Chevron Executive Comp 2012
|Filer||Laborers' International Union of North America|
|Sector||Oil and Gas|
|Resolved Clause Summary||Executive compensation linked to ESG|
|Status||Withdrawn; Company will address|
RESOLVED: That the shareholders of Chevron Corporation (“Chevron” or “Company”) request the Board's Compensation Committee, when setting senior executive compensation, include sustainability as one of the performance measures for senior executives under the Company’s annual and/or long-term incentive plans. Sustainability is defined as how environmental, social and financial considerations are integrated into corporate strategy over the long term.
We believe that the long-term interest of shareholders, as well as other important constituents, is best served by companies that operate their businesses in a sustainable manner focused on long-term value creation. As the recent financial crisis demonstrates, those boards of directors and management that operate their companies with integrity and a focus on the long term are much more likely to prosper than ones that are dominated by a short-term focus. The best means of demonstrating a company’s commitment to the concept of sustainability is through incorporating it as a performance measure in the Company’s annual and/or long-term incentive plans.
We note that the Company has affirmed its commitment to the concept of sustainability. Chevron’s 2010 Corporate Responsibility Report contains an extensive discussion of various social and environmental initiatives and the concept of sustainability. The letter from the Chairman of the Board and CEO states:
Energy is essential to human progress-it creates jobs, fuels innovation and powers virtually every element of the global economy.
Providing that energy safely, reliably and economically is a great responsibility that we take seriously.
While these words are laudable, incorporating them into the Company’s senior executive compensation program would give them real impact. The Compensation Discussion and Analysis does not disclose any specific performance measures related to sustainability in the Company’s annual incentive plan or its long-term incentive plan. We believe that this represents a serious shortcoming.
Other companies have added sustainability to the metrics that they use when determining executive compensation. British utility company National Grid announced last year it would partly base executive compensation on meeting targets for reducing carbon emissions. In addition, Xcel Energy in its 2009 proxy statement discloses that certain annual incentive payments are dependent on green house gas emission reductions alongside the weight given to meeting earnings per share targets.
We urge fellow shareholders to vote YES on this important proposal.