What\u2019s tougher than running Exxon Mobil Corp.?<\/p>\n
Not much, at least not much in corporate America. So if President-elect Donald Trump is turning to the business world to help staff his Cabinet and lead the nation, he\u2019s fortunate to land Rex Tillerson, chairman and CEO of the oil giant<\/p>\n
Every public official, from dog catcher to the president, is expected to meet general ethical principles. Those include loyalty to the public, transparency and duty of care \u2014 another way of saying competency.<\/p>\n
In other words, can he get the job done?<\/p>\n
That question doesn\u2019t get enough attention, given the concerns over Tillerson\u2019s ties to Russia and the wealth he\u2019s accumulated in Exxon stock. But his competency gene may be especially valuable in a Trump administration, because Tillerson won\u2019t be baited by a tweet.<\/p>\n
Disciplined and deliberate, he has cut deals with foreign leaders around the world, often in dangerous places. He\u2019s kept Exxon at the top in performance despite volatile swings in energy prices. He\u2019s even nudged Exxon forward on climate change and pushed the Boy Scouts to accept gays.<\/p>\n
\u201cHe has an understated toughness and a real understanding of how the world works,\u201d said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University. \u201cHe could be a transformational pick for secretary of state.\u201d<\/p>\n
Daniel Yergin, an energy historian, praised Tillerson, too: \u201cHe\u2019s a man with a tremendous capacity to absorb information and make decisions,\u201d Yergin told The New York Times. \u201cHe\u2019s very measured and disciplined and takes a long view.\u201d<\/p>\n
Tillerson joined Exxon in 1975 after graduating from the University of Texas at Austin, so he doesn\u2019t have experience in government. That\u2019s rare for this Cabinet post. But rising to the top of Exxon, and remaining there for a decade, is a major personal achievement.<\/p>\n
Exxon is famous for its methodical, demanding approach to business and management. Every year, executives are evaluated in seven key areas, including safety, strategic results and total shareholder return. Outstanding performance in one area will not cancel out a poor showing elsewhere, according to the proxy statement.<\/p>\n
\u201cAll 21 executive officers are expected to perform at the highest level or they are replaced,\u201d the proxy said.<\/p>\n
If another exec can make a stronger contribution, a succession plan is implemented and the incumbent is reassigned or pushed out, according to the filing.<\/p>\n
Tillerson\u2019s pay is benchmarked against executives at AT&T, Boeing, General Electric and other industrial giants. During his tenure, his \u201crealized\u201d pay ranked 10th among 13 companies. Include the value of unvested stock and delayed bonuses, and his pay ranked eighth, the proxy said.<\/p>\n
Tillerson became CEO in 2006, and in the next 10 years, Exxon outperformed its peers in the major metrics tracked by the board, the proxy shows. Exxon also has started 22 major projects since then and plans to bring on 10 more in 2017.<\/p>\n
Exxon\u2019s market value today is $27 billion higher than when Tillerson became CEO, even though the price of crude oil is $10 lower.<\/p>\n
Steve Coll, who wrote the 2012 book \u201cPrivate Empire: Exxon Mobil and American Power,\u201d has reservations about Tillerson. They start with whether he can put national interests ahead of private ones.<\/p>\n
Exxon executives have disdain for the state department, in part because Exxon\u2019s foreign policy sometimes had more impact on countries, Coll wrote in The New Yorker. He questioned whether Tillerson can \u201csuddenly develop respect and affection for the American diplomatic service.\u201d<\/p>\n
But Coll also acknowledged the CEO\u2019s personal integrity, as well as other skills. Tillerson can absorb complex political analysis, evaluate foreign leaders and negotiate with friends and adversaries. In addition, Coll noted Exxon\u2019s strong safety record and the fact that it avoided problems with prosecutions while operating in countries rife with corruption.<\/p>\n
Exxon goes to some lengths to promote strong ethics. It has \u201cclawback\u201d provisions to recoup executive pay in the event of a financial restatement. It has no employment contracts or severance agreements, so execs who fall short don\u2019t get a safety net. Exxon also has delayed bonuses and unvested stock awards that can be forfeited if an executive does something detrimental, even after retiring.<\/p>\n
In the 1990s, according to oilman Ray Hunt, Tillerson and Hunt refused to pay small bribes to expedite a deal in Yemen, even though the practice was not uncommon at the time.<\/p>\n
\u201cHe has the courage of his convictions,\u201d Hunt said in a 2014 story, \u201cand he will never do anything that creates a short-term gain at the price of a long-term loss.\u201d<\/p>\n
Many lawmakers, including some Republicans, have concerns about Tillerson\u2019s close ties with Russia and Vladimir Putin. That will be a major topic during Tillerson\u2019s Senate confirmation hearings next month.<\/p>\n
When Tillerson spoke to students at Southern Methodist University, he downplayed the importance of befriending the Russians.<\/p>\n
\u201cHe said it was a matter of understanding their history and culture,\u201d SMU\u2019s Bullock recalled. \u201cHe said they were once an empire \u2014 and are still a very proud country with very proud leaders.\u201d<\/p>\n
That kind of insight will have a place in Trump\u2019s Washington.<\/p>\n
\u2022 Mitchell Schnurman is a business columnist for the Dallas Morning News. Readers may email him at mschnurman@dallasnews.com.<\/p>\n","protected":false},"excerpt":{"rendered":"