ExxonMobil: Constructing a Mock Long-Term Plan

Michael P. Krzus and Brian Tomlinson

March 23, 2019

Abstract A diverse group of institutional investors and corporations are driving a movement to encourage corporate CEOs to present their organization’s long-term plan to institutional investors. Long-term plans may be perceived as additive to existing disclosures. Given that companies must comply with mandated disclosures and many provide a wide range of voluntary information, we decided to conduct an experiment. We posed the following question; “Is it possible and, if so, how difficult would it be to construct a mock long-term plan for a company based on information the company has placed in the public domain?” For our experiment, we selected ExxonMobil as the target of our experiment because of what had been learned about the extent of the company’s regulatory and voluntary disclosures during previous research projects. We were able to construct a decent a mock long-term plan that addressed, in varying degrees of completeness and quality, most of the recommended elements of a long-term plan. Keywords: capital allocation, CECP Strategic Investor Initiative, competitive advantage, corporate governance, ESG, ExxonMobil, FCLTGlobal, long-term plan, risks and opportunities, strategy, sustainability Michael P. Krzus is an independent consultant and researcher. Brian Tomlinson is the Research Director at the CECP Strategic Investor Initiative. Contact email: MikeKrzus@icloud.com and BTomlinson@cecp.co.

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Long-Term Plans Discussions about boards of directors and CEOs facing pressure to prioritize short-term earnings at the expense of long-term decision-making are decades old. All too often corporate representatives explain that they are faced with market demands for quarter-to-quarter financial performance and that questions regarding long-term prospects are seldom raised on earnings calls.1 It is true that earnings expectations and instantaneous flows of information are among the drivers of short-term metrics and decision-making, which create short-term incentives, which feed a short-term view of the markets. The challenge of short-termism does not rest on the shoulders of any single group; this is a collective action problem and alliances against the effects of short-termism are emerging. This project was inspired by the CEO-Investor Forums convened by the CECP Strategic Investor Initiative (SII)2 and the research3 published as a result of these forums. We were also influenced by the research and work of FCLTGlobal,4 International Integrated Reporting Council (IIRC),5 KKS Advisors (KKS),6 and McKinsey & Co.7 These organizations are among the champions for the idea that a company should communicate their plans for the long-term.

1 Dominic Barton, Jonathan Bailey, and Joshua Zoffer, Rising to the challenge of short-termism, FCLTGlobal, September 2016. 2 “The Strategic Investor Initiative is a forum where CEOs present long-term plans to longer-term investors, to demonstrate the greater sustained earnings power proven to come from long-term thinking.” CECP Strategic Investor Initiative, accessed December 18, 2018, http://cecp.co/home/our-coalition/strategic-investor-initiative/. 3 Brian Tomlinson and Michael P. Krzus. “Method of Production of Long-Term Plans: How and Why Corporations Choose to Talk About The Long Term.” CECP Strategic Investor Initiative. January 2019. Sakis Kotsantonis, Christina Rehnberg, George Serafeim, Brian Tomlinson, and Bronagh Ward. “The Economic Significance of Long-Term Plans.” CECP Strategic Investor Initiative and KKS Advisors, November 2018. Brian Tomlinson, Emerging Practice in Long-Term Plans: How CEOs Talk About the Long Term, CECP Strategic Investor Initiative, October 2018. 4 “FCLTGlobal is a not-for-profit organization that works to encourage a longer-term focus in business and investment decision-making. We accomplish this by developing practical tools and approaches to support long-term behaviors across the investment value chain.” FCLTGlobal, accessed December 18, 2018, https://www.fcltglobal.org. Also, see FCLTGlobal, Research, accessed December 18, 2018, https://www.fcltglobal.org/research/overview. 5 “The International Integrated Reporting Council (IIRC) is a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs. The coalition is promoting communication about value creation as the next step in the evolution of corporate reporting.” International Integrated Reporting Council, The IIRC, accessed December 18, 2018, http://integratedreporting.org/the-iirc-2/. 6 “At KKS Advisors, our mission is to help organizations build effective strategies that pave the way to a sustainable society.” KKS Advisors, About Us, accessed December 18, 2018, https://www.kksadvisors.com/about-us/. Also see KKS Advisors, Our Insights, Publications, accessed December 18, 2018, https://www.kksadvisors.com/publications/. 7 “We are a global management consulting firm that serves a broad mix of private, public and social sector institutions. We help our clients make significant and lasting improvements to their performance and realize their most important goals.” McKinsey & Co., About Us, accessed December 18, 2018, https://www.mckinsey.com/about-us/overview.

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The description of a long-term plan could be stated, for example, as explaining to “providers of financial capital”8 how a company plans to create value over the short-, medium-, and long-term. It would be a mistake to interpret the foregoing statement as being focused solely on investors and bankers or on maximizing earnings. The ideal long-term plan should explain how value will be created not only for today’s shareholders, but also for future generations of shareholders.9 The Experiment Publicly traded companies must comply with mandated disclosures and many publish a wide range of information on a voluntary basis. We decided to conduct an experiment given the increasing calls for companies to disclose more information about their long-term strategy. We posed the following question: Is it possible and, if so, how difficult would it be to construct a mock long-term plan for a company based on information the company has placed in the public domain? We selected ExxonMobil as the target of our experiment because of what we learned about the extent of the company’s regulatory and voluntary disclosures during research into the impact of the recommendations of the TCFD on the oil & gas industry (Eccles and Krzus, 2017)10 and the construction of a mock integrated report (Eccles and Krzus, 2018)11. Construction Methodology We identified and downloaded nine ExxonMobil documents that were in the public domain in November and December 2018. The following documents and information from two pages on the ExxonMobil corporate website were reviewed. With the exception of the Form 10-K, all were used to construct the mock long-term plan.

1. ExxonMobil 2017 Executive Compensation Overview12 2. ExxonMobil 2017 Financial and Operating Review13

8 International Integrated Reporting Council. International <IR> Framework, December 2013, p. 7. 9 Tim Koller, Marc Goedhart, and David Wessels. Valuation: Measuring and Managing the Value of Companies, 6th ed. (Hoboken, John Wiley & Sons, Inc., 2015), p. 4. 10 Robert G. Eccles and Michael P. Krzus. “An Analysis of Oil & Gas Company Disclosures from the Perspective of the Task Force on Climate-related Financial Disclosures” (Unpublished manuscript, December 14, 2017). 11 Robert G. Eccles and Michael P. Krzus. “Constructing ExxonMobil's First Integrated Report: An Experiment” (Unpublished manuscript, March 21, 2018). 12 ExxonMobil. 2017 Executive Compensation Overview, accessed December 18, 2018, https://cdn.exxonmobil.com/~/media/global/files/investor-reports/2017/2017_executive_compensation_overview.pdf. 13 ExxonMobil. 2017 Financial & Operating Review, accessed December 18, 2018, https://cdn.exxonmobil.com/~/media/global/files/summary-annual-report/2017-financial-and-operating-review.pdf.

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3. ExxonMobil 2017 Form 10-K14 4. ExxonMobil Notice of 2017 Annual Meeting and Proxy Statement 15 5. ExxonMobil 2017 Summary Annual Report16 6. ExxonMobil 2017 Sustainability Report Highlights17 7. ExxonMobil 2018 Analyst Meeting18 8. ExxonMobil News Release, March 7, 2018, ExxonMobil Outlines Aggressive Growth

Plans to More than Double Earnings19 9. ExxonMobil 2018 Energy and Carbon Summary20 10. ExxonMobil website, Our Guiding Principles21 11. ExxonMobil website, Research and Development22

We also read three other documents that were published by other organizations.

