Please stand by. Welcome to Exxon Mobil's Executive Compensation and Corporate Governance webcast. This webcast is being recorded. Your host for today will be Mr. Jeff Woodbury, Vice President, Investor Relations and Secretary, and Randy Powers, Manager, Executive Compensation Benefits and Policy. The format of today's call will include prepared remarks from Messrs. Woodbury and Powers, followed by a question and answer session. Questions can only be submitted via the webcast. During the webcast, you will be able to submit questions using the box at the bottom of your screen labeled, Please submit a question to the presenter. Type your question in the text box and then click submit. You may send in a question at any time during the presentation, and at this time, I will turn the webcast over to Mr. Woodbury. Please go ahead, sir.
Thank you. Ladies and gentlemen, good morning and welcome to today's webinar, during which Randy Powers and I will cover key highlights of Exxon Mobil's executive compensation program and the shareholder proposals. As in prior years, this webinar is part of a broad shareholder outreach effort at the encouragement of our board of directors. We realize that you are likely engaging with many companies during this time of year, and we would like to thank you for taking the time to participate this morning. This slide shows the agenda for the webinar. We will leave time at the end of our prepared remarks for questions and answers. We'd ask that you feel free to submit those questions via the internet at any time during the session. Now, the definition of compensation related terms differs in some respect from compensation totals that were reported in our proxy statement tables.
Definitions of these terms, as well as definitions of certain financial and other terms indicated by footnotes on the slides, are included in the back end of this presentation for your reference. Before you cast your vote on the proxy, we would encourage you to review Exxon Mobil's 2016 proxy statement and the Executive Compensation Overview. Now, you may also refer to the investor section of our website for additional information and definitions of key financial and operating terms that we'll use today. We believe ongoing engagement with our shareholders is vitally important, and keeping shareholders informed on relevant business matters is really a key priority for us. The company connects with shareholders through a variety of venues. We meet directly with key shareholders throughout the year to maintain periodic contact and address issues of interest. We strive to respond to all shareholder inquiries.
Of course, the annual shareholders meeting is a time that we interface with many individual and institutional shareholders. Our corporate website, company publications, and webcasts such as this are the other ways that we communicate with you, and we provide important information about your company. The board also has established procedures for shareholders to communicate directly with individual directors, including the Presiding Director, Board Committee members, or the non-employee directors as a group. More information about the process for communicating with directors may be found on page 13 of our proxy statement. Our key message here is that we welcome and value input from our shareholders. Such input is taken seriously and considered in company deliberations. I'll now hand off to Randy to summarize Exxon Mobil's executive compensation program.
Jeff, I'd like to start today's overview by reflecting on the strategic design choices in our executive compensation program that underpin our goal of achieving sustainable growth and shareholder value. Specifically, our compensation program is designed to reward outperformance, drive sustainability of performance, and ensure alignment with our business model. Throughout this webinar, I'll highlight the following three critical design features of our program that, in combination, help us achieve these objectives. First, our program has a strong performance basis by requiring industry-leading performance over investment lead times of the business. Second, our program includes a share-denominated strategy that ensures the same number of awards each year for a given performance and pay grade. Third, our program entails long vesting periods in the stock program, far exceeding common industry practice. In addition, I'll frame the level of ExxonMobil's CEO compensation relative to benchmark companies.
The slide in front of you contains key messages across four questions. Let me highlight just a few. Under the question of how did we perform? With earnings of $16.2 billion, a return on capital of 7.9%, and $15.1 billion in shareholder distributions, our company has maintained its leading position relative to industry peers. Second, regarding how do we link performance and pay? The compensation committee considers relative performance across seven key metrics and over time periods aligned with the long investment lead times of the business to determine the level of individual bonus and long-term stock awards. Third, in the category of how did we pay, CEO reported pay is down 18% and realized pay is down 15%. The ExxonMobil's CEO's combined realized and unrealized pay over his tenure is at the 43rd percentile of benchmark companies in 2015.
Fourth, in terms of how do we manage risk for our senior executives, long-term stock awards vest 50% in five years and 50% in 10 years or retirement, whichever is later. These long vesting periods result in a significant stock holding requirement. This design feature holds executives accountable for decisions made today on projects that may not be fully commercial for several years. Moreover, unvested stock is at risk of forfeiture and cannot be used as collateral for any purpose. I'd also like to highlight that our senior executives do not have change in control arrangements, employment contracts, or severance agreements. Now, turning to the next chart. As Jeff mentioned in his opening remarks, ongoing shareholder engagement is a high priority for ExxonMobil and the Compensation Committee of the Board of Directors.
