MARATHON PETROLEUM CORPORATION | Amendment to existing clawback provisions AT MARATHON PETROLEUM CORPORATION

Status
45.18% votes in favour
AGM date
Previous AGM date
Proposal number
8
Resolution details
Company ticker
MPC
Lead filer
United Steelworkers
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Remuneration or pay
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Energy
Company HQ country
United States
Resolved clause
Resolved, shareholders of Marathon Petroleum Corporation (the “Company”) urge the Board of Directors’ Compensation and Organization Development Committee to amend the company’s recoupment/clawback policy to add that the Committee will review and determine whether to seek recoupment of long-term incentive and short-term incentive compensation paid, granted or awarded to an executive officer if, in the Committee’s judgment, (a) an executive officer engaged in conduct that resulted in a violation of law or MPC policy, and that caused financial or reputational harm to the Company, or (b) an executive officer failed in their responsibility to manage conduct or risks, and such failure contributed to financial or reputational harm to the Company, with MPC to disclose to shareholders the circumstances of any recoupment or decision not to pursue recoupment in those situations.
Supporting statement
“Recoupment” includes: recovery of compensation already paid and forfeiture, recapture, reduction or cancellation of future amounts awarded or granted over which MPC retains control. This policy should operate prospectively and be implemented so as not to violate any contract, compensation plan, law or regulation.

We believe that compensation policies should promote sustainable value creation. We understand that the Company currently has in place a mechanism that imposes clawback provisions on both long-term incentive and short-term incentive awards. MPC’s existing policy allows clawback from an executive officer if, in the event of a material accounting restatement, the executive office is determined to knowingly engage in misconduct, be grossly negligent with respect to misconduct, knowingly failed or was grossly negligent in failing to prevent misconduct, or engage in misconduct materially harmful to the company.
Our view is that the existing clawback triggers are too limited in its assessment of executive conduct and the implications for long-term shareholder value. Recoupment can be an important remedy for conduct that may affect financial results or harm MPC’s reputation and prospects, but does not involve a financial restatement. The rationale for an expanded policy is illustrated by the reputational and financial risks associated with its $86 million settlement regarding the 2016 fire at the Galveston Bay refinery.1
Adopting this policy would help establish a culture of not only compliance but also sustainable value creation while demonstrating the Company’s commitment to accountability to shareholders.
We urge you to vote FOR this proposal.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
KBI Global Investors For
Kutxabank Gestion SGIIC SAU. For
Anima Sgr For The addition of reputational or other financial harm as a recoupment scenario would expand the board's ability to recoup incentive pay and the increased disclosure requirements would also better serve shareholders' informational needs. In addition, reputational or financial harm as a recoupment scenario would expand the board's ability to recoup incentive pay not just in instances of a material restatement, which could further serve as a deterrent against behavior that could negatively impact shareholder value.

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