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Reuters is reporting that Donald Trump is considering ExxonMobil CEO Rex Tillerson and former ExxonMobil CEO Lee Raymond for the post of Secretary of State.
As someone who’s been analyzing CEO pay for more than 20 years, I feel like I know these guys. So I couldn’t resist pulling out excerpts from two of our annual Executive Excess reports in which Raymond and Tillerson played starring roles. First, in 2006, our report zeroed in on the CEOs who were profiting from the war in Iraq. Lee Raymond, as the outgoing CEO of ExxonMobil, was cashing in bigtime on war-related oil price volatility, something he readily admitted he had no control over. While ordinary Americans were feeling “pain at the pump,” high oil prices had sent the value of his pay package soaring. Here’s the timely excerpt:
Lee Raymond, ExxonMobil CEO, 1999-2005:
In 2005, ExxonMobil collected $36 billion in profit, the grandest annual profit total ever recorded anywhere. Last November, called before Congress to explain the rising gas prices that appear to have fueled these record profits, ExxonMobil’s Lee Raymond explained that rising prices reflect global supply and demand, nothing more.
“We are all,” Raymond assured Congress, “in this together, everywhere in the world.”
We’re all in this together, except Raymond. As ExxonMobil CEO in 2005, his basic salary alone ran 63 times the average paycheck in the oil industry. Raymond’s $4 million salary last year amounted to a weekly take-home of $83,333.
But Raymond hardly had to content himself with just salary in 2005. His overall pay for the year totaled $69,684,030.
Raymond retired from ExxonMobil at the end of 2005, and his near $70 million in compensation for the year seemed, at the time, a more than ample reward for his career of service to company shareholders. Company directors disagreed. This past April, news reports revealed that Raymond walked off into the retirement sunset with a going-away pay package that sets a staggeringly new golden parachute standard.
This retirement package — a grab-bag of stock options, restricted stock awards from previous years, retirement-independent salary, and bonuses, plus a $1 million consulting contract, security services, a car and driver, access to the company corporate jet, and $210,800 in country club fees — would add up to nearly $400 million.
“He is a porker of the first order,” executive pay expert Graef Crystal told Bloomberg after the news of Raymond’s good fortune broke. “Those CEOs out there who are doing better at the trough must be thrilled he’s flying fighter cover for them.”
Rex Tillerson, ExxonMobil CEO, 2006-present:
And now on to ExxonMobil’s current CEO, Rex Tillerson. In 2015, our Executive Excess report was the first to analyze how CEO pay practices are rewarding corporate leaders for accelerating climate change. The report documented, for example, how oil executive bonuses encourage behaviors that further lock their companies into fossil fuel dependency instead of diversifying into renewables.
At ExxonMobil, the company’s proxy statement cited successful drilling in “the first ExxonMobil-Rosneft Joint Venture Kara Sea exploration well in the Russian Arctic” among the reasons for awarding high executive payouts in 2014. The Russian government-owned Rosneft has a dismal environmental, safety, and transparency record, according to Greenpeace. Within months of the ExxonMobil bonus awards, international sanctions against Russia led to the scrapping of this controversial joint venture.
Here’s more from that report about Tillerson:
A regular on lists of America’s highest-paid corporate executives, Rex Tillerson pocketed $33 million in 2014, raising his total compensation over the past five years to $165 million. His gargantuan reward package doesn’t just reflect the massive size of his firm, the nation’s second-largest. As detailed later in this report, ExxonMobil aggressively uses stock repurchases to boost share prices, a move that in turn inflates Tillerson’s equity-based pay. Between 2003 and 2013, buybacks accounted for an estimated 51 percent of ExxonMobil earnings per share growth. As of year-end 2014, Tillerson, who became ExxonMobil chair and CEO in 2006, was sitting on more than $166 million worth of unvested stock grants.
In the midst of all this share repurchasing, ExxonMobil has also been spending generously to support climate deniers. In the 2014 election cycle, ExxonMobil’s PAC dished out $715,000 in campaign contributions to candidates who have either denied or raised questions about climate science. ExxonMobil, adds the Union of Concerned Scientists, also continues to quietly fund climate denial organizations.
Shareholders have pushed hard for change at ExxonMobil. They’ve introduced 62 climate-related resolutions over the past 25 years. Management has opposed every one. CEO Tillerson, ironically, has little tolerance for environment-threatening behavior in his own backyard. Last year, his efforts to block a fracking project in his posh Dallas suburb made the front page of the Wall Street Journal.
I know I should add something thoughtful here about how Tillerson or Raymond might perform as our nation’s top diplomat, including in global climate negotiations and international efforts to fight global poverty. Sorry, I’ve got nothing to say.
Sarah Anderson directs the Global Economy Project and co-edits Inequality.org at the Institute for Policy Studies.