Ex-Exxon CEO set for US$180m severance

FORMER ExxonMobil chief Rex Tillerson is set to receive US$180m to sever financial ties with the oil major as he seeks to become US secretary of state.

The agreement to sever all ties with the company is necessary for Tillerson to comply with conflict-of-interest requirements associated with his nomination to the role by President-elect Donald Trump, ExxonMobil said in a statement.

Tillerson confirmed in a filing published by the US Office of Government Ethics that upon confirmation to the role of US Secretary of State he will recuse himself for one year from any government matters relating to ExxonMobil or its interests.

Concerns have been raised about the impartiality of Tillerson as US ‘foreign minister’ given ExxonMobil’s strong ties with overseas oil producers, including Russia where the company has a large presence. His confirmation hearing before US senators could begin as early as next week.

Tillerson has agreed to divest all his ExxonMobil stock along with interests in more than 150 firms within 90 days of his confirmation as US secretary of state. Taken altogether, his disclosed assets are worth as much as US$400m.

This includes some 600,000 shares he already holds in ExxonMobil worth around US$54m and the US$180m severance announced by ExxonMobil. The company will place into a trust 2m deferred shares that Tillerson would have received over the next ten years had he retired from the company in March as originally planned. The independently-managed trust is prohibited from investing in ExxonMobil. If Tillerson returns to work in the oil and gas industry within ten years, the fund’s money will be given to charities fighting poverty or disease in the developing world.

As part of the agreement, Tillerson will forfeit bonuses and retirement benefits worth around US$7m.

Tillerson joined ExxonMobil as a graduate production engineer more than 40 years ago and rose to CEO of the firm in 2006. He stepped down as CEO on 1 January and was replaced by ExxonMobil’s refining chief Darren Woods.