants in one or two annual installments that commenced in January 2008.

A significant portion of director compensation is paid in restricted stock to align director compensation with the long-term interests of shareholders. The annual restricted stock award grant for incumbent non-employee directors is 2,500 shares. A new non-employee director receives a one-time grant of 8,000 shares of restricted stock upon first being elected to the Board.

While on the Board, the non-employee director receives the same cash dividends on restricted shares as a holder of regular common stock, but the non-employee director is not allowed to sell the shares. The restricted shares may be forfeited if the non-employee director leaves the Board early, i.e., before retirement age of 72, as specified for non-employee directors.

Current and former non-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.

 

16


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Index to Financial Statements

Director Compensation for 2008

 

Name  

Fees

Earned

or Paid

in Cash

($)

 

Stock

Awards

($)(a)

 

Option

Awards

($)

 

Non-Equity

Incentive Plan

Compensation

($)

 

Change in
Pension Value
and
Nonqualified
Deferred
Compensation

Earnings

($)

 

Other

Compensation

($)(b)

 

Total

($)

M.J. Boskin

  100,000   234,163   0   0   0   350   334,513

L.R. Faulkner

  92,033   687,280   0   0   0   350   779,663

W.W. George

  105,934   234,163   0   0   0   350   340,447

J.R. Houghton

  110,000   234,163   0   0   0   350   344,513

W.R. Howell

  44,725   234,163   0   0   0   350   279,238

R.C. King

  100,000   234,163   0   0   0   350   334,513

P.E. Lippincott

  40,659   234,163   0   0   0   350   275,172

M.C. Nelson

  100,000   234,163   0   0   0   350   334,513

S.J. Palmisano

  100,000   234,163   0   0   0   350   334,513

S.S Reinemund

  100,000   510,846   0   0   0   350   611,196

W.V. Shipley

  100,000   234,163   0   0   0   350   334,513

E.E. Whitacre, Jr.

  59,341   418,670   0   0   0   350   478,361

 

(a) In accordance with SEC rules, the valuation of stock awards in this table represents the compensation cost of awards recognized for financial statement purposes for 2008 under Statement of Financial Accounting Standards No. 123, as revised (FAS 123R). The Company recognizes compensation cost for restricted stock granted to the non-employee directors over a 12-month period following the grant date. 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 Dr. Faulkner and Mr. Whitacre, who joined the Board in 2008) received an annual grant of 2,500 restricted shares in January 2008. The compensation cost recognized for these awards and shown in the table for 2008 is the same as the grant date fair value of these grants, which was $234,163.

 

   Dr. Faulkner received a one-time grant of 8,000 restricted shares upon being first elected to the Board in January 2008. The compensation cost recognized for this award and shown in the table for 2008 is the same as the grant date fair value of this grant, which was $687,280.

 

   Mr. Reinemund received a one-time grant of 8,000 restricted shares upon being first elected to the Board in May 2007. The compensation cost recognized for this award and shown in the table for 2008 is five-twelfths of the grant date fair value of this grant in 2007, which was $276,683.

 

   Mr. Whitacre received a one-time grant of 8,000 restricted shares upon being first elected to the Board in May 2008. The compensation cost recognized for this award and shown in the table for 2008 is seven-twelfths of the grant date fair value of this grant in 2008, which was $418,670.

 

17


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Index to Financial Statements
   At year-end 2008, the aggregate number of restricted shares held by each director was as follows:

 

Name    Restricted Shares (#)

M.J. Boskin

   46,800

L.R. Faulkner

   8,000

W.W. George

   18,500

J.R. Houghton

   48,400

R.C. King

   45,600

M.C. Nelson

   50,800

S.J. Palmisano

   14,500

S.S Reinemund

   10,500

W.V. Shipley

   44,400

E.E. Whitacre, Jr.

   8,000

 

(b) The amount shown for each director is the prorated 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.

The non-employee directors are not entitled to any additional payments or benefits as a result of leaving the Board or death except as described above. The non-employee directors are not entitled to any payments or benefits resulting from a change in control of the Corporation.

DIRECTOR AND EXECUTIVE OFFICER STOCK OWNERSHIP

These tables show the number of ExxonMobil common stock shares each executive named in the “Summary Compensation Table” on page 35 and each non-employee director or director nominee owned on February 28, 2009 (or at retirement, if earlier). 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 0.03 percent of the outstanding shares.

 

Named Executive Officer    Shares Owned     Shares Covered by
Exercisable Options

R.W. Tillerson

   1,131,520 (1)   327,307

D.D. Humphreys

   518,127 (2)   175,097

H.R. Cramer

   671,613     458,000

C.W. Matthews

   525,742     110,000

S.D. Pryor

   712,421 (3)   508,000

J.S. Simon

   833,685 (4)   462,705

M.E. Foster

   496,673 (5)   215,097

 

(1) Includes 1,875 shares owned by dependent child.
(2) Includes 54,947 shares jointly owned with spouse.
(3) Includes 23,022 shares owned by spouse.
(4) Includes 11,177 shares jointly owned with spouse.
(5) Includes 678 shares owned by spouse and 13,845 shares owned by dependent children.

 

18


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Index to Financial Statements
Non-Employee Director/Nominee   Shares Owned  

M.J. Boskin

  49,300  

L.R. Faulkner

  10,500  

K.C. Frazier

  0  

W.W. George

  31,000 (1)

J.R. Houghton

  57,900 (2)

R.C. King

  50,904 (3)

M.C. Nelson

  71,300 (4)

S.J. Palmisano

  17,000  

S.S Reinemund

  15,275 (5)

W.V. Shipley

  49,540  

E.E. Whitacre, Jr.

  10,500  

 

(1) Includes 10,000 shares held as co-trustee of family foundation.
(2) Includes 5,000 shares owned by spouse.
(3) Includes 1,000 shares owned by spouse.
(4) Includes 18,000 shares held as co-trustee of family trusts.
(5) Includes 1,100 shares held in family trust of which spouse is a trustee, and 1,175 shares held by family foundation of which Mr. Reinemund is a director.

On February 28, 2009, ExxonMobil’s incumbent directors and executive officers (27 people) together owned 6,979,421 shares of ExxonMobil stock and 2,401,119 shares covered by exercisable options, representing about 0.19 percent of the outstanding shares.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities and Exchange Act of 1934 requires that our executive officers and directors file reports of their ownership and changes in ownership of ExxonMobil stock on Forms 3, 4, and 5 with the SEC and NYSE. We are not aware of any unfiled reports and are not aware of any late reports for 2008.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors has reviewed and discussed the “Compensation Discussion and Analysis” for 2008 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 2009 annual meeting of shareholders, and also incorporated by reference in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2008.

 

William W. George, Chair    Samuel J. Palmisano
Reatha Clark King    Edward E. Whitacre, Jr.

 

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Table of Contents
Index to Financial Statements

COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Discussion and Analysis and Executive Compensation Tables are organized as follows:

 

         Topics    Page
Overview        Ÿ        Business Environment    21
       Ÿ    Key Business Strategies    21
       Ÿ    Key Elements of the Compensation Program    21
       Ÿ    Other Supporting Compensation and Staffing Practices    21
       Ÿ    Business Performance and Basis for Compensation Decisions    22
       Ÿ    Leadership Structure    22
       Ÿ    People and Business Strategies Model    23
Key Elements of the Compensation Program        Ÿ    Career Orientation    24
       Ÿ    Salary    24
       Ÿ    Bonus    24
       Ÿ    Equity    25
       Ÿ    Retirement    27
Basis of Compensation Committee Decisions        Ÿ    Analytical Tools:    28
      –    Tally Sheets    28
      –    Pension Modeling    29
      –    Benchmarking    29
       Ÿ    Performance Measurements:    30
      –    Business Results Considered    30
      –    Performance Assessment Process    30
      –    Individual Experience and Responsibility    31
       Ÿ    Pay Awarded to Named Executive Officers    32
       Ÿ    Award Timing    33
       Ÿ    Tax and Accounting Matters    34
Executive Compensation Tables and Narratives        Ÿ    Summary Compensation Table    35
       Ÿ    Grants of Plan-Based Awards    41
       Ÿ    Outstanding Equity Awards    42
       Ÿ    Option Exercises and Stock Vested    43
       Ÿ    Pension Benefits    44
       Ÿ    Nonqualified Deferred Compensation    47
       Ÿ    Administrative Services for Retired Employee Directors    48
       Ÿ    Health Care Benefits    48
       Ÿ    Unused Vacation    48
  

    Ÿ

 

   Termination and Change in Control    48
  

    Ÿ

 

   Payments in the Event of Death    49

 

20


Table of Contents
Index to Financial Statements

Overview

Providing energy to meet the world’s demands is a complex business. We meet this challenge by taking a long-term view rather than reacting to short-term business cycles. The compensation program of ExxonMobil aligns with and supports the long-term business fundamentals and core business strategies outlined below and illustrated in the model on page 23.

Business Environment

 

Ÿ  

Long investment horizons;

 

Ÿ  

Large capital investments;

 

Ÿ  

Worldwide diverse resources and markets; and,

 

Ÿ  

Commodity-based, cyclical product prices.

Key Business Strategies

 

Ÿ  

Long-term growth in shareholder value;

 

Ÿ  

Disciplined, selective, and long-term focus in making investments;

 

Ÿ  

Operational excellence; and,

 

Ÿ  

Industry-leading returns on capital and superior cash flow.

Key Elements of the Compensation Program

The key elements of our compensation program and staffing objectives that support the business fundamentals and strategies are:

 

Ÿ  

Long-term career orientation with high individual performance standards (see page 24);

 

Ÿ  

Base salary that rewards individual experience and performance (see page 24);

 

Ÿ  

Annual bonus grants based on business performance, as well as individual experience and performance (see pages 24-25);

 

Ÿ  

Payment of a large portion of executive compensation in the form of equity with long mandatory holding periods that extend beyond retirement (see pages 25-26); and,

 

Ÿ  

Retirement benefits (pension and savings plans) that provide for financial security after employment (see pages 27-28).

Other Supporting Compensation and Staffing Practices

 

Ÿ  

Executives are “at-will” employees of the Company. They do not have employment contracts, a severance program, or any benefits triggered by a change in control.

 

Ÿ  

A strong program of management development and succession planning is in place to reinforce a career orientation and provide continuity of leadership.

 

Ÿ  

Inappropriate risk-taking is discouraged by requiring senior executives to hold a substantial portion of their equity incentive award for their entire career and beyond retirement.

 

Ÿ  

All U.S. executives, including the CEO, the other Named Executive Officers, and about 1,200 other U.S. executives, participate in common programs (the same salary, incentive and retirement programs). Within these programs, the compensation of executives is differentiated based on individual experience, level of responsibility, and performance assessment.

 

Ÿ  

No tax assistance is provided by the Company on any elements of executive officer compensation or perquisites other than relocation. The relocation policy is a broad-based program that applies to all transferred U.S. professional and executive employees.

 

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Index to Financial Statements
Ÿ  

Substantial amounts of executive compensation are at risk of forfeiture in case of detrimental activity, unapproved early termination, or material negative restatement of financial or operating results.

 

Ÿ  

The Company does not reprice equity incentive awards. The utilization of restricted stock instead of stock options and the determination of annual grants on a share-denominated versus price basis help reinforce this practice.

 

Ÿ  

Equity compensation is not included in pension calculations.

Business Performance and Basis for Compensation Decisions

 

Ÿ  

Compensation decisions are based on the results achieved in the following areas over multiple year periods:

 

   

Total shareholder return;

 

   

Net income;

 

   

Return on capital employed;

 

   

Cash returned to shareholders;

 

   

Safety, health, and environmental performance;

 

   

Operating performance of the Upstream, Downstream, and Chemical segments;

 

   

Business controls; and,

 

   

Effectiveness of actions that support the long-term, strategic direction of the Company.

 

Ÿ  

The decision-making process with respect to compensation requires judgment, taking into account business and individual performance and responsibility. Quantitative targets or formulas are not used to assess individual performance or determine the amount of compensation. The Compensation Committee assesses the results described above against a broad range of goals and objectives and takes into consideration multiple external factors that influence these results.

Leadership Structure

 

Ÿ  

The disclosure regulations result in a roster of Named Executive Officers different from the most senior management team leading the Company, which is referred to as the Management Committee.

 

Ÿ  

The Management Committee comprises the following:

 

   

Chairman and CEO: R.W. Tillerson

 

   

Senior Vice Presidents who report directly to the CEO:

 

   

D.D. Humphreys;

 

   

M.W. Albers, who replaced S.R. McGill upon his retirement in 2007;

 

   

M.J. Dolan, who replaced J.S. Simon upon his retirement in 2008; and,

 

   

A.P. Swiger, effective April 2009.

 

Ÿ  

All members of the Management Committee are shown as Named Executive Officers except for Messrs. Albers, Dolan and Swiger, who have short tenure as Senior Vice Presidents. Consistent with our career orientation, which is supported by a career-based compensation strategy, their individual compensation levels do not currently place them among the Named Executive Officers.

 

Ÿ  

Although each member of the Management Committee is responsible for specific business activities, together they share responsibility for the performance of the Company.

 

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Index to Financial Statements

People and Business Strategies Model

The following summary illustrates how the compensation and executive development strategies support and integrate with ExxonMobil’s business model. This integrated approach supports long-term growth in shareholder value.

LOGO

 

23


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Index to Financial Statements

Key Elements of the Compensation Program

Career Orientation

 

Ÿ  

It is our objective to attract and retain for a career the best talent available.

 

Ÿ  

It takes a long period of time and a significant investment to develop the experienced executive talent necessary to succeed in the oil and gas business; senior executives must have experience with all phases of the business cycle to be effective leaders.

 

Ÿ  

Career orientation among a dedicated and highly skilled workforce, combined with the highest performance standards, contributes to the Company’s leadership in the industry and serves the interests of shareholders in the long term.

 

Ÿ  

The long Company service of executive officers reflects this strategy at all levels of the organization.

 

   

The Named Executive Officers have career service ranging from 32 to over 42 years.

 

   

The other executive officers of the Corporation have career service ranging from 27 to over 36 years.

 

Ÿ  

Consistent with our long-term career orientation, high-performing executives typically earn substantially higher levels of compensation in the final years of their careers than in the earlier years.

 

   

This pay practice reinforces the importance of a long-term focus in making decisions that are key to business success.

 

   

Because the compensation program emphasizes individual experience and long-term performance, executives holding similar positions may receive substantially different levels of compensation.

Salary

 

Ÿ  

Salaries provide executives with a base level of income.

 

Ÿ  

The level of annual salary is based on the executive’s responsibility, performance assessment, and career experience.

 

Ÿ  

Salary decisions directly affect the level of retirement benefits since salary is included in retirement-benefit formulas. The level of retirement benefits is, therefore, performance-based like other elements of compensation.

Bonus

 

Ÿ  

The annual bonus program is highly variable depending on annual financial and operating results.

 

Ÿ  

The size of the annual bonus pool is based on the annual net income of the Company and other business performance factors as described under “Business Results Considered” on page 30.

 

Ÿ  

In setting the size of the annual bonus pool and individual executive awards, the Compensation Committee:

 

   

Secures input from the Chairman on the performance of the Company and from the Compensation Committee’s external consultant regarding compensation trends across industries.

 

   

Uses judgment to determine the overall size of the annual bonus pool taking into consideration the cyclical nature and long-term orientation of the business.

 

Ÿ  

The annual bonus program incorporates unique elements to further reinforce retention and recognize performance. Awards under this program are generally delivered as:

LOGO

 

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Index to Financial Statements
Ÿ  

Earnings Bonus Units are cash awards that are tied to future cumulative earnings per share. Earnings Bonus Units pay out when a specified level of cumulative earnings per share is achieved or within three years.

 

   

For bonus awards granted in 2008, the trigger or cumulative earnings per share required for payout of the delayed portion was increased to $5.75 per unit versus $5.00 in 2007 (+15 percent), to reinforce the Company’s principle of continuous improvement in business performance and address the impact of the Company’s share purchase program.

 

   

If cumulative earnings per share do not reach $5.75 within three years, the delayed portion of the bonus would be reduced to an amount equal to the number of units times the actual cumulative earnings per share over the period.

 

   

The intent of the earnings per share trigger is to tie the timing of the bonus payment to the rate of the Corporation’s future earnings and not to decrease the amount of the payment, although it is at risk of forfeiture as described below. Thus the trigger of $5.75 is intentionally set at a level that is expected to be achieved within the three-year period.

 

   

Prior to payment, the delayed portion of a bonus may be forfeited if the executive leaves the Company before the standard retirement age, or engages in activity that is detrimental to the Company.

 

   

Cash and Earnings Bonus Unit payments are subject to recoupment in the event of material negative restatement of the Corporation’s reported financial or operating results. Even though a restatement is unlikely given ExxonMobil’s high ethical standards and strict compliance with accounting and other regulations applicable to public companies, a recoupment policy was approved by the Board of Directors to reinforce the well-understood philosophy that incentive awards are at risk of forfeiture and that how we achieve results is as important as the actual results.

 

Ÿ  

The 2008 annual bonus pool was $232 million versus $214 million in 2007. This reflects the combined value at grant of cash and Earnings Bonus Units.

Equity

 

Ÿ  

Equity compensation accounts for a substantial portion of total compensation to align the personal financial interests of executives with the long-term interests of shareholders.

 

Ÿ  

It is the objective to grant 50 to 70 percent of a senior executive’s total compensation in the form of restricted stock as measured by grant date fair market value, as described beginning on page 32.

Rationale

 

Ÿ  

Given the long-term orientation of our business, granting equity in the form of restricted stock with long vesting provisions keeps executives focused on the fundamental premise that decisions made currently affect the performance of the Corporation and Company stock many years into the future.

 

Ÿ  

This practice supports a risk/reward profile that reinforces a long-term view, which is fundamental to the business and discourages inappropriate risk taking.

 

Ÿ  

Restricted stock removes employee discretion on the sale of Company-granted stock holdings and reinforces the retention objectives of the compensation program.

Restriction Periods

 

Ÿ  

The restriction periods for ExxonMobil’s stock grants to the most senior executives are the longest of most public companies.

 

   

50 percent of each grant is restricted for five years; and,

 

   

The balance is restricted for 10 years or until retirement, whichever is later.

 

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Index to Financial Statements
Ÿ  

The long restriction periods reinforce the Company’s focus on growing shareholder value over the long term by subjecting a large percentage of executive compensation and personal net worth to the long-term return on ExxonMobil stock realized by shareholders.