We are committed to engagement between shareholders and the company to fully understand diverse viewpoints on the topic of executive compensation and to ensure shareholder understanding of ExxonMobil's executive compensation program. The compensation discussion and analysis and executive compensation overview describe in detail our exchange with shareholders in 2015, both before and after the vote on executive compensation. The 2015 advisory vote resulted in 90.1% of votes in support of the Say-on-Pay resolution. We heard positive feedback from shareholders on our extensive shareholder engagement, the new disclosure on the seven key performance metrics, our long vesting periods, and the analysis of market orientation based on realized and unrealized pay. In response to shareholders' feedback, we also identified two improvement opportunities which we have addressed in this year's disclosure. We will be reviewing charts and data to elaborate on these key points during this webinar.
Specifically, we further clarified how, in our program, applying the performance criteria at grant versus vest strengthens the linkage between performance and pay and allows for longer vesting periods. The combination of both the performance criteria at grant and long vesting results in alignment with shareholder interests in a way that exceeds more traditional performance shares. We've also enhanced disclosure on how the performance award matrix determines the level of individual stock and bonus awards. As mentioned earlier, the Compensation Committee assesses CEO performance on the basis of seven key metrics across companies within the oil and gas industry of similar scale and complexity and over investment lead times of the business. Jeff, in view of this, how would you characterize ExxonMobil's performance in 2015?
As Randy mentioned, the Compensation Committee evaluates seven key metrics, including safety and operational integrity, return on average capital employed, total shareholder return, free cash flow, shareholder distributions, strategic business results, and project execution. While the committee does not assign a specific weight to each of these seven metrics, I will say that safety performance and return on average capital employed are given the highest priority in evaluating performance. Specific to 2015, workforce safety performance for both our employees and contractors remained strong relative to industry. As to return on capital employed, ExxonMobil outperformed industry peers across all three time periods. In 2015, ExxonMobil's return on capital employed, as Randy indicated earlier, was 7.9% and was about four percentage points higher than our nearest competitor. Over the past five and 10-year periods, ExxonMobil's return on capital employed was close to double the weighted average of industry peers.
Moving to charts three and four, which depict shareholder returns. Specific to 10-year cumulative returns, ExxonMobil has generated superior returns through a range of economic environments and cycles, including strong relative performance through the industry downturn. The addition of Brent price over the same 10-year period provides an illustration of the commodity price volatility. Chart four on the right depicts total shareholder return, comparing ExxonMobil and the industry group average over a number of different time periods. While we do recognize that our one and three-year TSR is negative, this chart demonstrates our leading performance, most notably over longer periods of time, reflective of our long investment cycles. If we were to compare this chart with a similar chart last year, it would demonstrate that ExxonMobil actually sustained or increased its lead over industry peers.
Another measure of the value created by ExxonMobil through strong financial and operating performance is the amount of cash flow that provides capacity for both investments and shareholder distributions. ExxonMobil generated about $6 billion of free cash flow in 2015, and that's after our investment program and reflects our disciplined capital allocation approach. We significantly outperformed industry peers both on a five-year and a 10-year average and cumulative basis. As an example, on a 10-year basis, ExxonMobil's free cash flow was close to three times that of our nearest competitor. Since 2006, ExxonMobil generated almost $347 billion of free cash flow, which supported our reliable and growing dividend and industry-leading shareholder distributions. As you can see on chart six, ExxonMobil shareholder distributions led industry over the last five and 10 years.
In 2015 alone, ExxonMobil distributed just over $15 billion to shareholders through dividends and share buybacks for a total cash distribution yield of about 4%. I'll note, on average, $0.54 of every dollar of cash flow generated by the business over the last 10 years has been distributed to our shareholders. This brings us to our strategic business results and project execution highlights. For our upstream business segment, focus is on capital-efficient resource development. As an example, we've started up 22 major projects since 2012, which in combination will add about 1 million oil equivalent barrels per day of working interest capacity. Furthermore, we have another 10 major projects coming on stream by 2017. The results of our downstream and chemical business segments are demonstrating the value of our premier integrated businesses. We continue to strategically invest at advantage sites to enhance performance.
