Hewitt Pate
General Counsel at CVX
Executive
About Hewitt Pate
R. Hewitt Pate is Vice President and General Counsel of Chevron (CVX), serving as a Named Executive Officer (NEO) with responsibilities spanning strategic litigation, regulatory, and transactional support; in 2024 he was credited for leadership on complex litigation and advancing the pending Hess merger through stockholder approval and FTC review, with the Management Compensation Committee (MCC) applying positive discretion to his annual bonus for superior functional impact . His incentive design links a majority of pay to multi-year equity tied to relative Total Shareholder Return (TSR) and relative Return on Capital Employed–Improvement (ROCE‑I); the 2022–2024 performance share cycle paid at 99% based on Chevron ranking third on TSR vs peers/S&P 500 and fourth on ROCE‑I . Executives are prohibited from hedging or pledging Chevron stock and are subject to robust ownership guidelines and a two-year post-vest RSU holding period, supporting alignment with shareholders .
Fixed Compensation
Multi‑year Summary Compensation (Pate)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | $1,018,542 | $1,084,375 | $1,139,583 |
| Stock awards ($) | $3,275,929 | $3,396,781 | $3,498,434 |
| Option awards ($) | $1,015,436 | $1,053,860 | $1,071,600 |
| Non‑equity incentive plan compensation ($) | $1,680,000 | $1,149,500 | $1,463,000 |
| Change in pension value & NQDC earnings ($) | $522,067 | $446,251 | $325,520 |
| All other compensation ($) | $872,926 | $418,590 | $444,198 |
| Total ($) | $8,384,900 | $7,549,357 | $7,942,335 |
Base Salary Rate (most recent actions)
| Year | Base Salary Rate ($) |
|---|---|
| 2023 | $1,100,000 (effective Mar 1, 2023) |
| 2024 | $1,150,000 (effective Mar 1, 2024) |
Performance Compensation
Annual Incentive (Chevron Incentive Plan – CIP)
| Year | Target Bonus % | Target ($) | Corporate Performance Rating | Individual Adjustment | Actual CIP Payout ($) |
|---|---|---|---|---|---|
| 2023 | 110% | $1,210,000 | 0.95 | $0 | $1,149,500 |
| 2024 | 110% | $1,265,000 | 1.10 | +$65,000 | $1,463,000 |
- 2024 CIP metrics and weights: Financial results 35%, Capital & cost 30%, Operating & safety 25%, Lower carbon 10%; weighted corporate performance rating: 1.10 (award capped at 200% of target) .
Long‑Term Incentive Plan (LTIP) – Grants and Vesting
| Grant Year | Instrument | Quantity/Terms | Exercise Price | Vesting | Grant‑date Fair Value ($) |
|---|---|---|---|---|---|
| 2023 | Performance Shares | 11,790 target shares | — | 3‑yr cliff; 70% TSR vs peer group & S&P 500; 30% ROCE‑I | — |
| 2023 | RSUs | 5,900 | — | Ratable; 3‑yr; two‑year post‑vest holding (execs) | — |
| 2023 | Stock Options | 23,000 | See award docs | 10‑yr term; 1/3 vests each Jan 31 starting ≥1 year post‑grant | — |
| 2024 | Performance Shares | 14,070 target shares | — | 3‑yr cliff; 70% TSR; 30% ROCE‑I; settled in shares (2024+) | |
| 2024 | RSUs | 7,030 | — | Ratable; 1/3 on each Feb 10 after ≥1 year; 2‑yr post‑vest holding (execs) | $1,071,021 |
| 2024 | Stock Options | 28,200 | $152.35 | 10‑yr term; 1/3 vests each Feb 10 starting ≥1 year post‑grant | $1,071,600 |
Performance Share Outcomes:
- 2022 Grant (performance period 2022–2024): payout multiplier 99%; for Pate: 17,164 shares granted plus dividend equivalents × 99% = 16,993 shares acquired on vesting; valued at $150.10 20‑day average; cash value $2,550,616 .
Option Exercises and Stock Vested (2024):
- Pate: 0 options exercised; 27,055 shares vested; value realized on vesting $4,034,224 .
