UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 1, 2007

Tesoro Corporation

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 1-3473
(Commission File Number) 95-0862768
(IRS Employer Identification No.)

300 Concord Plaza Drive
San Antonio, Texas
(Address of principal executive offices) 78216-6999
(Zip Code)

(210) 828-8484
(Registrant’s telephone number,
including area code)

Not Applicable
(Former name or former address, if
changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
SIGNATURES

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On February 1, 2007, the Compensation Committee of the Board of Directors of Tesoro Corporation (“Tesoro” or the “Company”) approved base salary increases effective February 4, 2007 and annual incentive bonus targets effective January 1, 2007 for the Company’s named executive officers (as defined in Item 402 (a) (3) of Regulation S-K) and certain other executive officers. In addition, the Compensation Committee on February 1, 2007 approved long-term incentive awards for the Company’s named executive officers and certain other key employees under the 2006 Long-Term Incentive Compensation Plan. The long-term incentive awards included stock options granted at an exercise price of $83.16 per share and restricted shares of our common stock. The awarded stock options and restricted shares vest ratably over a three-year period beginning in 2008. The following table summarizes the approved compensation for each of the Company’s named executive officers.

			Annual Incentive
			Bonus Target (% of					Shares of
Name/Title	Base Salary		Base Salary)			Stock Option Shares		Restricted Stock
Bruce A. Smith(a) Chairman of the Board of Directors, President and Chief Executive Officer	$	1,200,000		120	%		152,000		22,400
William J. Finnerty Executive Vice President and Chief Operating Officer	$	754,000		100	%		47,000		6,900
Gregory A. Wright Executive Vice President and Chief Financial Officer	$	608,000		80	%		35,000		5,200
Everett D. Lewis Executive Vice President, Strategy and Asset Management	$	550,000		80	%		35,000		5,200
J. William Haywood Senior Vice President, Refining	$	400,000		60	%		16,000		2,300

(a) Mr. Smith’s 2007 base salary remains unchanged from the previous year.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934 the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 5, 2007

TESORO CORPORATION
By:	/s/ GREGORY A. WRIGHT
	Gregory A. Wright
	Executive Vice President and Chief Financial Officer

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