press release

Chevron Press Release - Chevron Meets Five-year Stockholder Return Goals, Announces 5 Percent Bonus

SAN FRANCISCO, Jan. 4, 1994 -- Chevron Corporation, which last week met its five-year goal of achieving the highest total return to stockholders among major companies in the U.S. oil industry, today announced it will share its financial success with employees.

In an 8 a.m. announcement to employees, Chevron Chairman Ken Derr said a one-time cash bonus equal to 5 percent of base pay would be awarded to about 42,500 employees worldwide. In addition, he said all employees would receive a commemorative watch recognizing their contributions to the company's success.

In l989, Chevron established a mission to achieve superior financial results for its stockholders. It set an objective to have the highest total stockholder return (stock appreciation plus dividend payments) among major companies in the U.S. oil industry for the five-year period, 1989-1993. To accomplish this, the company embarked upon an aggressive program to restructure, reduce operating costs, improve work processes and position itself for growth over the long term.

As of Friday, Dec. 31, Chevron's stock closed at $87-1/8, up $41-3/8 per share over the five-year period. That, coupled with dividend payments, boosted Chevron's total annual stockholder return over the l989-93 period to 18.9 percent per year, the best among the peer group against which Chevron compares itself.

"This accomplishment, which puts Chevron in the forefront of the competition, is something we share together," Derr told employees. "It involved a great deal of hard work, sacrifice and, in many cases, changes in the way we viewed our jobs and ourselves.

"Now it's time to share that success," Derr said.

Derr cited employee efforts in reducing operating expenses by more than $1 a barrel (or about $1.2 billion per year on an annualized basis) and in boosting the company's return on capital employed as cornerstones of the company's overall success.

"It was our committed team of employees who have made these achievements possible by finding new, improved ways of running the business," Derr said.

The one-time bonus will cost the company an estimated $115 million before tax or about $70 million after tax, which will be taken as a charge against fourth quarter 1993 earnings.

The bonus will be paid to all full- and part-time employees on the payroll as of Dec. 31, 1993, including those on disability, family, military or personal leave who were active employees during 1993. Payments to represented employees are subject to agreement by their collective bargaining agents, the company said. Excluded from the bonus program are some 500 senior managers who participate in a management incentive program.

Temporary employees, contractors and employees of APSI, Huntington Services Co., Telegraph, Action or Curran also are not eligible, according to Chevron.

Chevron's major U.S. competitors achieved a total return to stockholders ranging from 10.4 percent to 17.0 percent during the same period, with an average of 13.2 percent. The peer companies against which Chevron measures itself are Mobil, Texaco, Amoco, Exxon and ARCO.

"Our reductions in operating expenses and our improvement in return on capital employed are nothing short of remarkable," Derr said. "These successes, attributable directly to the efforts of our employees, position us to take advantage of opportunities to significantly grow stockholder value in the coming years."

Updated: January 1994