Oil man's half a BILLION dollar bye-bye (OMG!)

By Jad Mouawad
April 14, 2006


Lee Raymond … plus golf fees paid.

LAST year's high oil prices not only helped Exxon Mobil report $US36 billion in profit - the most ever for any corporation - they also allowed Lee Raymond to retire in style as chairman of Exxon Mobil.

Mr Raymond received a compensation package worth about $US140 million last year, including cash, stock, options and a pension plan. He is also still entitled to stock, options and long-term compensation worth at least another $US258 million, according to a proxy statement filed by Exxon with the Securities and Exchange Commission.

The total sum for Mr Raymond's golden years comes to at least $US398 million ($545 million). The compensation is among the richest known and is certain to provoke criticism of profiteering from oil prices - though oil companies say fluctuations in prices are outside their control.

The biggest payout ever is the $US550 million to Michael Eisner, the former head of Walt Disney, in 1997.

Exxon's board also agreed to pick up Mr Raymond's country club fees, allow him to use the company aircraft and pay him another $US1 million to stay on as a consultant for another year. Mr Raymond agreed to reimburse Exxon partly when he uses the company jet for personal travel.

"When is enough, enough?" asked Brian Foley, an executive compensation consultant in White Plains, New York. "This looks like a spigot that you can't turn off."

Mr Raymond, 67, spent 43 years at Exxon, including 12 as chairman. He orchestrated the merger between Exxon and Mobil in 1999, making it the largest oil company in the world as well as the most profitable. He was widely recognised for his financial acumen and focus on cost-cutting, whether in good times or bad. Some of the company's recent success, of course, can also be attributed to the doubling of oil prices over the past two years, higher refining margins and record high demand.

While Exxon showed record earnings, the total return to shareholders over the past five years averaged just under 8 per cent a year, about the same as the industry average.

"The numbers reflect the long-term nature of Mr Raymond's leadership at the corporation and a long and distinguished career," Mark Boudreaux, a spokesman for Exxon, said. "The compensation committee considered his performance and the fact he guided the company to industry-leading earnings for multiple years."

Exxon's proxy filing also showed that Rex Tillerson, the current chairman and chief executive, received $US13.4 million in 2005, about a third more than he got the previous year. That includes $US1.67 million in salary; a $US1.25 million bonus, restricted shares worth $US8.75 million, and an incentive payout of $US1.73 million. He also realised $US2.3 million by exercising stock options he held.

Mr Raymond owns 3.26 million restricted shares worth a total $US183 million as of December 31.

Those shares produced a separate windfall of $US3.1 million in cash dividends. Mr Raymond also owns 4.15 million options that hold a potential value of $US69.6 million.

Upon retiring in December, Mr Raymond collected his pension benefits as a $98 million lump sum.

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