Exxon’s profits are falling, but CEO Darren Woods’ compensation rose last year—here’s how the oil giant rewards its top exec

Oil-and-gas behemoth ExxonMobil announced disappointing financial results on Friday that led to a quick stock price drop of more than 3%. Earnings in the first quarter were about 28% lower than the same period last year: $8.2 billion compared to $11.6 billion, the company announced. CEO and chairman Darren Woods said the results could be attributed to a mix of non-cash tax and inventory adjustments that happen from time to time. Lower gas prices are also at issue. “This quarter they happened to stack up,” Woods said on CNBC. The company’s stock is up more than 15% year-to-date, and its market cap is $468 billion.

The relatively so-so first quarter comes on the heels of lower profits in 2023, which were still $36 billion, but lower than the 2022 record high of $55.7 billion following Russia’s invasion of Ukraine. The company’s skyrocketing profit growth moved President Biden to warn Exxon that the administration would explore tax penalties on oil companies if they didn’t try to invest in reducing gas prices for consumers at the pump. “Their profits are a windfall of war—the windfall from the brutal conflict that’s ravaging Ukraine and hurting tens of millions of people around the globe,” Biden said. “You know, at a time of war, any company receiving historic windfall profits like this has a responsibility to act beyond their narrow self-interest of its executives and shareholders.”

After the 2023 drop, the ExxonMobil board scooped $1.6 million from Woods’ annual bonus compared to the previous year, giving him $4.8 million down from $6.4 million in 2022. Woods’ total direct pay in 2023 was valued at $36.9 million, the company said this month. The amount was 2.8% higher than the year before due to a change in the Woods’ pension value. He has worked at ExxonMobil for 32 years.

Paid in a decade

The oil giant pays executives with performance-based equity, which makes up more than 70% of their total compensation package. However, Exxon requires executives hold their stock awards for 10 years, with half of the awards vesting in five years and the second half a decade after the grant date. Currently, Woods’ stock ownership is 86 times his base salary because 85% of his shares are unvested, Exxon said.

In 2023, Woods’ total realized pay—meaning the total cash salary, bonus, and market value at the vesting of his stock-based awards—was $15.6 million, down from $18.1 million in 2022, but still higher than his $9.1 million in realized pay in 2021. (Realized pay excludes unvested awards and amounts that an executive hasn’t received yet.)

ExxonMobil reported pay amounts for Woods and other top executives this month ahead of its annual shareholder meeting on May 29.

Woods said in his letter to investors that society has two essential asks of the industry: “reliably provide affordable energy and products critical to modern life, and reduce greenhouse gas emissions.”

To that end, the company is planning $20 billion in investments in lower emissions through 2027; half will be focused on reducing the company’s own emissions, while the other half will go to reducing emissions for third parties, said Woods. ExxonMobil will also invest between $23 to $25 billion this year to expand its portfolio of low-cost-of-supply assets. “The portfolio of opportunities we see in carbon capture and storage, hydrogen, biofuels, and lithium production could reduce third-party emissions by more than 50 million metric tons per year by 2030 while generating attractive returns,” said Woods. The ExxonMobil board has endorsed the strategic plan and its investments through 2027, the company said in a filing.

This story was originally featured on Fortune.com