1. Seeking Alpha, ExxonMobil Q3 2018 Results - Earnings Call Transcript23 2. The Motley Fool, “ExxonMobil is Playing the Long Term Game for a Bigger Win”24 3. Seeking Alpha, “ExxonMobil: The Time Has Come”25

Our next step was to create a long-term plan content framework to organize the information. Our framework was created by aligning guidance and research published by the following organizations:

14 ExxonMobil. 2017 Form 10-K, accessed December 18, 2018, https://ir.exxonmobil.com/sec-filings. 15 ExxonMobil. Notice of 2017 Annual Meeting and Proxy Statement, accessed December 18, 2018, https://cdn.exxonmobil.com/~/media/global/files/investor-reports/2018/2018-proxy-statement.pdf. 16 ExxonMobil. 2017 Summary Annual report, accessed December 18, 2018, https://cdn.exxonmobil.com/~/media/global/files/summary-annual-report/2017-summary-annual-report.pdf. 17 ExxonMobil. 2017 Sustainability Report Highlights, accessed December 18, 2018, https://cdn.exxonmobil.com/~/media/global/files/sustainability-report/2017-sustainability-report.pdf. 18 ExxonMobil. 2018 Analyst Day, accessed December 18, 2018, https://cdn.exxonmobil.com/~/media/global/files/investor-reports/2018/2018-analyst-meeting-presentation.pdf. 19 ExxonMobil. News Release, March 7, 2018, ExxonMobil Outlines Aggressive Growth Plans to More than Double Earnings, accessed December 18, 2018, https://news.exxonmobil.com/press-release/exxonmobil-outlines-aggressive-growth-plans-more-double-earnings. 20 ExxonMobil. 2018 Energy and Carbon Summary, accessed December 18, 2018, https://cdn.exxonmobil.com/~/media/global/files/energy-and-environment/2018-energy-and-carbon-summary.pdf. 21 ExxonMobil, Our Guiding Principles, accessed December 18, 2018, https://corporate.exxonmobil.com/en/company/about-us/guiding-principles/our-guiding-principles. 22 ExxonMobil. Research and Development, University Collaborations, accessed December 18, 2018, https://corporate.exxonmobil.com/en/energy/research-and-development/university-collaborations/overview. 23 Seeking Alpha. ExxonMobil Q3 2018 Results-Earnings Call Transcript, accessed December 18, 2018, https://seekingalpha.com/article/4217719-exxon-mobil-xom-q3-2018-results-earnings-call-transcript. 24 The Motley Fool. “ExxonMobil is Playing the Long Term Game for a Bigger Win,” accessed December 18, 2018, https://www.fool.com/investing/2018/03/22/exxonmobil-corporation-is-playing-the-long-game-fo.aspx. 25 Seeking Alpha. “ExxonMobil: The Time Has Come, accessed December 18, 2018, https://seekingalpha.com/article/4158474-exxon-mobil-time-come.

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• CECP Strategic Investor Initiative and KKS Advisors 26 • FCLTGlobal27 • International Integrated Reporting Council28 • Committee of Sponsoring Organizations of the Treadway Commission (COSO)29

We also considered information about value creation published by McKinsey & Co.30 and its partners. Analysis of ExxonMobil Mock Long-Term Plan Our experiment was successful in that we constructed a decent31 ExxonMobil mock long-term plan from publicly available information. Our collective expertise and familiarity with the depth and scope of ExxonMobil’s corporate reporting was helpful during this project. A brief review of each mock long-term plan section follows. Corporate Governance This section of the mock long-term plan addressed how compensation is linked to long-term goals. It covered linkage of performance to pay, components of compensation, and the relationship to managing risks. Targets for Earnings and Return on Capital Employed were presented for 2018, 2019, 2020-2024, and 2025, and three different assumptions for the price of oil were presented. There was a similar presentation for Cash Flow from Operations. In addition, targets for 2018 and 2019 Workforce lost time incidents (safety and operations integrity is an element of executive compensation) was disclosed.

26 George Serafeim and Christina Rehnburg. “The Economic Significance of Long-Term Plans.” Findings presented at the 5th CECP Strategic Investor Initiative CEO-Investor Forum, New York, NY, September 20, 2018. Kotsantonis, Rehnberg, Serafeim, Tomlinson, and Ward. “The Economic Significance of Long-Term Plans.” 27 Focusing Capital on the Long Term. “Straight talk for the long term: How to improve the investor-corporate dialogue,” March 2015. FCLTGlobal. “Rising to the challenge of short-termism,” September 2016. Accessed March 1, 2019, https://www.fcltglobal.org/research/reports. 28 The Human Capital section of our framework was based on the International <IR> Framework . International Integrated Reporting Council. International <IR> Framework, December 2013, p. 12. 29 The Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO is a joint venture of the American Accounting Association, the American Institute of Certified Public Accountants, Financial Executives International, The Institute of Internal Auditors, and the Institute of Management Accountants. COSO develops frameworks and guidance on enterprise risk management, internal control, and fraud deterrence. Accessed March 1, 2019, https://www.coso.org/Pages/default.aspx. Details regarding the Guidance on Enterprise Risk Management, Integrating with Strategy and Performance (2017) and how to purchase documents are on the website. 30 The Competitive Positioning section the mock long-term plan was informed by the work of McKinsey & Co. Koller, Goedhart, and Wessels. Valuation, 547-558. 31 The authors’ use of the word “decent” to describe the ExxonMobil mock long-term plan means the document is “of an acceptable standard; satisfactory.” New Oxford American Dictionary, Apple macOS Mojave, version 10.14.1.

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The board’s oversight responsibilities were explained in detail and included long-term strategic plans. However, no details were disclosed regarding the amount of time the board spent on long-term strategy discussions. The mock long-term plan described the company’s process for engaging with shareholders and other stakeholders, such as customers, employees, and communities. We were able to construct disclosures that named all directors and their affiliations, which implied a diversity of background and expertise; however, an explicit linkage to the effects of a diverse board of directors on guiding long-term plans was not explained. We used information in the following ExxonMobil documents and on the corporate website to construct this section. In this case, ExxonMobil overall transparency on the topic was offset by the number of sources needed to construct the mock long-term plan section.

1. 2017 Executive Compensation Overview 2. 2017 Sustainability Report Highlights 3. Notice of 2017 Annual Meeting and Proxy Statement 4. 2018 Energy & Carbon Summary 5. ExxonMobil website, Our Guiding Principles

Trends The key elements for disclosure in this section are trends in the marketplace, sources of competitive advantage, and megatrends likely to affect the company. Our mock long-term plan addressed each of these elements. Using the company’s 2018 Carbon & Energy Summary, we constructed a discussion about the risks of climate change and an acceleration of decarbonization of the global energy system. This discussion included an overview of the company’s responses for both the near- and long-term. The company also prepared a 2ºC scenario analysis to consider the potential effects of meeting these goals on the company’s proven reserves. Last, this section provided an overview of three major lines of business—Upstream, Downstream, and Chemical—and an assessment of the current business environment for those lines of business. We used information in the following ExxonMobil documents and on the corporate website to construct this section. Again, ExxonMobil transparency on the topic was offset by the number of sources needed to construct the mock long-term plan section.

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1. 2018 Energy & Carbon Summary 2. 2017 Financial & Operating Review 3. 2017 Summary & Annual Report

Corporate Purpose We created a statement of the company’s purpose and two brief sections captured five near-term actions and, for the longer term, one paragraph outlined ExxonMobil’s emphasis on pursuing technologies related to carbon capture and storage, reduction of energy requirements at manufacturing facilities, and development of biofuels. The 2018 Carbon & Energy Summary provided the information necessary to create this section. Competitive Positioning Our mock long-term plan included information from the March 2018 Analyst Meeting presentation and the company’s related press release. These documents addressed performance metrics for monitoring the company’s long-term strategic health, medium-term performance, and short-term performance. As described in the Corporate Governance section above, the company provided information about targets for Earnings and Return on Capital Employed for 2018, 2019, 2020-2024, and 2025. Three different assumptions for the price of oil were presented. There was a similar presentation for Cash Flow from Operations. In addition, targets for 2018 and 2019 Workforce lost time incidents were disclosed. Specific targets for Upstream, Downstream, and Chemical segments were also provided. We used information in the following ExxonMobil documents and on the corporate website to construct this section. We note that some of the information in this section is relevant to the discussion of Financial Performance.

1. ExxonMobil press release, March 7, 2018 2. 2018 Analyst Meeting presentation

Strategic Partnerships Collaborations with energy centers at Princeton University, Massachusetts Institute of Technology, University of Wisconsin-Madison, and University of Texas-Austin were described. The website identified areas of research, including but not limited to, energy bioscience, energy

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storage, nuclear fusion, and biofuels. In some cases, a discussion of the impact of the collaboration on company research in emerging areas, such as photovoltaic and nuclear power, was included. The missing element in this discussion was identification of metrics used to evaluate whether research objectives were progressing as envisioned, or had been attained. We used information on the corporate website—ExxonMobil Collaborating with Leading Universities—to construct this section. Capital Allocation ExxonMobil’s mock long-term plan included estimates for capital expenditures to 2025. The discussion foresees limited share buybacks and mentions, but does not provide many details about, free cash flow and dividends over time. We relied on information captured by two external observers and two ExxonMobil documents to construct this section. The combination of internal and external sources of information impeded our ability to easily construct this section.

1. The Motley Fool, “ExxonMobil is Playing the Long Term Game for a Bigger Win” 2. Seeking Alpha, ExxonMobil: The Time Has Come” 3. ExxonMobil Q3 2018 Earnings Call Transcript 4. 2017 Operating and Financial Review

Human Capital32 ExxonMobil disclosures focused on workplace safety (one of the seven performance areas for executive compensation) and health and employee engagement, for example, resource groups for Asians, Latinos, new employees, veterans, and women. This section also discussed the company’s global diversity framework, business conduct standards, and a range of workplace metrics (for example, safety and injury metrics, women in the workforce, training expenditures) for 2008-2017. Little or no information was provided on how the market environment or emerging trends might affect human capital related investments. We used information in the ExxonMobil 2017 Sustainability Report Highlights to construct this section. Risks and Opportunities 32 This section of is based on the International <IR> Framework. International Integrated Reporting Council. International <IR> Framework, December 2013, p. 12.