We believe that a full value chain market view and integrated facilities enable a more effective response to the current business environment. Our industry-leading performance across all seven metrics is resulting in our unparalleled financial position, which provides us the flexibility and the capacity to execute our business strategy through the cycle. I'll note on chart 7C, ExxonMobil's leading performance in two areas. That is total capitalization, which is calculated as net debt plus market capitalization, and leverage, which represents net debt as a percentage of total capitalization. As to total capitalization, I'll note that ExxonMobil total capitalization is about the level of Chevron and Shell combined at the end of 2015. Whilst S&P has recently lowered its credit rating on ExxonMobil, the chart demonstrates ExxonMobil's balance sheet strength amongst industry peers.
In summary, we do believe these charts underscore ExxonMobil's industry-leading performance across all seven metrics. Randy, we are often questioned on how we link performance and pay and how performance criteria determine the overall level of pay. I'll turn it back to you to go ahead and elaborate on this now.
Thank you, Jeff. Let me start by drawing the connection between performance and pay. From a compensation program design perspective, we seek to reward outstanding performance, promote retention, and encourage long-term business decisions. Each executive's total compensation is also highly differentiated by individual performance. Last year, we disclosed the performance award matrix to illustrate this level of differentiation and how the relative performance of the company determines the level of individual stock awards. This year, we've added the allocation of short-term awards to this illustration. I'll cover this in more detail in a minute. In terms of our career orientation, we believe that the company benefits from leadership that is built over a lifelong career and includes a broad range of experiences across the business cycle. As an example, our current CEO has over 40 years of career service with ExxonMobil.
Finally, developing talent from within enables ExxonMobil to ensure continuity of leadership, which in turn helps achieve sustainable risk management and sustainable growth in shareholder value. Turning to the next chart regarding compensation committee decisions, the compensation committee considered the company's performance across seven key metrics, as Jeff described. Those metrics are listed on the left side of this chart, and our results across these metrics were covered by Jeff in those recent charts. While not explicitly mentioned, the results in the areas of corporate governance, diversity, and other goals pertinent to sustainable growth and shareholder value are also considered in the overall assessment. Specific to benchmarking, as shown on the right side of the chart, we use a different set of companies when assessing the appropriate level of pay versus the list of companies used for assessing overall company performance.
This is because there is only one other large integrated oil and gas company that is U.S.-based, and we believe that evaluating an appropriate level of compensation requires comparison against other large U.S. companies with similar size, scale, scope, and complexity. Assessing performance of the business, however, is more meaningful if measured against other companies that face similar industry dynamics, and several of these companies are European-based firms. Turning to the next chart. The link between performance and pay is most apparent in the way in which we establish the highest performance standards. Ultimately, for our executive officers to receive an overall superior evaluation, performance must be high in all seven key areas. This also means that outstanding performance in one area will not cancel out a poor performance in another.
To address feedback from shareholders, we first disclosed the performance award matrix last year with a focus on our long-term stock awards. Chart eight now illustrates the distribution of stock and bonus awards by individual performance category and by pay grade. As this chart demonstrates, award levels are widely differentiated by performance and range from 100%-0%, depending on how the company and the executive perform with respect to the seven key metrics. To be clear, industry-leading performance over the investment lead times of the business is required in determining both the short-term and long-term incentive awards. Alternatively, many companies use formulas with preset goals for their bonus and/or equity programs. We consider industry-leading performance across all seven metrics to be the preset goal, and only if this goal is met will executives receive a top category bonus and equity award.
The performance award matrix also builds on a share-denominated strategy, which means that for any given performance level and pay grade, the number of shares is the same. Regarding this point, the current stage of the commodity price cycle in our industry is providing an opportunity to contrast this approach with other programs in which shares and options are increased to address the decline in the value of prior grants. The share-denominated approach that we deploy precludes this outcome. While chart eight illustrates the award levels for all five performance categories, for our 21 executive officers specifically, they're expected to perform at the highest level or they are replaced. If it is determined that another executive would make a stronger contribution than one of the current officers, a succession plan is implemented and the incumbent is reassigned or separated from the company.
