TILLERSON retires from Exxonmobil with USD $180M
Rex Tillerson cuts ties with Exxon Mobil via $180m retirement package
THE GUARDIAN – Donald Trump’s nominee for secretary of state will surrender all unpaid stock for a cash payment before his Senate confirmation hearing starts next week
If Tillerson re-enters the oil and gas industry within 10 yeras, he will forfeit the remaining money in the trust, which would be paid out to charities of the controlling trustee’s choosing.
Exxon boss Rex Tillerson will receive more than $180m from the company as he severs financial ties with the oil industry to become Donald Trump’s secretary of state. Tillerson’s confirmation hearings begin next week.
If confirmed, Tillerson will surrender all unpaid stock that was part of his pay package, more than 2m shares. In exchange, the company will make a cash payment equal to the value of those shares to a trust to be overseen by a third party, according to a regulatory filing on Wednesday with the Securities and Exchange Commission (SEC).
Some $54m of Tillerson’s stock options have already vested; he will be able to sell them at a much-reduced rate of tax, owing to laws that provide financial incentive to cabinet appointees to sell holdings that might conflict with their duties as public servants. Some have simply refused to do so, notably George W Bush’s vice-president, Dick Cheney, who retained stock options in government contractor Halliburton, which substantially increased its business with the US government while Cheney was in office.
Tillerson, who built close ties, and a personal fortune, with officials at many foreign governments including Russia and Nigeria through Exxon’s links to their state oil companies, represents a unique set conflicts himself. Exxon said in its SEC filing that it hoped to minimize those conflicts by “working in close consultation with federal ethics authorities”, though it did not say which authorities.
Tillerson, who worked for Exxon for more than 40 years, would have reached the company’s mandatory retirement age of 65 by March, after which he would have received the money from Exxon over a period of 10 years.
The payouts from the third-party trust will mimic the planned payouts from Exxon, though by retiring in January rather than March, Tillerson will forfeit some $7m. If Tillerson re-enters the oil and gas industry within 10 years, he will forfeit the remaining money in the trust, which would be paid out to charities of the controlling trustee’s choosing.
Trump himself has yet to set out a clear plan as to how, or if, he will manage his own complex set of potential conflicts of interest. The president elect has investments and building in countries around the world. His children will manage his portfolio of businesses and have already been invited to meetings with top government officials and business leaders.
The unprecedented wealth of Trump’s list of cabinet nominees means that more disclosures like Tillerson’s ate expected in the coming weeks and multiple billionaires across several industries will, like Tillerson, make huge savings on capital gains taxes, among other incentives, on their huge fortunes in return to taking up public office.
Wilbur Ross, the billionaire banker and restructuring specialist, whom Trump tapped to be secretary of commerce, and Gary Cohn, the former second in command at Goldman Sachs, whom Trump would like to lead the national economic council, are both expected to outline their own plans in the coming days.
Darren Woods, a 25-year Exxon veteran who had served as the company’s president, took over as CEO of ExxonMobil at the start of the new year.
Tillerson began his career at Exxon as a production engineer straight out of the University of Texas at Austin in 1975. He replaced longtime CEO Lee Raymond in 2006 and led the company during one of the most turbulent periods in its history, which included the 2008 financial crisis, and a collapse in oil prices since mid-2014 that has sharply diluted Exxon’s profits.