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Exxon Mobil Corporation
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Jeffrey J. Woodbury
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5959 Las Colinas Boulevard
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Vice President, Investor Relations
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Irving, Texas 75039-2298
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and Secretary
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May 30, 2017
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Dear ExxonMobil Shareholders:
ExxonMobil believes
that a key tenet of good governance is a strong, independent Board that represents the interests of all shareholders and provides effective oversight of management. There are several elements that support this objective.
Board Strength
ExxonMobils Board is comprised of highly-qualified and
distinguished leaders of their respective businesses and professions. The strength and breadth of the companys Board is well recognized by experts in the field. For example, the ExxonMobil Board ranked among the top 5% of Americas
largest corporations in a recent third-party survey, which assesses the Boards overall governance capacity based on the directors demonstrated accomplishments and acumen
1
. Our
shareholders, too, have consistently registered their high approval of our Boards quality, with support of about 96% on average over the last 5 years.
Composition and Succession Planning
The Board has a well-established
succession planning process to ensure proactive and timely Board renewal. In this regard, the Board Affairs Committee has
Guidelines for the Selection of Non-Employee Directors
, which are published on ExxonMobils website. At least
annually, these guidelines are reviewed to ensure that they reflect current needs. Diversity is a key consideration that figures prominently in the
Guidelines
and is reflected in the composition of the Board, which is comprised of leaders
from many different industries and backgrounds. The active refreshment and diversity afford a rich foundation for the Board to provide collective oversight of the Companys extensive and complex business. In seeking qualified candidates, the
Committee employs an executive search firm as well as considers referrals.
Over the last 5 years, there have been 5 non-executive director retirements, and 6 new
non-executive directors joining the Board. A total of eleven directors are standing for election in 2017, ten of which are independent. Board tenure of the nominated non-executive directors averages approximately 7 years.
The Board Affairs Committee also considers Board requirements and director skillsets in determining committee assignments. A substantial majority of the Board must meet
the independence standards described in the Boards
Corporate Governance Guidelines
, also published on ExxonMobils website. All Board committee members meet applicable NYSE and SEC requirements. Importantly, for example, all
members of the Audit Committee are independent and financially literate under the NYSE standards, and the Chair and most other members of the Committee are audit committee financial experts under SEC rules.
Compensation
The compensation program that applies to the Board is intended
to remunerate directors on a competitive basis to ensure the attraction and retention of the best candidates. An external, independent consultant is employed to survey external practices each year to advise Board committees on director compensation.
Board members are also granted Company restricted stock under a shareholder-approved equity program. The program and its vesting requirements help to align the interests of directors with those of long-term shareholders and the long investment lead
times of the Company. The program has successfully attracted and retained top talent and we believe it supports the Companys long-term business focus.