Exxon Mobil shelled out $180 million for former Chief Executive Rex Tillerson’s severance package, as the company moves to cut ties with President-elect Donald Trump’s pick for secretary of state.
If Tillerson’s appointment is confirmed, Exxon will transfer some 2 million shares that Tillerson would have received over the next decade to an independently managed trust, according to a Wednesday statement by the company.
Tillerson’s share awards would be cancelled, and the former executive would also forfeit $4.1 million in cash bonuses, scheduled to pay out over the next three years. The former executive would also surrender other retirement benefits, such as medical and dental benefits, and administrative benefits like tax and financial support.
To date, Tillerson owns more than 600,000 shares in Exxon, which are worth nearly $54 million. The total net effect of the severance agreement results in an approximately $7 million reduction in compensation owed to him, the company reports. Tillerson stepped down as chief executive officer on New Year’s Eve after more than four decades with the firm.
Before Tillerson stepped down, his severance package was set to be more than $180 million, the Wall Street Journal reports. After consulting with federal regulators, the company decided to lower the terms of the agreement.
The trust where the former executive’s shares are to be transferred is prohibited from investing in Exxon Mobil, and the trustee in charge of the funds would manage the assets consistent with government ethics rules, according to the company.
By extricating itself from Tillerson, Exxon hopes to alleviate concerns regarding conflicts of interest while Tillerson serves in the Department of State. Tillerson, while acting secretary of state, could hold influence over the company’s success.
Exxon Mobil announced that Darren Woods would be the next chief executive on Sunday. The company’s stock has gained 6.5 percent since Donald Trump defeated former Secretary of State Hillary Clinton.
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