Exxon Mobil (XOM) has reached an agreement for CEO Rex Tillerson's exit if the executive is confirmed as Secretary of State in the Trump administration that should ease many conflict-of-interest concerns, but not all.
The oil and gas company late Tuesday outlined measures to be taken if the U.S. Senate confirms President-elect Donald Trump's nomination of Tillerson, 64, to head the State Department. Under the agreement, the value of the more than two million Exxon shares Tillerson would have received over the course of 10 years upon retirement will be transferred to an independently managed trust prohibited from investing in the Irving, Texas-based company. Exxon has a market cap of $376.5 billion.
Tillerson will also surrender more than $4.1 million in cash bonuses scheduled for payout over the next three years as well as other benefits, including those related to retirement. Exxon has a mandatory retirement age of 65, which Tillerson reaches on March 23.
In total, the executive will see his compensation reduced by about $7 million if he becomes Secretary of State. According to the Wall Street Journal's calculations, his retirement package will still be worth about $180 million.
The agreement should ease conflict-of-interest risks for Tillerson in relation to Exxon if he is confirmed, said Washington University Law professor Kathleen Clark. The executive will face a two-year disqualification period for proceedings that directly involve Exxon, but he will be free to participate in broader policies that affect multiple parties, including Exxon.