A $69.7 million compensation package and $98 million pension payout to Exxon Mobil Corp.'s former chief executive and chairman Lee R. Raymond has some shareholders and economists asking, ''how much is enough?'' ''Some folks will ask the question, 'Is this more evidence of big oil taking an enormous windfall and retaining all the riches?''' said Mel Fugate, assistant professor for Southern Methodist University's Cox School of Business.
The Irving company has drawn criticism from politicians and economists for becoming the most profitable company in history -- at consumers' expense, they say. Exxon benefited from high oil and natural gas prices and solid demand for refined products en route to earning $36 billion last year. The company has defended its profits, saying that other industries have larger profit margins but oil companies' bottom lines stand out because they operate on a much larger scale.
Recent news of Raymond's payout and pension is stoking embers Fugate said had been starting to die out. But with gasoline prices again reaching $3 a gallon at the pump in some areas and big oil companies about to report first-quarter earnings in coming weeks, expect more fallout, economists say. On Wednesday, Exxon reported executive compensation in a regulatory filing that showed Raymond receiving $48.5 million in salary, bonuses, incentive payments and stock awards. His compensation package also included $21.2 million from exercising stock options, which the company stopped awarding in 2001.
His $98 million pension payout reflects 43 years of service. But he would have received nearly $17 million less had he retired just last year, according to the company's 2005 proxy statement. In this year's proxy statement, Exxon defended the package by saying it rewards Raymond's ''outstanding leadership of the business, continued strengthening of our worldwide competitive position, and continuing progress toward achieving long-range strategic goals.'' Raymond had been CEO since 1993 before stepping down at the end of last year. Fugate, who specializes in executive compensation and management, said Exxon is sending a ''very, very bad signal'' by allowing Raymond to select the lump-sum payout.
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