In 2023, Chevron’s CEO Michael Wirth received a 12.2% increase in pay, totaling $26.5 million, as revealed in a securities filing. This surge in executive compensation further widens the gap between the CEO’s earnings and the median pay raise for Chevron’s 45,511 employees. The median annual compensation for Chevron employees, both in the U.S. and abroad, rose by 8.7% to $175,673 in 2023, marking a notable increase from the previous year’s median compensation of $161,488, which had experienced a 12% decline. Meanwhile, Wirth’s pay had increased by 4% in 2022.
The proposed $53 billion acquisition of oil producer Hess by Chevron contributed positively to Wirth’s compensation, with the board emphasizing its potential to strengthen the company’s portfolio. However, the acquisition is currently pending regulatory approval and is being contested by rival Exxon Mobil in an arbitration procedure.
Chevron highlighted Wirth’s success in delivering the company’s key financial priorities, which primarily revolve around enhancing shareholder returns and reducing debt. In 2023, Chevron allocated a record $26.3 billion to shareholders through dividends and buybacks, representing an 18% increase from the previous year.
Additionally, Mark Nelson, the second-highest paid executive at Chevron, saw a 61.5% pay raise to $12.2 million after being promoted to vice chair. It’s important to note that the disclosed figures do not reflect the actual realizable compensation, as they include equity-based awards, the value of which remains uncertain until options are exercised or stock is sold.
Despite these positive developments, Chevron underperformed its peers in 2023, with its shares declining by 15% to $149. Furthermore, Wirth’s non-equity incentive plan compensation decreased by 42% to $2.6 million, attributed to cost and schedule slippage on Chevron’s major project in Kazakhstan and capital expenditures overruns in the U.S. Permian Basin.