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

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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.

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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?
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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.

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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.

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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.

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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.

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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.
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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.
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