BREAKING NEWS, Oil & Gas
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| By Anayo Ezugwu |
THE board of directors of Exxon Mobil Corporation has reached an agreement with Rex W. Tillerson, former chairman and chief executive officer of the company, to sever all ties with the company to comply with conflict-of-interest requirements associated with his nomination as secretary of state.
Under the agreement developed in consultation with federal ethics regulators, if Tillerson is confirmed as secretary of state, the value of more than 2 million deferred ExxonMobil shares that he would have received over the next 10 years would be transferred to an independently managed trust and the ExxonMobil share awards would be cancelled.
The trust would be prohibited from investing in ExxonMobil and the trustee would manage the assets consistent with government ethics rules. Payments to Tillerson from the trust would be subject to the same 10-year schedule that the cancelled awards would have had if they had continued in place.
Tillerson will also surrender entitlement to more than $4.1 million in cash bonuses, scheduled to pay out over the next three years, and other benefits such as retiree medical and dental benefits, and administrative, financial and tax support. The one-time payment to the trust would be equal to the value of Tillerson’s cancelled shares based on a volume-weighted average price per share.
Consistent with guidance from federal ethics regulators, the value would be reduced by about $3 million. The trust would include forfeiture rules that would prohibit Tillerson from working in the oil and/or gas industry during the 10-year payout period.
The trust rules dictate that in the event of forfeiture, the money would be distributed to one or more charities involved in fighting poverty or disease in the developing world. Neither Tillerson nor ExxonMobil would have any control over the selection of the charities. The net effect of the agreement is a reduction of approximately $7 million in compensation owed to Tillerson.
Apart from the agreement with ExxonMobil, Tillerson has also committed to the State Department that, if confirmed, he would sell the more than 600,000 shares in ExxonMobil he currently owns.
Tillerson retired on December 31, 2016, with more than 40 years of service with ExxonMobil following his nomination for the position of United States of America Secretary of State by President-elect Donald Trump. He led ExxonMobil with integrity and honour, ensuring that safety and environmental protection were at the forefront of everything the company does, generating value for shareholders and highlighting the impressive accomplishments of the company’s diverse workforce throughout the world.
Tillerson was scheduled to retire in March 2017 when he reached 65, the company’s mandatory retirement age for his position. After consideration, Tillerson concluded, and the board agreed, that given the significant requirements associated with the confirmation process, it was appropriate to move the retirement date.
He joined Exxon Company USA in 1975 as a production engineer. He held various senior roles in the corporation throughout his career spanning more than four decades, including executive vice president of ExxonMobil Development Company. He was named senior vice president of ExxonMobil Corporation in 2001 and was elected president and member of the board of directors in 2004. Tillerson was elected chairman and chief executive officer in January 2006.
ExxonMobil, the largest publicly traded international oil and gas company, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil holds an industry-leading inventory of resources and is one of the world’s largest integrated refiners, marketers of petroleum products and chemical manufacturers.
— Jan 16, 2017 @ 01:00 GMT
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