 

Ÿ  

For the most senior executives, more than half of the total amount of restricted stock may not be sold or transferred until after the executive retires.

 

Ÿ  

The restricted period for stock awards is not subject to acceleration, except in the case of death.

Forfeiture Risk and Hedging Policy

 

Ÿ  

Restricted stock is subject to forfeiture if an executive:

 

   

Leaves the Company before standard retirement time (defined as age 65 for U.S. employees). In the event of early retirement prior to the age of 65 (i.e., age 55 to 64), the Compensation Committee must approve the retention of awards by an executive officer.

 

   

Engages in activity that is detrimental to the Company, even if such activity occurs or is discovered after retirement.

 

Ÿ  

Company policy prohibits all employees, including executives, from entering into put or call options on ExxonMobil common stock or futures contracts on oil or gas.

Share Utilization

 

Ÿ  

The Compensation Committee establishes a ceiling each year for annual stock awards. The overall number of shares granted in the restricted stock program in 2008 represents dilution of 0.2 percent, which is well below the average of the other large U.S.-based companies benchmarked for compensation and incentive program purposes based on their historical grant patterns.

 

Ÿ  

The Company has a long-established practice of purchasing shares in the marketplace to eliminate the dilutive effect of stock-based incentive awards.

Prior Stock Programs

 

Ÿ  

All equity awards granted since 2003 are granted under the Corporation’s 2003 Incentive Program. All equity-based awards (including stock options and restricted stock) granted prior to 2003 that remain outstanding were granted under the Corporation’s 1993 Incentive Program (other than awards granted by Mobil Corporation prior to the merger). No further grants can be made under the 1993 Incentive Program.

 

Ÿ  

Prior to 2002, ExxonMobil granted Career Shares to the Company’s most senior executives.

 

   

Career Shares vest the year following an executive’s retirement and are subject to forfeiture on substantially the same terms as current grants of restricted stock. The long vesting period further aligns the personal financial interests of executives with the long-term interests of shareholders, and helps ExxonMobil retain senior executives for the duration of their careers.

 

   

The Corporation ceased granting Career Shares in 2002 when the Corporation began granting restricted stock to the broader executive population in lieu of stock options.

 

   

Restricted stock and long mandatory holding periods achieve the same objectives as Career Shares and therefore it is unnecessary to grant both Career Shares and the current form of restricted stock.

 

   

Career Shares could be granted again in the future under the Corporation’s 2003 Incentive Program, but there are no current plans to make such grants.

 

Ÿ  

Before the merger, Mobil Corporation granted retention awards under the former Mobil Corporation Management Retention Plan. Retention awards are stock units that settle in cash in a single lump sum

 

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Index to Financial Statements
 

payment as soon as practicable after retirement (taking into account the required six-month delay in payment required under the American Jobs Creation Act of 2004). Messrs. Cramer and Pryor have outstanding retention awards.

Stock Ownership

 

Ÿ  

The table below shows stock ownership as a multiple of salary and the percentage of shares that are still subject to restrictions for the Named Executive Officers except for Messrs. Foster and Simon who have retired, and the average for all other executive officers as of year-end 2008. Valuation for this purpose is based on the year-end stock price. These levels of ownership ensure executive officers have a significant stake in the sustainable long-term success of the Corporation.

 

Name  

Dollar Value of Stock Ownership

as a Multiple of Salary

   Percent of
Shares Restricted

R.W. Tillerson

  48    89%

D.D. Humphreys

  45    84%

H.R. Cramer

  64    69%

C.W. Matthews

  49    72%

S.D. Pryor

  61    68%

All Other Executive Officers  (average)

  35    74%

Retirement

Common Programs

 

Ÿ  

Senior executives participate in the same tax-qualified pension and savings plans as most other U.S. employees. Senior executives also participate in the same nonqualified defined benefit and defined contribution plans as other U.S. executives.

 

Ÿ  

A key principle on which the pension and savings programs are based is commonality of design for all employees, except where the American Jobs Creation Act of 2004 requires delayed timing of nonqualified plan distributions for higher-level executives. The same principle of commonality applies to the Company health care benefits (see page 48).

Pension Plans

 

Ÿ  

The tax-qualified and nonqualified pension plans, described in more detail beginning on page 44, provide an annual benefit of 1.6 percent of final average pay per year of service, with an offset for Social Security benefits.

 

Ÿ  

Pay for the purpose of pension calculations includes base salary and bonus but does not include equity compensation.

 

Ÿ  

Bonus includes the amounts that are paid at grant and the amounts delayed by the Company, as described beginning on page 24.

 

Ÿ  

The portion of annual bonus subject to delayed payment is not intended to be at risk and therefore is included for pension purposes in the year of grant rather than the year of payment, as described on page 45.

 

Ÿ  

Pension benefits are paid upon retirement as follows:

 

   

Qualified pension plan benefits are payable, at the election of the employee, in a lump sum or in one of various forms of annuity payments.

 

   

Nonqualified pension plan benefits are paid in the form of an equivalent lump sum six months after retirement.

 

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Index to Financial Statements

Qualified Savings Plan

 

Ÿ  

The qualified savings plan described on page 39 permits employees to make pre- or post-tax contributions and receive a Company-matching contribution of 7 percent of eligible salary, subject to Internal Revenue Code (“Code”) limits on the amount of pay taken into account and the total amount of contributions.

 

Ÿ  

To receive the Company-matching contribution, employees must contribute a minimum of 6 percent of salary.

 

Ÿ  

Qualified benefits are payable in a single lump sum or in partial withdrawals at any time after retirement.

 

Ÿ  

The Code generally requires distributions to commence after the employee has attained age 70-1/2.

Nonqualified Savings Plan

 

Ÿ  

The nonqualified savings plan described on pages 39 and 47 does not permit employee contributions, but provides 7 percent of eligible pay to restore matching contributions that could not be made to the qualified plan due to Code limits (increased from 6 percent beginning in 2008).

 

Ÿ  

The nonqualified savings plan balance is paid in a single lump sum six months after retirement.

Basis of Compensation Committee Decisions

The Committee sets the compensation for the Named Executive Officers and certain other senior executives. The following describes the basis on which the Committee made decisions in 2008.

LOGO

Analytical Tools

Tally Sheets

 

Ÿ  

A tally sheet is a matrix used by the Compensation Committee that shows the individual elements of compensation and benefits for each Named Executive Officer. The total of all compensation and benefit plan elements is included to reflect the full employment costs for each Named Executive Officer.

 

Ÿ  

For tally sheet purposes, the Compensation Committee values restricted stock based on fair market value at the date of grant, which equals the number of shares multiplied by the grant price. This is different from the restricted stock values in the “Summary Compensation Table,” which, as required by current disclosure rules, are based on the expensing of outstanding restricted stock under Statement of Financial Accounting Standards No. 123, as revised (FAS 123R).

 

Ÿ  

Tally sheets were used for the following principal purposes:

 

   

To understand how decisions on each individual element of compensation affect total compensation for each senior executive;

 

   

To gauge total compensation for each senior executive against publicly available data for comparable positions at comparator companies; and,

 

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Index to Financial Statements
   

To confirm that equity compensation represents a substantial portion of each senior executive’s total compensation.

Pension Modeling

 

Ÿ  

A pension modeling tool was used to determine how current compensation decisions would affect pension values upon retirement.

Benchmarking

 

Ÿ  

Compensation is benchmarked annually. The primary benchmark for the Named Executive Officers is a select group of large companies across industries.

 

Ÿ  

Comparator Companies

 

   

The following criteria for selecting comparator companies are consistently applied every year:

 

  Ÿ  

U.S. companies;

 

  Ÿ  

International operations;

 

  Ÿ  

Large scope and complexity;

 

  Ÿ  

Capital intensive; and,

 

  Ÿ  

Proven sustainability/permanence.

 

   

The 14 companies benchmarked based on these criteria are listed below. The comparator group included the same companies as in 2007, except United Technologies was added, and Ford and General Motors were removed from the overall analysis. The changes aligned the comparator group more closely with ExxonMobil’s current business circumstances and the above selection criteria. Changes to the list of comparator companies are infrequent.

 

Altria Group

AT&T

Boeing

Chevron

 

 

Citigroup

ConocoPhillips

General Electric

Hewlett-Packard

 

IBM

Johnson & Johnson

Pfizer

Procter & Gamble

 

United Technologies

Verizon Communications

 

   

In the United States, only Chevron and ConocoPhillips have the size, complexity, and geographic scope in the oil and gas business to provide reasonable comparisons. Other smaller oil companies in the United States do not have the international scale or functional integration to make comparisons meaningful for our senior executives.

 

Ÿ  

Principles

 

   

Consistent with the Compensation Committee’s practice of using well-informed judgment rather than formulas to determine executive compensation, the Committee does not target any particular percentile among comparator companies at which to align compensation.

 

   

When the Committee cross-checks compensation levels against comparator companies, the focus is on a broader and more flexible orientation, generally a range around the median of comparator company compensation, which provides the ability to:

 

  Ÿ  

Better respond to changing business conditions;

 

  Ÿ  

Manage salaries based on a career orientation;

 

  Ÿ  

Minimize the potential for automatic ratcheting-up of compensation that could occur with an inflexible and narrow target among benchmarked companies; and,

 

  Ÿ  

Differentiate compensation based on experience and performance levels among executives.

 

   

This benchmarking principle applies to salaries and the annual incentive program that includes bonus awards and stock grants.

 

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Index to Financial Statements
   

For the purpose of its analysis, the Compensation Committee does not adjust for differences in the types or nature of businesses. Consideration is given, however, to the differences in size, scope, and complexity among ExxonMobil and the comparator companies. This is one of several judgmental factors the Committee considers and is not based on a formula.

 

   

The Compensation Committee uses an independent consultant to assist in this analysis as described in the Corporate Governance section beginning on page 8.

Performance Measurements

Decisions made by the Compensation Committee in 2008 were based on the Company’s operating and financial performance, as well as individual performance, experience and level of responsibility as described below.

Business Results Considered

The operating and financial performance measurements listed below and the Company’s continued maintenance of sound business controls and a strong corporate governance environment formed the basis for the salary and incentive award decisions made by the Committee in 2008. The Committee considered the results in the aggregate and over multiple years, in recognition of the long-term nature of our business.

 

Ÿ  

Record net income of $45.2 billion. Five-year annual average of $37.4 billion.

 

Ÿ  

Total shareholder return was a negative 13.2 percent versus the S&P 500 of negative 37.0 percent. Ten-year annual average of 10.4 percent.

 

Ÿ  

$8.1 billion distributed to shareholders as dividends in 2008. $62.5 billion in dividends distributed to shareholders since the beginning of 2000. Dividend payments per share increased for the 26th consecutive year.

 

Ÿ  

$32 billion distributed to shareholders through the share purchase program in 2008 and $125 billion since the beginning of 2000.

 

Ÿ  

Strong results in the areas of safety, health, and environment. Workforce safety continues to lead the industry.

 

Ÿ  

Industry-leading return on average capital employed of 34.2 percent, with a five-year average of 30.7 percent.

Performance Assessment Process

 

Ÿ  

The above business results form the context in which the Committee assesses the individual performance of each senior executive, taking into account experience and level of responsibility.

 

Ÿ  

During the annual executive development review with the Board of Directors in October of each year, the CEO reviews the performance of the Management Committee and all officers in achieving results in line with the long-term business strategies (see page 21).

 

Ÿ  

The same long-term business strategies and results are key elements in the assessment of the CEO’s performance by the Compensation Committee.

 

Ÿ  

The performance of all officers is also assessed by the Board of Directors throughout the year during specific business reviews and Board committee meetings that provide reports on strategy development; operating and financial results; safety, health, and environmental results; business controls; and other areas pertinent to the general performance of the Company.

 

Ÿ  

The Committee does not use quantitative targets or formulas to assess executive performance or determine compensation. The Compensation Committee does not assign weights to the factors considered. Formula-based performance assessments and compensation typically require emphasis on two or three business metrics. For the Company to be an industry leader and effectively manage

 

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Index to Financial Statements
 

the technical complexity and global scope of ExxonMobil, the most senior executives must advance multiple strategies and objectives in parallel, versus emphasizing one or two at the expense of others that require equal attention.

 

Ÿ  

An executive’s performance must be high in all key performance areas for the executive to receive an overall superior evaluation. Outstanding performance in one area will not cancel out poor performance in another. For example:

 

   

A problem in safety, health, or environmental performance in a business unit for which the executive is responsible could result in an executive’s incentive award being reduced even though the executive’s performance against financial and other criteria was superior.

 

   

A violation of the Company’s code of business conduct could result in elimination of an executive’s incentive award for the year, as well as termination of employment and/or cancelation of all previously granted awards that have not yet vested or been paid.

 

Ÿ  

The Management Committee and all other officers are expected to perform at the highest level or they are replaced. If it is determined that another executive is ready and would make a stronger contribution than one of the current officers, a replacement plan is implemented.

 

Ÿ  

The fact that executives do not have employment contracts, severance agreements, or change-in-control arrangements eliminates any real or perceived “safety net” with respect to job security. This increases the risk and consequences of performance that does not meet the highest standards.

Individual Experience and Responsibility

Experience and assigned responsibilities are factors in assessing the contribution of individual executives. The current responsibilities, tenure in the current job, and recent past experience of each Named Executive Officer are described below. Refer to page 22 for information on the leadership structure of the Company.

 

Ÿ  

Management Committee

 

   

Mr. Tillerson was a Senior Vice President before becoming President and a member of the Board in 2004, and Chairman of the Board and CEO in 2006.

 

   

Mr. Humphreys was Vice President and Controller, and then Vice President and Treasurer before becoming Senior Vice President and Treasurer in 2006.

 

   

Mr. Simon, who retired in 2008, was President of ExxonMobil Refining & Supply Company before becoming Senior Vice President in 2004 and a member of the Board in 2006.

 

Ÿ  

Other Named Executive Officers

 

   

Mr. Cramer has been President of ExxonMobil Fuels Marketing Company since 1999.

 

   

Mr. Matthews has been Vice President and General Counsel since 1995.

 

   

Mr. Pryor was President of ExxonMobil Refining & Supply Company since 2004 before becoming President of ExxonMobil Chemical Company in 2008.

 

   

Mr. Foster, who retired in 2008, was President of ExxonMobil Development Company before becoming President of ExxonMobil Production Company in 2004.

As discussed on page 24, the career service for Named Executive Officers ranges from 32 to over 42 years.

 

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Index to Financial Statements

Pay Awarded to Named Executive Officers

 

Ÿ  

Within the context of the compensation program structure and performance assessment processes described above, the Compensation Committee aligned the value of 2008 incentive awards and 2009 salary adjustments with the:

 

   

Performance of the Company;

 

   

Individual performance;

 

   

Long-term strategic plan of the business; and,

 

   

Annual compensation of comparator companies.

 

Ÿ  

The Committee’s decisions reflect judgment taking all factors into consideration, rather than application of formulas or targets. The Committee approved the individual elements of compensation and the total compensation as shown in the tables beginning on page 35.

CEO

 

Ÿ  

The higher level of pay for Mr. Tillerson, CEO, versus the other Named Executive Officers reflects his greater level of responsibility, including the ultimate responsibility for the performance of the Corporation and oversight of the other senior executives.

Other Named Executive Officers

 

Ÿ  

The higher level of compensation for Mr. Humphreys, versus the active other Named Executive Officers, reflects his greater level of responsibility as Senior Vice President and Treasurer and tenure as a member of the Management Committee.

 

Ÿ  

The compensation of Messrs. Cramer and Pryor is lower than that of the CEO and Mr. Humphreys based on combined salary, bonus, and the annual stock grant (calculated using the fair market value on date of grant). This occurs because Messrs. Cramer and Pryor report to designated members of the Management Committee (CEO and Senior Vice Presidents). Messrs. Humphreys and Matthews report to the CEO.

 

Ÿ  

Messrs. Simon and Foster are included as Named Executive Officers due to the full expensing of their prior stock grants still outstanding in 2008, resulting from their retirements, as required by FAS 123R. They did not receive a bonus or restricted stock grant in 2008.

Compensation Allocation

 

Ÿ  

To achieve alignment with the interests of shareholders, it is the objective that 50 to 70 percent of annual total remuneration be in the form of stock with long holding periods as described on page 25 (based on grant date fair value as shown in the “Grants of Plan-Based Awards” table).

 

Ÿ  

To further tie compensation to the performance of the business, the objective is to have about 15 to 20 percent of annual total remuneration in the form of variable annual bonus awards, which are described beginning on page 24.

 

Ÿ  

Salary represents less than 10 percent of annual total remuneration, with pension accruals and other forms of compensation comprising the remainder.

 

Ÿ  

Whether an executive’s total compensation is near, substantially below, or substantially above the comparator group median is a qualitative factor the Compensation Committee considers along with experience, level of responsibility, and performance (see page 29).

 

32


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Index to Financial Statements
Ÿ  

The allocation of compensation in 2008 for the CEO and the average for the other Named Executive Officers is illustrated in the chart below, excluding Messrs. Simon and Foster.

LOGO

Salary

 

Ÿ  

The change in salary for the active Named Executive Officers from the prior year, as shown in the “Summary Compensation Table,” primarily reflects adjustments to the competitive position of the base salary program for U.S. executives, taking into account individual experience and level of responsibility.

Bonus

 

Ÿ  

The change in bonus for the active Named Executive Officers from the prior year, as shown in the “Summary Compensation Table,” reflects the Company’s strong business results compared to 2007 and takes into account individual experience and level of responsibility.

Restricted Stock

 

Ÿ  

The increase in the number of shares granted to Messrs. Tillerson and Humphreys reflects the Corporation’s strong earnings and cash flow performance, safety record, and performance versus industry peers (see “Business Results Considered” on page 30), as well as the additional experience the officers have gained in their positions.

 

Ÿ  

The Committee makes grant decisions on a share-denominated basis rather than a price basis. The Committee does not support a practice of offsetting the loss or gain of prior restricted stock grants by the value of current year grants. This practice would minimize the risk/reward profile of equity-based awards and undermine the long-term view that executives are expected to adopt.

 

Ÿ  

The Corporation also compares the total value of restricted stock grants against the combined value of all forms of long term awards by comparator companies through an annual benchmarking process, and makes adjustments as necessary (see page 29).

Other Compensation

 

Ÿ  

This category comprises the change in pension value and earnings on nonqualified deferred compensation and all other compensation as shown in the “Summary Compensation Table” beginning on page 35.

