Rex Tillerson, the former CEO and Chairman of ExxonMobil Corporation, is Donald Trump‘s Secretary of State. Tillerson was one of the highest-paid CEOs in the world before Trump chose him for the cabinet role. On January 3, ExxonMobil formally announced that it cut ties with Tillerson to avoid a potential conflict of interest.
Tillerson is a surprising choice, since he has absolutely no experience in government or as a diplomat. Tillerson also has deep ties to Russia and is one of the faces of the oil industry as the chief executive of the eighth largest company in the world by revenue.
The New York Times’ list of the 200 highest-paid CEOs in 2016 puts Tillerson at number 29. He earned an estimated $24.3 million in 2016, according to the Times. If Tillerson becomes Secretary of State, his pay will be $203,700, according to the U.S. Office of Personnel and Management.
Tillerson has an estimated net worth of $150 million, NBC News reports. On January 4, The Associated Press reported,/a> that he stands to get a $180 million retirement package from ExxonMobil if confirmed.
Trump tweeted on December 13 that Tillerson will be his nominee for Secretary of State. Trump praised Tillerson as “one of the truly great business leaders of the world.”
Here’s a look at Tillerson’s salary, the current financial state of his company and what he does with his funds.
1. Tillerson’s 2016 Salary Was $24.3 Million, Down 15 Percent From the Previous Year & He Has an Estimated Net Worth of $150 Million
Tillerson is number 29 on the New York Times list of the 200 highest-paid CEOs in 2016. The Times estimates that he earned $24.3 million, down 15 percent from 2015.
Tillerson earned $27.3 million in 2015, The Washington Post estimates. This was an 18 percent pay cut from the year before, when he earned $33 million.
The Wall Street Journal reported in April 2015 that Tillerson earned $33 million in 2014. That was an increase from the $28 million he earned in 2013. Tillerson also had a base salary increase from $2.7 million in 2012 to $2.8 million in 2013.
The reason for the salary decrease in 2015 was due to Exxon’s eye-popping decrease in profits. In July 2016, CNBC reported that Exxon earned $1.7 billion in the second quarter of 2016, down from $4.2 billion during the same quarter in 2015. In the second quarter of 2015, the company’s total revenue was $74.11 billion, but the second quarter of 2016 saw total revenue fall to $57.694 billion.
NBC News reports that Tillerson’s estimated net worth is $150 million.
The financial disclosure report Tillerson sent to the U.S. Office of Government Ethics in early January shows that he owns over $15 million in Texas real estate, notes Forbes. The magazine reports that Tillerson also has investments in 15 other countries: France, Japan, The Netherlands, Switzerland, Ireland, the U.K., China, Canada, Germany, Italy, Hong Kong and Spain.
Forbes notes that Tillerson personally only has one direct investment in a Russian company. His stake in Yandex, Google’s Russian competitor, is just under $15,000.
2. Tillerson Will Get a $180 Million Retirement Package if He’s Confirmed as Secretary of State
Tillerson, who has been at Exxon since 1975, planned to retire as ExxonMobil CEO anyway, after 10 years in the position. He is currently 64 and will reach 65, the company’s mandatory retirement age, reports Bloomberg. His successor is expected to be Darren Woods, who has been at Exxon since 1999.
On December 14, ExxonMobil announced that Tillerson will retire at the end of the year. Darren Woods was elected Chairman and CEO, and will take the role on January 1, 2017.
The Washington Post reports that the April 13 proxy statement from Exxon shows Tillerson with a pension benefits worth about $69.5 million. In 2014, his pension benefits grew by $4.6 million, The Wall Street Journal reports.
ExxonMobil announced on January 3 that it has a plan to completely cut ties with Tillerson so there wouldn’t be a conflict of interest if he is confirmed by the Senate. The 2 million deferred shares Tillerson was supposed to receive over the next 10 years will instead be put in an independently managed trust and the ExxonMobil share awards will be cancelled. It will be a one-time payment to a trust overseen by a third party. According to the Associated Press, the entire package is worth an estimated $180 million.
Tillerson will also surrender over $4.1 million in cash bonuses that were to be paid out over three years. He will also sell the 611,000 shares in ExxonMobil that he currently owns.
3. ExxonMobil’s Third Quarter 2016 Profits Plunged 38 Percent Compared to 2015’s Third Quarter
ExxonMobil is still the largest publicly-traded oil and gas company by market value and is ranked sixth on Fortune Magazine’s Global 500 list. However, the company has recently seen declining revenues from year-to-year.
During the second quarter of 2016, ExxonMobil earned $1.7 billion, down a huge 59 percent from the same period in 2015, according to the company’s quarterly earnings report. During the first half of 2016, the company earned $3.51 billion, down 62 percent from the $9.13 billion earned in the first half of 2015.
The third quarter of 2016 saw an uptic in earnings, but it was still a big disappointment to investors. As the earnings report shows, ExxonMobil earned $2.65 billion, a drop of 38 percent from the $4.24 billion earned during the same period.
In the first nine months of 2016, the company earned $6.16 billion, compared to the $13.37 billion earned in the first nine months of 2015. “Results reflect lower refining margins and commodity prices,” the company noted.
“ExxonMobil’s integrated business continues to deliver solid results,” Tillerson said in a statement released by the company. “While the operating environment remains challenging, the company continues to focus on capturing efficiencies, advancing strategic investments, and creating long-term shareholder value.”
Exxon’s total revenue and other income from the first nine months of 2016 was $165,078,000, compared to $209,075,000 from the first nine months of 2015.
4. ExxonMobil Lost $1 Billion After Sanctions Were Imposed on Russia’s Energy Sector
ExxonMobil began projects in Russia during the late 1990s. In 2011, Tillerson began a partnership with Rosneft, the Kremlin-run oil company, to explore the Black Sea and Arctic. In 2013, Tillerson was awarded Russia’s Order of Friendship by Russian President Vladimir Putin.
Initially, Tillerson didn’t think sanctions on Russia were effective and called for them to be lifted. But they began to hurt his business in 2014 after Russia annexed Crimea, when the U.S. and European Union began imposing tougher sanctions.
In September 2014, the most expensive well in ExxonMobil’s history finally hit oil a mile under the ground in Siberia and the well could have pumped a billion barrels of oil a day, Bloomberg reports. However, thanks to the economic sanctions, Exxon had to close the well.
In a 2014 filing with the Securities and Exchange Commission, Exxon said that the sanctions cost a loss of at least $1 billion.
The filing reads:
In 2014, the European Union and United States imposed sanctions relating to the Russian energy sector. In compliance with the sanctions and all general and specific licenses, prohibited activities involving offshore Russia in the Black Sea, Arctic regions, and onshore western Siberia have been wound down. The Corporation’s maximum exposure to loss from these joint ventures as of December 31, 2014, is $1.0 billion.
5. Tillerson Owns the Horse Ranch Bar RR Ranches LLC, Worth $5 Million
Tillerson and his wife, Renda, own Bar RR Ranches LLC in Bartonville, Texas. According to the Dallas Business Journal, the property is worth $5 million and includes homes, horse stables and training facilities. It covers 83 acres and is near the couple’s 18-acre homestead.
In February 2014, The Wall Street Journal reported that Tillerson joined a lawsuit against a watertower that would be used for hydraulic fracking. Tillerson’s attorney told the Journal that his client was concerned about the water tower lowering property value, although other plaintiffs in the case complained about noise and traffic issues caused by fracking.
Two months after joining the lawsuit, The Dallas Business Journal reported that the Tillersons dropped out of the lawsuit.