Chevron's (NYSE:CVX) board of directors has approved a multimillion-dollar bonus for CEO J.S. Watson. Under the oil major's incentive plan, he will receive $3.48 million in cash for his labors.

In an SEC filing detailing its executive compensation, the company said it determined this bonus -- and others awarded Watson's fellow top managers -- by taking into account "Chevron's strong 2012 financial and operating performance, including the second highest earnings in Chevron's history, strong total shareholder return, [and] safety performance," among other factors.

The executives awarded cash bonuses include CFO P.E. Yarrington, who received just under $1.34 million.

In addition to the bonuses, Chevron also raised the salaries of several of those top managers. Leading this group was Watson, whose annual pay was increased by $100,000 to reach $1.8 million. The raises took effect April 1.

Fool contributor Eric Volkman has no position in Chevron. The Motley Fool recommends Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.