Award Timing

 

Ÿ  

The Compensation Committee grants incentive awards to the Company’s senior executives at their regular November meeting, which is held either the day of or the day before the regularly scheduled November Board of Directors meeting.

 

   

The Board of Directors meeting is scheduled over a year in advance and is held on the last Wednesday of the month (or on Tuesday if the last Wednesday immediately precedes Thanksgiving).

 

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Index to Financial Statements
   

This firm timing of award grants is reinforced through a decision-making process in which the Corporation does not grant awards by written consent.

 

Ÿ  

A committee comprising ExxonMobil’s Chairman and Senior Vice Presidents grants incentive awards to other eligible managerial, professional, and technical employees, within the parameters of the bonus and equity award ceilings approved by the Compensation Committee. The schedule of the November meeting of the Compensation Committee as described above determines when this committee meets to approve the annual incentive grants for employees under its purview.

 

Ÿ  

The Company has not granted stock options since 2001.

 

Ÿ  

Previously granted stock options that remain outstanding were granted on the same annual schedule described above except for grants in 1999. Due to the fact that the merger closed on November 30 of that year, the regular annual grant meeting date was moved to December 8. Grants to other managerial, professional, and technical employees were made on December 8, and also to additional grantees on April 26, 2000, after employee data for the two companies had been more fully integrated.

 

Ÿ  

The exercise price for each stock option grant was the average of the high and low sale prices reported on the NYSE on the date of the grant meeting.

Tax and Accounting Matters

 

Ÿ  

U.S. income tax law limits the amount ExxonMobil can deduct for compensation paid to the CEO and the other three most highly paid executives other than the Principal Financial Officer (PFO). Performance-based compensation that meets Internal Revenue Service requirements is not subject to this limit.

 

   

The short term awards and restricted stock grants described above are designed to meet these requirements so that ExxonMobil can continue to deduct the related expenses. The shareholders have approved the material terms of performance goals for awards to the senior executives. These material terms limit short term and long term awards to each of these executives to 0.2 and 0.5 percent, respectively, of income from continuing operations.

 

  Ÿ  

These terms have been established to meet tax regulations and do not represent performance targets for the affected executives. Actual award levels have been significantly less based on the factors and judgments described in this report.

 

   

Salaries for senior executives may be set at levels that exceed the U.S. income tax law limitation on deductibility. The primary drivers for determining the amount and form of executive compensation are the retention and motivation of superior executive talent rather than the Internal Revenue Code.

 

Ÿ  

In 2005 the Compensation Committee eliminated the ability of executives to defer payment of incentive awards. No element of compensation for executives can be deferred prior to retirement.

 

Ÿ  

Tax assistance is not provided by the Company for either the short term or long term incentive awards discussed above.

 

Ÿ  

All nonqualified pension and other benefits have been modified to be in full compliance with the American Jobs Creation Act of 2004, which imposes tax penalties unless the form and timing of distributions are fixed to eliminate executive and company discretion (Section 409A of the Internal Revenue Code).

 

34


Table of Contents
Index to Financial Statements

EXECUTIVE COMPENSATION TABLES

Summary Compensation Table for 2008

 

Name and

Principal Position

  Year  

Salary

($)

 

Bonus

($)

 

Stock

Awards

($)*

 

Option

Awards

($)

 

Non-

Equity
Incentive
Plan
Compen-

sation

($)

 

Change in

Pension

Value and

Nonqualified

Deferred

Compen-

sation

Earnings

($)

 

All

Other

Compen-

sation

($)

 

Total

($)

R.W. Tillerson

Chairman and CEO

  2008

2007

2006

  1,870,000

1,750,000

1,500,000

  4,000,000

3,360,000

2,800,000

  7,807,523

5,675,362

4,159,713

  0

0

0

  0

0

0

  8,290,253

5,511,588

4,067,544

  446,826

429,792

482,238

  22,414,602

16,726,742

13,009,495

D.D. Humphreys

PFO; Senior Vice President

  2008

2007

2006

  910,000

830,000

750,000

  2,364,000

1,859,000

1,750,000

  3,895,851

2,421,168

1,768,252

  0

0

0

  0

0

0

  4,599,191

3,919,806

2,784,795

  108,989

86,689

97,331

  11,878,031

9,116,663

7,150,378

H.R. Cramer

Vice President;

President, ExxonMobil Fuels Marketing Company

  2008

2007

2006

  843,333

807,917

772,917

  1,744,598

1,586,000

1,586,176

  3,383,296

3,645,262

2,921,188

  0

0

0

  0

0

0

  3,215,127

2,294,584

1,833,188

  87,522

86,202

93,148

  9,273,876

8,419,965

7,206,617

C.W. Matthews

Vice President; General Counsel

  2008   855,000   1,477,305   5,490,643   0   0   1,781,214   96,065   9,700,227

S.D. Pryor

Vice President; President, ExxonMobil Chemical Company

  2008   905,000   1,744,598   3,668,776   0   0   3,571,656   311,614   10,201,644

RETIRED

J.S. Simon

Senior Vice President

and Director

(Retired 6/1/2008)

  2008

2007

2006

  593,337

995,000

935,000

  0

2,150,000

2,150,000

  18,366,191

9,168,388

3,284,506

  0

0

0

  0

0

0

  714,029

2,585,221

2,088,907

  103,747

135,133

121,735

  19,777,304

15,033,742

8,580,148

M.E. Foster

Vice President;

President, ExxonMobil Production Company

(Retired 4/1/2008)

  2008

2007

  314,233

803,750

  0

1,859,000

  12,113,088

7,805,893

  0

0

  0

0

  554,968

2,930,181

  76,845

116,389

  13,059,134

13,515,213

 

* In accordance with disclosure regulations, the valuation of “Stock Awards” in this table represents the compensation cost of awards recognized for financial statement purposes under Statement of Financial Accounting Standards No. 123, as revised (FAS 123R).

As described in more detail under “Stock Awards” below, the stock award values shown in 2008 for Messrs. Simon and Foster reflect the recognition of expense for outstanding awards triggered by their retirements. This is not a severance payment or a new award. Of the underlying stock awards for Messrs. Simon and Foster, more than 93 and 96 percent, respectively, remain restricted from transfer and subject to forfeiture for a number of years.

The stock award value shown in 2008 for Mr. Matthews includes the effect of using a shorter amortization schedule since he is nearing standard retirement age.

 

35


Table of Contents
Index to Financial Statements

Employment Arrangements

ExxonMobil’s Compensation Committee believes senior executives should be “at will” employees of the Corporation. Accordingly the CEO and other executive officers, including the other officers named in these tables, do not have employment contracts, severance agreements, or change-in-control arrangements with the Company.

Salary

 

Ÿ  

Effective January 1, 2009, Mr. Tillerson’s annual salary increased to $2,057,000, and Mr. Humphreys’ annual salary increased to $1,010,000.

 

Ÿ  

The 2008 and 2009 salary increases reflect adjustments to the competitive position of the base salary program for U.S. executives, taking into account individual experience and level of responsibility. See the “Pay Awarded to Named Executive Officers” section beginning on page 32.

 

Ÿ  

The 2008 salary for Messrs. Simon and Foster includes pay in lieu of vacation that they received due to their retirements. Refer to page 48 for information on unused vacation.

Bonus

 

Ÿ  

As described in more detail in the “Compensation Discussion and Analysis” (CD&A), the 2008 bonus shown was paid half in cash at the time of grant. The Company delays payment of the balance until cumulative earnings reach $5.75 per share.

 

Ÿ  

Delayed bonus amounts do not earn interest.

 

Ÿ  

The bonus and the stock awards described below meet the requirements of Section 162(m) of the Internal Revenue Code for tax deductibility, which is explained in more detail on page 34.

Stock Awards

 

Ÿ  

In accordance with disclosure regulations, the valuation of stock awards in this table represents the compensation cost of awards recognized for financial statement purposes under Statement of Financial Accounting Standards No. 123, as revised (FAS 123R).

 

Ÿ  

The amounts include portions of restricted stock grants in 2002 through 2008 that were expensed in 2008 based on the following amortization schedule:

 

   

Awards granted in 2002 through 2005 are amortized over the period of restriction.

 

   

Awards granted after 2005 are amortized over the period of restriction or the time between the grant date and age 65, whichever is less.

 

Ÿ  

The 2008 grant was made November 25, and therefore only one month of amortized expense for 2008 is reflected in the total.

 

Ÿ  

If an executive retires in the reportable year, the remaining amortization expense for all outstanding awards is accelerated and recognized in the year of retirement (see the specific discussion regarding Messrs. Simon and Foster below).

 

Ÿ  

The remaining value of all outstanding Career Shares described on page 26 was fully expensed in 2006.

 

Ÿ  

The amount shown for stock awards also includes the following:

 

   

For Messrs. Cramer and Pryor, the retention awards made by Mobil Corporation before the merger are included. Retention awards are stock units settled in cash after retirement. During employment, dividend equivalents are credited and reinvested in additional units up to the total dollar amount of the retention award. Both Messrs. Cramer and Pryor reached the dividend reinvestment cap in 2007, and, therefore, they did not receive any further dividend equivalents on these awards in 2008. These awards were expensed at time of grant, but the incremental

 

36


Table of Contents
Index to Financial Statements
 

cost of the awards based on changes in share price is expensed quarterly on a mark-to-market method. The lower share price resulted in negative values for 2008 for Mr. Cramer (-$425,090) and for Mr. Pryor (-$212,505), which are included in the table.

 

   

For Mr. Simon, the scheduled amortization expense is through his retirement date of June 1, 2008, and reflects the expensing of the unamortized remaining balance of six years’ worth of outstanding awards. Mr. Simon did not receive a 2008 restricted stock award. His Career Shares remained restricted for seven months after retirement, and his restricted stock grants outstanding from 2002 through 2007 will remain restricted for up to nine years and six months following his retirement.

 

   

For Mr. Foster, the scheduled amortization expense is through his retirement date of April 1, 2008, and reflects the expensing of the unamortized remaining balance of six years’ worth of outstanding awards. Mr. Foster did not receive a 2008 restricted stock award. His Career Shares remained restricted for nine months after retirement, and his restricted stock grants outstanding from 2002 through 2007 will remain restricted for up to nine years and eight months following his retirement.

 

Ÿ  

The terms of all restricted stock granted between 2002 and 2008 are the same and are provided on page 25.

 

Ÿ  

Dividends on stock awards are not shown in the table because those amounts are reflected in the grant date fair value reported in the “Grants of Plan-Based Awards” table.

Change in Pension Value and Nonqualified Deferred Compensation Earnings

The following table breaks down the 2008 amounts shown in this column in the “Summary Compensation Table.”

 

Name     

Change in

Pension Value

($)

    

Nonqualified Deferred
Compensation Earnings

($)

    

Total

($)

R.W. Tillerson

     8,290,253      0      8,290,253

D.D. Humphreys

     4,599,191      0      4,599,191

H.R. Cramer

     3,215,127      0      3,215,127

C.W. Matthews

     1,781,214      0      1,781,214

S.D. Pryor

     3,571,656      0      3,571,656

J.S. Simon

     714,029      0      714,029

M.E. Foster

     552,298      2,670      554,968

Pension Value

 

Ÿ  

The change in pension value shown in the table is the increase between year-end 2007 and year-end 2008 (or retirement, if earlier) in the present value of each executive’s pension benefits under the plans described in more detail in the text following the “Pension Benefits” table on page 44. Messrs. Simon and Foster retired on June 1, 2008, and April 1, 2008, respectively, resulting in lower pension accruals than those for the other Named Executive Officers in the table.

 

Ÿ  

For each year end, the data reflects an annuity beginning at age 60 (or current age if over 60) equal to 1.6 percent of the participant’s covered compensation multiplied by year-end service. These values are converted to lump sums using the plan’s applicable factors and then discounted in the case of employees under age 60 to present values based on the time difference between the individual’s age at year-end 2007 and age 60 (and at year-end 2008 and age 60) using the interest rates for financial reporting of pension obligations as of each year end. The difference between the two year-end amounts represents the annual increase in the value of the pension shown in the “Summary Compensation Table.”

 

37


Table of Contents
Index to Financial Statements
Ÿ  

The lump sum interest rate applied for an employee who worked through the end of 2007 was 4.75 percent. The lump sum interest rate applied for an employee who worked through the end of 2008 was 4.25 percent. In the second quarter of 2008 (when Messrs. Simon and Foster retired), the lump sum interest rate was 4.5 percent. The rate used to discount the age 60 lump sum to a value at current age for those under age 60 was 6.25 percent for 2007 and 2008.

 

Ÿ  

The pension accrual shown for the two retired Named Executive Officers reflects their additional months of service in 2008 plus the impact of the lower interest rate used in calculating their lump sum benefits, as described in the paragraph above.

 

   

For Mr. Simon, who worked through May 31, 2008, and retired June 1, 2008, the pension accrual shown in the table represents five additional months of service in 2008 on the value of his lump sum pension distribution and the effect of the lower interest rate used in computing the lump sum.

 

   

For Mr. Foster, who worked through March 31, 2008, and retired April 1, 2008, the pension accrual shown in the table represents three additional months of service in 2008 on the value of his lump sum pension distribution and the effect of the lower interest rate used in computing the lump sum.

Nonqualified Deferred Earnings

 

Ÿ  

The portion of annual earnings on each executive’s principal balance under the Corporation’s nonqualified supplemental savings plan that exceeds 120 percent of the long-term Applicable Federal Rate, compounded monthly, as prescribed under Section 1274(d) of the Internal Revenue Code, is required to be disclosed. As of January 1, 2008, the basis for the interest rate during the term of a participant’s employment was changed from the Citibank prime lending rate to 120 percent of the long-term Applicable Federal Rate.

 

Ÿ  

For Mr. Foster, the amount reported in 2008 is interest exceeding 120 percent of the long-term Applicable Federal Rate on the lump sum nonqualified pension payments during the six-month deferral period required by Section 409A of the Internal Revenue Code. The deferred payment bore interest at the Citibank prime lending rate on the date of retirement.

All Other Compensation

The following table breaks down the amounts included in the “All Other Compensation” column of the “Summary Compensation Table.” Note the table has been changed from prior years as follows: removed the column for “Club Memberships” since the Company discontinued reimbursement effective January 1, 2007; and added a new column labeled “Relocation” since a Named Executive Officer had relocation costs in 2008.

 

Name  

Life

Insurance

($)

 

Savings
Plan

($)

 

Personal
Security

($)

 

Personal Use of

Company

 

Relocation

($)

 

Financial
Planning

($)

 

Tax

Assistance

($)

 

Total

($)

       

Aircraft

($)

 

Properties

($)

 

Car

($)

       

R.W. Tillerson

  38,390   130,900   222,985   41,980   3,271   0   0   9,300   0   446,826

D.D. Humphreys

  28,618   63,700   3,281   0   4,090   0   0   9,300   0   108,989

H.R. Cramer

  17,338   59,033   1,835   0   0   16   0   9,300   0   87,522

C.W. Matthews

  26,915   59,850   0   0   0   0   0   9,300   0   96,065

S.D. Pryor

  18,593   63,350   810   0   0   528   148,275   7,500   72,558   311,614

J.S. Simon

  58,115   30,333   2,469   0   430   0   0   12,400   0   103,747

M.E. Foster

  46,965   15,050   1,246   0   0   1,184   0   12,400   0   76,845

 

38


Table of Contents
Index to Financial Statements

Life Insurance

 

Ÿ  

The Company offers senior executives term life insurance or a Company-paid death benefit.

 

Ÿ  

Coverage under either option equals four times base salary until age 65, and a declining multiple thereafter until age 75, at which point the multiple remains at 2.5 times salary.

 

Ÿ  

For executives with life insurance coverage, the premium cost in any year depends on overall financial and mortality experience under the group policy.

 

Ÿ  

For executives electing the death benefit, there is no cash cost until the executive dies, as benefits are paid directly by the Company.

 

Ÿ  

The amount shown is based on Internal Revenue Service tables used to value the term cost of such coverage. This valuation is applied since the actual life insurance premium is a single payment for a large group of executives that does not represent the cost of insuring one specific individual and because several of the Named Executive Officers have elected the death benefit, the long-term cost of which is comparable to the insurance.

 

Ÿ  

The Company eliminated the executive term life insurance and Company-paid death benefit for all newly eligible executives as of October 1, 2007, and retained it for all current participants, including the Named Executive Officers.

Savings Plan

 

Ÿ  

The amount shown is the value of Company-matching contributions under ExxonMobil’s tax-qualified defined contribution (401(k)) plan and Company credits under the related nonqualified supplemental plan.

 

Ÿ  

The nonqualified supplemental plan provides all affected employees with the 7-percent Company credit to which they would otherwise be entitled as a matching contribution under the qualified plan but for limitations under the Internal Revenue Code. The Company credit was previously 6 percent and was increased to 7 percent effective January 1, 2008. All affected employees participate in the nonqualified supplemental plan on the same basis.

 

Ÿ  

The value of the credits to the nonqualified supplemental plan is also disclosed in the “Nonqualified Deferred Compensation” table on page 47.

Personal Security

 

Ÿ  

The Company provides security for its employees as appropriate based on an assessment of risk. The assessment includes consideration of the employee’s position and work location.

 

Ÿ  

The Company does not consider any such security costs to be personal benefits since these costs arise from the nature of the employee’s employment by the Company; however, the disclosure regulations require certain security costs to be reported as personal benefits.

 

Ÿ  

The amounts shown in the table include the following types of security related costs: security systems at executive residences; security services and personnel (at residences and/or during personal travel); car and personal security driver; and Company mobile phones. Costs of security relating to travel for business purposes are not included.

 

Ÿ  

Cars provided for security reasons and used primarily for commuting are valued based on the annualized cost of the car plus maintenance and fuel. Reported costs for rental cars utilized due to security concerns during personal travel are the actual incremental costs.

 

Ÿ  

For security personnel employed by the Company, the cost is the actual incremental cost of expenses incurred by the security personnel. Total salary, wages, and benefits for security personnel are not allocated because the Company already incurs these costs for business purposes.

 

39


Table of Contents
Index to Financial Statements
Ÿ  

For security contractors, the cost is the actual incremental cost of such contractors associated with the executive’s personal time.

 

Ÿ  

For Mr. Tillerson, the amount shown includes $34,060 for car, $57,513 for personal security driver, and $122,182 for residential security. The remainder is for mobile phones and other communications equipment for conducting business in a secure manner.

