PsychoticDan
19-04-2006, 23:02
I think he's right, except about new fuels. We'll be running on new fuels because we'll be forced to by geology. In anycase, it's clear that many who criticize the industry really don't understand it.
Former Exxon CEO defends $150M pay package (http://money.cnn.com/2006/04/19/news/newsmakers/exxon_raymond.reut/index.htm?cnn=yes)
Lee Raymond blasts critics of his retirement package, says oil industry will have its day of reckoning.
April 19, 2006: 12:47 PM EDT
NEW YORK (Reuters) - Never one to back away from confrontation while head of ExxonMobil Corp. for more than 13 years, Lee Raymond showed few signs of mellowing in retirement in his first public appearance following the controversy that erupted with the disclosure of his multimillion-dollar retirement package.
In a 90-minute talk at Columbia University on Tuesday evening, Raymond was unrepentant for any past decisions he had made and he blasted politicians, the U.S. car industry, Wall Street, environmentalists and other critics of the oil industry for what he said was their failure to understand the nature of the energy business, conceding only that he had been unsuccessful in getting his point of view across.
"People don't understand the time frame that we operate in. We operate in terms of 10-, 20-, 30-, 40-year cycles and to put that in context, that's 20 (U.S.) Congresses. A single quarter or a single year, which may mean everything from a political circus point of view, is not really all that significant in the time frame that we operate in," Raymond said.
He added later: "It's not like we didn't say it. But the only conclusion I think you can come to is, it didn't penetrate."
Raymond denied having any role in formulating his $52 million 2005 pay package, the $98.4 million lump sum retirement payment he received when he left ExxonMobil (up $0.46 to $64.00, Research) on Dec. 31, or any other compensation he received over his 43-year career with Exxon. He told his audience he had no influence over the pay decisions made by the company's board of directors.
"I have never had a conversation in my whole career about my compensation," he said.
Raymond defended the large payout, saying that it was Exxon's policy that employees' pay and incentive payments were supposed to reflect the performance of the company.
"When the company does well, the shareholders and employees should do well, and when the company does poorly, then the shareholders and employees should do poorly. The facts are that when prices of oil collapsed, the incentive program went down, substantially," Raymond said.
According to his view of the oil industry, Raymond may well have picked the best time to retire, as he continues to believe that the current oil price environment is unsustainable and an eventual fall in prices is inevitable.
"The seeds are being sown right now for another turn in the cycle of the oil industry," he said. "For those people who think there will not be a day of reckoning on the other side, and I hope I live long enough to see it ... it just takes a long time in this industry for supply and demand to react. This isn't like going out and producing a few more semiconductors."
The combative former CEO said Exxon's success during his tenure was entirely due to its focus on long-term goals and he had nothing but withering criticism for those who are proposing windfall taxes on energy companies, saying it would only serve as a disincentive to investment.
"Back in 1998, when prices went down to $10 (per barrel), I don't recall anyone in Washington calling me up and saying 'what can we do to help.' But I didn't want them to be calling up. That's our job. We are in that business. It's our job to manage the risk. I am not interested in hearing from (politicians) when prices are at $10 and I am not interested in hearing from them when prices are at $40 or $50," he said.
On the topic of alternative energy sources, Raymond poured scorn on the notion that petroleum-based fuels will be supplanted in the near future.
When President Bush's suggestion of using ethanol produced from switchgrass as an alternative to gasoline came up, Raymond shook his head and grinned sarcastically.
Yet, despite his view that gasoline is not about to be supplanted as the main motor fuel in this country - and that it was the job of the oil industry to tackle new investments over the long term without reference to the short-term price environment - he predicted that no new oil refineries would be built in the United States because, even for a company as big as ExxonMobil, "the risk of the investment would be extraordinarily high."
Former Exxon CEO defends $150M pay package (http://money.cnn.com/2006/04/19/news/newsmakers/exxon_raymond.reut/index.htm?cnn=yes)
Lee Raymond blasts critics of his retirement package, says oil industry will have its day of reckoning.
April 19, 2006: 12:47 PM EDT
NEW YORK (Reuters) - Never one to back away from confrontation while head of ExxonMobil Corp. for more than 13 years, Lee Raymond showed few signs of mellowing in retirement in his first public appearance following the controversy that erupted with the disclosure of his multimillion-dollar retirement package.
In a 90-minute talk at Columbia University on Tuesday evening, Raymond was unrepentant for any past decisions he had made and he blasted politicians, the U.S. car industry, Wall Street, environmentalists and other critics of the oil industry for what he said was their failure to understand the nature of the energy business, conceding only that he had been unsuccessful in getting his point of view across.
"People don't understand the time frame that we operate in. We operate in terms of 10-, 20-, 30-, 40-year cycles and to put that in context, that's 20 (U.S.) Congresses. A single quarter or a single year, which may mean everything from a political circus point of view, is not really all that significant in the time frame that we operate in," Raymond said.
He added later: "It's not like we didn't say it. But the only conclusion I think you can come to is, it didn't penetrate."
Raymond denied having any role in formulating his $52 million 2005 pay package, the $98.4 million lump sum retirement payment he received when he left ExxonMobil (up $0.46 to $64.00, Research) on Dec. 31, or any other compensation he received over his 43-year career with Exxon. He told his audience he had no influence over the pay decisions made by the company's board of directors.
"I have never had a conversation in my whole career about my compensation," he said.
Raymond defended the large payout, saying that it was Exxon's policy that employees' pay and incentive payments were supposed to reflect the performance of the company.
"When the company does well, the shareholders and employees should do well, and when the company does poorly, then the shareholders and employees should do poorly. The facts are that when prices of oil collapsed, the incentive program went down, substantially," Raymond said.
According to his view of the oil industry, Raymond may well have picked the best time to retire, as he continues to believe that the current oil price environment is unsustainable and an eventual fall in prices is inevitable.
"The seeds are being sown right now for another turn in the cycle of the oil industry," he said. "For those people who think there will not be a day of reckoning on the other side, and I hope I live long enough to see it ... it just takes a long time in this industry for supply and demand to react. This isn't like going out and producing a few more semiconductors."
The combative former CEO said Exxon's success during his tenure was entirely due to its focus on long-term goals and he had nothing but withering criticism for those who are proposing windfall taxes on energy companies, saying it would only serve as a disincentive to investment.
"Back in 1998, when prices went down to $10 (per barrel), I don't recall anyone in Washington calling me up and saying 'what can we do to help.' But I didn't want them to be calling up. That's our job. We are in that business. It's our job to manage the risk. I am not interested in hearing from (politicians) when prices are at $10 and I am not interested in hearing from them when prices are at $40 or $50," he said.
On the topic of alternative energy sources, Raymond poured scorn on the notion that petroleum-based fuels will be supplanted in the near future.
When President Bush's suggestion of using ethanol produced from switchgrass as an alternative to gasoline came up, Raymond shook his head and grinned sarcastically.
Yet, despite his view that gasoline is not about to be supplanted as the main motor fuel in this country - and that it was the job of the oil industry to tackle new investments over the long term without reference to the short-term price environment - he predicted that no new oil refineries would be built in the United States because, even for a company as big as ExxonMobil, "the risk of the investment would be extraordinarily high."