2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 354 EXECUTIVE COMPENSATION The material components of our executive compensation program are summarized in the following chart. PAY ELEMENT METRICS / PURPOSE GOVERNANCE / TIMING Annual Incentive Plan (Chevron Incentive Plan, or “CIP”) Recognize annual performance achievements in the following categories: • Financials • Capital Management • Operating Performance • Health, Environmental, and Safety Base Salary Fixed level of competitive base pay to attract and retain executive talent Benefits Competitive retirement and savings plan benefits to encourage retention and support long-term employment MCC and Board provide oversight of retirement/savings plan design and administration Long-Term Incentive Plan (“LTIP”) Reward creation of long-term stockholder value using a balanced portfolio approach, with annual grants composed of three equity vehicles, each objectively measured and designed to focus recipients on different aspects of different stockholder value creation: • Performance shares: incentivize performance relative to peers; modifier varies from 0 to 200% based on relative TSR vs. large-cap energy peers and S&P 500; three-year performance cycle • Stock options: incentivize absolute performance and long- term value creation; three-year vesting, 10-year term • Restricted stock units: incentivize absolute performance and retention through long holding periods; five-year cliff vesting 4th quarter of preceding year January each year At the end of 3 years Over 10 years At the end of each year At the end of 5 years MCC, supported by independent compensation consultant, reviews competitive data; approves salary range, CIP and LTIP targets for executive officers except CEO MCC and Board determine CIP and LTIP target for CEO; approve salary and LTIP awards for all executive officers MCC approves performance share payout based on relative TSR performance Stock options pay out based on absolute stock performance MCC and Board approve CIP awards after performance results are evaluated against predetermined measures Restricted stock units pay out based on absolute stock performance The Management Compensation Committee (“MCC”) believes a majority of an executive’s pay should be composed of awards that are directly tied to Chevron and individual employee performance. The MCC considers all elements of pay when setting awards. The large majority of each Named Executive Officer’s (“NEO”) target compensation is at risk based on Company performance (approximately 91 percent for the CEO and 84 percent for the other NEOs), and the majority of this at-risk compensation is tied to Chevron’s stock price. What NEOs eventually earn from their at-risk compensation will align strongly with what stockholders earn over that same period from their investment in Chevron. Base Salary CIP LTIP 2017 CEO Compensation Mix 2017 Other NEOs Compensation Mix 9% 14% 77% 65% 16% 19% 91% at risk 84% at risk Chevron Corporation—2018 Proxy Statement 33 CHEVRON CORPORATION