Aircraft

 

Ÿ  

Incremental cost for personal use of the aircraft is based on direct operating costs (fuel, airport fees, incremental pilot costs, etc.) and does not include capital costs of the aircraft since the Company already incurs these capital costs for business purposes.

 

Ÿ  

For security reasons, the Board requires the Chairman and CEO to use Company aircraft for both business and personal travel.

 

Ÿ  

The Committee considers these costs to be necessary, security-related business expenses rather than perquisites, but per the disclosure regulations we report the incremental cost of aircraft usage for personal travel.

Properties

 

Ÿ  

The Company owns or leases various venues for the purpose of business entertainment, including boxes and season tickets to sporting events and recreation and conference retreat properties. When these venues are not otherwise in use for business entertainment, the tickets and properties may be available for use by Company executives and other personnel.

 

Ÿ  

The table shows the incremental cost incurred for any personal use of these venues by the Named Executive Officers.

 

Ÿ  

Cost for this purpose is based solely on incremental operating costs (catering, transportation, incremental employee or contractor costs, etc.) and does not include annual or capital costs of these venues since the Company already incurs these costs for business purposes.

Car

 

Ÿ  

Incremental cost for personal use of company car by executives other than Mr. Tillerson (whose car-related expenses are included under “Personal Security”) is based on an assumed cost in 2008 of $0.505 per mile for January through June, and $0.585 for July through December. Driver personnel costs are not allocated because the Company already incurs these costs for business purposes.

Financial Planning

 

Ÿ  

The Company provides financial planning services to senior executives, which includes tax preparation. This benefit is valued based on the actual charge for the services.

Relocation

 

Ÿ  

The Company provides relocation assistance for all transferred professionals and executives. All affected employees participate in the Company’s relocation program on the same basis. The amount shown is the relocation costs reimbursed to the executive or paid on behalf of the executive.

Tax Assistance

 

Ÿ  

The amount shown is the aggregate amount of payments made on the executive’s behalf by the Corporation during the year for the payment of taxes related to relocation costs. The Company discontinued providing tax assistance on financial planning effective January 1, 2008.

 

40


Table of Contents
Index to Financial Statements

Grants of Plan-Based Awards for 2008

 

 

Name   Grant Date  

Estimated Future
Payouts

Under Non-Equity
Incentive

Plan Awards

 

Estimated Future
Payouts

Under Equity
Incentive

Plan Awards

 

All Other

Stock

Awards:

Number

of Shares

of Stock

or Units

(#)

 

All Other

Option

Awards:

Number
of

Securities

Under-

lying

Options

(#)

 

Exercise
or

Base
Price

of
Option

Awards

($/Sh)

  Grant Date
Fair Value of
Stock and
Option
Awards ($)
   

Thresh-

old

($)

 

Tar-

get

($)

 

Maxi-

mum

($)

 

Thresh-

old

(#)

 

Tar-

get

(#)

 

Maxi-

mum

(#)

       

R.W. Tillerson

  11/25/2008   0   0   0   0   0   0   225,000   0   0   17,604,000

D.D. Humphreys

  11/25/2008   0   0   0   0   0   0   106,400   0   0   8,324,736

H.R. Cramer

  11/25/2008   0   0   0   0   0   0   77,000   0   0   6,024,480

C.W. Matthews

  11/25/2008   0   0   0   0   0   0   64,400   0   0   5,038,656

S.D. Pryor

  11/25/2008   0   0   0   0   0   0   77,000   0   0   6,024,480

J.S. Simon

    0   0   0   0   0   0   0   0   0   0

M.E. Foster

    0   0   0   0   0   0   0   0   0   0

The awards granted in 2008 are in the form of restricted stock.

Restrictions and Forfeiture Risk

 

Ÿ  

These grants are restricted (1) for half the shares, until five years after the grant date; and, (2) for the balance, until 10 years after the grant date or retirement, whichever occurs later. These restricted periods are not subject to acceleration, except upon death, and thus, shares may remain subject to restriction for many years after an executive’s retirement.

 

Ÿ  

During the restricted period, the executive receives the same cash dividends as a holder of regular common stock and may vote the shares; however, the executive may not sell or transfer the shares, or use them as collateral.

 

Ÿ  

The shares also remain subject to forfeiture during the restricted period in case of an unapproved early termination of employment or in case the executive is found to have engaged in activity that is detrimental to the Company. Detrimental activity may include conduct that violates the Company’s Ethics or Conflicts of Interest policies.

Grant Date

 

Ÿ  

The grant date is the same as the date on which the Compensation Committee of the Board met to approve the awards, as described beginning on page 33.

 

Ÿ  

Grant date fair value is equal to the number of shares awarded times the grant price, which is deemed to be the average of the high and low sale prices on the NYSE on the grant date (November 25, 2008; $78.24).

 

41


Table of Contents
Index to Financial Statements

Outstanding Equity Awards at Fiscal Year-End for 2008

 

 

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
Expiration

Date

  Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
 

Market

Value of
Shares or
Units of
Stock That
Have Not
Vested ($)

 

Equity
Incentive
Plan

Awards:
Number of
Unearned
Shares,
Units or
Other

Rights That
Have Not
Vested (#)

 

Equity

Incentive
Plan

Awards:

Market or
Payout
Value of
Unearned
Shares,
Units or
Other

Rights That
Have Not

Vested ($)

R.W. Tillerson

  130,000   0   0   45.21875   11/28/2010   1,002,000   79,989,660   0   0
    197,307           37.12000   11/27/2011                

D.D. Humphreys

  87,790   0   0   45.21875   11/28/2010   436,950   34,881,719   0   0
    87,307           37.12000   11/27/2011                

H.R. Cramer

  118,000   0   0   41.78125   12/07/2009   502,188   40,089,668   0   0
    170,000           45.21875   11/28/2010                
    170,000           37.12000   11/27/2011                

C.W. Matthews

  110,000   0   0   37.12000   11/27/2011   376,900   30,087,927   0   0

S.D. Pryor

  11,090   0   0   31.70000   02/25/2009   491,141   39,207,786   0   0
    168,000           41.78125   12/07/2009                
    170,000           45.21875   11/28/2010                
    180,000           37.12000   11/27/2011                

J.S. Simon

  117,608   0   0   41.78125   12/07/2009   517,450   41,308,034   0   0
    167,790           45.21875   11/28/2010                
    177,307           37.12000   11/27/2011                

M.E. Foster

  107,790   0   0   45.21875   11/28/2010   344,500   27,501,435   0   0
    107,307           37.12000   11/27/2011                

Option Awards

 

Ÿ  

The option awards shown are exercisable and outstanding as of year end. The actual gain on an option exercise, if any, will depend on the market price of ExxonMobil stock at the time of exercise. ExxonMobil has not granted stock options since 2001.

Stock Awards (Restricted Stock/Units)

 

Ÿ  

See the narrative accompanying the “Grants of Plan-Based Awards” table as well as the narrative describing Stock Awards in the “Summary Compensation Table” for more information regarding the terms of restricted stock. For Messrs. Cramer and Pryor, the table above also includes the retention awards granted by Mobil Corporation before the merger in the form of restricted stock units as described beginning on page 36.

 

42


Table of Contents
Index to Financial Statements
Ÿ  

The table below shows the dates on which the respective restricted periods for the restricted stock shown in the previous table expire, assuming the awards are not forfeited and the executive is alive when the restrictions lapse.

 

Name   Date Restrictions Lapse / Number of Shares
  11/23/2009   11/30/2010   11/28/2011   11/28/2012   11/25/2013   10 Years
or
Retirement,
Whichever
Occurs
Later
  Retirement*

R.W. Tillerson

  66,000   75,000   92,500   92,500   112,500   545,500   18,000

D.D. Humphreys

  24,200   28,000   40,000   45,400   53,200   226,150   20,000

H.R. Cramer

  38,500   38,500   38,500   38,500   38,500   255,200   54,488

C.W. Matthews

  27,500   30,000   32,200   32,200   32,200   194,800   28,000

S.D. Pryor

  38,500   38,500   38,500   38,500   38,500   260,400   38,241

J.S. Simon

  45,400   53,500   53,500   53,500   0   277,550   34,000

M.E. Foster

  27,500   33,000   40,000   45,400   0   186,600   12,000

 

  * Restrictions lapse on Career Shares on the first day of the calendar year following retirement with the exception of the restricted stock units granted to Messrs. Cramer and Pryor by Mobil Corporation under the Management Retention Plan, which are converted to a cash value at retirement and then paid in a single lump sum (36,488 units for Mr. Cramer and 18,241 units for Mr. Pryor).

Option Exercises and Stock Vested for 2008

 

 

Name   Option Awards   Stock Awards
 

Number of Shares

Acquired on Exercise

(#)

 

Value Realized

on Exercise

($)

 

Number of Shares
Acquired on Vesting

(#)

 

Value Realized

on Vesting

($)

R.W. Tillerson

  0   0   53,500   4,215,265

D.D. Humphreys

  20,000   997,575   18,350   1,445,797

H.R. Cramer

  71,964   3,838,920   31,350   2,470,067

C.W. Matthews

  110,000   5,417,538   20,350   1,603,377

S.D. Pryor

  172,838   8,704,641   33,950   2,674,921

J.S. Simon

  39,137   2,044,519   36,700   2,891,593

M.E. Foster

  0   0   20,350   1,603,377

Option Awards

 

Ÿ  

The value realized on option awards represents the difference between the option exercise price and the market price of ExxonMobil stock on date of exercise.

 

Ÿ  

The net number of shares acquired as a result of all exercises during 2008: 1,135 for Mr. Matthews; 6,858 for Mr. Pryor; and 21,062 for Mr. Simon.

Stock Awards/Restriction Lapse in 2008

 

Ÿ  

Restrictions lapsed on 50 percent of stock awards that were granted in 2003.

 

Ÿ  

The number of shares acquired on vesting is the gross number of shares to which the award relates.

 

Ÿ  

The value realized is the gross number of shares times the market price, which is the average of the high and low sale prices on the NYSE on the date that restrictions lapse.

 

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Ÿ  

The net number of shares acquired (gross number of shares less shares withheld for taxes): 33,999 for Mr. Tillerson; 11,661 for Mr. Humphreys; 18,120 for Mr. Cramer; 12,932 for Mr. Matthews; 21,575 for Mr. Pryor; 23,322 for Mr. Simon; and 12,932 for Mr. Foster.

 

Ÿ  

Refer to pages 25-27 for information on restricted stock awards.

Career Shares Distribution

 

Ÿ  

Messrs. Simon and Foster received their Career Shares (less shares withheld for taxes) in January 2009, as described beginning on page 26.

 

Ÿ  

All other shares granted to Messrs. Simon and Foster from 2002 through 2007 remain restricted, except for 50 percent of the 2002 and 2003 grants on which restrictions lapsed in 2007 and 2008 respectively, as described above.

Pension Benefits for 2008

 

 

Name   Plan Name  

Number of
Years Credited
Service

(#)

 

Present Value of
Accumulated
Benefit

($)

 

Payments During

Last Fiscal Year

($)

 

R.W. Tillerson

  ExxonMobil Pension Plan   33.58   1,330,660   0  
    ExxonMobil Supplemental Pension Plan   33.58   9,436,657   0  
    ExxonMobil Additional Payments Plan   33.58   21,569,425   0  

D.D. Humphreys

  ExxonMobil Pension Plan   32.40   1,512,694   0  
    ExxonMobil Supplemental Pension Plan   32.40   4,407,828   0  
    ExxonMobil Additional Payments Plan   32.40   14,505,657   0  

H.R. Cramer

  ExxonMobil Pension Plan   35.58   1,609,138   0  
    ExxonMobil Supplemental Pension Plan   35.58   4,401,242   0  
    ExxonMobil Additional Payments Plan   35.58   12,423,572   0  

C.W. Matthews

  ExxonMobil Pension Plan   37.96   1,643,942   0  
    ExxonMobil Supplemental Pension Plan   37.96   4,530,908   0  
    ExxonMobil Additional Payments Plan   37.96   11,062,187   0  

S.D. Pryor

  ExxonMobil Pension Plan   37.17   1,700,523   0  
    ExxonMobil Supplemental Pension Plan   37.17   5,076,474   0  
    ExxonMobil Additional Payments Plan   37.17   13,241,260   0  

J.S. Simon

  ExxonMobil Pension Plan   41.43   0   1,838,255 *
    ExxonMobil Supplemental Pension Plan   41.43   0   5,968,286  
    ExxonMobil Additional Payments Plan   41.43   0   17,361,681  

M.E. Foster

  ExxonMobil Pension Plan   42.83   0   1,849,080  
    ExxonMobil Supplemental Pension Plan   42.83   0   4,467,778  
    ExxonMobil Additional Payments Plan   42.83   0   13,680,687  

 

* Payment was deferred until third quarter 2008 and calculated based on 4.25 percent interest rate, rather than 4.5 percent rate in effect on retirement date.

Pension Plan

 

Ÿ  

The tax-qualified pension plan provides a benefit calculated as an annual annuity beginning at age 65 (the Plan’s normal retirement age) equal to 1.6 percent of the participant’s final average salary multiplied by years of credited service, minus an offset for Social Security benefits.

 

   

Final average salary is the average of the highest 36 consecutive months in the 10 years of service prior to retirement.

 

   

Final average salary included and benefits paid are subject to the limits on compensation ($230,000 for 2008) and benefits prescribed under the Internal Revenue Code.

 

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Index to Financial Statements
Ÿ  

The benefit is available as a lump sum or in various annuity forms.

 

Ÿ  

The defined benefit pension arrangements (qualified and nonqualified) help to attract and retain employees at all levels of the Corporation.

 

Ÿ  

The defined benefit pension plan provides a strong incentive for employees to stay until retirement age.

 

Ÿ  

The plan uses final average pay applied to all years of service, and thus, the increase in pension values is greatest late in career, when compensation tends to be highest. This retention feature is strong for high performers, whose compensation increases as their job responsibilities continue to expand throughout their career, making their level of retirement income performance-based.

Supplemental Pension Plan

 

Ÿ  

The nonqualified plan provides a benefit calculated as an annuity on salary above the Internal Revenue Code limit.

 

Ÿ  

It is calculated as an annual annuity beginning at age 65 equal to 1.6 percent of the participant’s final average salary over the Internal Revenue Code limit multiplied by years of credited service.

 

Ÿ  

To help meet the retention and performance objectives described for U.S. salaried employees, the Supplemental Pension Plan provides pension benefits to the extent annual pay exceeds the amount that can be considered in determining qualified pension benefits ($230,000 for 2008, adjusted each year based on inflation).

 

Ÿ  

Without the Supplemental Pension Plan, the retention power of the overall pension plan would be greatly reduced for employees earning more than that amount, since the increase in their pension values in mid- to late-career would be based on relatively flat final average pay.

Additional Payments Plan

 

Ÿ  

The nonqualified plan provides a benefit calculated as an annual annuity beginning at age 65 equal to 1.6 percent of the participant’s average annual bonus multiplied by years of credited service.

 

   

The plan uses the average of the annual bonus for the three highest grants of the last five prior to retirement (including the portion of the annual bonus that is paid at time of grant and the portion that is paid on a delayed basis as described on page 27).

 

Ÿ  

Benefits under the Additional Payments Plan are forfeited if an employee resigns prior to completion of 15 years of service and attainment of age 55. All of the Named Executive Officers have satisfied these conditions.

 

Ÿ  

The objective of the Additional Payments Plan is to support retention and performance objectives in light of the Compensation Committee’s practice of putting higher percentages of annual cash compensation at risk at higher executive levels.

 

Ÿ  

The Compensation Committee believes that even though a large percentage of annual cash compensation is discretionary and based on Corporate business performance, it should not be excluded from the pension calculation. Inclusion of discretionary bonuses in the pension formula strengthens the performance basis of such bonuses.

 

Ÿ  

By limiting bonuses to those granted in the five years prior to retirement, there is a strong motivation for executives to continue to perform at a high level.

 

Ÿ  

The Additional Payments Plan is designed to be a powerful retention tool, since benefits are forfeited if the employee resigns prior to completion of 15 years of service and attainment of age 55. The plan applies on the same terms to all U.S. salaried employees who receive a bonus.

 

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Index to Financial Statements

Present Value Pension Calculations

 

Ÿ  

The present value of accumulated benefits shown in the “Pension Benefits” table is determined by converting the annuity values earned as of year end to lump sum values payable at age 60 (or at the employee’s actual age, if older) using the mortality tables and interest rate (4.25 percent) that would apply to a participant who worked through the end of 2008, and retired in the first quarter of 2009.

 

Ÿ  

The actual lump sum conversion factors that will apply when each executive retires could be different. For executives who were not yet 60, the present value as of year-end 2008 of each executive’s age 60 lump sum is determined using a discount rate of 6.25 percent, the rate used for valuing pension obligations for purposes of the Corporation’s financial statements for 2008.

Other Plan Terms

 

Ÿ  

All three pension plans require attainment of age 55 and completion of 15 years of service to be eligible for early retirement. All Named Executive Officers have satisfied this requirement.

 

Ÿ  

The early retirement benefit consists of an annuity that is undiscounted for retirement ages of 60 years or over, with a discount of 5 percent for each year under age 60.

 

Ÿ  

In addition the Social Security offset is waived for annuity payments scheduled to be paid prior to age 62.

 

Ÿ  

Because early retirement benefits are subject to a smaller discount than a full actuarial equivalent discount, they can be more valuable than the present value of the executives’ earned normal retirement age benefits.

 

Ÿ  

Messrs. Tillerson, Cramer, and Pryor were eligible for early retirement prior to age 60 under the plans as of year-end 2008.

 

Ÿ  

The table below shows the lump sum early retirement benefits under the three plans for the Named Executive Officers who are under age 60 as of year-end 2008. The lump sum early retirement benefits for Messrs. Humphreys, Matthews, Simon, and Foster as of year-end 2008 are the amounts shown in the “Pension Benefits” table. Messrs. Simon and Foster retired at normal retirement age.

