<Perhaps we are getting a little more attentionThe Oil DrumThursday Open Thread: The "What Have You Done with The Press Release?" Edition>

129 comments on Record Oil Company Profits and High Gas Prices: A Connection?

Comments can no longer be added to this story.

PhilRelig on April 25, 2006 - 6:24pm Permalink | Subthread | Parent | Comments top
However, there's nothing stopping Lee Raymond from giving away some of his own $400 million nest-egg to the poor.  And there are certainly plenty of desperately poor people on the planet who would stand to benefit greatly from Mr. Raymond's largesse.  

On the other hand, I don't see why it would do Mr. Raymond himself any harm to give away $200-300 million of it.  What sort of material deprivations, exactly, would he incur by doing this?

0
Comments can no longer be added to this story.
Oil CEO on April 25, 2006 - 7:15pm Permalink | Subthread | Parent | Comments top
This is exactly - exactly - what Hugo Chavez is doing. The desperately poor only benefit from a day's bread and circus. The givers of largesse have bought permanent power.

While your compassion is admirable, I would prefer to live in a place where everybody can decide how much all the fatcats get taxed, rather than dragging the scapegoat-of-the-day-CEO through the mud.

This campaign against Lee Raymond is being orchestrated by two rather strange bedfellows, Bill O'Reilly and Charles Schumer. Raymond has been retired since January for God's sake. Nobody knew his name before last week. But now his $400 million is the solution to our energy problems? Ridiculous.

0
Comments can no longer be added to this story.
PhilRelig on April 25, 2006 - 8:28pm Permalink | Subthread | Parent | Comments top
It's true that Lee Raymond is currently an easy target in a manner similar to the way Martha Stuart once was, and that some politicians and pundits are exploiting him in an opportunistic way.  But to me, these people are merely symbols.

I myself think there is something truly shameful and disgusting about the way ALL of the very rich hoard wealth, and use it to appropriate a morally unseemly share of the planet's finite resources to themselves, and away from billions of others that need it.  It may not be obvious that this is shameful and disgusting in a society as saturated with wealth-worshipping free market ideology as American society is, but for that very reason, what I just said sometimes just needs to be said.  To a lesser extent, I think what I said is true also of all lesser degrees of affluence also.

There was an illuminating article just recently about what the very rich actually DO with their wealth: http://www.wsws.org/articles/2006/apr2006/rich-a19.shtml

0
Comments can no longer be added to this story.
peakoilphil76 on April 25, 2006 - 11:51pm Permalink | Subthread | Parent | Comments top
I can't understand why it's always the rich that are targeted.  If you were rich and had $400M payday, you wouldn't be too anxious to give that up, especially if you worked for it.  It's all part of the entitlement mentality and since we don't make $400M, Americans are looking to point fingers and blame somebody since they can't afford $3 a gallon.  The solution: make more money and the price of gas won't bother you.  
0
Comments can no longer be added to this story.
haggisbasher on April 26, 2006 - 5:38am Permalink | Subthread | Parent | Comments top
So someone working as a fireman, nurse, doorman etc. does not make 400m because they don't work hard enough.  Absolute bullshit.  Are you really saying that the benefit to society from Lee Raymond and others of his ilk is really worth thousands of times the value of people who do everyday jobs and take home a normal wage.  I agree that there has to be reward for enterprise and for taking responsibility, but the growing disparity between the highest and lowest earners is nothing but an abuse of power.
0
Comments can no longer be added to this story.
odograph on April 26, 2006 - 7:52am Permalink | Subthread | Parent | Comments top
Especially since one of their contributions was to explicitly undermine the science of global warming.  We also see their possible misinformation campaign on peak oil.

When a company dominates a national industry for decades, and the population and GNP grow over that time, they get to see very big numbers on their balance sheets.  There are more people, making more money, and (with current prices) Exxon is pulling down a higher portion of family income.

The numbers are driving a greater concentration of wealth and power for Exxon, and the way they are using that wealth and power is ... simply evil.

0
Comments can no longer be added to this story.
smekhovo on April 26, 2006 - 8:38am Permalink | Subthread | Parent | Comments top
The share of national income pocketed by the top 0,1% in the US has grown from 2% to 7% since 1980. There's been nothing like the same change in any other rich country. The UK is closest, where that share has grown from 2% to 4%.
0
Comments can no longer be added to this story.
odograph on April 26, 2006 - 9:02am Permalink | Subthread | Parent | Comments top
Yeah, and the ratio of incomes from the least paid in a company to the highest paid in the same company has exploded as well.

I think it is an unanticipated consequence of the stock market boom/bubble, and the well known connection between available shares and an aging baby boom population.  Money flows into the stock market, supporting the bubble, and giving companies huge capitalizations.  Management compensation, as a fraction of capitalization, is nothing ... while at the same time it is huge from a 'real world' perspective.

