Chevron’s CEO reportedly plans to step down from job
John Watson, who has led Chevron Corp. since 2010, is planning to step down as the oil company seeks a new chief executive officer, the Wall Street Journal said, citing people familiar with the matter.
While the San Ramon energy giant has not made a final decision on a successor, Michael Wirth, a veteran Chevron employee whose elevation was telegraphed in January when the company announced his promotion to vice chairman, has been seen as a leading candidate. An announcement will probably be made next month, the Journal said.
Chevron spokesman Kent Robertson declined to comment on the report.
Watson, 60, was named CEO after he oversaw the integration of Texaco and Unocal into Chevron. They
were purchased by his acquisitive predecessor and mentor, David O’Reilly. Since the global oil rout began in earnest in 2014, though, Watson has struggled to protect dividend payouts from the ravages of tumbling crude prices and shrinking cash flow.
Watson has resorted to job cuts, project cancellations and billions of dollars in asset sales to cope with an industry downturn that erased $50 billion from Chevron’s market value. In 2016, Chevron posted its first annual loss in at least 37 years.
One of Wirth’s crowning achievements was the restructuring of Chevron’s refining business by selling off billions of dollars in assets from Africa to Europe.
Under his leadership, the company quit processing crude in Western Europe as that market matured and growth slowed, and sharpened its focus on expanding demand in East Asia and Latin America.
Watson later expanded Wirth’s portfolio-trimming template to Chevron’s worldwide oil and natural gas unit.
Watson was an unlikely oil executive, having majored in agricultural economics at UC Davis before obtaining his master’s degree in business administration from the University of Chicago. Chevron’s mandatory retirement age for employee directors like Watson is 65.
The CEO could depart with an exit package worth as much as $119.3 million, according to data compiled by Bloomberg. That includes pension benefits worth $45.4 million and $13.4 million in accumulated deferred compensation. Both those figures are as of Dec. 31, according to regulatory filings. The remaining $60.3 million comes from previously awarded equity grants, as valued at the close of trading Monday.
His severance agreement provides that his options and restricted stock will vest as long as he’s held them for at least one year. If Watson leaves before Jan. 25, he’ll forfeit options and restricted stock that were granted in January, valued at $3.46 million.
As part of his retirement package, Chevron will also provide him an office and administrative support at approximately $200,000 per year.
Joe Carroll is a Bloomberg writer. Email: jcarroll8@ bloomberg.net