We are confident in making this statement because our development model results in a deep bench of qualified talent for senior positions generated by a disciplined management development and succession planning process. Within this framework and based on the results Jeff shared with you earlier, the compensation committee determined that the CEO continues to demonstrate performance represented by the top performance category in the performance award matrix. Turning to the next chart. I'd like to finish this section by highlighting chart nine, which puts in perspective the scale and scope of ExxonMobil and its three business segments versus our compensation benchmark companies. To be clear, the primary factor in determining compensation levels by the compensation committee is business and individual performance as measured across the seven key metrics we covered previously.
The committee also believes that the compensation program should recognize that our senior executives are responsible for managing a larger investment on behalf of shareholders relative to that of most other large publicly traded companies. As such, the size and complexity of ExxonMobil are considered among several factors. Turning to the next chart. Let me now focus on the question of how did we pay? Before we discuss the level of CEO compensation, I'll share highlights of our bonus and equity programs, both of which have been applied consistently for the past 14 years to all our executives worldwide, including the CEO. The annual bonus is determined by three performance factors, which in combination ensure our executives are focused on sustainable growth and shareholder value. First, the size of the annual bonus pool is closely aligned with changes in annual earnings per the formula depicted on this slide.
Chart 10 illustrates how this formula has been applied consistently since 2002, including years in which earnings declined. Second, individual grant levels are determined by business and individual performance per the performance award matrix I covered earlier. Third, half of the annual bonus is delayed until cumulative EPS reach a specified level. Over the years, the EPS threshold has been raised from $3 per unit in 2001 to $6.50 in 2014 and the 2015 time period. The purpose of this delay is to strengthen our forfeiture flexibility. Consistent with 2015 earnings, the CEO bonus was down 35% versus 2014. I'd like to note that the bonus is intentionally kept as a small portion of the CEO's total compensation to reflect the committee's continuing emphasis on long-term compensation. Specifically, his bonus was about 9% of total compensation in 2015. Turning to the next chart.
This brings me to the equity program, which is underpinned by three design principles that in combination result in performance and risk profiles aligned with the returns of long-term shareholders. First, as we previously covered, the performance award matrix, which determines the number of shares at grant on the basis of business and individual performance. Second, the value of shares at vest is determined by share price at vest. Third, the time between grant and vest represents long vesting periods aligned with the long investment lead times of our business. Furthermore, attaching performance criteria at grant versus vest results in strong alignment between performance and pay and allows for much longer vesting periods.
To illustrate these long vesting periods, which far exceed industry practice, we have mapped out the period over which the CEO is receiving grants from 2006 to 2016, assuming retirement in 2017, and the period over which his awards vest, 2011 to 2026, which is a 16-year period. We believe that tying the actual award value to the stock price at vest creates the ultimate measurement, and it links to the company performance. It ensures the executive's commitment to creating long-term sustainable growth in shareholder value, while at the same time providing a strong retention mechanism for consistently high-performing ExxonMobil executives who are highly sought after in the industry.
In summary, in 2015, 67% of the CEO's reported compensation represented restricted stock units with a number of shares granted consistent with 2014 as a result of the committee's assessment that the CEO's performance was warranted a sustained top quintile performance category. Turning to the next chart. With this in mind, let me now focus on CEO compensation. Chart 11 depicts reported pay as covered in the summary compensation table for 2013, 2014, and 2015. In 2015, CEO reported pay was down 18%, reflective of the industry downturn and resulting primarily from a decrease in the annual bonus and share price used to value the equity grant. For perspective, overall reported pay is about the same level as 2007 and 2009. Excluding the change in pension value, CEO reported pay was down 15%. Close to two-thirds of total CEO compensation is in the form of long-term equity.
In line with our previous discussion on long vesting periods, this means that the CEO will not actually receive these stock grants for many years in the future, and until such time, unvested awards remain at risk of forfeiture. In view of this, looking at reported pay in isolation is not the most complete way to assess compensation. For this reason, we have disclosed the benchmark orientation of CEO realized and unrealized pay, and we've received positive feedback from our shareholders on the additional perspective that this provides. Specifically, Chart 12 depicts realized pay in the red bars compared to reported pay in the blue bars for the CEO's tenure.