 

Name   Plan Name   Lump Sum
Early Retirement
Benefit ($)

R.W. Tillerson

  ExxonMobil Pension Plan   1,467,077
    ExxonMobil Supplemental Pension Plan   10,252,077
    ExxonMobil Additional Payments Plan   23,433,236

H.R. Cramer

  ExxonMobil Pension Plan   1,679,705
    ExxonMobil Supplemental Pension Plan   4,567,473
    ExxonMobil Additional Payments Plan   12,892,801

S.D. Pryor

  ExxonMobil Pension Plan   1,755,786
    ExxonMobil Supplemental Pension Plan   5,219,426
    ExxonMobil Additional Payments Plan   13,614,130

Form of Nonqualified Pension Payments

 

Ÿ  

The benefits under the ExxonMobil Supplemental Pension Plan and the ExxonMobil Additional Payments Plan are payable only in the form of a single lump sum six months following retirement.

 

Ÿ  

The payment is equal to the pension balance plus interest for the six-month waiting period at the Citibank prime lending rate or a lump sum amount recalculated using the discount rate in effect at the time of payment, whichever is greater.

 

Ÿ  

The retirement distributions to Messrs. Simon and Foster included interest as set forth below. To the very limited extent that interest included amounts in excess of a market rate, those amounts are included in the “Summary Compensation Table.”

 

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Name   Plan Name   Interest ($)

J.S. Simon

  ExxonMobil Supplemental Pension Plan   146,055
    ExxonMobil Additional Payments Plan   424,359

M.E. Foster

  ExxonMobil Supplemental Pension Plan   115,064
    ExxonMobil Additional Payments Plan   352,175

Service Credit Multipliers

 

Ÿ  

Under the Company’s U.S. retirement plans, only actual service with Exxon Mobil Corporation or an affiliated company is recognized under current plan rules.

 

Ÿ  

Historically the Company provided a “service credit multiplier” for foreign service in specified geographic areas, which has since been discontinued under U.S. and other country pension plans.

 

Ÿ  

Mr. Simon has 0.5 additional years of service credit reflected in the above table resulting from discontinued service credit multipliers.

 

Ÿ  

All service of the Named Executive Officers is under the U.S. pension plan.

Nonqualified Deferred Compensation for 2008

 

 

Name  

Executive
Contributions in
Last FY

($)

 

Registrant
Contributions in
Last FY

($)

 

Aggregate

Earnings in

Last FY

($)

 

Aggregate
Withdrawals/
Distributions

($)

 

Aggregate

Balance at

Last FYE

($)

R.W. Tillerson

  0   114,800   27,458   0   616,366

D.D. Humphreys

  0   47,600   17,503   0   380,697

H.R. Cramer

  0   42,933   60,202   0   1,229,300

C.W. Matthews

  0   44,888   20,969   0   447,935

S.D. Pryor

  0   47,250   49,113   0   1,010,650

J.S. Simon

  0   14,233   25,799   580,859   0

M.E. Foster

  0   0   18,163   491,482   0

 

Ÿ  

The table above shows the value of the Company credits under ExxonMobil’s nonqualified supplemental savings plan. The Company credits for 2008 are also included in the “Summary Compensation Table” under the column labeled “All Other Compensation.”

 

Ÿ  

The amounts in the “Summary Compensation Table” include both Company contributions to the tax-qualified plan and Company credits to the nonqualified plan, whereas the registrant contributions in the table above represent only the Company credits to the nonqualified plan.

 

Ÿ  

The amount of Company contributions to the tax-qualified savings plan was limited to the Internal Revenue Service contribution and salary maximums. For this reason, $16,100 was the maximum Company match in 2008 to the qualified savings plan.

 

Ÿ  

The aggregate balance at the last fiscal year end shown above includes amounts reported as Company contributions in the “Summary Compensation Table” of the current proxy statement and in prior-year proxy statements as follows: $453,250 for Mr. Tillerson; $116,750 for Mr. Humphreys; $111,083 for Mr. Cramer; $44,888 for Mr. Matthews; and $47,250 for Mr. Pryor. The aggregate balances for Messrs. Simon and Foster were distributed six months following their retirements.

 

Ÿ  

The nonqualified savings plan provides employees with the 7-percent Company-matching contribution to which they would otherwise be entitled under the qualified plan but for limitations on covered compensation and total contributions under the Internal Revenue Code.

 

   

All eligible employees participate in the nonqualified plan on the same basis.

 

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Index to Financial Statements
   

Effective January 1, 2008, the Company match was increased from 6 to 7 percent and the rate at which the nonqualified savings plan account bears interest during the term of a participant’s employment was changed from the Citibank prime lending rate to 120 percent of the long-term Applicable Federal Rate.

 

   

Distribution of the nonqualified plan is in a single lump sum six months from date of retirement. During this six-month period, the account bears interest at the Citibank prime lending rate. To the extent that this results in payment of amounts in excess of a market rate of interest, those amounts are included in the “Summary Compensation Table.”

 

Ÿ  

The tax-qualified and nonqualified savings plans are designed to help attract and retain employees. The matching design is intended to encourage employees to contribute their own funds to the plan to receive the tax benefits available under the Internal Revenue Code. The supplemental savings plan serves similar purposes for salary or contributions in excess of the Internal Revenue Code limits referenced above.

Administrative Services for Retired Employee Directors

 

Ÿ  

The Company provides certain administrative support to retired employee directors.

 

Ÿ  

The support provided generally involves, but is not limited to, assistance with correspondence and travel arrangements relating to activities the retired directors are involved with that continue from their employment, such as board positions with nonprofit organizations. Given the nature of the support provided, a retired director’s spouse may also benefit from the support provided.

 

Ÿ  

The Company also allows retired employee directors to use otherwise vacant office space at the Company’s headquarters.

 

Ÿ  

It is not possible to estimate the future cost that may be incurred by the Company for providing these services to Mr. Tillerson, who is currently the only employee director.

 

   

The aggregate incremental cost of providing these services for all currently covered persons is approximately $190,000 per year.

 

   

This amount represents the compensation and benefit cost for support personnel allocated based on their estimated time dedicated to providing this service, as well as other miscellaneous office support costs.

Health Care Benefits

 

Ÿ  

ExxonMobil does not provide any special executive health care benefits.

 

Ÿ  

Executives and their families are eligible to participate in the Company’s health care programs, including medical, dental, prescription drug, and vision care, on the same basis as all other U.S. salaried employees.

 

Ÿ  

The terms and conditions of the programs for both current employees and retirees do not discriminate in scope, terms, or operation in favor of executive officers.

Unused Vacation

 

Ÿ  

All U.S. salaried employees are entitled to payment of salary for any accumulated but unused vacation days at retirement or other termination of employment.

 

Ÿ  

Payment for unused vacation is included in final payments of earned salary.

Termination and Change in Control

 

Ÿ  

ExxonMobil executive officers are not entitled to any additional payments or benefits relating to termination of employment other than the retirement benefits previously described in the preceding compensation tables and narrative.

 

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Index to Financial Statements
Ÿ  

Executives are “at-will” employees of the Company. They do not have employment contracts, a severance program, or any benefits triggered by a change in control.

 

Ÿ  

As discussed in greater detail above, unexercised stock options, unvested restricted stock, and any unpaid portion of an annual bonus are subject to forfeiture at the discretion of the Compensation Committee if an executive:

 

   

Engages in detrimental activity; or,

 

   

Terminates employment prior to standard retirement age (currently age 65 for U.S. executives), whether such termination is voluntary or involuntary.

 

Ÿ  

The Board also adopted a recoupment policy in the event of a material negative restatement of the Corporation’s reported financial or operating results as described on page 25.

Payments in the Event of Death

 

Ÿ  

The only event that results in acceleration of the normal payment or vesting schedule of any benefit is death. In that event, the vesting period of outstanding restricted stock awards would be accelerated. Also in the event of death, the executive’s estate or beneficiaries would be entitled to payment of the life insurance or death benefit as described beginning on page 39. At year-end 2008, the amount of that life insurance benefit for each Named Executive Officer would be as follows:

 

 

Name    Life Insurance Benefit ($)

R.W. Tillerson

   7,480,000

D.D. Humphreys

   3,640,000

H.R. Cramer

   3,360,000

C.W. Matthews

   3,420,000

S.D. Pryor

   3,620,000

J.S. Simon

   3,640,000

M.E. Foster

   3,010,000

AUDIT COMMITTEE REPORT

The primary function of our 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. Our Committee acts under a charter, which can be found on the ExxonMobil Web site at exxonmobil.com/governance. We review the adequacy of the charter at least annually. All of our members are independent, and all are audit committee financial experts under SEC rules. We held 11 meetings in 2008 at which, as discussed in more detail below, we had extensive reports and discussions with the independent auditors, internal auditors, and other members of management.

In performing our oversight function, we reviewed and discussed the consolidated financial statements with management and PricewaterhouseCoopers LLP (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. We discussed significant accounting policies applied by the Corporation in its financial statements, as well as alternative treatments. We discussed with PwC matters covered by the Statement on Auditing Standards No. 61 (Communication with Audit Committees). In addition we reviewed and discussed management’s report on internal control over financial reporting and the related audit performed by PwC, which confirmed the effectiveness of the Corporation’s internal control over financial reporting.

We also discussed with PwC its independence from the Corporation and management, including the communications PwC is required to provide us under applicable Public Company Accounting Oversight

 

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Index to Financial Statements

Board (PCAOB) rules. We considered the non-audit services provided by PwC to the Corporation, and concluded that the auditors’ independence has been maintained.

We discussed with the Corporation’s internal auditors and PwC the overall scope and plans for their respective audits. We 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 discussed with the Corporation’s management the comprehensive, long-standing risk management processes 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 our role described below, we recommended to the Board, and the Board has approved, the inclusion of the audited financial statements in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2008, for filing with the SEC.

We have also appointed PwC to audit the Corporation’s financial statements for 2009, subject to shareholder ratification of that appointment.

In carrying out our responsibilities, we look 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 controls 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. Our 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.

 

James R. Houghton, Chair    Larry R. Faulkner
Michael J. Boskin    Steven S Reinemund

ITEM 2 – RATIFICATION OF INDEPENDENT AUDITORS

The Audit Committee has appointed PricewaterhouseCoopers LLP (PwC) to audit ExxonMobil’s financial statements for 2009. 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, 2008, were $34.9 million, a decrease of $17.7 million from 2007. The Audit Committee reviewed and pre-approved all services in accordance with the service pre-approval policies and procedures, which can be found on the ExxonMobil Web site at exxonmobil.com/governance. The Audit Committee did not use the “de minimis” exception to pre-approval that is available under SEC rules. The following table summarizes the fees, which are described in more detail below.

 

         2008            2007    
     (millions of dollars)

Audit Fees

   24.8    25.5

Audit-Related Fees

   6.1    5.5

Tax Fees

   4.0    21.6

All Other Fees

     
         

Total

   34.9    52.6

 

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Index to Financial Statements

Audit Fees

The aggregate fees for PwC professional services rendered for the annual audit of ExxonMobil’s financial statements for the year ended December 31, 2008, and for the reviews of the financial statements included in our quarterly reports on Form 10-Q for that year were $24.8 million (versus $25.5 million for 2007).

Audit-Related Fees

The aggregate fees for PwC Audit-Related services rendered to ExxonMobil for the year ended December 31, 2008, were $6.1 million (versus $5.5 million in 2007). These services were mainly related to asset dispositions, benefit plan and joint venture audits, and attestation procedures related to cost certifications.

Tax Fees

The aggregate fees for PwC Tax services rendered to ExxonMobil for the year ended December 31, 2008, were $4.0 million (versus $21.6 million for 2007). These services are described below.

 

Ÿ  

PwC assisted in preparing tax returns for individual ExxonMobil expatriate employees. These fees were $2.6 million for 2008 (versus $20.2 million for 2007). The transition of tax return preparation assistance to another service provider is under way.

 

Ÿ  

PwC also assisted various ExxonMobil affiliates with the preparation of local tax filings and related tax services. These fees were $1.4 million for 2008 (also $1.4 million in 2007).

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, 2008, were zero (also zero in 2007).

PwC has been ExxonMobil’s independent auditing firm for many years, and we believe they are well-qualified for the job. A PwC representative will be at the annual meeting to answer appropriate questions and to make a statement if he desires.

The Audit Committee recommends you vote FOR this proposal.

SHAREHOLDER PROPOSALS

We expect Items 3 through 13 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. On oral or written request to the Secretary at the address listed under “Contact Information” on page 3, we will provide information about the sponsors’ shareholdings, as well as the names, addresses, and shareholdings of any co-sponsors.

The Board recommends you vote AGAINST Items 3 through 13 for the reasons we give after each one.

ITEM 3 – CUMULATIVE VOTING

This proposal was submitted by Mr. Emil Rossi, P.O. Box 249, Boonville, CA 95415.

“3 – Cumulative Voting

RESOLVED: Cumulative Voting. Shareholders recommend that our Board take the steps necessary to adopt cumulative voting. Cumulative voting means that each shareholder may cast as many votes as

 

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Index to Financial Statements

equal to number of shares held, multiplied by the number of directors to be elected. A shareholder may cast all such cumulated votes for a single candidate or split votes between multiple candidates. Under cumulative voting shareholders can withhold votes from certain poor-performing nominees in order to cast multiple votes for others.

Statement of Emil Rossi

Cumulative voting won 54%-support at Aetna and greater than 51%-support at Alaska Air in 2005 and in 2008. It also received greater than 53%-support at General Motors (GM) in 2006 and in 2008. The Council of Institutional Investors www.cii.org and CalPERS recommended adoption of this proposal topic.

Cumulative voting allows a significant group of shareholders to elect a director of its choice – safeguarding minority shareholder interests and bringing independent perspectives to Board decisions. Cumulative voting also encourages management to maximize shareholder value by making it easier for a would-be acquirer to gain board representation. It is not necessarily intended that a would-be acquirer materialize, however that very possibility represents a powerful incentive for improved management of our company.

The merits of this Cumulative Voting proposal should also be considered in the context of the need for improvements in our company’s corporate governance and in individual director performance. For instance in 2008 the following governance and performance issues were identified:

 

Ÿ  

The Corporate Library www.thecorporatelibrary.com, an independent research firm rated our company ‘High Concern’ in executive pay.

 

Ÿ  

Only 59% of CEO pay was incentive based.

 

Ÿ  

Our key directors also served on boards rated ‘D’ by the Corporate Library:

 

James Houghton   

Corning (GLW)

James Houghton had 39-years tenure at Corning.

Edward Whitacre   

Anheuser-Busch (BUD)

Edward Whitacre had 20-years tenure at Anheuser-Busch.

Michael Boskin   

Oracle (ORCL)

Michael Boskin had 14-years tenure at IBM.

William George   

Goldman Sachs (GS)

William George was on 3 key committees at Goldman Sachs.

Larry Faulkner   

Temple-Inland (TIN)

Larry Faulkner was on 2 key committees at Temple-Inland.

Samuel Palmisano   

International Business Machines (IBM)

 

Ÿ  

James Houghton (on our audit committee) was designated as an ‘Accelerated Vesting’ director by The Corporate Library due to speeding up stock option vesting to avoid recognizing the related cost.

 

Ÿ  

Marilyn Carlson Nelson had long tenure of 17-year tenure (independence concern) and was one of only 3-members on our nomination committee.

 

Ÿ  

Our directors made sure that we could not vote on this established topic of cumulative voting at our 2008 annual meeting. Reference: Exxon Mobil Corporation (March 24, 2008) no action letter available through SECnet http://secnet.cch.com.

 

Ÿ  

We had no shareholder right to:

Call a special meeting.

Vote on executive pay.

Cumulative voting.

An independent board chairman.

 

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The above concerns show there is need for improvement. Please encourage our board to respond positively to this proposal:

Cumulative Voting

Yes on 3”

The Board recommends you vote AGAINST this proposal for the following reasons:

The Board believes the Corporation’s current and long-standing method of voting for directors has resulted in a balanced and highly effective Board of Directors who have represented the best interests of all shareholders, as demonstrated by ExxonMobil’s superior long-term performance. Accordingly the Board does not support this proposal.

ExxonMobil’s director election standards, like those of most major corporations, provide that the holder of each share of common stock is entitled to cast one vote FOR – or WITHHOLD that vote from – each director nominee.

The Corporation’s Corporate Governance Guidelines require a director to tender his or her resignation if the director does not receive a majority of votes cast in favor of election. In the absence of a compelling reason, the resignation will be accepted. The Board believes this director resignation guideline provides shareholders a clear voice in director elections without disturbing the equitable “one share - one vote” approach.

Cumulative voting provides the opportunity for special interest shareholder groups to gain a disproportionate voice in shareholder voting, including in the election of directors who represent special interest groups rather than the interests of all shareholders. This disproportionate voice is especially worrisome when coupled with a majority vote standard.

ITEM 4 – SPECIAL SHAREHOLDER MEETINGS

This proposal was submitted by Mr. Kenneth Steiner, 14 Stoner Avenue, 2M, Great Neck, NY 11021.

“4 – Special Shareowner Meetings

RESOLVED, Shareowners ask our board to take the steps necessary to amend our bylaws and each appropriate governing document to give holders of 10% of our outstanding common stock (or the lowest percentage allowed by law above 10%) the power to call special shareowner meetings. This includes that such bylaw and/or charter text will not have any exception or exclusion conditions (to the fullest extent permitted by state law) that apply only to shareowners but not to management and/or the board.

Statement of Kenneth Steiner

Special meetings allow shareowners to vote on important matters, such as electing new directors, that can arise between annual meetings. If shareowners cannot call special meetings investor returns may suffer. Shareowners should have the ability to call a special meeting when a matter merits prompt consideration.

This proposal topic won impressive support at the following companies based on 2008 yes and no votes:

 

Occidental Petroleum (OXY)    66%    Emil Rossi (Sponsor)
FirstEnergy Corp. (FE)    67%    Chris Rossi
Marathon Oil (MRO)    69%    Nick Rossi

Shareowners should have the ability to call a special meeting when a matter is sufficiently important to merit prompt consideration. Fidelity and Vanguard have supported a shareholder right to call a special meeting.

The proxy voting guidelines of many public employee pension funds also favor this right. Governance ratings services, such as The Corporate Library and Governance Metrics International, have taken special meeting rights into consideration when assigning company ratings.

 

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Please encourage our board to respond positively to this proposal:

Special Shareowner Meetings –

Yes on 4”

The Board recommends you vote AGAINST this proposal for the following reasons:

ExxonMobil’s Corporate Governance Guidelines posted on our Web site indicate that a special meeting of shareholders may be called by a holder of not less than 10 percent of outstanding shares in accordance with New Jersey law upon a showing of good cause. The Board believes this proposal is therefore unnecessary and redundant.

