The ratio of the annual total compensation of our CEO (Mr. Watson) to the annual total compensation of our median
compensated employee was 180:1 for 2017, calculated by dividing our CEOs 2017 annual total compensation of $24,781,568
1
by the 2017 annual total compensation of our median compensated
employee of $137,849
2
.
The SECs rules
for identifying the median compensated employee and calculating the pay ratio based on that employees annual total compensation allow companies to choose from a variety of methodologies, to apply certain exclusions and to make reasonable
estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable with our pay ratio reported above.
Our CEO to median compensated employee pay ratio is a reasonable estimate calculated in a manner that is consistent with SEC rules based on a combination
of compensation data from global payroll and human resources records and using the methodology, assumptions, and estimates described below.
We
identified the median employee using our employee population as of October 1, 2017, which included approximately 52,953 individuals located in 54 countries, of which 25,564 employees were on U.S. payroll and 27,389 were on non-U.S. payrolls.
Utilizing the de minimis exemption as permitted by SEC rules, we excluded approximately 4.1 percent of the total employee population in the non-U.S. jurisdictions with the smallest employee populations. As a result, we excluded 2,164
individuals in 38 non-U.S. countries. The excluded countries and their employee populations were as follows: Azerbaijan (9), Bahrain (9), Belgium (132), Bermuda (6), Botswana (8), Cambodia (34), Colombia (289), Democratic Republic of Congo (2),
Denmark (5), Egypt (53), El Salvador (107), Germany (13), Glorioso Islands (1), Greece (14), Guatemala (50), Honduras (37), India (1), Italy (4), Japan (140), Kazakhstan (213), Malaysia (186), Mexico (48), Myanmar (4), Netherlands (107), Norway
(11), Pakistan (110), Panama (50), Poland (1), Republic of Congo (34), Russian Federation (47), South Korea (10), Sri Lanka (76), Sweden (1), Taiwan (1), Turkey (4), United Arab Emirates (52), Venezuela (228), and Vietnam (67). As a result of these
exclusions, the employee population used to identify the median employee was composed of 50,789 individuals. We included employees from the following non-U.S. countries: Angola, Argentina, Australia, Bangladesh, Brazil, Canada, China, France,
Indonesia, Kuwait, Nigeria, Philippines, Singapore, South Africa, Thailand, and the United Kingdom.
We identified the median employee using 2017
total cash compensation as our consistently applied compensation measure, calculated for employees as the sum of (i) 2017 annual base salary determined as of October 1, 2017, and (ii) the actual annual cash bonus paid in the first quarter of 2017;
provided, however, that for hourly employees who work for Chevron Stations Inc., their total cash compensation was instead based on actual wages and bonus paid during 2017. The compensation in non-U.S. currencies was converted to U.S. dollars using
an average foreign exchange rate for the month of October 2017.
Our pay philosophy is to pay our workforce competitively and equitably; we offer
competitive pay packages across all geographies based on industry-specific compensation in the local market, job responsibilities, and individual performance. In general, our compensation programs are applied consistently across the workforce, and
compensation targets are set using a consistent methodology regardless of job function, with a higher percentage of pay-at-risk provided to executives. We believe both our CEO and our employee compensation packages are appropriately structured to
attract and retain the talent needed to deliver on our business plan and to drive long-term stockholder value.
1
|
Reflects the CEOs annual total compensation as reported in the Summary Compensation Table on page 49
of this Proxy Statement.
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2
|
The annual total compensation of the median compensated employee is calculated in the same manner as the CEOs
annual total compensation in the Summary Compensation Table.
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62
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Chevron Corporation2018 Proxy
Statement
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