ExxonMobil’s CEO Pay Mirrors Skyrocketing Trends of Oil Prices (5/28/08)
FOR IMMEDIATE RELEASE: May 28, 2008
CONTACT: Julie Goodridge
NorthStar Asset Management, Inc.
PO Box 301840, Boston, MA 02130
Dallas, TX — Today at the annual ExxonMobil shareholder meeting, NorthStar Asset Management of Boston presented a resolution asking the company to examine the significant income gap between its lowest paid workers and the highest paid worker. “We believe it is fiscally irresponsible for a company to put so much of its resources into a single individual, the CEO,” explains Julie Goodridge, of NorthStar and a shareholder of ExxonMobil. Over the past year, the compensation of CEO, Rex Tillerson, increased nearly 18% to $21.7 million.
This is an unprecedented time in the oil industry. Companies are reaping historic profits at the same time that consumer anger over escalating gas prices is exploding.
“We estimate that given the increase in gasoline prices since last year, minimum wage employees of ExxonMobil are now spending 30% of their $187 weekly earnings to fill their cars with ExxonMobil’s gas,” said Goodridge. “In stark contrast, the CEO’s weekly income was over $300,000. Mr. Tillerson would need to put $96,000 of his own company’s product in his car each week to understand the devastating effect that oil prices are having on his own employees and workers all across this country.”
A telling study conducted by the Boston College Center for Corporate Citizenship last year surveyed hundreds of U.S. executives finding that nearly 80% of these executives attribute the public distrust of corporations to excessive CEO pay. The average CEO earns 364 times the wage of the average worker. ExxonMobil’s CEO Rex Tillerson earned 575% more during 2007.
In 2007, Mr. Tillerson’s salary alone went up over 28% yet the value of ExxonMobil shares increased by 11%.
Analysts estimate that every $1 increase in the per-barrel price of oil translates into a 1.5% increase in ExxonMobil’s earnings. According to The New York Times, because a significant portion of executive pay at ExxonMobil is related to earnings growth, rising oil prices mean bigger paychecks. “Well, oil prices are up over 104% since last year, why can’t ExxonMobil’s employees afford to drive to work, pay for housing and feed their families?” wonders Goodridge.
“Asking for a justification of this gap at a time in our history when it takes an ExxonMobil employee earning minimum wage almost 2 days pay to fill her car with gas at one of our Company’s pumps is pertinent and reasonable,” continued Goodridge.
NorthStar Asset Management, Inc. is a wealth management firm based in Boston, specializing in socially responsible investing.