By January 4, 2017 0 Comments Read More →

ExxonMobil, Tillerson reach agreement to comply with conflict of interest requirements

Tillerson

Russia’s President Vladimir Putin, Rosneft Chief Executive Igor Sechin and Exxon Mobil Chief Executive Rex Tillerson take part in a signing ceremony at a Rosneft refinery in the Black Sea town of Tuapse, Russia June 15, 2012. Sputnik/Kremlin/Mikhail Klimentyev via REUTERS/File Photo

Tillerson committed to State Department that, if confirmed, he would sell the 600,000 shares in ExxonMobil he owns

Exxon Mobil Corporation has reached an agreement with former CEO Rex Tillerson to sever all ties with the company, allowing him to comply with conflict-of-interest requirements associated with his secretary of state nomination, according to an Exxon press release.

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 would 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. Tillerson retired on Dec. 31 with more than 40 years of service with ExxonMobil.

Separate to the agreement with ExxonMobil, he has also committed to the State Department that, if confirmed, he would sell the more than 600,000 shares in ExxonMobil he currently owns.

Posted in: Energy Politics

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