Tax Withholding on RSUs (Dec 2024):
- Pate: 159 RSUs withheld; valued at $148.11; cash value $23,583 .
Equity Ownership & Alignment
Beneficial Ownership and Units (as of March 15, 2024)
| Holder | Shares Beneficially Owned | Stock Units | Total | % of Class | Notes |
|---|---|---|---|---|---|
| R. Hewitt Pate | 338,854 | 11,238 | 350,092 | <1% | Includes 258,408 options exercisable within 60 days ; includes 13,264 shares held by The Lindsey H. Pate 2019 Irrevocable Trust, disclaimed . |
Outstanding Equity Awards at FY 2024‑End (Selected Pate Line Items)
| Grant Date | Options Exercisable | Options Unexercisable | Exercise Price | Expiration | Unvested RSUs (#) | RSUs MV ($, at $144.84) | Unearned PSUs (#) | PSUs MV ($) |
|---|---|---|---|---|---|---|---|---|
| 2/6/2024 | — | 28,200 | $152.35 | 2/6/2034 | 7,339 | $1,063,032 | 29,378 | $4,255,110 |
| 1/25/2023 | 7,666 | 15,334 | $179.08 | 1/25/2033 | 4,109 | $595,192 | 12,793 | $1,852,938 |
| 1/26/2022 | 28,733 | 14,367 | $132.69 | 1/26/2032 | 8,252 | $1,195,267 | — | — |
| 1/27/2021 | 41,134 | — | $88.20 | 1/27/2031 | 9,648 | $1,397,406 | — | — |
| 1/29/2020 | 58,000 | — | $110.37 | 1/29/2030 | 8,158 | $1,181,611 | — | — |
| 1/30/2019 | 47,200 | — | $113.01 | 1/30/2029 | — | — | — | — |
| 1/31/2018 | 40,200 | — | $125.35 | 1/31/2028 | — | — | — | — |
| 1/25/2017 | 35,475 | — | $117.24 | 1/25/2027 | — | — | — | — |
Ownership Alignment Policies:
- Stock ownership guidelines: Vice Chairman, EVPs, and CFO: 4× salary; all other Executive Officers: 2× salary; executives have five years to comply; as of 12/31/24, all other NEOs met guidelines; average NEO multiple 7.0 .
- Hedging and pledging Chevron securities are prohibited; RSUs for executive officers carry a two‑year post‑vesting holding period .
Employment Terms
- General policy: Chevron does not maintain employment, severance, or change‑in‑control agreements for NEOs; there is no accelerated vesting upon change‑in‑control under the LTIP .
- Pate‑specific: 2018 agreement deems Pate to have 90 “points” (age + service) if terminated on or after June 30, 2022 (other than for misconduct), enhancing deemed vesting per LTIP service rules .
- LTIP vesting on termination (points framework): at ≥90 points, 100% vesting for RSUs and performance shares and remaining tranches of certain option grants, with options exercisable for remaining term; see company termination matrix .
Potential Payments Upon Termination (assumed termination 12/31/2024; non‑misconduct):
| Component | Amount |
|---|---|
| Performance shares deemed vested | $1,852,877 |
| RSUs deemed vested | $4,369,476 |
| Stock options deemed vested | $174,559 |
| Base salary, CIP, Severance | Not applicable (—) |
Clawbacks and Forfeiture:
- Chevron’s Dodd‑Frank Clawback Policy requires recovery of erroneously awarded incentive-based compensation after required restatements; compensation plans also carry discretionary forfeiture for misconduct (e.g., restatements, fraud, disclosure violations, unfair competition) .
- No tax gross‑ups for NEOs (except standard expatriate tax equalization for overseas assignments) .
Retirement and Deferred Compensation:
- Pension present value (12/31/2024): Chevron Retirement Plan $551,291; Retirement Restoration Plan $3,416,196; 15 years credited service .
- Deferred compensation: prior amounts reported for Pate include salary deferrals $366,585; ESIP‑RP $371,646; CIP $793,475; CIP credited to DCP in 2024: $365,750 .
