Equity compensation can include restricted stock units (RSUs), stock options, performance shares, and employee stock purchase plan (ESPP) shares, and each vests and is taxed on its own schedule; the ExxonMobil section below shows which of these appear in ExxonMobil's own filings.

What types of equity compensation might ExxonMobil employees receive?

A restricted stock unit (RSU) is not stock itself. It is an unfunded promise to deliver shares, or sometimes cash, once a time-based or performance-based vesting condition is met; a performance share is simply an RSU with a performance-based condition.

Stock options give the right to buy shares at a fixed strike price. Nonqualified stock options (NSOs) can go to employees, consultants, or outside directors. Incentive stock options (ISOs) carry extra tax rules and may only go to employees of the company or a parent or subsidiary.

An ESPP lets employees buy company stock through payroll deductions, usually at a discount from the market price, and a plan that qualifies under Internal Revenue Code Section 423 carries its own holding-period rules for favorable tax treatment.

What happens to unvested equity and stock options if employment ends?

The plan document and the individual award agreement, not a general rule, control what happens to unvested RSUs, options, and performance shares when someone leaves ExxonMobil. Most plans stop vesting on the termination date and forfeit the unvested portion, though severance or retirement provisions in a specific plan can change that outcome.

To keep ISO tax treatment, the option generally must be exercised within 3 months after employment ends. If the employee left because of a permanent and total disability under Internal Revenue Code Section 22(e)(3), that window becomes 1 year instead, and an ISO exercised later is taxed going forward as a nonstatutory option.

How are RSUs and stock options taxed in 2026?

RSUs are taxed as wages, not capital gains, at the point they vest and settle: the fair market value of the shares delivered, or the cash paid, that day goes into gross income and is reported on Form W-2.

Employers typically withhold federal income tax on RSU and NSO exercise income using the supplemental-wage rules: for 2026 the flat rate is 22% on up to $1 million of cumulative supplemental wages from one employer in the calendar year, and 37% on the excess.

An NSO is taxed at exercise, not at grant: the spread (the stock's fair market value minus the exercise price paid) counts as wages in the year of exercise.

How does the AMT apply to incentive stock options?

Exercising an ISO creates no regular income tax, unlike an NSO exercise, but the spread is added back as an alternative minimum tax (AMT) adjustment on Form 6251, line 2i, so the exercise can still trigger AMT with no regular tax due.

For 2026, the AMT exemption is $90,100 for single filers and $140,200 for married couples filing jointly, phasing out once AMT income passes $500,000 (single) or $1,000,000 (joint). A 2025 law, the One, Big, Beautiful Bill Act, made those higher 2026 amounts permanent.

Selling ISO shares more than 2 years after the grant date and more than 1 year after the exercise date, a qualifying disposition, means the gain is taxed at long-term capital gains rates. Selling sooner, a disqualifying disposition, generally shifts part or all of that gain into ordinary wage income instead.

If the value of ISO shares that first become exercisable for one employee in a calendar year, across all of ExxonMobil's plans, tops $100,000 measured at grant, the excess loses ISO status and is taxed going forward as a nonstatutory option.

What should employees know about the Section 83(b) election?

A Section 83(b) election applies to actual restricted stock, shares already transferred but still subject to forfeiture, not to RSUs, since an RSU holder has not yet received any property to elect on. Filing it lets an employee include the stock's value in income at grant instead of at vesting.

The IRS uses a standardized form for this, Form 15620, filable online or by mail, and the deadline is strict: no later than 30 days after the stock transfers, with no exceptions.

How do employee stock purchase plans work under Section 423?

A Section 423 ESPP can price shares at up to a 15% discount, the lesser of 85% of fair market value at the start of the offering period or 85% of its value on the purchase date. The tax code also caps how much stock one employee can accrue the right to buy: no more than $25,000 of fair market value, measured at grant, for each calendar year the option is outstanding.

Selling the shares more than 2 years after the offering date and more than 1 year after the purchase date is a qualifying disposition: part of the gain, limited to the original discount, counts as ordinary income, and the rest is long-term capital gain. Selling sooner moves more of the gain into ordinary income.

What are the 2026 tax rates on selling equity compensation shares?