By requiring a showing of good cause to call a special meeting, the existing New Jersey statute better balances the interests of all shareholders by allowing shareholders of 10 percent or more of outstanding common stock to call a meeting for a legitimate purpose while protecting against the potential for a minority shareholder group to abuse this right.

ITEM 5 – INCORPORATE IN NORTH DAKOTA

This proposal was submitted by Mr. Chris Rossi, P.O. Box 249, Boonville, CA 95415.

“5 – Reincorporate in a Shareowner-Friendly State

Resolved: That shareowners hereby request that our board of directors take the necessary steps to reincorporate the Company in North Dakota with articles of incorporation that provide that the Company is subject to the North Dakota Publicly Traded Corporations Act.

Statement of Chris Rossi

This proposal requests that the board initiate the process to reincorporate the Company in North Dakota under the new North Dakota Publicly Traded Corporations Act. If our company were subject to the North Dakota act there would be additional benefits:

 

Ÿ  

There would be a right of proxy access for shareowners who owned 5% of our Company’s shares for at least two years.

 

Ÿ  

Shareowners would be reimbursed for their expenses in proxy contests to the extent they are successful.

 

Ÿ  

The board of directors could not be classified.

 

Ÿ  

The ability of the board to adopt a poison pill would be limited.

 

Ÿ  

Shareowners would vote each year on executive pay practices.

These provisions, together with others in the North Dakota act, would give us as shareowners more rights than are available under any other state corporation law. By reincorporating in North Dakota, our company would instantly have the best governance system available.

The SEC recently refused to change its rules to give shareowners a right of access to management’s proxy statement. And the Delaware courts recently invalidated a bylaw requiring reimbursement of proxy expenses. Each of those rights is part of the North Dakota act. As a result, reincorporation in North Dakota is now the best alternative for achieving the rights of proxy access and reimbursement of proxy expenses. And at the same time those rights would become available to us as shareowners in a North Dakota corporation, our Company would also shift to cumulative voting, ‘say on pay,’ and other best practices in governance.

Our Company needs to improve its governance:

 

Ÿ  

The Corporate Library www.thecorporatelibrary.com, an independent research firm rated our company ‘High Concern’ in executive pay and only 59% of CEO pay was incentive-based.

 

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Ÿ  

Our directors also served on boards rated ‘D’ by the Corporate Library:

 

James Houghton     

Corning (GLW)

Edward Whitacre     

Anheuser-Busch (BUD)

Michael Boskin     

Oracle (ORCL)

William George     

Goldman Sachs (GS)

Larry Faulkner     

Temple-Inland (TIN)

Samuel Palmisano     

International Business Machines (IBM)

 

Ÿ  

James Houghton (on our audit committee) was designated as an ‘Accelerated Vesting’ director by The Corporate Library for speeding up stock option vesting to avoid recognizing the related cost.

 

Ÿ  

Marilyn Nelson had long tenure of 17-years (independence concern) and was one of only 3-members on our nomination committee.

 

Ÿ  

We had no shareholder right to:

Call a special meeting.

Vote on executive pay.

Cumulative voting.

An independent Board Chairman.

Reincorporation in North Dakota provides a way to switch to a vastly improved system of governance in a single step. And reincorporation in North Dakota does not require a major capital investment or layoffs to improve financial performance.

I urge your support for Reincorporating in a Shareowner-Friendly State.”

The Board recommends you vote AGAINST this proposal for the following reasons:

Exxon Mobil Corporation has been incorporated in New Jersey for over 125 years. New Jersey corporate law is well-developed and has served the Company and its shareholders well over this period. The new North Dakota statute referenced by the proposal is untested, and, we believe, would subject the Company and our shareholders to substantial legal uncertainty. Therefore the Board does not support this proposal.

Reincorporation would also require a proxy solicitation for shareholders to approve a merger of the Company into a North Dakota corporation. This would require expenditure of substantial Company time and money without commensurate benefit. New Jersey law already supports a wide range of sound governance practices such as those already implemented by ExxonMobil. Moreover each of the items mentioned by the proponent as a reason to reincorporate can already be effected under New Jersey law if the Board determines such measures to be in the best interests of shareholders.

ITEM 6 – BOARD CHAIRMAN AND CEO

This proposal was submitted by a client of Ram Trust Services, 45 Exchange Street, Portland, ME 04101, as lead proponent of a filing group.

“RESOLVED that Sections 4, 5 and 6 of Article IV of the by-laws be amended to read as follows:

 

4. The chairman of the board shall preside at all meetings of shareholders and directors. The chairman of the board shall not otherwise be an officer or employee of the corporation and, subject to the board of directors, shall speak for, and direct the administration of the activities of, the board of directors.

 

5. The president shall be the chief executive officer of the corporation and, subject to the board of directors, shall have general care and supervision of the business and affairs of the corporation.

 

6. In the event of death, absence, or disability of the president, an executive or senior vice president may be designated by the board to exercise the powers and perform the duties of the president.

 

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SUPPORTING STATEMENT

Exxon is managed by its Board of Directors. Much power is delegated to the CEO, but it’s the Board that must take the initiative, and function independently, in some of the most important matters affecting the company. In our view, it is difficult for a board of 11 individuals to do so without some one individual charged with the responsibility of making it all work.

Exxon has a ‘lead director,’ Samuel Palmisano, the Chairman and chief executive of IBM. We hold him in high regard. However, we believe it unrealistic to think that a man with as demanding a job as running IBM could at the same time have the time to lead a board in managing Exxon and make it a top priority.

We therefore favor the concept of an independent nonexecutive chairman. The concept is neither new nor novel. Exxon’s principal worldwide competitors – British Petroleum, Royal Dutch Shell, Petrobras – all have independent nonexecutive chairmen.

The nonexecutive chairman does not merely preside at directors’ meetings. He directs the administration of all the Board’s activities. He is not an executive officer; but, by virtue of his time commitment and independent access, he is in a position to inform himself as to what in fact is going on and bring to the Board’s attention matters on which it should focus. He speaks for the Board and is available to those legitimately wishing to have contact with the Board.

It is sometimes argued that a company must speak with one voice. But the CEO/nonexecutive chairman model has been around for a long time and, in our view, has worked rather well. We believe shareholders wish to hear not only the voice of the CEO but the voice of the Board as well.

Our proposal is not intended as any implied criticism. However, even big companies can experience great difficulties, as recent events demonstrate, and questions are then raised whether the directors should have exercised greater oversight. Our proposal is intended to provide a framework that, in our view, will enable the Board to be more effective and proactive.

For our full statement, please see our website at www.exxonaction.com.”

The Board recommends you vote AGAINST this proposal for the following reasons:

The Board believes that the decision as to who should serve as Chairman and CEO, and whether the offices should be combined or separate, is properly the responsibility of the Board. The members of the Board possess considerable experience and unique knowledge of the challenges and opportunities the Company faces, and are in the best position to evaluate the needs of the Company and how best to organize the capabilities of the directors and senior managers to meet those needs. The Board believes that the most effective leadership structure for Exxon Mobil Corporation at the present time is for Mr. Tillerson to serve as both Chairman and CEO.

The Board believes there is NO single best organizational model that is the most effective in all circumstances, and the Board retains the authority to separate the positions of Chairman and CEO if it deems appropriate in the future. This proposal, however, which is structured this year as a binding, prescriptive By-Law amendment, would cause the Board to lose its flexibility to change the structure of the Chairman and CEO positions, as and when appropriate, to best serve the interests of shareholders. We also believe the proposal would create practical difficulties. Accordingly the Board does not support this proposal.

To demonstrate its continuing commitment to strong corporate governance and Board independence, the Board took steps in 2008 to enhance the role of the Presiding Director. With these changes, the independent members of the Board will annually select one of their members to serve as Presiding Director. It is normally expected that the same director will serve as Presiding Director for a minimum of two years. The Presiding Director will act as a liaison with the Chairman, in consultation with the other directors, provided that each director will also be afforded direct and complete access to the Chairman at any time as such director deems necessary or appropriate.

 

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Specific duties of the Presiding Director include chairing executive sessions of the non-employee directors and providing feedback from such sessions to the Chairman, and chairing meetings of the Board in the absence of the Chairman and President. In addition the Presiding Director reviews in advance, in consultation with the Chairman, the schedule and agenda for all Board meetings as well as materials distributed to the directors in connection therewith.

Executive sessions of the non-employee directors are scheduled to follow each meeting of the full Board. If the Board includes non-employee directors who are not independent, at least one executive session per year will include only the independent directors. Additional executive sessions may be convened by the Presiding Director at his or her discretion and will be convened if requested by any other director. Any non-employee director may raise issues for discussion at an executive session.

ITEM 7 – SHAREHOLDER ADVISORY VOTE ON EXECUTIVE COMPENSATION

This proposal was submitted by The Needmor Fund, 3306 NW 71st Street, Seattle, WA 98117, as lead proponent of a filing group.

“RESOLVED, that shareholders of ExxonMobil request the board of directors to adopt a policy that provides shareholders the opportunity at each annual shareholder meeting to vote on an advisory resolution, proposed by management, to ratify the compensation of the named executive officers (‘NEOs’) set forth in the proxy statement’s Summary Compensation Table (the ‘SCT’) and the accompanying narrative disclosure of material factors provided to understand the SCT (but not the Compensation Discussion and Analysis). The proposal submitted to shareholders should make clear that the vote is non-binding and would not affect any compensation paid or awarded to any NEO.

SUPPORTING STATEMENT

Investors are increasingly concerned about mushrooming executive compensation especially when it is insufficiently linked to performance. In 2008, shareholders filed close to 100 ‘Say on Pay’ resolutions. Votes on these resolutions have averaged 43% in favor, including 40.8% at ExxonMobil, with ten votes over 50%, demonstrating strong shareholder support for this reform.

An Advisory Vote establishes an annual referendum process for shareholders about senior executive compensation. We believe the results of this vote would provide the board and management useful information about shareholder views on the company’s senior executive compensation.

In its 2008 proxy Aflac submitted an Advisory Vote resulting in a 93% vote in favor, indicating strong investor support for good disclosure and a reasonable compensation package. Daniel Amos, Chairman and CEO said, ‘An advisory vote on our compensation report is a helpful avenue for our shareholders to provide feedback on our pay-for-performance compensation philosophy and pay package.’

To date eight other companies have also agreed to an Advisory Vote, including Verizon, MBIA, H&R Block, Blockbuster, and Tech Data. TIAA-CREF, the country’s largest pension fund, has successfully utilized the Advisory Vote twice.

Influential proxy voting service RiskMetrics Group, recommends votes in favor, noting: ‘RiskMetrics encourages companies to allow shareholders to express their opinions of executive compensation practices by establishing an annual referendum process. An advisory vote on executive compensation is another step forward in enhancing board accountability.’

The Council of Institutional Investors endorsed advisory votes and a bill to allow annual advisory votes passed the House of Representatives by a 2-to-1 margin. As presidential candidates, Senators Obama and McCain supported the Advisory Vote.

We believe that existing U.S. Securities and Exchange Commission rules and stock exchange listing standards do not provide shareholders with sufficient mechanisms for providing input to boards on senior executive compensation. In contrast, in the United Kingdom, public companies allow shareholders to cast

 

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a vote on the ‘directors’ remuneration report,’ which discloses executive compensation. Such a vote isn’t binding, but gives shareholders a clear voice that could help shape senior executive compensation.

We believe that a company that has a clearly explained compensation philosophy and metrics, reasonably links pay to performance, and communicates effectively to investors would find a management sponsored Advisory Vote a helpful tool.

We urge our board to allow shareholders to express their opinion about senior executive compensation through an Advisory Vote.”

The Board recommends you vote AGAINST this proposal for the following reasons:

The Board agrees that input from shareholders should play an important role in the design of executive compensation programs. Accordingly the Board has already put in place a thorough, thoughtful, and transparent approach to executive compensation – including a number of effective ways for shareholders to express their views on these matters. The Board does not believe the advisory vote suggested by the proponent would be helpful or effective for this purpose.

As described in detail in the “Compensation Discussion and Analysis” and accompanying tables in this proxy statement, ExxonMobil’s executive compensation program consists of a number of elements carefully designed to support ExxonMobil’s specific circumstances and business goals. A simple up or down vote on this program would not convey useful information to the Board as to the specific element of the program with which a shareholder may have a concern or the nature of that concern.

We also believe widespread adoption of the advisory vote on compensation would have the negative effect of encouraging companies to take a “one size fits all” approach to compensation under which programs would be designed with reference to standardized voting guidelines of proxy advisory firms, rather than to the particular facts and circumstances of the business.

From a practical standpoint, shareholders are not able to review the full range of information concerning a company – including information on business strategy and outlook, competitive positioning, corporate culture, and employee performance – taken into account by the Board in making executive compensation decisions. Substituting the judgment of shareholders for the judgment of the Board on these matters would result in a less-informed decision-making process, and would circumvent the role of the Board in representing shareholders – a role that has been fundamental to the long-term success and competitive advantage of ExxonMobil.

The Board and management recognize the importance of improving the public’s understanding of ExxonMobil’s executive compensation program, addressing disclosure issues, and improving shareholder involvement. Public awareness and understanding are essential; therefore, changes continue to be made to the “Compensation Discussion and Analysis” section in this proxy statement to improve knowledge of how executive compensation links to and supports the business strategies and long-term success of the Company. The “Compensation Discussion and Analysis” includes a conceptual model and summary description to illustrate how business and people strategies are fully integrated to achieve superior results and create shareholder value.

We believe the Company’s approach to executive compensation and the existing communication channels provide shareholders the ability to share input directly with the Board on specific concerns relating to compensation. Shareholders who wish to express their views to the Board have several effective ways to do so – all of which are considerably clearer, and, therefore, more effective than an up or down advisory vote. Shareholders can:

 

Ÿ  

Write to any Board member or group of Board members and describe their views specifically on executive compensation or on any other material matter;

 

Ÿ  

E-mail any Board member or group of Board members through the communication portal on the Company’s Web site;

 

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Ÿ  

Write or e-mail Company management representatives and discuss specific concerns with the appropriate department managers and/or staff; and,

 

Ÿ  

Attend the annual meeting of shareholders and express their views in that forum.

ITEM 8 – EXECUTIVE COMPENSATION REPORT

This proposal was submitted by NorthStar Asset Management Inc., 43 St. John Street, Jamaica Plain, MA 02130.

“WHEREAS, in 2007, the total compensation of our CEO Rex Tillerson exceeded $16 million including salary, bonus, restricted stock, and the value of his stock awards. In addition, SEC filings report that he holds stock options valued at an additional $16 million and has pension benefits valued at over $24 million;

In 1980, CEOs in the US were paid 40 times the average worker. Today, they are paid 344 times more.

Last year, Mr. Tillerson was paid 541 times the average worker. This type of over-compensation is increasingly being called into question by consumers, politicians and shareholders, and erodes customer trust and loyalty, potentially negatively affecting shareholder value;

In 2007, ExxonMobil share prices increased by 24%, the total market capitalization of the company increased by $19 billion dollars, and Mr. Tillerson’s compensation increased by 28%.

However, as of December 5, 2008, ExxonMobil’s share price has declined 19% and market capitalization has gone down by $88 billion. Yet, according to a November 25, 2008 ExxonMobil SEC filing, Mr. Tillerson was awarded a $4 million bonus and 225,000 shares of restricted stock. In addition, Mr. Tillerson will receive a 10% raise for 2009.

Legislation passed by the House of Representatives in April 2007, and currently being considered in the Senate, requires shareholders’ approval of executive compensation packages;

RESOLVED, shareholders request the Board initiate a review of our company’s executive compensation policies and make available, upon request, a report of that review by December 1, 2009 (omitting confidential information and prepared at a reasonable cost). We request the report include:

 

1. A comparison of the increase in the total compensation package of our CEO between 1998 and 2008 with the increase in the average US per capita income during that same period.

 

2. An analysis of changes in the relative size of the gap between the two groups and the rationale justifying this trend.

Supporting Statement

We believe all ExxonMobil employees work together to create value for shareholders and customers. We also believe the company has the ability to increase shareholder value by reinvesting in the whole company, not just a single individual. It is not clear how the company’s executive pay incentives are creating the desired and beneficial effect on shareholder value.”

The Board recommends you vote AGAINST this proposal for the following reasons:

The Board believes the compensation information disclosed in the proxy statement, which includes a detailed discussion of our compensation goals and methods, provides information that is more meaningful for shareholders than the analysis that is requested by this proposal.

The basis of ExxonMobil’s compensation program is to compensate each individual, executive or non-executive, at a level that recognizes the individual’s experience, performance, and level of responsibility. Compensation should be competitive with that of persons performing similar jobs at other companies with whom the Company competes for employee talent.

 

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ExxonMobil’s compensation programs are internally aligned, but the Committee does not believe a specific numeric ratio between the increase in the compensation of the CEO and the increase in average U.S. per capita income is meaningful or an appropriate factor for setting compensation.

The “Compensation Discussion and Analysis” section in this proxy statement provides a detailed discussion of our compensation goals and methods.

ITEM 9 – CORPORATE SPONSORSHIPS REPORT

This proposal was submitted by Dr. Martha Burk, 323 Morning Sun Trail, Corrales, NM 87048.

“Whereas,

ExxonMobil has a strong antidiscrimination statement, stating:

‘ExxonMobil’s policy on discrimination is clear and straightforward. Our all-inclusive, intentionally broad policy prohibits any form of discrimination or harassment, in any company workplace, anywhere in the world – and this policy applies equally to employees, supervisors, contractors, or anyone else in the company’s employ.’

Yet ExxonMobil’s antidiscrimination policy is not as straightforward regarding company expenditures for sponsorships and executive perks with institutions that don’t comply with the clear intent of its antidiscrimination statement.

ExxonMobil is a lead sponsor of the Masters Golf Tournament, owned by and held at Augusta National Incorporated, an organization that explicitly excludes women from membership.

Resolved,

Shareholders request the Board of Directors conduct a special review of ExxonMobil’s antidiscrimination statement as it pertains to corporate sponsorships and executive perks and publish a summary report addressing the following:

 

1) What company funds are presently expended on corporate sponsorships and executive perks, like country club memberships and entertainment at or in conjunction with institutions that discriminate against groups protected by the company’s antidiscrimination statement?

 

2) Would the company sponsor an event held at a venue barring African Americans, Jews or homosexuals from membership?

 

3) How is the company’s antidiscrimination statement applied to decisions concerning sponsorships and executive perks?

The report, prepared at reasonable cost and omitting proprietary information, shall be available to shareholders upon request no later than December 1, 2009.

