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US: Exxon Chairman Got Retirement Package Worth at Least $398 Million

by Jad MouawadThe New York Times
April 13th, 2006

Last year's high oil prices not only helped Exxon Mobil report $36 billion in profit � the most ever for any corporation � they also allowed Lee R. Raymond to retire in style as chairman of Exxon Mobil.

Mr. Raymond received a compensation package worth about $140 million last year, including cash, stock, options and a pension plan. He is also still entitled to stock, options and long-term compensation worth at least another $258 million, according to a proxy statement filed by Exxon with the Securities and Exchange Commission yesterday.

The total sum for Mr. Raymond's golden years comes to at least $398 million, among the richest compensation packages ever. The record was the payout of $550 million to Michael D. Eisner, the former head of Walt Disney, in 1997.

Exxon's board also agreed to pick up Mr. Raymond's country club fees, allow him to use the company aircraft and pay him another $1 million to stay on as a consultant for another year. Mr. Raymond agreed to reimburse Exxon partly when he uses the company jet for personal travel. "It begs the old question again, When is enough, enough?" said Brian Foley, an executive compensation consultant in White Plains. "This looks like a spigot that you can't turn off."

Mr. Raymond, 67, spent 43 years at Exxon, including 12 as chairman. He orchestrated the merger between Exxon and Mobil in 1999, making it the largest oil company in the world as well as the most profitable. He was widely recognized for his financial acumen and focus on cost-cutting, whether in good times or bad. Some of the company's recent success, of course, can also be attributed to the doubling of oil prices over the last two years, higher refining margins and record high demand.

While Exxon showed record earnings, the total return to shareholders over the last five years averaged just under 8 percent a year, about the same as the industry average.

"The numbers reflect the long-term nature of Mr. Raymond's leadership at the corporation, and a long and distinguished career," Mark Boudreaux, a spokesman for Exxon, said. "The compensation committee considered his performance and the fact he guided the company to industry-leading earnings for multiple years."

Exxon's proxy filing also showed that Rex W. Tillerson, the current chairman and chief executive, received $13.4 million in 2005, about a third more than what he got the previous year. That includes $1.67 million in salary; a $1.25 million bonus, restricted shares worth $8.75 million, and an incentive payout of $1.73 million. He also realized $2.3 million by exercising stock options he held.

Mr. Raymond owns 3.26 million restricted shares worth a total $183 million as of December 31.

Those shares produced a separate windfall of $3.1 million in cash dividends. Mr. Raymond also owns 4.15 million options that hold a potential value of $69.6 million.

Upon retiring at the end of last year, Mr. Raymond opted to collect his pension benefits as a one-time lump sum instead of receiving annuities. That amounted to $98.4 million.

The company also paid $210,800 for Mr. Raymond's country club fees, financial planning and tax assistance services. It also provided two years of protection for Mr. Raymond and his wife, including paying for a security system for his principal residence, security personnel, a car and a driver.



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