Chevron Corp. (NYSE: CVX) announced Thursday morning that CEO John Watson will retire as chairman and chief executive officer of the company effective February 1, 2018. Michael Wirth, currently vice chairman and executive vice president, has been named to succeed Watson.
Watson’s 37-year career with Chevron was capped by his eight-year tenure as the company’s board chair and CEO. Wirth has been employed by Chevron for 35 years and currently leads the company’s midstream and development operations.
From 2006 to 2015, Wirth was executive vice president of Chevron’s downstream segment before taking over as midstream and development chief in 2016. He was appointed vice chairman and executive vice president in February of this year.
Ronald D. Sugar, Chevron’s lead independent director, said:
John has done an outstanding job in guiding the company through one of the industry’s most tumultuous periods. During John’s tenure, Chevron’s stock has outperformed its peer companies by a wide margin and he leaves the company well prepared for the future. Mike is ready to be Chevron’s next chairman and CEO. He has the right business experience and leadership qualities to extend the company’s success, and the board has full confidence in his ability to do so.
Looming large in Chevron’s future — and indeed in the futures of most fossil-fuel energy companies — is the anticipated surge in adoption of electric vehicles, both passenger cars and heavy trucks. The transition is expected to begin in earnest in the middle of the next decade. How energy giants like Chevron and Exxon react and adapt to that transition will depend to a large degree on a company’s leadership.
In the shorter term, Chevron could continue to work on keeping costs down even as crude oil prices rise. That would boost profits and cash flow, which it could then share with investors.
Chevron stock traded up fractionally Thursday morning, at $117.90 in a 52-week range of $99.61 to $119.00. The consensus 12-month price target is $115.77, and the range among 22 analysts is $95 to $130 per share.