Supporting Statement

ExxonMobil’s strong antidiscrimination statement demonstrates a commitment to workplace inclusion and opportunity. Failing to apply this statement to corporate sponsorships and executive perks undermines these laudable aspirations. Club memberships are more than about recreation, they are places where important business is conducted. Excluding people from these networking opportunities and decisionmaking venues on the basis of gender, race, religion or sexual orientation is a discriminatory practice denying equal opportunity.

Would ExxonMobil sponsor an event at a club explicitly barring African Americans or Jews from membership? If the answer is ‘no,’ then why would we sponsor events at institutions that explicitly bar women? ExxonMobil has made public statements that the company draws a distinction between race and gender, which is a harmful message for our employees, customers, and potential investors that the company does not value all of its employees equally. Event sponsorships at venues that discriminate against women also sends a message that gender discrimination is not taken seriously by ExxonMobil.

 

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ExxonMobil has many talented women in high ranking positions. These women should in their own right be able to avail themselves of the networking opportunities that come with club membership, rather than having to be invited into these settings by male colleagues, who because of gender alone are eligible for membership.

Our company rightly extends coverage of its antidiscrimination statement to contractors. Why not also to sponsorships and executive perks purchased with shareholder funds?

Please join us in assuring that the ExxonMobil logo stands for the highest standards of antidiscrimination and vote FOR this proposal.”

The Board recommends you vote AGAINST this proposal for the following reasons:

ExxonMobil prohibits discrimination of any kind in its employment policies everywhere in the world. The Board believes the report requested is unnecessary given ExxonMobil’s nondiscrimination policy.

ExxonMobil’s policies on nondiscrimination are clear and comprehensive. The Company is committed to fostering diversity in the workplace, as well as contributing to organizations that support diversity, especially in the area of education. ExxonMobil is consistently recognized as one of the leading supporters of women- and minority-owned businesses, in terms of actual business awarded.

ExxonMobil determines which organizations and events to support financially based on an assessment of business needs, fit with corporate social objectives, and overall effectiveness. The Company will continue to communicate about its diversity efforts through the Corporate Citizenship Report and on the Company’s Web site.

In 2005 ExxonMobil launched our Educating Women and Girls Initiative (EWGI). EWGI provides funding and applies the Company’s core business and management expertise to help women and girls realize their full potential. Projects funded by EWGI help reduce barriers to education, give women training to start or improve businesses and nongovernmental organizations, and help women to be catalysts for progress and development in their communities. In 2008 EWGI made grants totaling more than $8 million – bringing cumulative investment to almost $20 million.

In 2008 ExxonMobil continued support for the Centre for Development and Population Activities’ Global Women in Management Program. Two hundred women from 35 countries have now been trained. This Program helps strengthen financial management skills of women managers working in community organizations in developing countries.

Reflecting our commitment to diversity, ExxonMobil supports networks for female, African-American, and Hispanic employees that provide mentoring, coaching, and strategies to enhance personal and professional development.

ExxonMobil is a member of the Women’s Leadership Board at Harvard University and committed $1.5 million in 2008 to Harvard’s “Closing the Gender Gap” research program, in addition to supporting research at the International Center for Research on Women. ExxonMobil also launched, in 2008, a mentoring program to link successful women leaders at Fortune 500 companies with high potential female students at local universities.

ExxonMobil continues to be the largest contributor to the Society of Women Engineers for outreach programs to young women, having provided $2.2 million in the past 10 years. In addition ExxonMobil provided a $1 million, five-year grant to Spelman College and Georgia Tech in 2006 to develop African-American women engineers through the Women in Science and Engineering (WISE) Program.

 

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ITEM 10 – AMENDMENT OF EEO POLICY

This proposal was submitted by the New York City Employees’ Retirement System, 1 Centre Street, New York, NY 10007, as lead proponent of a filing group.

“Whereas: Exxon Mobil Corporation does not explicitly prohibit discrimination based on sexual orientation and gender identity in its written employment policy;

Over 88% of the Fortune 500 companies have adopted written nondiscrimination policies prohibiting harassment and discrimination on the basis of sexual orientation, as have more than 98% of Fortune 100 companies, according to the Human Rights Campaign; over 30% now prohibit discrimination based on gender identity;

We believe that corporations that prohibit discrimination on the basis of sexual orientation and gender identity have a competitive advantage in recruiting and retaining employees from the widest talent pool;

According to a June, 2008 survey by Harris Interactive and Witeck-Combs, 65% of gay and lesbian workers in the United States reported facing some form of job discrimination related to sexual orientation; an earlier survey found that almost one out of every 10 gay or lesbian adults also reported that they had been fired or dismissed unfairly from a previous job, or pressured to quit a job because of their sexual orientation;

Twenty states, the District of Columbia and more than 160 cities and counties, have laws prohibiting employment discrimination based on sexual orientation; 12 states and the District of Columbia have laws prohibiting employment discrimination based on sexual orientation and gender identity;

Minneapolis, San Francisco, Seattle and Los Angeles have adopted legislation restricting business with companies that do not guarantee equal treatment for gay and lesbian employees;

Our company has operations in, and makes sales to institutions in states and cities that prohibit discrimination on the basis of sexual orientation;

National public opinion polls consistently find more than three quarters of the American people support equal rights in the workplace for gay men, lesbians and bisexuals; for example, in a Gallup poll conducted in May, 2007, 89% of respondents favored equal opportunity in employment for gays and lesbians;

Resolved: The Shareholders request that Exxon Mobil Corporation amend its written equal employment opportunity policy to explicitly prohibit discrimination based on sexual orientation and gender identity and to substantially implement the policy.

Supporting Statement: Employment discrimination on the basis of sexual orientation and gender identity diminishes employee morale and productivity. Because state and local laws are inconsistent with respect to employment discrimination, our company would benefit from a consistent, corporate wide policy to enhance efforts to prevent discrimination, resolve complaints internally, and ensure a respectful and supportive atmosphere for all employees. Exxon Mobil Corporation will enhance its competitive edge by joining the growing ranks of companies guaranteeing equal opportunity for all employees.”

The Board recommends you vote AGAINST this proposal for the following reasons:

ExxonMobil is committed to having a workplace that facilitates the maximum contribution from all of our employees. While there are many factors that are important to creating this type of environment, one of the most significant is having a workplace that is free from any form of harassment or discrimination.

The Board has reviewed in detail ExxonMobil’s existing global policies that prohibit all forms of discrimination, including those based on sexual orientation and gender identity, in any Company

 

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workplace, anywhere in the world. In fact ExxonMobil’s policies go beyond the law and prohibit any form of discrimination. Based on these existing all-inclusive, zero-tolerance policies, the Board believes the proposal is unnecessary.

The Corporation’s Equal Employment Opportunity (EEO) and Harassment in the Workplace policies, which are included in the Standards of Business Conduct (Standards), constitute the foundational documents of our employment nondiscrimination policy. The EEO communication initiatives, training programs, and investigating and stewardship processes explicitly state that any form of discrimination or harassment in the workplace based on sexual orientation will not be tolerated, and more broadly, that no form of discrimination or harassment in the workplace will be tolerated. It is these elements, as a totality, that constitute ExxonMobil’s policies.

As stated in the EEO portion of the Standards, the Corporation administers its personnel policies, programs, and practices in a nondiscriminatory manner in all aspects of the employment relationship, including recruitment, hiring, work assignment, promotion, transfer, termination, wage and salary administration, and selection for training. ExxonMobil is a meritocracy, with programs and policies designed to employ the best people, recognize and reward superior job performance, and to create an environment in which employees can maximize their contributions and reach their full potential. A discrimination-free environment is essential to meet these objectives.

Where we operate in countries in which the national laws require specific language regarding nondiscrimination based on sexual orientation or gender identity be included in policies, we have amended our policies as appropriate.

A written statement by our Chairman regarding ExxonMobil’s commitment to nondiscrimination, including that based on sexual orientation, is widely accessible to all employees on the Company intranet, and we provide training programs for new employees and refresher courses for existing employees. The harassment training material included in our Working Together booklet includes an example specifically based on sexual orientation. As a part of our ongoing policy compliance stewardship, ExxonMobil also has annual reporting and compliance procedures, which include a letter to all senior managers emphasizing their responsibilities regarding maintaining work environments free from harassment and discrimination.

ITEM 11 – GREENHOUSE GAS EMISSIONS GOALS

This proposal was submitted by the Sisters of St. Dominic of Caldwell New Jersey, 40 South Fullerton Avenue, Montclair, NJ 07042, as lead proponent of a filing group.

“WHEREAS:

The International Energy Agency warned in its 2008 World Energy Outlook: ‘For all the uncertainties highlighted in this report, we can be certain that the energy world will look a lot different in 2030 than it does today. The world energy system will be transformed …‘

Cambridge Energy Research Associates’ (CERA) Chairman Daniel Yergin notes that ‘climate change and putting a price on carbon will change the dynamics of the energy marketplace.’ CERA further reports that clean energy investment could surpass $7 trillion by 2030 and that ‘clean energy is not a bubble or passing phenomenon. Clean energy is now poised to cross the divide and move from the fringes of the energy sector to the mainstream.’

Shareholders’ repeated request for emission reduction goals reiterates ExxonMobil’s own Environmental Business Planning process, which is used ‘to identify key environmental drivers …, set targets in key focus areas, and identify projects and actions to achieve those targets.’ (Carbon Disclosure Project 6 [CDP6], 3(a) iii)

Proponents believe ExxonMobil’s board never has sufficiently responded to shareholders in their request for an action plan and articulated goals for reducing GHG emissions from the Company’s products and operations.

 

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ExxonMobil has set an energy efficiency target for operations of 10% by 2012, a 5,000-Megawatt cogeneration goal by 2011, and announced investments of $4 billion to reduce flaring. And the Company finally reduced direct GHGs in 2007, after a multi-year struggle with rising GHG emissions. However admirable, this progress is inadequate because the IEA estimates that, on average, only 10% of petroleum-related emissions are from industry operations.

ExxonMobil has recently announced $300 million for lithium ion battery technologies, and $100 million for carbon capture research. Yet, we believe ExxonMobil has done a poor job of articulating a cohesive business plan for dealing with climate risk and opportunity – especially regarding its products – or offered robust responses to the financial, regulatory, and technology impacts of the climate crisis.

BP, Royal Dutch Shell, ConocoPhillips, and Chevron have made newsworthy investments in renewables and low-carbon technologies to reduce emissions, and/or have begun integrating the cost of carbon into planning and investments. ConocoPhillips, BP America, and Shell have further endorsed calls for the U.S. to reduce carbon emissions by 60-80% by 2050.

We believe that ExxonMobil has not adequately assessed or disclosed the financial effects of climate regulation or industry-changing technologies. ‘We do not assess current and/or future financial effects because . . . In ExxonMobil’s view, it is impossible today to assess potential implications for shareholder value from regulatory approaches to address rising greenhouse gas concentrations.’ (CDP6)

THEREFORE, BE IT RESOLVED: shareholders request that the Board of Directors adopt quantitative goals, based on current technologies, for reducing total greenhouse gas emissions from the Company’s products and operations; and that the Company report to shareholders by September 30, 2009, on its plans to achieve these goals. Such a report will omit proprietary information and be prepared at reasonable cost.”

The Board recommends you vote AGAINST this proposal for the following reasons:

In a world where ExxonMobil’s technical and management capabilities will be essential to meet growing global demand for energy and to address greenhouse gas emissions, the Board does not believe that setting absolute goals to reduce emissions from operations and product use is the most effective way to manage climate risks.

The fundamental challenge of meeting growing global demand in a responsible manner requires ongoing effort to improve efficiency and reduce emissions in the near term as production grows, and to invest in research and development to create effective, affordable, game-changing technologies that can be deployed on a large scale in the future. In the recent report The Outlook for Energy: A View to 2030 (available on our Web site), ExxonMobil provides a comprehensive discussion of the Company’s views and actions to manage its business, including steps to reduce emissions and improve product use, in the face of ongoing commercial, technological, political and regulatory risks. These risks include those from greenhouse gas emissions. ExxonMobil’s performance on these issues is also described in the Corporate Citizenship Report.

The Company’s primary opportunities to reduce greenhouse gas emissions from operations are in improving energy efficiency and reducing flaring. In both areas, the Company has established improvement objectives and planned improvement steps. For example, since 2004 ExxonMobil has invested more than $1.5 billion in activities that improve energy efficiency with a companion reduction in greenhouse gas emissions, and we will spend about one-half billion dollars over the next few years to continue this initiative. As part of the American Petroleum Institute’s Voluntary Climate Challenge Program, ExxonMobil committed to improve energy efficiency by 10 percent between 2002 and 2012 across U.S. refining operations. The Company is on pace to exceed that commitment, not only in the United States, but globally as well.

Emissions from ExxonMobil’s customers’ use of our products are determined both by their need for energy services and by the efficiency with which it is used. For years the Company has maintained

 

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research to identify and develop technologies that improve the efficient use of its products. For example, over the past two years, ExxonMobil announced the development of a new technology for on-board hydrogen reforming to power fuel cell vehicles, deployment of new battery separator films for use in lithium-ion batteries in hybrid and electric vehicles, and a major pilot project to demonstrate a more efficient means to capture carbon dioxide from produced gas.

As described by ExxonMobil, the International Energy Agency, and others, even with the introduction of significant future improvements in energy efficiency, absolute greenhouse gas emissions will continue to increase in coming years to meet growing global energy demand.

As ExxonMobil seeks to increase production of oil and gas to meet growing global energy demand and to maintain leadership in return to shareholders, the Company will continue to take steps to improve efficiency, reduce emissions, and contribute to effective long-term solutions to manage climate risks.

ITEM 12 – CLIMATE CHANGE AND TECHNOLOGY REPORT

This proposal was submitted by Ms. Neva Rockefeller Goodwin, 30 Rockefeller Plaza, Room 5600, New York, NY 10112, as lead proponent of a filing group.

“Resolved: Shareholders ask Exxon Mobil Corporation’s (‘ExxonMobil’s’) Board of Directors to establish a task force, which should include both (a) two or more independent directors and (b) relevant company staff, to investigate and report to shareholders on the likely consequences of global climate change between now and 2030, for emerging countries, and poor communities in these countries and developed countries, and to compare these outcomes with scenarios in which ExxonMobil takes leadership in developing sustainable energy technologies that can be used by and for the benefit of those most threatened by climate change. The report should be prepared at reasonable expense, omitting proprietary information, and should be made available to shareholders by March 31, 2010.

SUPPORTING STATEMENT

The April 2007 Fourth Assessment from the United Nation’s Intergovernmental Panel on Climate Change (Working Group II) details the potential climate-change-related devastation that regions like Africa and Asia will suffer. IPCC Chairman Rajendra Pachauri noted that ‘It’s the poorest of the poor in the world, and this includes poor people even in prosperous societies, who are going to be the worst hit.’

This view is widely shared. As stated by The Prince Of Wales Corporate Leaders Group on Climate Change, an organization that includes Dupont, GE and Sun Microsystems, in a November 30th, 2007 Communique: ‘The economic and geopolitical costs of unabated climate change could be very severe and globally disruptive. All countries and economies will be affected, but it will be the poorest countries that will suffer earliest and the most’. As witnessed by the devastation brought on by hurricane Katrina, extreme climate events can devastate poor communities even in the United States.

ExxonMobil often argues that cheap and abundant energy is crucial for the economic advancement of poor economies. These countries are forecast, by ExxonMobil and others, to contribute the largest increase in energy use. However, if, as predicted by ExxonMobil, this energy use is based on continued reliance on hydrocarbons, we will see an unrelenting increase in global CO2 emissions with devastating consequences especially for those who are poor in resources and influence, whether they live in the rich or the poor countries. To the extent that ExxonMobil’s growth continues to rely on the sale of hydrocarbon energy to emerging markets, it faces a painful paradox in the future, and distances itself from its true legacy. Part of John D. Rockefeller’s genius was in recognizing early on the need and opportunity of a transition to a better and cheaper fuel.

While investment in renewable energy sources and ‘clean’ technologies has recently accelerated, driven by players as diverse as venture capitalists, chemical companies, internet companies and old fashioned utilities, we believe our company is now lagging in creating solutions for the looming climate and energy crisis. We are concerned that ExxonMobil’s current slow course in exploring and promoting low carbon or carbon-free energy technologies will exacerbate the crisis rather than make ExxonMobil part of the solution.

 

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We urge shareholders to vote for this proposal.”

The Board recommends you vote AGAINST this proposal for the following reasons:

The information requested on possible climate impacts and on ExxonMobil’s views and actions on global climate change is widely available in existing publications, including authoritative third-party assessments, that have been widely disseminated and provided to the proponent. In view of the extensive, up-to-date information readily available, the Board does not believe an additional report is warranted.

Authoritative assessments of the impacts of climate change are publicly available, most notably in the recently published Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC, 2007), an effort in which ExxonMobil scientists directly participated. The IPCC Report includes a 900-page volume on Impacts and Adaptation that discusses impacts and vulnerability of society and ecosystems to future climate change.

ExxonMobil continues to share our views on society’s requirements for future energy, the role of technology and policy options to limit greenhouse gas emissions, and ExxonMobil’s actions to address climate risks – most recently in The Outlook for Energy: A View to 2030 (available on our Web site). Additional perspectives are available in ExxonMobil’s Corporate Citizenship Report.

Meeting growing energy demand will require navigating a host of risks – commercial, technological, political, and regulatory – as well as those associated with increased greenhouse gas emissions. The Outlook provides a comprehensive discussion of ExxonMobil’s actions to reduce greenhouse gas emissions in its own operations and the steps we are taking to promote efficiency in the use of our products by customers. These actions include both research and development to create innovative technologies and steps to commercialize them.

ITEM 13 – RENEWABLE ENERGY POLICY

This proposal was submitted by Mr. Stephen Viederman, 135 East 83rd Street, 15A, New York, NY 10028, as lead proponent of a filing group.

“Resolved: That ExxonMobil’s Board adopt a policy for renewable energy research, development and sourcing, reporting on its progress to investors in 2010.

In May 2008 the Board recommended voting against this resolution: ‘The Corporation is investing at record levels in its traditional oil and gas development projects and is actively involved in research on alternative energy technologies’, concluding: ‘This proposal is unwarranted.’

XOM Chair/CEO, Rex Tillerson acknowledges ‘it is increasingly clear that climate change poses risks to society and ecosystems that are serious enough to warrant action – by individuals, by businesses, and by governments.’ Warranted for some but not, apparently, others.

