Lee Raymond is the trigger for this latest warning from Slugcatcher about how big oil is in danger of becoming the world’s most hated sector – and the sector most likely to spark a global government backlash.
Last week, with little fanfare outside his home country of the US, Raymond announced his decision to step down as chief executive of ExxonMobil. On the way to the front door, Raymond did more than “pass go, and collect $200” as they say on the Monopoly board.
He passed go and collected $US600 million, or since this is an Australian website, an ultra-cool $A800 million, for his 12 years work in the top job at the world’s top oil company.
Converting Raymond’s retirement bonanza into more simple forms, he is walking away with the equivalent of $A1.28 million for every week he attended work – or $A182,000 per day.
Some true believers in the theory of providing incentives to top executives will argue that Raymond deserves every cent. He has, after all, been the man in charge of ExxonMobil’s growth over the past decade.
But the Slug reckons that the other 99.9% of the population will shudder at the concept of paying anyone so much for simply occupying a desk and processing the recommendations of an army of legal and technical advisers.
In fact, Raymond did a lot more than occupy a desk. As the Boston Herald newspaper noted, in addition to the cash Raymond enjoyed a few other perks, such as $46,000 paid last year by ExxonMobil for his private club fees (some clubs!), plus the use of an ExxonMobil jet for business and personal travel (security, naturally), and $101,000 paid by the company for tax planning advice over the past three years.
In fairness to Raymond, The Slug should also point out that the chief executive of ConocoPhilips, Archie Dunham, retired last year with shares valued at $US730 million.
No explanation can justify payments of this magnitude to salaried employees of a business.
If the chief executives had been the people putting up their own risk capital to create a business there might be a valid reason for such massive payouts.
But these men are the hired help, they are not the owners. They did not create the system which is permitting such enormous payouts, but they are certainly benefiting handsomely from it.
The Slug, though listening for an outcry of some sort, is yet to hear one. Only a few commentators have noted the vast wealth passing from the owners of the businesses involved to the retiring staff.
The quiet might not last for long. Governments, propelled along by voters who are being bled dry at the bowser by sky-high petroleum prices, will react to Raymond’s $US600 million and Dunham’s $US730 million.
There will be demands for restraint, and wrapped inside the demands will be a threat to invoke laws limiting the size of payouts, and perhaps even putting a ceiling on management salaries across the board – in all industries.
Oil, which is leading the charge for mega-bucks payments, will become the industry which killed the game for all executives – some achievement!
Before The Slug signs off, a final provocative thought from the Boston Herald which noted that ExxonMobil, while performing well under Raymond, had not performed as well as BP, or a number of other oil companies.
In fact, it noted that BP’s boss, Lord Browne, only received $US14 million last year, which led to these delightful words from a newspaper based in a city which held a tea party which led to the creation of the US – “There’s something wrong when US tycoons behave more like aristocrats than a British aristocrat.” Touché!