Once RSU shares, exercised option shares, or ESPP shares are sold, any gain above the taxable basis is a capital gain, and the rate depends on how long the shares were held and on taxable income. For 2026, the 0% long-term capital gains rate applies up to taxable income of $49,450 (single) or $98,900 (married filing jointly). The 15% rate applies above that up to $545,500 (single) or $613,700 (joint), and amounts above those upper figures are taxed at 20%.

Higher earners may also owe the 3.8% net investment income tax on some of that gain. It applies to the lesser of net investment income or the amount modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly), thresholds Congress set in 2013 and has not adjusted for inflation since.

What rules govern company insider trading plans?

Directors, officers, and other insiders who want to sell shares on a set schedule often use a Rule 10b5-1 trading plan. Under the SEC's 2022 amendments, a director or officer cannot start trading under a new or modified plan until a cooling-off period passes. That period is the later of 90 days after adoption or 2 business days after the next quarterly results are disclosed, capped at 120 days; other persons get a shorter 30-day period instead.

Everyone adopting a plan has to act in good faith, and directors and officers must certify at adoption that they are not aware of material nonpublic information. The rule also limits a person to one single-trade plan per 12-month period and restricts overlapping plans.

Separately, ExxonMobil has to state in its Form 10-K whether it has adopted insider trading policies for its directors, officers, and employees, and file those policies as an exhibit. Those filed policies are generally where blackout-window rules live, often tied to earnings announcements, when insiders cannot trade ExxonMobil stock.

How much company stock is too much to hold?

Putting a large portion of personal wealth into one employer's stock concentrates risk, since a decline in that one company can affect a paycheck, unvested equity, and an investment account at the same time. The following is a short, clearly labeled hypothetical, not a projection of ExxonMobil stock or any real account.

For example, an employee might start with $100,000 in cash savings and $100,000 in vested company stock, half the $200,000 total in one stock. Over several years, that employee could sell newly vested shares as they vest and move the proceeds into other investments, gradually lowering how concentrated that stock position is. There is no fixed share that works for every situation, and this hypothetical does not say how any investment will perform.

Where might equity compensation proceeds go?

Cash from selling vested RSU shares, exercised options, or ESPP shares can go toward ordinary savings and retirement accounts that each carry their own 2026 limit. For a 401(k), 403(b), or governmental 457(b) plan, the 2026 employee deferral limit is $24,500, with an extra $8,000 catch-up for employees 50 and older, or $11,250 instead for those turning 60 through 63 in 2026.

An IRA has a separate 2026 limit of $7,500, plus a $1,100 catch-up for those 50 and older. An employee enrolled in an HSA-eligible health plan can direct proceeds there too: the 2026 HSA contribution limit is $4,400 for self-only coverage and $8,750 for family coverage.

How does ExxonMobil's own equity plan work?

Before routing any proceeds toward retirement accounts, ExxonMobil employees should know how their own equity awards actually vest. ExxonMobil's 2003 Incentive Program grants stock options, stock appreciation rights, and restricted stock units to eligible employees, with 41 million shares still available for new awards at the end of 2025. Most awards vest in two steps, half after three years and half after seven years, though management, professional and technical employees often vest in full after three years, and senior executives wait five and ten years for their two halves. If employment ends before standard retirement time and before an award's restricted period expires, ExxonMobil's standard restricted stock unit agreement forfeits the unvested units on the date of termination unless the program's administrative authority decides otherwise; units held at standard retirement keep vesting on schedule, and death ends all restrictions right away. An individual award letter can set its own vesting dates and exceptions.

What trading rules apply to ExxonMobil stock?

ExxonMobil's Insider Trading Policy covers directors, officers and employees, barring trades in company securities while holding material non-public information. Added blackout periods and pre-clearance for 10b5-1 trading plans apply only to directors and Section 16 officers, running from before the 20th of each fiscal quarter's last month until after that quarter's earnings come out, while routine ExxonMobil Savings Plan payroll contributions keep running during a blackout. That same Savings Plan already holds ExxonMobil stock for many employees through its company stock fund, so a blackout window or 10b5-1 plan can touch savings plan elections tied to company shares too.