As a reminder, realized pay includes compensation actually received by the CEO during the year, including, among others, salary, current cash bonus, payouts of previously granted Earnings Bonus Units, market value at vesting of previously granted stock awards, and all other compensation realized during the year. Of note, if calculated over the CEO's tenure for the period 2006 to 2015, realized pay represents, on average, 47% of reported pay, reflective of the long vesting periods associated with his equity grants. Turning to the next page. Chart 13 compares realized pay for ExxonMobil to that of compensation benchmark companies and puts in perspective while relying solely on reported pay to determine CEO compensation, market orientation may not result in the right conclusions. More specifically, realized pay can differ significantly from reported pay for companies that grant stock options and have formula-based pay with steep payout factors or leverage.
In 2015, ExxonMobil's CEO realized pay ranked seven of 13 among the compensation benchmark companies, versus two of 13 for reported pay. ExxonMobil's CEO realized pay of $15.6 million compares to benchmark companies' median of close to $16 million and a high of $39 million. It should be noted that ExxonMobil's CEO compensation has been below the median for the entire period, with the exception of 2011, which included the exercise of his last stock option grant that was made in 2001. This leaves one final but very important step in the analysis. That is the market orientation on the basis of combined realized and unrealized pay, which was reflected in chart 14. Specifically, over his tenure since 2006, ExxonMobil's CEO combined realized and unrealized pay was at the 43rd percentile.
For this purpose, unrealized pay represents the current value, not the grant date value, of all outstanding unvested cash and stock-based incentive awards as what the current market value of unexercised in-the-money stock options granted during the years 2006 to 2015. Award values are based on target levels of formula-based awards and fiscal year-end 2015 stock prices. On this basis, chart 14 quantifies both realized and unrealized pay for all benchmark companies and ExxonMobil. The purpose of chart 14 is to ensure all forms of compensation are captured, including granted but unvested awards, even if those awards do not vest for many years. We believe that this in-depth analysis provides a more balanced and accurate perspective on how ExxonMobil's CEO compensation compares to that of compensation benchmark companies.
I believe, Jeff, this answers the question on how we link performance and pay and how performance criteria determine the overall level of pay. Upon reflection, the current industry environment is providing an important illustration on the value of sustainable risk management. I'd like to finish my remarks with a focus on how ExxonMobil manages risk within the framework of our executive compensation program. Turning to the next chart. Our long vesting periods far exceed competitive practice and are strongly integrated with our business model in the interest of long-term shareholders, particularly in an industry with significant exposure to volatile commodity prices. Chart 15 illustrates cumulative vested shares year-over-year for two distinct programs. ExxonMobil's program, depicted in the red line, in which 50% of an annual grant vests in five years and the remaining 50% vests in 10 years or retirement, whichever is later.
An alternate formula-based program, depicted in blue, in which annual grants vest in three years based on relative TSR compared to industry peers. The chart illustrates cumulative vested shares, assuming a grant of 100 shares each year between 2006 and 2016, as compared to Brent price, which has a significant impact on industry earnings. This chart shows that as an example, in 2013, close to the peak of Brent crude prices, the alternate program vested 84% of awards granted compared to 19% in the ExxonMobil program. The chart illustrates that programs with a shorter-term vesting schedule enable an opportunity to monetize and diversify investment of stock-based compensation at a much faster pace, which we believe is not aligned with the interest of our long-term shareholders. The ExxonMobil program requires that our executives hold a much larger percentage of their stock-based compensation through the inevitable commodity price cycles.
Turning to the next chart. Chart 16 depicts the same program as chart 15, but illustrates the frequency and pace of vested shares each year as compared to the typical net cash flow of a major ExxonMobil project. In this example, the alternate formula-based program provides a high degree of variability and earlier payout, which is not aligned with the impact of a typical ExxonMobil project. Assuming retirement in 2017, the majority of ExxonMobil awards remain unvested, thus holding the executive accountable many years in the future for business decisions made over a decade earlier. Turning to the next chart. A key step in ensuring that our compensation program addresses the requirement of sustainable risk management includes a periodic assessment of our program. For this purpose, the Compensation Committee evaluates alternative program designs.
The last two charts demonstrate that programs with shorter-term payout schedules are not aligned with ExxonMobil's business model nor the interest of our long-term shareholders. More specifically, long-term equity programs in which performance criteria apply to the vest date require greater line of sight and thus shorter vesting periods. This is why we apply the performance criteria to the grant level of stock and bonus awards. Earlier payout schedules entail a leveraged formula basis that could focus executives on short-term results at the expense of long-term sustainable growth in shareholder value. By excluding leverage from our methodology, ExxonMobil executives see a one-for-one change in compensation with share price, which is aligned with the experience of the long-term shareholders. After retirement, ExxonMobil senior executives continue to have grants unvested, which are at risk of forfeiture for 10 years and cannot be used as collateral for any purpose.