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The key elements discussed in this section are how the company assessed financially material ESG issues, the affect of those issues on strategy and capital allocation plans, how financially material risks were managed or mitigated, and how financially material opportunities were developed. The processes for identifying and assessing material ESG issues were disclosed and specific 2107 material issues were identified. Board and management oversight responsibilities were discussed and opportunities primarily related to transitioning to a lower carbon economy were also disclosed. We used information in the following ExxonMobil documents and on the corporate website to construct this section. ExxonMobil transparency on the topic was offset by the number of sources needed to construct the mock long-term plan section.

1. 2017 Sustainability Report Highlights 2. Notice of 2017 Annual Meeting and Proxy Statement 3. 2018 Energy & Carbon Summary

Financial Performance The key elements disclosed in this section were historical capital efficiency, profitability, and growth performance. In addition, the Competitive Positioning section of the mock long-term plan included forward looking metrics that are relevant to the Financial Performance discussion. We used information in 2017 Operating & Financial Review to construct this section. Conclusion This experiment and previous work to create an ExxonMobil mock integrated report (Eccles and Krzus, 2018) found that ExxonMobil publishes a wide range of corporate information in the public domain. Much of the same information enabled us to create a decent mock long-term plan, which, at least to some degree, addresses the elements of our long-term plan content framework. The quality of disclosures for the nine major themes described in our content framework would be improved with more consistent disclosure of information having a medium- and long-term view. We acknowledge that the overall quality and level of detail in our mock long-term plan may not entirely satisfy the expectations of asset owners and asset managers. That said, we are certain that our lack of experience with the oil & gas industry and the absence of any contact with ExxonMobil contributed to some of the shortcomings of the mock report.

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Even though we acknowledge the company’s transparency in reporting a wide range of information, the number of ExxonMobil documents across which data relevant to a long-term plan are spread diminishes their usefulness to shareholders and stakeholders.

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References Barton, Dominic. “Capitalism for The Long Term,” Harvard Business Review, March 2011. Barton, Dominic. “The City and Capitalism for the Long Term.” The Tomorrow’s Value Lecture Series. London, May 15, 2013. Barton, Dominic and Mark Wiseman, “Focusing Capital on the Long Term,” Harvard Business Review, December 20, 2013. Barton, Dominic, Jonathan Bailey, and Joshua Zoffer, Rising to the challenge of short-termism, FCLTGlobal, September 2016. Barton, Jonathan, James Manyika, Timothy Koller, Robert Palter, Jonathan Godsall, and Joshua Zoffer, Measuring the Economic Impact of Short-Termism,” McKinsey Global Institute, February 2017. CECP Strategic Investor Initiative Advisory Board Investor Subcommittee, CEO Investor Forum: Investor Letter to Presenting Companies, February 2018. Darr, Rebecca, and Tim Koller, How to build an alliance against short-termism, McKinsey & Co., January 2017. Eccles, Robert G. and Michael P. Krzus. “Constructing ExxonMobil’s First Integrated Report: An Experiment.” Unpublished manuscript, last modified March 21, 2018. Eccles, Robert G. and Michael P. Krzus. “Constructing Alphabet Inc.’s 2017 Mock Integrated Report.” Unpublished manuscript, last modified July 1, 2018. Eccles, Robert G. and Michael P. Krzus. “Constructing Bank of America’s 2017 Mock Integrated Report: Experiment No. 3.” Unpublished manuscript, last modified August 6, 2018. FCLTGlobal, Long-term Boards in a Short-term World, June 2018. FCLTGlobal, We Need to Talk: Driving Long-term Value Through the Investor/Corporate Dialogue, May 2018. FCLTGlobal, Moving Beyond Quarterly Guidance: A Relic of the Past” October 2017.

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Focusing Capital on the Long Term, A roadmap for focusing capital on the long term, March 2015. Focusing Capital on the Long Term, Straight talk for the long term: How to improve the investor-corporate dialogue, March 2015. Goedhart, Mark, Tim Koller, and David Wessels, The real business of business, McKinsey & Co., March 2015. Koller, Tim, Marc Goedhart, and David Wessels. Valuation: Measuring and Managing the Value of Companies, 6th ed. (Hoboken, John Wiley & Sons, Inc., 2015). Kotsantonis, Sakis, Christina Rehnberg, George Serafeim, Brian Tomlinson, and Bronagh Ward. “The Economic Significance of Long-Term Plans.” CECP Strategic Investor Initiative and KKS Advisors, November 2018. Knauer, Andrew and George Serafeim, “Attracting Long-Term Investors Through Integrated Thinking and Integrated Reporting: A Clinical Study of a Biopharmaceutical Company,” Spring. Journal of Applied Corporate Finance 26, no. 2 (2014). Rehnberg, Christina, George Serafeim, and Brian Tomlinson, “Why CEOs Should Share Their Long-Term Plans with Investors,” Harvard Business Review, September 19, 2018. George Serafeim, “Integrated Reporting and Investor Clientele,” Spring. Journal of Applied Corporate Finance 27, no. 2 (2015). Serafeim, George, and Christina Rehnberg, “The Economic Significance of Long-Term Plans.” Presented at CECP Strategic Investor Initiative CEO-Investor Forum, New York, NY, September 20, 2018. Brian Tomlinson and Michael P. Krzus. “Method of Production of Long-Term Plans: How and Why Corporations Choose to Talk About The Long Term.” CECP Strategic Investor Initiative. January 2019. Tomlinson, Brian, Emerging Practice in Long-Term Plans: How CEOs Talk About the Long Term, CECP Strategic Investor Initiative, October 2018. Tomlinson, Brian, Reorienting Capital Markets Toward the Long-Term, CECP Strategic Investor Initiative, August 2018.

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Appendix 1

ExxonMobil Mock Long Term Plan

Corporate Governance Executive compensation and long term strategy

How did we perform? How do we link performance and pay?

How do we pay? How do we manage risk?

Best-ever safety performance Industry-leading ROCE over the business cycle 2016 results • Earnings of $7.8 billion • Distributed $12.5 billion to

shareholders Strongest balance sheet among industry peers

Industry-leading results required in 7 pre-established performance areas and metrics, over time periods aligned with investment lead times of the business, to achieve top level incentive award.

Bonus program down 30 percent, which followed a 35-percent reduction in 2015 Ultimate value of long-term performance shares determined by share price at vest Vesting periods that are 3 times longer than competitors CEO realized and unrealized pay at 43rd percentile of benchmark companies

Significant performance share holding requirement through long vesting periods Performance shares at risk of forfeiture and cannot be used as collateral for any purpose, including during retirement No change-in-control arrangements and no employment contracts Bonus clawback policy

Linking Performance and Pay Business Performance

• Industry-leading results [in comparison to Chevron, Royal Dutch Shell, Total, and BP] in 7 pre-established performance areas and metrics [Safety and Operations Integrity, Return on Average Capital Employed (ROCE), Free Cash Flow, Shareholder Distributions, Total Shareholder Return (TSR), Strategic Business Results, and Project Execution] over investment lead times of the business required to achieve a top quintile bonus and long-term performance share award

• Outstanding performance in one area will not cancel out poor performance in another Individual Performance

• Annual performance assessment through well-defined process covering executive officers and more than 1,700 executives worldwide across multiple business lines and staff functions

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• Performance assessments are spread across 5 quintiles, each of which corresponds to an award level, widely differentiated between highest and lowest quintile, and determined by annual benchmarking

• All 21 executive officers are expected to perform at the highest level or they are replaced o If it is determined that another executive would make a stronger contribution than

the current officer, a succession plan is implemented and the incumbent is reassigned or separated

Performance Award Matrix

Quintile 1 2 3 4 5 Performance shares

100% 80% 50% 30% 0

Bonus 100% 80% 60% 50% 0 Performance CEO

Annual benchmarking determines number of shares of each quintile and pay grade

Management Committee Presidents Executives

Vesting Periods Vesting periods for senior executives far exceed typical three-year vesting that is common across most industries.

• Performance shares vest 50 percent in 5 years from grant date and 50 percent in 10 years or retirement, whichever is later; these stock holding requirements are not accelerated upon retirement. For example, awards granted based on business and individual performance during the period 2006-2016 vest valued at share price when vested, which would be during the period 2011-2026.

