Company: IMO
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000049938-25-000015
Chunk: 171

Company: IMPERIAL OIL LTD
Filing Date: 2025-02-19
Form: 10-K
Item: Item 16
Chunk 171
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)D.W. Cornhill was appointed as lead director in 2024 and has elected to receive his director fees and lead director fees in deferred share units.

142

The number of deferred share units granted to a nonemployee director is determined at the end of each calendar quarter for that year, according to the following calculation: 

(i)the dollar amount of the nonemployee director’s fees for that calendar quarter that the director elected to receive as deferred share units; divided by 

(ii)the average of the closing price of the company’s shares on the Toronto Stock Exchange for the five consecutive trading days (“average closing price”) immediately prior to the last day of that calendar quarter. 

Those deferred share units are granted effective the last day of that calendar quarter. 

A nonemployee director is also granted additional deferred share units to represent dividends on unexercised deferred share units. These additional units are granted on the dividend payment dates for the company’s common shares, according to the following calculation: 

(i)the cash dividend payable for a common share of the company divided by the average closing price immediately prior to the payment date for that dividend; multiplied by 

(ii)the number of unexercised deferred share units held by the nonemployee directors on the dividend record date. 

Deferred share units cannot be exercised until after termination of service as a director, including termination due to death, and must be exercised in their entirety in one election no later than December 31 of the year following the year of termination of service. On the exercise date, the cash value to be received for the units is determined based on the company’s average closing price immediately prior to the date of exercise. 

Restricted stock units 

In addition to the cash fees described above, the company pays a significant portion of director compensation in restricted stock units to align director compensation with the long-term interests of shareholders. The restricted stock unit plan is described in more detail beginning on page 161. 

The number of restricted stock units granted annually was increased in 2016 from 2,000 units to 2,600 units, in 2018 to 3,000 units, and in 2021 to 3,300 units. Up until 2015, the vesting period for restricted stock units was 50 percent vesting on the third anniversary of the grant date (received in cash) and the remaining 50 percent vesting on the seventh anniversary of the grant date (with an option to receive in cash or common shares). In 2016, in order to