For these reasons, the Compensation Committee believes that a requirement to demonstrate leadership in all seven key performance areas establishes a significant performance standard at grant, which in turn allows ExxonMobil to maintain its uniquely long vesting periods. Finally, I'd like to highlight that our program is underpinned by sound governance practices. Most of these practices we have covered in detail throughout this presentation and are based on a desire to encourage significant performance differentiation and discourage inappropriate risk-taking. In closing, let me bring us back to how we have strategically designed our compensation program to reward outperformance, drive sustainability, and ensure alignment with our business model in support of our overall goal of achieving sustainable growth in shareholder value. I hope I've been able to articulate how in our compensation program three critical design features in combination help us to achieve this goal.
First, our program has a strong performance basis by requiring industry-leading performance over investment lead times of the business. Second, our program includes a share-denominated strategy that ensures the same number of awards for a given performance category and pay grade. Third, our program entails long vesting periods far exceeding common industry practice. With that, Jeff, I'd like to turn it back to you for some insight regarding other shareholder proposals.
Thanks, Randy. A few closing comments on compensation before we move to the shareholder proposals. We certainly recognize your vote is important, and we encourage you to carefully consider the information provided today and vote for the advisory vote to approve executive compensation. ExxonMobil's compensation program supports a business model that has weathered volatile commodity prices and industry business cycles for many decades and consistently generated industry-leading financial and operating performance and shareholder returns. The compensation program sets ExxonMobil apart and has established a strong culture of performance, integrity, reliability, and consistency. We hope that you as shareholders recognize that the compensation program has been a key ingredient in achieving these objectives.
It's our belief that ExxonMobil's business model and supporting compensation program are effective in achieving the objective of long-term shareholders. This is especially evident in the current commodity price environment, and we believe it will continue serving shareholders well into the future. I would now like to briefly comment on the shareholder proposals in our proxy statement. I can assure you we've had a robust dialogue with the proponents for each of the proposals that have been submitted, some of which have resulted in proposals ultimately being withdrawn. Further, we've carried on these discussions with our broader shareholder base. I do want to reinforce the comment made at the beginning of our webcast that we truly do value these communications and we encourage ongoing engagement. The 11 shareholder proposals on this slide are those that remain after our engagements and are before our shareholders for consideration.
I'll now touch on each proposal to highlight the Board's reasoning for their recommendation against these proposals. The first few shareholder proposals touch on governance matters. First among them is a proposal requesting a policy and an amendment to our bylaws that require the Chairman to be an independent member of the Board. The Board doesn't support this proposal because it removes its flexibility to determine the appropriate governance structure that would best serve the long-term interest of our shareholders. Note that the Board is comprised of independent directors, except the CEO and President, which represents about 85% of the total Board. Further, the Audit, Compensation, Board Affairs, and Public Issues Committees are comprised solely of independent directors. The Presiding Director provides independent Board leadership as he has the authority to call, chair, and set the agenda in executive sessions of our non-employee directors.
Further, the Presiding Director consults with the Chairman on regular Board meetings, including schedules and agendas. The second shareholder proposal would require a climate expert on the Board. The Board's published guidelines for the selection of non-employee directors requires candidates to have the breadth of experience and demonstrated expertise in managing large, global, complex organizations such as ExxonMobil. Further, all directors must possess the capabilities to address the full range of business risks, including those associated with the risk of climate change. In this regard, the current Board is comprised of members with credentials, proficiencies, and experience to address climate-related matters. Board members hold nine science and engineering degrees and have relevant experience and leadership in a range of environmental matters, including water, alternative energies, energy conservation, global climate issue management, and environmental innovation.
Additionally, the board has access to environmental and climate expertise via regular briefings by company professionals, which includes the sharing of external perspectives on the status of science, research and development, and public policy. For these reasons, the board recommends against this proposal. Next is a shareholder proposal to hire an investment bank to explore the sale of the company. The company pursues business strategies that maximize long-term shareholder value. This asset management discipline includes considering asset divestments when they are the highest value option for shareholders. Over the last 15 years, ExxonMobil has returned almost $360 billion to shareholders through dividends and share repurchases in a sustainable manner without having to dismantle the company or undermine its proven business model. The board recommends against this proposal. Item seven is a shareholder proposal to adopt a proxy access bylaw.
