Summary
This 8-K filing from Exxon Mobil Corporation (XOM) on December 16, 2005, primarily details the leadership transition and post-employment arrangements for its outgoing Chairman and CEO, Lee R. Raymond. The report announces the resignation of Mr. Raymond effective December 31, 2005, and the appointment of Rex W. Tillerson as his successor, effective January 1, 2006. Investors should note the terms of Mr. Raymond's transition and protective services agreement, which includes a one-year period of advisory services for a $1 million fee and two years of protective services, with specific reimbursement terms for personal use of company assets.
Key Highlights
- 1Lee R. Raymond resigns as Chairman and CEO, effective December 31, 2005.
- 2Rex W. Tillerson appointed as the new Chairman and CEO, effective January 1, 2006.
- 3Lee R. Raymond enters a one-year agreement for transition services at a fee of $1 million, plus expenses.
- 4Exxon Mobil will provide two years of protective services to Lee R. Raymond and his spouse, including security systems, personnel, transportation, and aircraft use, with specific reimbursement clauses for personal use.
- 5The estimated incremental cost of protective services for Mr. Raymond, excluding business-related services and reimbursements, is expected to be less than $1 million per year.
- 6Mr. Tillerson will not have an employment contract, aligning with the company's 'at will' executive employment policy, and will receive an annual salary of $1.5 million.
- 7Details are provided on the restricted stock vesting schedules for senior executives, including Mr. Raymond, with restrictions lasting up to 10 years post-grant or retirement.
Frequently Asked Questions
Exxon Mobil will pay Mr. Raymond a $1 million fee for one year of transition services. The company will also provide two years of protective services. While the exact cost of protective services is variable, the estimated incremental cost to Exxon Mobil, excluding business-related services and reimbursements for personal use, is projected to be less than $1 million per year. Mr. Raymond will reimburse the company for personal use of company aircraft and vehicles.
Rex W. Tillerson has been elected to succeed Lee R. Raymond as Chairman and CEO, effective January 1, 2006. Mr. Tillerson has a long tenure with Exxon Mobil, holding various senior management positions since 1975.
No, Mr. Tillerson does not have an employment contract, consistent with Exxon Mobil's policy of having 'at will' employees for senior executives. He will, however, participate in the company's incentive programs and receive an annual salary of $1.5 million.
Restricted stock granted before 2002 vests according to original grant terms. For stock granted in 2002 and later, half of the shares remain restricted for five years from the grant date, and the other half for ten years from the grant date or retirement, whichever is later. These restrictions generally do not accelerate, except in case of death.