• Better aligns with time frames over which business decisions affect long-term shareholder value

Sources: Tables were recreated from 2017 Executive Compensation Overview, pages 1 and 4 and vesting period text created from bar chart in 2017 Executive Compensation Overview, page 6. Board composition and long term strategic goals ExxonMobil’s board of directors provides a key oversight role, including review of risk management efforts and long-term strategic plans. Ensuring that we have diversity of

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background, experiences and thought represented on the board remains critical to succeeding in a global market. [The Board is composed of people with] Diverse backgrounds and expertise, including Former president and director of the Woods Hole Oceanographic Institution, T.M. Friedman Professor of Economics and Senior Fellow, Hoover Institution, Stanford University, Former Chairman of the Board, President and Chief Executive Officer of WellPoint (now Anthem), a health insurance company, Chairman of the Board, Xerox Corporation, Chairman of the Board and Chief Executive Officer, Holsman International, Chairman of the Board, President, and Chief Executive Officer, Merck & Co., Former Chairman of the Board and Chief Executive Officer, Caterpillar Inc., Former Chairman of the Board, IBM, Executive in Residence, Wake Forest University, Former Chairman of the Board, Johnson & Johnson, and Chairman of the Board and Chief Executive Officer, Exxon Mobil Corporation. Sources: 2017 Sustainability Report Highlights, Corporate Governance, p. 9 and Notice of 2017 Annual Meeting and Proxy Statement, “ExxonMobil directors,” pages 14-19. The role of board in corporate strategy, risk management, and setting incentives The Board of Directors and its committees perform a number of functions for ExxonMobil and its shareholders, including: Overseeing the management of the Company on your behalf, including oversight of risk management; Reviewing ExxonMobil’s long-term strategic plans; Exercising direct decision-making authority in key areas, such as declaring dividends; Selecting the CEO and evaluating the CEO’s performance; and Reviewing development and succession plans for ExxonMobil’s top executives. Risk Oversight. Risk oversight is the responsibility of the full Board of Directors. The Board throughout the year participates in reviews with management on the Company’s business, including identified risk factors. As a whole, the Board reviews include litigation and other legal matters; political contributions, budget, and policy; lobbying costs; developments in climate science and policy; the Energy Outlook, which projects world supply and demand to 2040; stewardship of business performance; and long-term strategic plans. Climate risk oversight. ExxonMobil’s Board of Directors is responsible for risk oversight, including the risks of climate change. The Board routinely reviews and considers this risk, including briefings on public policy, scientific and technical research, as well as company and external positions and actions in this area. Climate-related matters are also considered by the Board throughout the year in various other contexts, including reviews of the Outlook for Energy, the company’s safety, health and environmental performance, the annual corporate planning process, shareholder proposals, and regulatory filings such as the 10-K.

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The Chairman of the Board/Chief Executive Officer and other members of the Management Committee have responsibility for management of climate risk, including in business plans, performance, and public policy. Source: 2018 Energy & Carbon Summary, Climate risk oversight, p. 22. Interacting with its shareholders and key stakeholders We believe ongoing engagement with our shareholders is vitally important. ExxonMobil understands the importance of keeping shareholders informed about our business and to address areas of interest. The Company does so through a variety of means, including publications we issue throughout the year; our website (including the Perspectives blog); the annual shareholders meeting; webcasts including our annual executive compensation and governance webcast during which any shareholder can submit comments or questions; and through direct interface. We welcome and value input from all shareholders, and such input is taken seriously by the Company. The following principles guide our relationships with our shareholders, customers, employees, and communities: Shareholders We are committed to enhancing the long-term value of the investment dollars entrusted to us by our shareholders. By running the business profitably and responsibly, we expect our shareholders to be rewarded with superior returns. This commitment drives the management of our Corporation. Customers Success depends on our ability to consistently satisfy ever changing customer preferences. We commit to be innovative and responsive, while offering high quality products and services at competitive prices. Employees The exceptional quality of our workforce provides a valuable competitive edge. To build on this advantage, we will strive to hire and retain the most qualified people available and to maximize their opportunities for success through training and development. We are committed to maintaining a safe work environment enriched by diversity and characterized by open communication, trust, and fair treatment. Communities

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We commit to be a good corporate citizen in all the places we operate worldwide. We will maintain high ethical standards, obey all applicable laws, rules, and regulations, and respect local and national cultures. Above all other objectives, we are dedicated to running safe and environmentally responsible operations. [Our] External Sustainability Advisory Panel has commented on ExxonMobil’s sustainability reporting and transparency [for 10 years]. The Panel is composed of academics, nongovernmental organization representatives and former government employees who have expertise in a variety of environmental, social and governance topics. Sources: Notice of 2017 Annual Meeting and Proxy Statement, Board of Directors and Shareholder Engagement, pages 4-13, 2017 Sustainability Report Highlights, External Sustainability Advisory Panel, p. 7 and ExxonMobil, Our Guiding Principles, https://corporate.exxonmobil.com/en/company/about-us/guiding-principles/our-guiding-principles.

Trends Megatrends ExxonMobil’s Outlook for Energy anticipates significant changes through 2040 to boost living standards and accelerate decarbonization of the world’s energy system to help address the risks of climate change. By 2040, the world’s population is expected to reach 9.2 billion people. Over that period, the world’s economy will likely double, helping billions of people join the middle class. Energy-efficiency improvements will help curb the growth in global energy demand to about 25 percent over the period to 2040. Efficiency gains, along with changes in the energy mix, will also help reduce the carbon intensity of global GDP by nearly 45 percent, as nuclear and renewables, led by solar and wind, contribute nearly 40 percent of incremental energy supplies to meet demand growth. Natural gas will grow the most of any energy type; oil will continue to play a leading role in the world’s energy mix, even as electric cars become more prevalent. The International Energy Agency estimates cumulative oil and natural gas investment needs may reach approximately $21 trillion between 2017 and 2040.

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Technology is the foundation of ExxonMobil’s business and a key enabler to grow shareholder value. Our ongoing commitment to innovation, along with our proprietary technologies, provides a unique competitive advantage that reduces costs, improves efficiencies, creates new high-value products, and maximizes our return on projects. The Outlook anticipates global energy needs will rise about 25 percent over the period to 2040, led by non-OECD countries. While the mix shifts toward lower- carbon-intensive fuels, the world will need to pursue all economic energy sources.

• Worldwide electricity from solar and wind will increase about 400 percent • Natural gas will expand its role, led by growth for electricity generation • Growth in oil demand will be driven by commercial transportation and the chemical

industry, while more electric cars and efficiency improvements in conventional cars will likely lead to a peak in liquid fuels demand for the light-duty vehicle fleet

• Efficiency gains and growing use of less-carbon- intensive energy sources will contribute to a nearly 45 percent decline in the carbon intensity of global GDP

As we look to the future, we remain confident that these proven capabilities will enable our businesses to adjust to society’s needs, including those that may result from evolving technology and policy. Taking near-term action As demonstrated by the Paris Agreement, governments have signaled an aspiration to move towards a lower- carbon energy system. We have already observed the beginnings of a shift, and are taking action to position ourselves to help meet future global energy needs. For example, we are: Expanding supply of cleaner-burning natural gas This will enable greater substitution of coal with natural gas in power generation. Natural gas can be up to 60-percent less carbon intensive than coal for power generation and is a significant component of ExxonMobil’s portfolio and investment activities. Transitioning our manufacturing facilities We are retooling our refining capacity to shift from fuel oils and light-duty vehicle gasoline to higher-value distillates (e.g., diesel, jet fuel), lubricants, and chemical feedstock. This reflects projected trends in consumer products and policy, such as growing EV penetration, increasing requirements for heavy-duty transportation fuels, higher performance lubricants, and increasing demand for chemical products that provide sustainability benefits. Mitigating emissions from our own facilities/operations

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Our prime focus is on energy efficiency and reducing flaring, venting, and fugitive emissions. ExxonMobil also extensively employs cogeneration in its operations to increase energy efficiency and reduce net emissions while reducing the need to import power. Currently, our global gross capacity for cogeneration is 5.3 gigawatts, enough to meet the annual electricity needs of 2.5 million U.S. homes. Developing consumer products that help others reduce their emissions ExxonMobil has one of the largest chemical companies in the world. Leveraging proprietary technologies, we produce an array of materials that bring both energy efficiency and sustainability benefits to consumers. Engaging on climate policy We continue to encourage policy that addresses the risks of climate change at the lowest cost to society. We are actively engaged in evaluating potential renewable alternatives, including solar, bioenergy, and wind. Our focus is on contributing in areas where we can help make a difference in line with our technical capabilities. Our research and development program includes opportunities that could make renewable technologies more competitive. We also support the deployment of renewables as a supplier of synthetic lubricants to wind turbines around the world. The natural gas that we produce can also serve as an energy backstop to address intermittency issues associated with these energy sources. We continue to actively monitor developments in this area through our research activities and our annual Outlook process, advancing opportunities that appear to hold promise. Preparing for the long term We believe society will continue moving towards a lower-carbon energy system, and we are committed to longer-term solutions through our ongoing research and development program. We have collaborations with more than 80 academic institutions around the globe to progress an array of technologies that have the potential to be scalable, reliable, and commercially viable. We are focused on fundamental research to discover or enhance energy solutions for the future. Power generation One of the attributes of a lower- carbon future is the increased electrification of society. We have several areas of research that support this trend, including greater utilization of CCS and developments in energy storage technology. ExxonMobil is a leader in existing CCS, participating in more than one-fifth of the world’s CCS capacity. Industrial/Petrochemicals