The activities noted in Tomorrow’s Energy (which EXXON cited in January in its unsuccessful attempt to convince the SEC that it had already implemented the resolution) are individual research projects on alternative energy rather than renewable energy technologies, and certainly do not constitute a policy as requested.

No policy statement on renewable energy research, renewable energy development, or renewable energy sourcing, can be found on XOM’s website.

XOM projects there will be growing demand for oil and gas until 2030.

The International Energy Agency (World Energy Outlook 2008) reflects ‘We can be certain that the energy world will look a lot different in 2030 than it does today,’ citing political and regulatory changes, projected higher prices for oil and gas, and the emergence of low-carbon energy technologies.

They observe, ‘It is within the power of all governments, … acting alone or together, to steer the world towards cleaner, cleverer and more competitive energy system. Time is running out and the time to act is now.

 

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And certainly there will be game-changing shifts on energy policy in the U.S. and the world.

Our company is spending $100 million on advertising to soften its image on these issues.

The $10 million per year that XOM grants to Stanford for long-term research, only a small portion of which deals with renewables, pales in comparison to this advertising budget, and is a rounding error compared to XOM’s total R&D budget.

Our company has the research and development capacity to create ‘game-changing renewable energy technologies’ (Tillerson) for the long-term.

What it lacks is the will, we believe.

Caught in the narrow mindset and culture of an oil and gas company, XOM is not prepared to make the transition from ‘taking on the world’s toughest energy [read oil and gas] challenges’ to ‘taking on the world’s toughest sustainable energy system challenges.’

The World Energy Council makes clear ‘it is a myth that the task of meeting the world’s energy needs while addressing climate change is simply too expensive and too daunting.’

Shell, BP, Chevron and others have decided that clean, renewable energy has a role to play in a different energy future.

We, as long-term investors, request a renewable energy policy to guide our company in the decades ahead.

This resolution, presented at XOM’s 2008 AGM, received a 27.5% vote in favor.”

The Board recommends you vote AGAINST this proposal for the following reasons:

The Outlook for Energy: A View to 2030, released by ExxonMobil in December 2008 and available on our Web site at exxonmobil.com/energyoutlook, outlines the magnitude of the world’s energy challenges. Growing populations and expanding economies are expected to increase global energy needs by 35 percent between 2005 and 2030, even with significant energy-efficiency gains. While all viable sources of energy should be pursued, the scale and nature of the global energy outlook mean that the Corporation’s traditional business focus areas will remain indispensable for decades. Therefore the Board does not support this proposal.

As the Outlook indicates, reliable and affordable energy is critical to economic progress and social welfare. While wind, solar, and biofuel energies will grow rapidly, they will likely reach just 2 percent of global energy supplies by 2030 and remain highly dependent on subsidies and mandates. At the same time, oil and natural gas demand is expected to grow much more in absolute terms, and remain close to 60 percent of global energy supplies. This reflects their abundance, availability, and affordability to meet consumer needs, as well as environmental advantages versus coal, the most carbon-intensive energy source.

The International Energy Agency also recognizes the world’s growing needs for oil and natural gas, and increased its estimate of required investments to an average of nearly $500 billion a year over 2007 to 2030. This signals a significant and growing call on the scale and capabilities of the Corporation and the opportunity to provide tremendous value.

Meeting growing energy demand and managing greenhouse gas emissions require an integrated set of solutions. The Corporation is committed to providing practical, broad-based solutions to help meet these challenges, consistent with long-term fundamentals and ExxonMobil’s proven approach to improve shareholder value. The Corporation’s active involvement in research on renewable and alternative energy technologies enables it to readily assess new developments for possible commercialization and

 

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investment to improve shareholder value. Additional perspectives are available in ExxonMobil’s Corporate Citizenship Report. A policy focus directed specifically at renewable energy forms would be too narrow and would not necessarily optimize the Company’s strategic strengths.

ADDITIONAL INFORMATION

Other Business

We are not currently aware of any other business to be acted on at the 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 with 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 3.

Outstanding Shares

On February 28, 2009, there were 4,922,925,742 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 for Next Year

Any shareholder proposal for the annual meeting in 2010 must be sent to the Secretary at the address or fax number of ExxonMobil’s principal executive office listed under “Contact Information” on page 3. The deadline for receipt of a proposal to be considered for inclusion in the proxy statement is 5:00 p.m., Central Time, on December 14, 2009. The deadline for notice of a proposal for which a shareholder will conduct his or her own solicitation is February 26, 2010. On request the Secretary will provide instructions for submitting proposals.

Duplicate Annual Reports

Registered shareholders with multiple accounts may authorize ExxonMobil to discontinue mailing extra annual reports by marking the “discontinue annual report mailing for this account” box on the proxy card. If you vote via the Internet or by telephone, you will also have the opportunity to indicate that you wish to discontinue receiving extra annual reports. 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.

You may discontinue duplicate mailings by calling ExxonMobil Shareholder Services at the toll-free telephone number listed under “Contact Information” on page 4 at any time during the year. Beneficial holders can contact their banks, brokers, or other holders of record to discontinue duplicate mailings.

 

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Shareholders with 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 annual report and proxy statement 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 a separate annual report and proxy statement to a shareholder at a shared address on request. Shareholders with a shared address may also request us to send separate annual reports and proxy statements 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 under “Contact Information” on page 4. Beneficial shareholders can request information about householding from their banks, brokers, or other holders of record.

Financial Statements

The year 2008 consolidated financial statements and auditors’ report, management’s discussion and analysis of financial condition and results of operations, information concerning the quarterly financial data for the past two fiscal years, and other information, including stock performance graphs, are provided in Appendix A.

SEC Form 10-K

Shareholders may obtain a copy of the Corporation’s Annual Report on Form 10-K to the Securities and Exchange Commission without charge by writing to the Secretary at the address listed under “Contact Information” on page 3, or by visiting ExxonMobil’s Web site at exxonmobil.com/financialpublications.

 

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APPENDIX A

FINANCIAL SECTION

TABLE OF CONTENTS

 

Business Profile

   A2

Financial Summary

   A3

Frequently Used Terms

   A4

Quarterly Information

   A6

Management’s Discussion and Analysis of Financial Condition and Results of Operations

    

Functional Earnings

   A7

Forward-Looking Statements

   A8

Overview

   A8

Business Environment and Risk Assessment

   A8

Review of 2008 and 2007 Results

   A10

Liquidity and Capital Resources

   A12

Capital and Exploration Expenditures

   A15

Taxes

   A16

Environmental Matters

   A16

Market Risks, Inflation and Other Uncertainties

   A16

Recently Issued Statements of Financial Accounting Standards

   A18

Critical Accounting Policies

   A18

Management’s Report on Internal Control Over Financial Reporting

   A22

Report of Independent Registered Public Accounting Firm

   A22

Consolidated Financial Statements

    

Statement of Income

   A24

Balance Sheet

   A25

Statement of Shareholders’ Equity

   A26

Statement of Cash Flows

   A27

Notes to Consolidated Financial Statements

    

1. Summary of Accounting Policies

   A28

2. Accounting Change for Fair Value Measurements

   A30

3. Miscellaneous Financial Information

   A30

4. Cash Flow Information

   A30

5. Additional Working Capital Information

   A30

6. Equity Company Information

   A31

7. Investments, Advances and Long-Term Receivables

   A32

8. Property, Plant and Equipment and Asset Retirement Obligations

   A32

9. Accounting for Suspended Exploratory Well Costs

   A33

10. Leased Facilities

   A35

11. Earnings Per Share

   A35

12. Financial Instruments and Derivatives

   A36

13. Long-Term Debt

   A36

14. Incentive Program

   A41

15. Litigation and Other Contingencies

   A43

16. Pension and Other Postretirement Benefits

   A45

17. Disclosures about Segments and Related Information

   A49

18. Income, Sales-Based and Other Taxes

   A51

Supplemental Information on Oil and Gas Exploration and Production Activities

   A53

Operating Summary

   A63

Stock Performance Graphs

   A64

 

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Index to Financial Statements

BUSINESS PROFILE

 

Financial


   Earnings After
Income Taxes


    Average Capital
Employed


   Return on
Average Capital
Employed


   Capital and
Exploration
Expenditures


   2008

    2007

    2008

   2007

   2008

   2007

   2008

   2007

     (millions of dollars)    (percent)    (millions of dollars)

Upstream

                                                     

United States

   $ 6,243     $ 4,870     $ 14,651    $ 14,026    42.6    34.7    $ 3,334    $ 2,212

Non-U.S.

     29,159       21,627       51,413      49,539    56.7    43.7      16,400      13,512
    


 


 

  

  
  
  

  

Total

   $ 35,402     $ 26,497     $ 66,064    $ 63,565    53.6    41.7    $ 19,734    $ 15,724
    


 


 

  

  
  
  

  

Downstream

                                                     

United States

   $ 1,649     $ 4,120     $ 6,963    $ 6,331    23.7    65.1    $ 1,636    $ 1,128

Non-U.S.

     6,502       5,453       18,664      18,983    34.8    28.7      1,893      2,175
    


 


 

  

  
  
  

  

Total

   $ 8,151     $ 9,573     $ 25,627    $ 25,314    31.8    37.8    $ 3,529    $ 3,303
    


 


 

  

  
  
  

  

Chemical

                                                     

United States

   $ 724     $ 1,181     $ 4,535    $ 4,748    16.0    24.9    $ 441    $ 360

Non-U.S.

     2,233       3,382       9,990      8,682    22.4    39.0      2,378      1,422
    


 


 

  

  
  
  

  

Total

   $ 2,957     $ 4,563     $ 14,525    $ 13,430    20.4    34.0    $ 2,819    $ 1,782
    


 


 

  

  
  
  

  

Corporate and financing

     (1,290 )     (23 )     23,467      26,451    —      —        61      44
    


 


 

  

  
  
  

  

Total

   $ 45,220     $ 40,610     $ 129,683    $ 128,760    34.2    31.8    $ 26,143    $ 20,853
    


 


 

  

  
  
  

  

See Frequently Used Terms for a definition and calculation of capital employed and return on average capital employed.

 

Operating


   2008

   2007

     (thousands of barrels daily)

Net liquids production

         

United States

   367    392

Non-U.S.

   2,038    2,224
    
  

Total

   2,405    2,616
    
  
     (millions of cubic feet daily)

Natural gas production available for sale

         

United States

   1,246    1,468

Non-U.S.

   7,849    7,916
    
  

Total

   9,095    9,384
    
  
     (thousands of oil-equivalent barrels daily)

Oil-equivalent production (1)

   3,921    4,180
     (thousands of barrels daily)

Refinery throughput

         

United States

   1,702    1,746

Non-U.S.

   3,714    3,825
    
  

Total

   5,416    5,571
    
  
     (thousands of barrels daily)

Petroleum product sales

         

United States

   2,540    2,717

Non-U.S.

   4,221    4,382
    
  

Total

   6,761    7,099
    
  
     (thousands of metric tons)

Chemical prime product sales

         

United States

   9,526    10,855

Non-U.S.

   15,456    16,625
    
  

Total

   24,982    27,480
    
  

(1) Gas converted to oil-equivalent at 6 million cubic feet = 1 thousand barrels.

 

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FINANCIAL SUMMARY

 

     2008

    2007

    2006

    2005

    2004

 
     (millions of dollars, except per share amounts)  

Sales and other operating revenue (1) (2)

   $ 459,579     $ 390,328     $ 365,467     $ 358,955     $ 291,252  

Earnings

                                        

Upstream

   $ 35,402     $ 26,497     $ 26,230     $ 24,349     $ 16,675  

Downstream

     8,151       9,573       8,454       7,992       5,706  

Chemical

     2,957       4,563       4,382       3,943       3,428  

Corporate and financing

     (1,290 )     (23 )     434       (154 )     (479 )
    


 


 


 


 


Net income

   $ 45,220     $ 40,610     $ 39,500     $ 36,130     $ 25,330  
    


 


 


 


 


Net income per common share

   $ 8.78     $ 7.36     $ 6.68     $ 5.76     $ 3.91  

Net income per common share – assuming dilution

   $ 8.69     $ 7.28     $ 6.62     $ 5.71     $ 3.89  

Cash dividends per common share

   $ 1.55     $ 1.37     $ 1.28     $ 1.14     $ 1.06  

Net income to average shareholders’ equity (percent)

     38.5       34.5       35.1       33.9       26.4  

Working capital

   $ 23,166     $ 27,651     $ 26,960     $ 27,035     $ 17,396  

Ratio of current assets to current liabilities (times)

     1.47       1.47       1.55       1.58       1.40  

Additions to property, plant and equipment

   $ 19,318     $ 15,387     $ 15,462     $ 13,839     $ 11,986  

Property, plant and equipment, less allowances

   $ 121,346     $ 120,869     $ 113,687     $ 107,010     $ 108,639  

Total assets

   $ 228,052     $ 242,082     $ 219,015     $ 208,335     $ 195,256  

Exploration expenses, including dry holes

   $ 1,451     $ 1,469     $ 1,181     $ 964     $ 1,098  

Research and development costs

   $ 847     $ 814     $ 733     $ 712     $ 649  

Long-term debt

   $ 7,025     $ 7,183     $ 6,645     $ 6,220     $ 5,013  

Total debt

   $ 9,425     $ 9,566     $ 8,347     $ 7,991     $ 8,293  

Fixed-charge coverage ratio (times)

     52.2       49. 9       46.3       50.2       36.1  

Debt to capital (percent)

     7.4       7.1       6.6       6.5       7.3  

Net debt to capital (percent) (3)

     (23.0 )     (24.0 )     (20.4 )     (22.0 )     (10.7 )

Shareholders’ equity at year end

   $ 112,965     $ 121,762     $ 113,844     $ 111,186     $ 101,756  

Shareholders’ equity per common share

   $ 22.70     $ 22.62     $ 19.87     $ 18.13     $ 15.90  

Weighted average number of common shares outstanding (millions)

     5,149       5,517       5,913       6,266       6,482  

Number of regular employees at year end (thousands) (4)

     79.9       80.8       82.1       83.7       85.9  

CORS employees not included above (thousands) (5)

     24.8       26.3       24.3       22.4       19.3  

(1) Sales and other operating revenue includes sales-based taxes of $34,508 million for 2008, $31,728 million for 2007, $30,381 million for 2006, $30,742 million for 2005 and $27,263 million for 2004.
(2) Sales and other operating revenue includes $30,810 million for 2005 and $25,289 million for 2004 for purchases/sales contracts with the same counterparty. Associated costs were included in Crude oil and product purchases. Effective January 1, 2006, these purchases/sales were recorded on a net basis with no resulting impact on net income.
(3) Debt net of cash, excluding restricted cash.
(4) Regular employees are defined as active executive, management, professional, technical and wage employees who work full time or part time for the Corporation and are covered by the Corporation’s benefit plans and programs.
(5) CORS employees are employees of company-operated retail sites.

 

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Index to Financial Statements

FREQUENTLY USED TERMS

Listed below are definitions of several of ExxonMobil’s key business and financial performance measures. These definitions are provided to facilitate understanding of the terms and their calculation.

CASH FLOW FROM OPERATIONS AND ASSET SALES

Cash flow from operations and asset sales is the sum of the net cash provided by operating activities and proceeds from sales of subsidiaries, investments and property, plant and equipment from the Consolidated Statement of Cash Flows. This cash flow reflects the total sources of cash from both operating the Corporation’s assets and from the divesting of assets. The Corporation employs a long-standing and regular disciplined review process to ensure that all assets are contributing to the Corporation’s strategic objectives. Assets are divested when they are no longer meeting these objectives or are worth considerably more to others. Because of the regular nature of this activity, we believe it is useful for investors to consider sales proceeds together with cash provided by operating activities when evaluating cash available for investment in the business and financing activities, including shareholder distributions.

 

Cash flow from operations and asset sales


   2008

   2007

   2006

     (millions of dollars)

Net cash provided by operating activities

   $ 59,725    $ 52,002    $ 49,286

Sales of subsidiaries, investments and property, plant and equipment

     5,985      4,204      3,080
    

  

  

Cash flow from operations and asset sales

   $ 65,710    $ 56,206    $ 52,366
    

  

  

CAPITAL EMPLOYED

Capital employed is a measure of net investment. When viewed from the perspective of how the capital is used by the businesses, it includes ExxonMobil’s net share of property, plant and equipment and other assets less liabilities, excluding both short-term and long-term debt. When viewed from the perspective of the sources of capital employed in total for the Corporation, it includes ExxonMobil’s share of total debt and shareholders’ equity. Both of these views include ExxonMobil’s share of amounts applicable to equity companies, which the Corporation believes should be included to provide a more comprehensive measure of capital employed.

 

Capital employed


   2008

    2007

    2006

 
     (millions of dollars)  

Business uses: asset and liability perspective

                        

Total assets

   $ 228,052     $ 242,082     $ 219,015  

Less liabilities and minority share of assets and liabilities

                        

Total current liabilities excluding notes and loans payable

     (46,700 )     (55,929 )     (47,115 )

Total long-term liabilities excluding long-term debt and equity of minority interests

     (54,404 )     (50,543 )     (45,905 )

Minority share of assets and liabilities

     (6,044 )     (5,332 )     (4,948 )

Add ExxonMobil share of debt-financed equity company net assets

     4,798       3,386       2,808  
    


 


 


Total capital employed

   $ 125,702     $ 133,664     $ 123,855  
    


 


 


Total corporate sources: debt and equity perspective

                        

Notes and loans payable

   $ 2,400     $ 2,383     $ 1,702  

Long-term debt

     7,025       7,183       6,645  

Shareholders’ equity

     112,965       121,762       113,844  

Less minority share of total debt

     (1,486 )     (1,050 )     (1,144 )

Add ExxonMobil share of equity company debt

     4,798       3,386       2,808  
    


 


 


Total capital employed

   $ 125,702     $ 133,664     $ 123,855  
    


 


 


 

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Table of Contents
Index to Financial Statements

RETURN ON AVERAGE CAPITAL EMPLOYED

Return on average capital employed (ROCE) is a performance measure ratio. From the perspective of the business segments, ROCE is annual business segment earnings divided by average business segment capital employed (average of beginning and end-of-year amounts). These segment earnings include ExxonMobil’s share of segment earnings of equity companies, consistent with our capital employed definition, and exclude the cost of financing. The Corporation’s total ROCE is net income excluding the after-tax cost of financing,