Let me state that the board agrees with the underlying objective of maintaining a high-quality and independent board with broad access to potential candidates. The existing director nomination process is robust as it ensures the required skills, backgrounds, and competencies to maintain a highly qualified board. The current process also provides shareholders the ability to suggest non-employee candidates for consideration to the board, and further, all directors stand for re-election annually. The board believes that this proposal would create business risk, as it could result in a contentious election process that would be costly, distracting, and potentially lead to results that are not in the best interest of the company or its shareholders. Most concerning is the potential risk of increasing the influence of special interest groups, which could lead to single-issue participants on the board. The board appreciates the full range of views it has received on this matter.
However, it doesn't believe the proposal is in the best interest of the company. Our current governance practices provide strong board accountability and important shareholder rights. The next shareholder proposal is a report on compensation for women. First, let me note that ExxonMobil values diversity and has well-established processes to advance women on a global basis. Leadership opportunities for women are promoted through all aspects of the employment relationship, including recruitment, training, advancement, and salary administration. Also, robust development processes and rigorous management reviews allow us to advance our diversity objectives, yielding the most qualified pool of candidates. It is important to note that as an individual advances through various career stages, pay grade and total compensation will advance accordingly. The program compensates each individual at a level commensurate with individual performance, experience, and pay grade, independent of gender.
Detailed information on our workforce demographics and comprehensive diversity and inclusion efforts is available in our corporate citizenship report on our website. Our focus on all aspects of the development path, supported by a consistently applied compensation program, continues to result in a diverse pool of highly qualified talent. For these reasons, the board recommends against the proposal. The next shareholder proposal is a report on lobbying. As you know, lobbying is an important process to explain or advocate the corporation's position at both federal and state levels, much like many other U.S. companies, labor unions, and non-governmental organizations. Our policy and procedures governing lobbying, including oversight, can be found in the accountability section of the company's website. Key policy issues are reviewed by our management committee and the board, and our position on these issues are posted in the Current Issues section of our website.
As you would expect, our lobbying activities are fully aligned with those positions. Also, in compliance with the Lobbying Disclosure Act, the company publicly reports its lobbying expenses and the specific issues lobbied to Congress on a quarterly basis via the U.S. Senate website. Lobbying reports are also filed with state and local jurisdictions as required by law. The board believes significant disclosure is currently provided, and as such, does not support this proposal. First among several climate-related proposals is one that seeks to increase capital distributions, meaning dividends and share purchases, in light of climate change-related risks. To address questions raised on the topics of global energy demand and supply, climate change policy, and carbon asset risk, the company previously published a comprehensive report entitled Energy and Carbon: Managing the Risks.
I'll also highlight that our Outlook for Energy, which details our forward assessment of energy demand and supply, is updated annually and considers many key demand-based variables, including the most up-to-date climate policy information available. Both of these documents, which are available on our website, provide to the shareholders an important insight into the merits of our business model and the rigor that underpins our investment plans to create shareholder value. The company maintains a disciplined capital allocation approach. As I said, it has returned almost $360 billion to shareholders over the last 15 years through distributions, reducing shares outstanding by 40% and growing the dividend over 34 consecutive years. The company stress tests its capital investment opportunities, which provides an added margin of safety against many diverse uncertainties.
In this regard, we address the potential for future climate-related policy, including the expectation that future government policies to reduce greenhouse gas emissions will become more restrictive by using a proxy cost of carbon, which has been embedded in our outlook since 2007. These factors have positioned Exxon Mobil consistently as an industry leader in return on capital employed, being unrelenting in our commitment to shareholder value. The board recommends against this proposal. Another proponent asks us to establish a policy to limit global warming to two degrees Celsius. Let me touch on a few points on how we have proactively addressed this global challenge. First, you should know that the company takes the risk of climate change seriously, and this risk requires thoughtful action.