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As economic development progresses, energy demand for industry and the need for petrochemicals will continue to grow. Here again, we expect CCS will be an important technology to reduce emissions. Biofuels, as an alternative source of energy or as feedstock, is another significant opportunity being investigated. We are also researching ways to reduce energy requirements of manufacturing facilities by fundamentally changing processes that require significant heat and pressure. Commercial transportation Large-scale commercial transportation requirements by road, sea, and air will continue to require fuels with high energy density. Advanced biofuels offer potential to meet these energy requirements while reducing emissions and minimizing the impact on land, fresh water, and food supplies. Our research programs are focused on algae and conversion of agricultural waste to liquid fuels. These technologies could provide renewable, lower-emission fuels that utilize existing refining processes and infrastructure. Preparing for the potential of shifting demand We also recognize that society’s choices on lower- carbon energies may impact demand for some products we produce. For those sectors of our business that might see a decrease in demand, rationalization of industry capacity could occur. Capacity rationalization has been a key dimension of our industry for decades. For example, over the past twenty years, the global refining sector has been overbuilt, leading to industry rationalization. During this period, our Downstream business has strengthened its competitive position by divesting smaller, less- competitive facilities and redeploying resources and capital to our larger, more efficient sites that are integrated with chemical and lubricant manufacturing. This constant highgrading of our portfolio has positioned ExxonMobil’s Downstream to be one of the most cost- competitive in industry, and positioned to address a wide variety of future scenarios. A theoretical 2°C pathway This year’s Outlook also includes sensitivities to provide greater perspective on the energy landscape. For example, greater penetration of electric vehicles (EV) and/or wind/solar deployment beyond our base Outlook assumptions could slow the growth in oil and natural gas demand, respectively. Relative to our Outlook, a theoretical 2°C pathway would generally lower the world’s demand for total energy, oil, natural gas and coal, but increase nuclear, bioenergy, and non-bio renewables.

• Signposts in the energy system will provide important indicators on whether society is moving toward a 2°C pathway

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• Even under a 2°C pathway, significant investment will be required in oil and natural gas capacity, as well as other energy sources

• Production from our proved reserves and investment in our resources continue to be needed to meet global requirements

Marketplace trends and competitive advantage Upstream business overview Our Upstream business is a global leader in exploration, development, production, natural gas marketing, and energy research. We maintain a large, diverse portfolio of opportunities to provide profitable long-term value growth. Between a highly successful exploration program and recent strategic acquisitions, we added 9.8 billion oil-equivalent barrels to our resource base in 2017. We plan to grow our tight-oil production in the U.S. Permian Basin fivefold. We also plan to grow our business in Brazil, with both exploration and development activities planned to start in 2018. We also have LNG that is among the lowest cost in the industry, with developing projects in Mozambique and Papua New Guinea. Our capital discipline and proven project management systems—incorporating best practices from across our global operations – enable us to create and drive value. From the initial discovery phase through production start-up, we benefit from our extensive multidisciplinary teamwork, industry-leading technology, rigorous management practices, and proven operational expertise. Upstream business environment Meeting the world’s growing demand for energy presents a tremendous challenge that requires a long- term view, significant investment, and continued innovation. Global demand for oil is expected to rise by about 20 percent from 2016 to 2040, continuing to be the primary source of energy for transportation and as a feedstock for chemicals. Demand for natural gas is expected to grow nearly 40 percent over the same period, led by increasing use to help meet rising electricity demand with lower-emission fuels. To meet this demand, increased supplies of both oil and natural gas will be needed, much of which will come from unconventional reservoirs. We expect global LNG volumes to more than double by 2040, mainly to supply the Asian and European markets. Our focus is on improving our long-term profitability by investing in low-cost-of-supply, higher-margin barrels, maximizing the value of our current capacity, and reducing costs through productivity and efficiency gains.

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Downstream business overview Our Downstream business is one of the world’s largest refiners and lubricants manufacturers. Our 22 refineries—17 of which are co-located with chemical or lubricant facilities—enable us to manufacture higher-value fuels, lubricants, and chemical products more efficiently than our competitors. We are highgrading our product slate to maximize the value of every molecule. Our long-standing record of technology leadership underpins the development of the products our customers demand. Our integrated business model across the entire value chain enables us to benefit from lower-cost feedstocks than our competitors. Our proprietary process and catalyst technologies help convert those feedstocks into the fuels and lubricants marketed under our world-renowned Exxon, Mobil, Mobil 1, and Esso brands. That full value-chain integration is expected to generate an additional $1 billion in the U.S. Permian alone. Downstream business environment By 2040, demand for transportation fuel is expected to increase by nearly 30 percent, driven by commercial transportation in developing countries. Demand for diesel fuel is expected to increase by more than 30 percent, while worldwide gasoline demand is expected to level off, as declining demand for light-duty transportation fuel in developed countries is offset by growth in developing nations. Lubricant demand is also expected to grow, particularly in Asia. Within the high-value synthetic lubricants sector, where we have a leading market position, demand is expected to outpace industry growth significantly. We selectively invest in sites and value chains that generate the highest returns. Our integrated business model, world-class assets, and feedstock flexibility have positioned us to be a market leader across the business cycle. Chemical business overview Our Chemical business is one of the largest, most successful chemical companies in the world. Investment in technology and new capacity enables us to capitalize on growing chemical demand worldwide We are investing in two world-class steam crackers on the U.S. Gulf Coast. We are expanding our capacity in Singapore to meet the needs of growing economies in Asia. Leveraging our strength in technology, we are highgrading our product portfolio to focus on high-performance, high-margin products.

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We process feedstock from our Upstream and Downstream operations, and from third parties, with world- scale manufacturing facilities strategically located around the globe. We focus on product lines that benefit from our scale and technology advantages, resulting in lower costs. We have a strong market position in every business line, particularly in high-performance products, and are well positioned to generate attractive returns throughout the business cycle. Chemical business environment Global chemical demand has doubled since 2000, well above economic and energy demand. Over the next two to three decades, we expect this demand to continue to grow at about 4 percent annually. Nearly three-quarters of that increased demand will be in Asia. Rising prosperity and a growing middle class in the region will drive expanded purchases of packaged goods, appliances, cars, and other consumable items, many of which are manufactured from the chemicals we produce. We are committed to helping our customers reduce their impact on the environment. We are leading the way in the development of advanced polymer materials that make cars lighter and more fuel efficient, and improving plastic packaging that reduces the energy needed to ship goods around the world. Sources: 2018 Energy & Carbon Summary, Summary-at-a-glance, p. 2, 2017 Financial & Operating Review, Business Environment, p. 5, 2017 Financial & Operating Review, Innovating to drive our success, p. 8, and 2017 Summary Annual Report, pages 22-29.

Corporate Purpose Providing affordable energy to support prosperity while reducing environmental impacts—including the risks of climate change… Near-term actions, consistent with society’s energy requirements and environmental objectives, include:

• Expanding the supply of cleaner-burning natural gas • Transitioning our manufacturing facilities to higher-value distillates, lubricants, and

chemical feedstock • Mitigating emissions from our own facilities through energy efficiency and reduced

flaring, venting, and fugitive emissions

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• Developing consumer products that help others reduce their emissions, such as premium lubricants, lightweight plastics, and special tire liners

• Engaging on climate policy to address the risks of climate change at the lowest cost to society

Importantly, on a longer-term horizon, we are pursuing technologies to enhance existing operations and develop alternative energies with a lower carbon intensity, including:

• Researching breakthroughs that make CCS technology more economic for power generation and industrial applications

• Developing process intensification technologies to reduce energy requirements of manufacturing facilities

• Progressing advanced biofuels for commercial transportation and petrochemicals Sources: 2018 Energy & Carbon Summary, Summary-at-a-glance, p. 2 and letter from the Chairman, p. 1.