I was actually in a small company, and saw a couple guys turn into billionares on the day of public offering.  It was actually freakier that a couple guys who knew me, who would say hi to me (a working engineer) in the elevator, were suddenly billionares.

Why did they get that rich?  Well, they were certainly smart and hard workers ... but not even they expected that much.  It was the dot com boom, and the market just threw money at them/us.

It's a strange world.

0
Comments can no longer be added to this story.
RedRiver on April 26, 2006 - 10:11am Permalink | Subthread | Parent | Comments top
Let's see what would happen if Lee Raymond's $20 million/year were distributed to the Exxon customers ...

There are probably 100 million Exxon customers in the U.S., so that would come to 20 cents per customer per year, or about a penny and a half per month.

But why only the U.S. customers ?  Exxon probably has a billion customers worldwide for its various products.  So that would make 2 cents per year per customer.

And what if his pay were distributed among all of the poor in the world ? How many poor are there ... perhaps 4 billion ? They would each get a half-penny per year.

0
Comments can no longer be added to this story.
GreyZone on April 26, 2006 - 11:17am Permalink | Subthread | Parent | Comments top
How about distributing it to just his shareholders, you know, the people who placed their capital at risk so he could sit on his arse through the largest price boom in decades but still not grow ExxonMobil's share of the market?
0
Comments can no longer be added to this story.
RedRiver on April 26, 2006 - 11:55am Permalink | Subthread | Parent | Comments top
Yes, that's another reasonable option.

There are about 6 billion outstanding shares, so each of those shares would get three tenths of a penny per year, or a roughly 0.005% annual dividend.  Before taxes.

0
Comments can no longer be added to this story.
odograph on April 26, 2006 - 12:43pm Permalink | Subthread | Parent | Comments top
That gets back to what I said about market cap.  They've got a value of 393 billion ... actually to give away 1/1000 of their cap to a non-founder is pretty impressive.

The question should really go to shareholders though.  It could be that 400 million to a environmental program or etc. would stand them in better stead 10 years from now ... when people figure out Exxon's social responsibility has really been.

And I personally think Lee should be able to have a pretty happy retirement on 30 or 40 million.  If he can't he has other problems.

0
Comments can no longer be added to this story.
twicker on April 29, 2006 - 11:58am Permalink | Subthread | Parent | Comments top
Quick reminder:

Much of Lee's $400 million is actually in stocks and stock options -- meaning that he has wealth, but not cash, and the company has given up shares of its stock (shares that were already outstanding), or options on shares, but not in the same way as $400 million in cash would have.

I don't know enough about the accounting behind it all, but they didn't give 1/1000 of the market cap away -- the market cap remained the same (unless investors decided they didn't like the $400 million, and, thus, started selling/not buying, driving the price and, thus market cap down), their profits barely took a hit, and they retained value in the company.

And the company is perfectly within its rights to provide absolutely ridiculous amounts of compensation to people. And, if I was offered $400 million, I'd take it.

As for taxes on the wealthiest, I concur -- taxes at the high end need to be raised. With the one caveat that the taxes need to be consumption-based, not wealth-increase based. If Lee keeps all his $400 million in stocks, etc., or gives it all to charity (while driving an '83 Honda Civic and living in a trailer), then I don't want him taxed -- let him build businesses, support charities, etc. If, on the other hand, he throws a $15 million birthday party for his dog (as far as I know he hasn't, but it's a hypothetical), then that whole $15 million gets taxed -- and I really don't give a hoot in a holler about whether it was made as salary or as capital gains.

$400 million doesn't bother me (don't invest in ExxonMobil, don't buy their gas). Reducing incentives to invest and save bothers me.

0
Comments can no longer be added to this story.
odograph on April 26, 2006 - 12:47pm Permalink | Subthread | Parent | Comments top
Oh oh.  And while they give Lee 400 million, they are leaving their pension plan for ordinary folks unfunded:

"Exxon alone is currently staring at an unfunded pension obligation of $11.5 billion," says The Post article.

http://www.newsmax.com/archives/articles/2005/11/9/154053.shtml

Let's see how Lee distributes that 400 million to charities, but at this point it doesn't look like he's going to shape up as my paragon of virtue.

0
Comments can no longer be added to this story.
tom deplume on April 26, 2006 - 4:00pm Permalink | Subthread | Parent | Comments top
So Exxon could fully fund the pension plan with about 2 weeks profit yet they don't. Immorality causes poverty, immorality at the top.
0
Comments can no longer be added to this story.
GreyZone on April 27, 2006 - 12:30pm Permalink | Subthread | Parent | Comments top
No, $11.5 billion is about 1/3rd of last years profits or 4 months, not two weeks. Still, it's patently obvious that yes they could cover the unfunded part of the pension fund.
0
Comments can no longer be added to this story.