The long-term objective of climate change policy should be to reduce the risk of harm at minimal societal cost, while also providing reliable and affordable energy to improve global living standards. The company remains focused on practical, achievable solutions consistent with its mandate to provide reliable and affordable energy rather than focusing on a future global temperature outcome that ultimately will be dictated by many variables beyond the company's control. We've taken action for many years by increasing energy efficiencies and reducing emissions in our operations, by providing products to help consumers reduce their emissions, by supporting research to advance technology breakthroughs, and by participating in constructive dialogue on policy options with stakeholders. Finally, I'll note that our annual Outlook for Energy includes a significant reduction in projected energy use and greenhouse gas emissions due to efficiency initiatives and continuing policy action.
In short, our outlook by no means represents a business as usual case and is generally consistent with other forecasting organizations such as the International Energy Agency. The board continues to believe the company's focus should be on solutions, and therefore recommends against this proposal. The next climate policy is on a report on impacts of climate change policies. I mentioned earlier that the company previously published the report, "Energy and Carbon: Managing the Risks." This report demonstrates the board's focus on the importance of assessing the resiliency of the company's resource portfolio. As shown in the chart on page 11 of this report, even in the International Energy Agency's 450 Scenario, which represents an energy pathway consistent with two degrees Celsius, significant hydrocarbon investment will be necessary to meet demand requirements. The board believes that the company's current processes sufficiently test its portfolio to ensure long-term shareholder value.
Framed by the report I just mentioned, and assessed annually through stress testing in our Outlook for Energy and in investment planning, we remain confident in the commercial viability of our portfolio. It should also be noted that all of our proved reserves fully comply with SEC definitions and requirements as detailed in our annual 10-K filing. It's also important to note that our outlook is consistent with other forecasting organizations such as the International Energy Agency, as well as the commitments made under the Paris Agreement. In other words, the aggregation of Intended Nationally Determined Contributions, which were submitted by governments as part of the Paris Agreement, indicates a greenhouse gas trajectory similar to that anticipated in our outlook.
The outlook includes an expectation that future government policies to reduce greenhouse gas emissions will become increasingly stringent over time and has used a proxy cost of carbon to assess investments since 2007. I'll note that stress testing, which differs from alternative scenario planning, further enables us to consider a much wider range of variables in our planning and investment process. The board recommends against this proposal as our current processes test the portfolio in a more comprehensive manner than what the proposal requests. The next shareholder proposal relates to reporting reserves replacement in British Thermal Units or BTUs. As you know, reserves reporting on an oil equivalent barrel basis is the industry standard and governed by the SEC rules. Redundant reporting on a BTU basis, as suggested by this proposal, will not better inform the investment committee nor influence investment choices.
Our investments will continue to be dictated by the value proposition. I'm sure it's clear to you by now that the Outlook for Energy informs our business strategy and investment planning. It assesses energy trends, including alternatives such as nuclear and renewables, and assumes government policies will lead to increasing restrictions and significant costs on greenhouse gas emissions. The company's mandate is to create long-term shareholder value through energy development, and moving to a system that accounts for reserves differently will not enhance its ability to do so. The board recommends against this proposal. The last shareholder proposal requests a report on hydraulic fracturing, specifically a subset of data by resource play or field level.
In addition to the report I mentioned earlier, the company has published another significant report entitled "Unconventional Resource Development: Managing the Risks." This report describes in detail how the company assesses and manages risk associated with developing unconventional resources. This proposal, submitted now for seven straight years, does not recognize the continued operational enhancements and disclosures made by industry and the significant expansion of federal and state requirements that govern industry operations. Informing shareholders of the risks and how these risks are effectively managed is important, which is why we published the report and why our annual corporate citizenship report details corporate metrics and risk management activities. Fundamentally, we believe that a subset of detailed by-play data, as suggested by the proposal, would not meaningfully inform our shareholders and therefore recommend against this proposal.
That concludes our prepared remarks. I would like to say again that we do continue to have positive and insightful shareholder engagements that continues to add value to our disclosure and deliberations, and we would be happy to address any questions. I'm looking at what has been submitted, which there is none at this point. Randy, if you have any closing comments?
No, I'd just like to thank everybody for the opportunities to talk about our executive compensation program and encourage anybody that may have questions outside of this to provide them.
In closing, I do want to once again thank everybody for their time and participation this morning, and as Randy just said, if there are any residual questions, please feel free to reach out. Thank you.
Thank you very much. That does conclude our webcast for today. I would like to thank everyone for your participation. Have a great day.