Competitive Positioning Authors’ note: Long term (>7 years) value drivers of strategic health, Medium term (2-7 years) value drivers of commercial, cost structure, and asset health, and Short term (<=2 years) value drivers of sales, operating cost, and capital productivity. Time frames from Focusing Capital on the Long Term, Straight talk for the long term: How to improve the investor-corporate dialogue, March 2015. Our plan takes full advantage of the company’s unique strengths and financial capabilities, using innovation, technology and integration to drive long-term shareholder value and industry-leading returns. Growth plans include steps to increase earnings by more than 100 percent – to $31 billion by 2025 at 2017 prices – from last year’s adjusted profit of $15 billion, which excluded the impact of U.S. tax reform and impairments. This plan projects double-digit rates of return in all three segments of ExxonMobil’s business—upstream, downstream and chemical—which are all three world-class businesses in their own right. In the upstream, the company expects to significantly increase earnings through a number of growth initiatives involving low-cost-of-supply investments in U.S. tight oil, deepwater and

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liquefied natural gas (LNG). Growth coming online from new and existing projects is expected to increase production from 4 million oil-equivalent barrels per day to about 5 million. The company plans to increase tight-oil production five-fold from the U.S. Permian Basin and start up 25 projects worldwide. Those startups will add volumes of more than 1 million oil-equivalent barrels per day. In LNG, the company expects to bring on new production to meet a projected increase in global demand. Upstream growth will benefit from ExxonMobil’s industry-leading exploration success and strategic acquisitions. In 2017 alone, the company added 10 billion oil-equivalent barrels to its resource base in locations including the Permian, Guyana, Mozambique, Papua New Guinea and Brazil. Key drivers of growth are in Guyana, where exploration success has added 3.2 billion gross oil equivalent barrels of recoverable resource and plans are in place for development and further exploration, and in the Permian, where the company has increased the size of its resource to 9.5 billion oil-equivalent barrels from less than 3 billion in the past year. Through its acquisition of several Bass entities in 2017, ExxonMobil added an estimated resource of 5.4 billion oil-equivalent barrels in the Permian. The original resource estimate of 3.4 billion barrels at the time of the purchase was increased through technical evaluation and successful delineation in the Delaware Basin, reducing the acquisition cost to just above $1 per oil-equivalent barrel. The contiguous stacked pays from the New Mexico acquisition are now estimated to provide more than 4,800 drilling locations with an average lateral length of more than 12,000 feet, enabling capital-efficient execution of Permian volumes growth and the potential to further increase future volumes. “We are in a solid position to maximize the value of the increased Permian production as it moves from the well head to our Gulf Coast refining and chemical operations, where we are focusing on manufacturing higher- demand, higher-value products.” ExxonMobil’s downstream business is projected to double earnings by 2025 by upgrading its product slate through strategic investments at refineries in Baytown and Beaumont in Texas and Baton Rouge, Louisiana, Rotterdam, Antwerp, Singapore, and Fawley in the U.K. These projects are expected to result in double-digit returns by enabling increased production of higher-value products, such as ultra-low sulfur diesel, chemicals feedstocks and basestocks for

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lubricants. As a result of these improvements, the company’s 2025 downstream margins are projected to increase by 20 percent. Expansion is supported by projected demand growth in emerging markets, and includes entries into new markets such as Mexico and Indonesia. It is supported by integration with chemical manufacturing and upstream production. In its chemical business, ExxonMobil expects to grow manufacturing capacity in North America and Asia Pacific by about 40 percent. That growth will be achieved in part by adding 13 new facilities, including two world-class steam crackers in the United States. These investments would enable the company to meet increasing demand in Asia and other growing markets. “We are uniquely positioned to take advantage of the global demand growth for higher-value products in the downstream and chemical.” “Our combined strengths in innovative technology, resource and market access, marketing product leadership and integration improve profitability and create significant shareholder value.” [Woods said] the company’s overall growth strategy is designed with a key goal in mind – fully leveraging our competitive advantages to grow shareholder value across all three of our world-class businesses. Through higher returns from increased investments, the company has the potential to increase its return on capital employed to about 15 percent by 2025. “Our existing business and plans for growth are robust to a wide range of price environments, allowing us to maintain a growing dividend and a strong balance sheet while returning excess cash to our shareholders.” NOTE: The following information was extracted from ExxonMobil’s 2018 Analyst Meeting slides Leveraging the fundamentals to grow value

• This slide focused on Earnings and Return on Average Capital Employed (ROCE) • The slide covered the following time periods: 2017 (actual), 2018, 2019, 2020-2024

Average, and 2025 • Earnings targets were presented at $80/bbl (barrels), real; $60/bbl, real; and $40/bbl, real.

Note: Page 73, Supplemental Information, states, “For all price point comparisons, unless otherwise indicated, crude prices and product margins are on a flat real basis.”

• Actual 2017 ROCE was 7% and target ROCE for 2020-2024 Average (at 60/bbl) was >10% and target for 2025 (at 60/bbl) ROCE was ~15%

Advantaged investments drive cash flow growth

• This slide focused on Cash flow from operations

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• The slide covered the following time periods: 2017 (actual), 2018, 2019, 2020-2024 Average, and 2025

• Cash flow targets were presented at $80/bbl (barrels), real; $60/bbl, real; and $40/bbl, real. Note: Page 73, Supplemental Information, states, “For all price point comparisons, unless otherwise indicated, crude prices and product margins are on a flat real basis.”

Productively generating cash flow

• This slide focused Cash flow from operations over capex (cumulative 2008 – 2017) • The slide compared ExxonMobil’s performance to four competitors (Named but not

specifically identified on each of the four bar graphs • ExxonMobil’s cash flow from operations over capex for the periods was about 120%,

while all competitors delivered a lower rate Progressing advantaged investments

• This slide focused on capital expenditures (in $ billions) for the periods 2017 (actual) and targets for 2018 and 2019

• New investments were separately disclosed for License to operate, exploration capex, Upstream, Chemical, and Downstream

Relentlessly focused on the fundamentals

• Two separate graphs were presented—Workforce lost-time incident rate and operating costs

• The Workforce lost-time incident rate covered 2012-2017, was based on Employee and contractor lost-time incidents per 200K hours, and compared ExxonMobil’s performance to an industry average for each year. ExxonMobil’s lost-time incident rate was lower than the industry average for all years presented.

• Operating costs were presented for the years 2013-2017 (actual) and disclosed a 2013 to 2017 decline of $11 billion. Targets were presented for 2018 and 2019

Ability to pursue attractive opportunities

• This graph disclosed total capitalization as a percent of leverage in comparison to four competitors for the year 2017. Note: Total capitalization defined as “net debt + market capitalization”; leverage defined as “net debt/total capitalization.”

Continued commitment to distributions

• This slide focused on Annual dividend growth rate and free cash flow • The Annual dividend growth rate section compared ExxonMobil’s performance to four

competitors for 2008-2017 average, 2013-2017 average, and 2017 • The Free cash flow section covered the following time periods: 2018, 2019, 2020-2024

Average, and 2025

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• Free cash flow targets were presented at $80/bbl (barrels), real; $60/bbl, real; and $40/bbl, real.

Growing shareholder value

• The slide focused on Average annual ROCE and Average earnings for the period 2015-2017 in comparison to four competitors

• ExxonMobil targets for 2020 and 2025 were also disclosed Sources: “ExxonMobil Outlines Aggressive Growth Plans to More than Double Earnings,” ExxonMobil press release, March 7, 2018 and 2018 Analyst Meeting presentation, March 7, 2018, pages 62-68 and 70.

Strategic partnerships We have begun collaborations with energy centers at Princeton University, Massachusetts Institute of Technology (MIT), University of Wisconsin-Madison and the University of Texas at Austin as part of our commitment to finding meaningful and scalable solutions to meet global energy demand. Massachusetts Institute of Technology. In October 2014, ExxonMobil became a founding member of the MIT Energy Initiative, a unique collaboration aimed at working together to advance and explore the future of energy focused on new energy sources and more efficient use of conventional energy resources. Since launching the collaboration with MIT, the joint research program has made inroads into several areas, including bio-inspired catalysts for the petrochemical industry and computational modeling to better understand the properties of iron and iron-based alloys used in pipelines. The program has also enabled ExxonMobil to expand research efforts to emerging areas like photovoltaic and nuclear power, as well as enhance our understanding of energy options and the interactions between them. ExxonMobil has also joined the MIT Energy Initiative’s Carbon Capture, Utilization, and Storage (CCUS) Center, one of eight Low-Carbon Energy Centers—first called for in MIT’s Plan for Action on Climate Change in October 2015. It was established to advance research on specific, key technologies to address climate change such as electric power systems, energy bioscience, energy storage, materials for energy and extreme environments, advanced nuclear energy systems, nuclear fusion and solar energy, in addition to CCUS. Princeton University. In Sept. 2016, ExxonMobil and Princeton University announced the selection of five research projects associated with their partnership focused on energy technologies. The projects will center on solar and battery technologies, plasma physics, Arctic

