exv10w13






Exhibit 10.13




SUMMARY OF CHEVRON INCENTIVE PLAN AWARD CRITERIA




The Chevron Incentive Plan (CIP) (formerly the Management Incentive Plan of Chevron Corporation) is
an annual cash incentive plan that links awards to performance results of the prior year.
Chevron’s named executive officers (NEOs) are eligible to receive awards under the CIP. CIP awards
are designed to reward plan participants, including the NEOs, for business and individual
performance.



Prior to each performance year (i.e. fiscal year), the Board’s Management Compensation Committee
establishes a CIP Award Target (explained under “CIP Award Target” below) for each NEO, which is
based on a percentage of the NEO’s base salary. After the end of the performance year, the
Committee assesses Chevron’s overall performance and sets a Corporate Performance Factor (explained
under “Chevron’s Corporate Performance” below), which is the same for each NEO. The Committee then
determines the cash amount for each NEO’s CIP award by multiplying the NEO’s CIP Award Target by
the Corporate Performance Factor, and then adjusting the number to take into account the NEO’s
individual performance, including the performance of any strategic business units reporting to the
NEO. The Corporate Performance Factor and the NEO’s individual performance are not determined by a
formula or on the basis of predetermined financial targets or award ranges. Rather, the Committee
exercises its discretion based upon a number of factors discussed below. With respect to each NEO
other than the CEO, the CEO makes a recommendation to the Committee.



CIP Award Target. The CIP Award Target is a percentage of the NEO’s base salary and is set
prior to the beginning of the performance year as an appropriate starting point for determining the
actual size of the NEO’s CIP award. The Committee sets the percentage of base salary for each
salary grade to be competitive with similar awards to persons in similar positions at companies in
Chevron’s Oil Industry Peer Group (viz. Anadarko Petroleum, Hess, BP, ConocoPhillips, Devon Energy,
Exxon Mobil, Marathon Oil, Occidental Petroleum, Royal Dutch Shell, Sunoco, Tesoro and Valero
Energy).



Chevron’s Corporate Performance. After the end of the performance year, the Committee sets
the Corporate Performance Factor based on its assessment of how Chevron performed. The Committee
considers numerous metrics in setting the Corporate Performance Factor, including earnings, return
on capital employed, and Chevron’s total stockholder return ranking and Chevron’s return on capital
employed ranking. The Committee does not have a set formula for evaluation of these metrics, but
rather exercises its discretion, taking into account how Chevron performed in light of its business
plan objectives. Also, given the long-term nature of the business, in which investments today
yield returns for decades to come, the Committee also considers decisions and progress on strategic
investments. The Committee also focuses on nonfinancial items, such as safety, employee diversity,
oil and gas production, reliability of facilities and operations, and progress on strategic
projects and investments for the future of the business. The Committee considers Chevron’s
performance in these areas on both an absolute and relative basis, comparing our performance
against the performance of our top competitors in the Oil Industry Peer Group (viz. BP,
ConocoPhillips, Exxon Mobil and Royal Dutch Shell) and considering these in light of matters beyond
management’s control, such as commodity price effects, industry mergers and acquisitions, and
foreign exchange. The Corporate Performance Factor is the same for each NEO.



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Individual Performance. After the Committee has applied the Corporate Performance Factor
to the CIP Award Target for each NEO, the Committee exercises its discretion in further adjusting
the final CIP award to take into account individual performance, which includes consideration of
business performance in the areas of responsibility reporting to the NEO. The Committee also
considers internal pay equity to ensure that NEOs in the same base salary grade are positioned
properly. The Committee does not use a predetermined set of metrics, targets or formula in
considering individual performance. Instead, the Committee uses its judgment in analyzing the
individual performance of each NEO, including how any business units reporting to the NEO
performed.



Chevron reports annual CIP awards to each of its NEOs in its Annual Report on Form 10-K or its
annual Proxy Statement.




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