- Retirement Restoration Plan (RRP) distribution election: Pate elected a single installment, first quarter at least one year following separation .
Performance Compensation (Detail: Metrics, Weighting, Payout, Vesting)
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| 2024 CIP (Corporate) | Financial 35%; Capital & cost 30%; Operating & safety 25%; Lower carbon 10% | Target bonus $1,265,000 | Corporate rating 1.10; individual +$65,000 | $1,463,000 | Paid Mar 2025 |
| 2022–2024 Performance Shares | 70% relative TSR; 30% relative ROCE‑I | 100% | TSR 3rd; ROCE‑I 4th; 99% modifier | $2,550,616 cash value for Pate | 3‑year cliff |
| 2024 RSUs | — | — | — | — | 1/3 vests each Feb 10 starting ≥1 year; 2‑yr post‑vest holding (execs) |
| 2024 Stock Options | — | — | — | — | 10‑year term; 1/3 vests each Feb 10 starting ≥1 year |
Compensation Structure Analysis
- Mix shifts and alignment: For 2024, Pate’s target package remained heavily at‑risk with LTIP vehicles (performance shares, RSUs, options) and an annual bonus; target details: Base $1,150,000; CIP target $1,265,000 (110%); LTIP target $4,286,100 .
- Year‑over‑year trends: Base salary rate increased 4.5% to $1,150,000 in 2024 (from $1,100,000 in 2023); LTIP target value modestly higher ($4.286M vs $4.224M) .
- Performance linkage: Multi‑year PSU payout at 99% ties realized pay to relative TSR/ROCE‑I; 2024 corporate score of 1.10 and modest positive discretion reflect MCC’s assessment of legal and M&A execution impact .
- Equity settlement change: PSUs awarded in 2024 and later settle in shares (was cash), further increasing equity alignment .
Equity Ownership & Alignment
- Compliance and restrictions: All other NEOs (including Pate) met ownership guidelines; hedging and pledging are prohibited; RSUs carry a mandatory two‑year post‑vest holding period for executive officers .
- Realization and supply overhang: Pate realized $4.03M from vesting in 2024 (no option exercises), with additional RSUs/PSUs outstanding; several option tranches are deeply in‑the‑money given lower historical strikes, with expirations stretching 2027–2034, but staggered vesting and long tenors mitigate forced selling pressure .
Employment Terms
- No companywide CIC acceleration; termination economics hinge on age‑plus‑service points; Pate’s 2018 agreement deems him at 90 points if terminated on/after 6/30/2022 (non‑misconduct), providing deemed vesting of certain unvested equity consistent with ≥90‑point tier .
- Clawback coverage is robust and extends across incentive pay; no NEO tax gross‑ups .
Additional Context: Peer Groups and Pay Governance
- Peer groups used for benchmarking include Oil Industry and Non‑Oil Industry peers; LTIP performance share peer group centers on BP, ExxonMobil, Shell, and TotalEnergies (TSR vs peer group and S&P 500) .
- Governance practices include ownership guidelines (CEO 6×, Vice Chair/EVPs/CFO 4×, others 2× salary), post‑vest holding, independent compensation consultant, and no option repricing or loans .
Investment Implications
- Alignment: Strong pay‑for‑performance architecture (70% TSR/30% ROCE‑I in PSUs, 2‑year RSU holding, no hedging/pledging) and share‑settled PSUs (from 2024) reinforce long‑term alignment and reduce agency risk .
- Retention: The ≥90‑point vesting construct and Pate’s 2018 agreement (deemed 90 points) enhance vesting continuity upon non‑misconduct termination, diminishing retention risk; 2024 termination table shows substantial deemed vesting values for PSUs/RSUs .
- Selling pressure: 2024 activity shows no option exercises by Pate and limited RSU tax withholding; large remaining option tranches have long maturities (2027–2034), implying low near‑term forced selling risk .
- Execution track record: Positive CIP discretion in 2024 was tied to progress on the Hess merger and strategic litigation leadership, suggesting continued influence on value‑critical corporate events; PSU payout at 99% evidences relative performance in line with peers over 2022–2024 .