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sea-ice modeling, and the impact of carbon dioxide absorption on the world’s oceans. This announcement followed ExxonMobil’s June 2015 commitment to contribute $5 million over five years to Princeton E-ffiliates Partnership, a program administered by Princeton University’s Andlinger Center for Energy and the Environment that fosters research in sustainable energy and environmental solutions. E-ffiliates promotes collaboration between industry and academia to search for energy and environmental breakthroughs. ExxonMobil scientists collaborated with Princeton professors to identify areas with the most scientific potential, particularly ones that build on the university’s existing strengths and interests in emerging energy. The University of Texas at Austin. In July 2016, ExxonMobil announced a $15 million investment as a leading member of the University of Texas at Austin Energy Institute to pursue technologies to help meet growing energy demand while reducing environmental impacts and the risk of climate change. The joint research initiative will study transformational energy innovations including integrating renewable energy sources into the current supply mix and advancing traditional energy sources in ways that improve efficiency and reduce impacts on water, air and climate. Research projects are expected to cover a range of emerging technologies, and will take advantage of the university’s capabilities in renewable energy, battery technologies and power grid modeling. Core strengths in advanced computing, environmental management and additive manufacturing may be applied to improve traditional energy sources. Georgia Institute of Technology. Scientists from ExxonMobil and the Georgia Institute of Technology (GT) have developed a potentially revolutionary new technology that could significantly reduce the amount of energy and emissions associated with manufacturing plastics. Results of the research were published in the Aug. 19, 2016, edition of the professional journal Science. This breakthrough could reduce annual carbon dioxide emissions by 45 million tons, which is equivalent to the annual energy-related carbon dioxide emissions of about five million U.S. homes. It could also reduce global energy costs used to make plastics by up to $2 billion a year. As our research into this specific chemical process advances, we hope to learn more about how this technology could be used in other applications to achieve the same type of efficiency and emissions-reductions results, and potentially reduce our manufacturing footprint even further. University of Wisconsin-Madison. The University of Wisconsin-Madison and ExxonMobil continue to partner together to research the fundamental chemistry of converting biomass into transportation fuels. The research is part of a broad effort to identify scalable and commercially viable solutions to help meet increasing global energy demand with a renewable resource. UW-Madison has long been known for its expertise in biomass conversion. The project leverages the university’s expertise with ExxonMobil’s resources and strong technological capabilities.

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George Huber, the Harvey D. Spangler professor of chemical and biological engineering at UW-Madison, is working closely with ExxonMobil’s scientists to build a stronger understanding of the basic chemical transformations that occur during biomass conversion into diesel and jet fuels. ExxonMobil is also a founding member of the Global Climate and Energy Project at Stanford University, which seeks to develop fundamental, game-changing scientific breakthroughs that could lead to lower greenhouse gas emissions and a less carbon-intensive global energy system. Other university collaborations cover a wide range of scientific topics, from understanding the impacts of black carbon and aerosols at the University of California, Riverside to the fundamentals of biomass pyrolysis used to make biofuels at Iowa State University. Source: ExxonMobil Collaborating with Leading Universities. Accessed November 3, 2018, https://corporate.exxonmobil.com/en/energy/research-and-development/university-collaborations/overview.

Capital Allocation It [ExxonMobil] intends on getting there by significantly ramping up its investments, calling for $24 billion in capital spending this year, which should rise to $28 billion in 2019 before averaging about $30 billion annually from 2023 to 2025. That increase in spending was “the price you pay for cash flow.” [CEO Darren Woods] further noted that every $1 ExxonMobil spent on capital expenses over the past decade produced $1.20 in operating cash flow. That plan would put the company on pace to generate more than $60 billion in annual operating cash flow by 2025, assuming $50 oil. These growth investments make it less likely that Exxon Mobil will pursue a meaningful reduction of its share count via buybacks in the near future. The market had hoped for such an announcement, the lack thereof made the share price decline. “Third quarter CapEx was $6.6 billion. We continue to progress investments to support our long-term growth plans, including increased activity in the Permian and the acquisition of additional acreage in Brazil. CapEx through the first three quarters of the year was $18.1 billion. Now, if you exclude the acquisition of incremental Brazil acreage of about $1 billion, we remain on pace to meet full- year guidance of approximately $24 billion. Free cash flow after investments was $7.2 billion, more than enough to cover the $3.5 billion in dividends. Capital and exploration expenditures (Tables omit the years 2013—2016)

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(millions of dollars) 2017 Upstream Exploration

United States 527 Non-U.S. 5,744 Total 6,271

Production United States 3,189 Non-U.S. 7,235 Total 10,424

Power United States -- Non-U.S. -- Total --

Total Upstream 16,695 Downstream Refining

United States 655 Non-U.S. 1,381 Total 2,036

Marketing United States 34 Non-U.S. 320 Total 354

Pipeline/Marine United States 134 Non-U.S. -- Total 134

Total Downstream 2,524 Chemical

United States 1,583 Non-U.S. 2,188

Total Chemical 3,771 Other

United States 90 Non-U.S. -

Total other 90 Total Capital and exploration expenditures 23,080

Sources: The Motley Fool. “ExxonMobil Corporation Is Playing the Long Game for a Bigger Win,” Matthew DiLallo, March 22, 2018. Accessed November 3, 2018, https://www.fool.com/investing/2018/03/22/exxonmobil-corporation-is-playing-the-long-game-fo.aspx. Seeking Alpha. “Exxon Mobil: The Time Has Come,” Jonathan Weber, March 23, 2018. Accessed November 3, 2018, https://seekingalpha.com/article/4158474-exxon-mobil-time-come. Seeking Alpha. Exxon Mobil Q3 2018 Results - Earnings Call Transcript. Nov. 2, 2018 3:25 PM ET. Comments by Neil Hansen—Vice President of Investor Relations and Secretary. 2017 Operating & Financial Review. Capital and & exploration expenditures, p. 80.

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Human Capital Safety, health and the workplace Safety is a core value at ExxonMobil. The health and safety policies set by ExxonMobil and adopted by our affiliates reflect our company’s commitment to high operational standards and the well-being of our employees. We strive for an incident-free workplace and a culture that complies with our clear and simple objective: Nobody Gets Hurt. We build our culture of safety and health by attracting, developing and retaining individuals who share our commitment to operational excellence. Safety and health ExxonMobil’s commitment to operational excellence starts at the top, is driven throughout our businesses and is consistent everywhere we operate. Our global health and safety goal is zero injuries and illnesses. Since 2000, we have reduced our workforce lost-time incident rate by more than 80 percent. While this number is declining, safety incidents do occur. We deeply regret that two contract workers were fatally injured in separate incidents related to ExxonMobil operations in 2017. One incident occurred at an onshore drilling site and the other happened at a refinery during construction activities. We thoroughly investigated the causes and contributing factors associated with the incidents to prevent similar events in the future and to globally disseminate findings. ExxonMobil’s Operations Integrity Management System (OIMS) establishes a framework for addressing risk across all aspects of our operations. OIMS, which is built around 11 key elements of risk, is embedded into everyday work processes in each of the following areas of safety at ExxonMobil:

Process safety Process safety is about managing the integrity of our facilities by applying good design principles, engineering and operating practices. ExxonMobil incorporates rigorous safety standards and procedures in our facilities’ design, construction and operating activities. We classify and track incidents by severity from Tier 1 through Tier 4, with Tier 1 referring to events of greater consequence. In 2017, we experienced 63 Tier 1 process safety events, which is approximately 1.6 percent lower than 2016.

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Product stewardship Product stewardship refers to a series of interconnected work processes for the safe and effective management of a product, focusing on the health, safety and environmental impacts at each phase of a product’s lifecycle. We regularly use lifecycle assessments to consider impacts during the development, manufacturing, use and disposal of our products. Product transportation ExxonMobil implements rigorous safety and environmental standards while transporting our products, including by marine, pipeline and rail. We carefully maintain and monitor our infrastructure worldwide to identify and prevent corrosion, third-party damage or illegal intrusions onto our rights of way. Emergency preparedness and response We establish emergency support groups and incident management teams around the world to develop and practice emergency response strategies. In 2017, we conducted 37 drills, including in Guyana where we have discovered an estimated recoverable resource of over four billion oil equivalent barrels.

OIMS also establishes a framework for addressing risk across our supply chain. Contractors are an integral part of the ExxonMobil team; it is essential that they conduct work in accordance with our policies and business objectives. Since 2000, we have conducted safety leadership forums with contractors working on our major projects. This promotes a strong safety partnership with contract workers to improve our safety performance and positively influence the industry. The success of ExxonMobil’s operations depends on a healthy and competent workforce. We have corporate-wide expectations for identifying, evaluating and managing health risks related to our operations that can potentially affect our employees, contractors or the public. In each country, we develop workplace health programs that take into consideration local health care systems, health needs and available resources. ExxonMobil’s U.S.-based Culture of Health program supports the well-being of our employees and reduces health plan costs. We continue to look for new opportunities to expand the reach of our Culture of Health program. In 2017, we expanded the program to our affiliates in Brazil and Mexico. Graphic omitted: Lost-time incident rate. Incidents per 200,000 work hours. This graphic tracks the incident rate from 2008—2017. The following paragraph recaps the graph content.

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In 2017, our workforce lost-time incident rate per 200,000 work hours was 0.029, consistent with the previous year. Since 2000, we have reduced this rate by 80 percent. When compared with the American Petroleum Institute U.S. petroleum industry workforce benchmark, ExxonMobil continues to outperform industry peers in safety performance. Workforce engagement We value the exceptional qualities and diverse perspectives of our employees and strive to promote the inclusion of thought, skill, knowledge and culture across our operations. As demand for workers in the fields of science, technology, engineering and mathematics continues to increase, we support immigration policies that will help U.S. companies fill their needs for highly skilled workers. We support voluntary, employee-led networks that foster a culture of diversity and inclusion by offering development programs, community service opportunities and mentoring. Our local employee resource groups include:

• Asian Connection for Excellence (ACE) • Black Employee Success Team (BEST) • Global Organization for the Advancement of Latinos (GOAL) • Organization for New Employees (ONE) • People for Respect, Inclusion and Diversity of Employees (PRIDE) • Veteran Advocacy and Support Team (VAST) • Women’s Interest Network (WIN)

We strive to foster innovation and progress across our operations by helping our employees reach their full potential. We offer robust corporate and technical training programs and encourage employee engagement through a variety of channels, including mentorship programs and networking opportunities. In 2017, more than 4,500 employees at various levels of the company participated in ExxonMobil’s leadership development training programs, of which 34 percent were women and 54 percent were employees from outside the United States. Our Global Diversity Framework and Standards of Business Conduct govern all aspects of our employment and support our commitment to provide equal employment opportunities, prohibit harassment and discrimination in the workplace and align with applicable laws and regulations in the countries where we operate. Graphic omitted: 2017 female and minority career development. This graphic provided the following information.

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• Campus new hires for professional position. Worldwide females—59%, up 12% since 2010. U.S. Minorities—31%, up 41% since 2010.

• Leadership training participation. Worldwide females—34%. U.S. Minorities—26%. • Senior leadership potential. Worldwide females—31%, up 17% since 2010. U.S.

Minorities—22%, up 18% since 2010. • Executive population. Worldwide females—20%, up 43% since 2010. U.S. Minorities—

16%, up 58% since 2010. Performance data table, Safety, health and the workplace. Years 2008—2016 omitted.

Safety, health and the workplace 2017 Fatalities—employees 0 Fatalities—contractors 2 2 Fatal accident rate — total workforce (per 1,000,000 work hours) 0.005 Fatal incident rate — total workforce (per 1,000,000 work hours) 0.005 Lost-time incident rate — employees (per 200,000 work hours) 0.034 Lost-time incident rate — contractors (per 200,000 work hours) 0.026 Lost-time incident rate — total workforce (per 200,000 work hours) 0.029 Total recordable incident rate — employees (per 200,000 work hours) 0.14 Total recordable incident rate — contractors (per 200,000 work hours) 0.22 Total recordable incident rate — total workforce (per 200,000 work hours) 0.19 Process Safety Tier 1 Events (API RP 754 guidance) 63 Number of regular employees at year end, thousands 70 Percent of workforce — outside the United States 60 Percent women — global workforce 28 Percent management and professional new hires — women (campus and experienced) 41 Percent management and professional new hires — outside the United States (campus and experienced)

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Number of non-unique employee participants in corporate and technical training, thousands 98 Total corporate and technical training expenditures, millions of dollars 94

Sources: 2017 Sustainability Report Highlights. Safety, health and the workplace, pages 13-15 and Performance data, p. 31.

Risks and Opportunities Identifying and assessing financially material ESG issues Since 2006, ExxonMobil has conducted an annual materiality assessment to identify the issues that, in the view of the company’s management and its external stakeholders, have the potential to significantly affect sustainability performance. For this 2017 Sustainability Report, we evaluated key metrics within the sustainability issues for our business and stakeholders using a review of IPIECA reporting guidance, feedback from external stakeholders, sessions with

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ExxonMobil business support representatives, a benchmark of peer company reports and a media review. 2017 material issues Since 2006, ExxonMobil has conducted an annual materiality assessment to identify the issues that, in the view of the company’s management and its external stakeholders, have the potential to significantly affect sustainability performance. For this 2017 Sustainability Report, we evaluated key metrics within the sustainability issues for our business and stakeholders using a review of IPIECA reporting guidance, feedback from external stakeholders, sessions with ExxonMobil business support representatives, a benchmark of peer company reports and a media review. Safety, health and the workplace

• Emergency preparedness and response • Employee benefits and practices • Personnel and process safety • Product safety and responsibility • Product transportation safety • Workforce engagement • Workplace security • Worksite health and wellness

Managing the risks of climate change

• Developing technology solutions • Engaging on climate change policy • Mitigating emissions • Providing solutions for customers

Environmental performance

• Air emissions • Biodiversity and ecosystem services • Decommissioning and rehabilitation of the environment • Environmental compliance • Environmental management approach • Spill performance • Water management

Community engagement and human rights

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• Community relations External stakeholder engagement • Human rights Indigenous peoples

Local development and supply chain management

• Local economic growth and development • Supply chain management

Corporate governance

• Board leadership • Ethics and integrity • Executive compensation and strategic advantage • Political advocacy and contributions • Shareholder relations • Transparency

Business operations (included throughout report)

• Energy future and portfolio management • Management systems • Operating in sensitive environments

Source: 2017 Sustainability Report Highlights, 2017 material issues, p. 30. Management and oversight of financially material risks Risk oversight is the responsibility of the full Board of Directors. The Board throughout the year participates in reviews with management on the Company’s business, including identified risk factors. As a whole, the Board reviews include litigation and other legal matters; political contributions, budget, and policy; lobbying costs; developments in climate science and policy; the Energy Outlook, which projects world supply and demand to 2040; stewardship of business performance; and long-term strategic plans. Source: Notice of 2017 Annual Meeting and Proxy Statement, Risk Oversight, p. 5. Leveraging financially material opportunities We are committed to providing affordable energy to support human progress while advancing effective solutions to address the risks of climate change. That’s why we are working to be part of the solution. Our climate change risk management strategy consists of four pillars:

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• Mitigating emissions in our operations • Developing scalable technology solutions • Providing solutions for our customers • Engaging on climate change policy

Source: 2018 Energy & Carbon Summary, ExxonMobil is part of the solution, p. 16.

Financial Performance All tables omit the years 2013—2016. Financial highlights (millions of dollars, unless noted)

2017 Net income attributable to ExxonMobil 19,710 Cash flow from operations and asset sales 33,169 Capital and exploration expenditures 23.080 Research and development costs 1,063 Total debt at year end 42,336 Average capital employed 222,631 Market valuation at year end 354,561 Regular employees at year end (thousands) 69.6

Key financial ratios

2017 Return on average capital employed (percent) 9.0 Earnings to average ExxonMobil share of equity (percent) 11.1 Debt to capital (percent) 17.9 Net debt to capital (percent) 16.8 Current assets to current liabilities (times) 0.82 Fixed-charge coverage (times) 13.2

Average capital employed by the business (millions of dollars)

2017 Upstream

United States 64,896 Non-U.S. 109,778 Total 174,674

Downstream United States 7,935 Non-U.S. 14,578 Total 22,514

Chemical United States 10,672 Non-U.S. 16,844

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Total 27,516 Corporate and Financing (2,073) Corporate total 222,631 Average capital employed applicable to equity companies 35,941

Return on average capital employed by the business (percent)

2017 Upstream

United States 10.2 Non-U.S. 6.1 Total 7.6

Downstream United States 24.5 Non-U.S. 25.0 Total 24.9

Chemical United States 20.5 Non-U.S. 13.8 Total 16.4

Corporate and Financing N/A Corporate total 9.0

Operating costs (millions of dollars) 2017 Production and manufacturing expenses 34,128 Selling, general and administrative 10,956 Depreciation and depletion 19,893 Exploration 1,790

Sub-total 66,767 ExxonMobil’s share of equity company expenses 9,016 Total operating costs 75,783

Sources: Operating and Financial Review, Financial highlights and Key financial ratios, page 78, Average capital employed & Return on average cap employed, page 79, and Operating costs, page 82.