Comms 336 Exxon Campaign

8/13/2019 Comms 336 Exxon Campaign

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According to the Bureau of Labor Statistics, national unemployment is 7.3%as of August 2013. Because of this high rate, may people are becoming angrywith high pay for management in a struggling economy, with many peopleare out of work.

Other companies have said that paying their top executives lots of moneyencourages them to do what is in the best interest of their shareholders.

Exxon is actually having more issues with criticism over pollution and gayrights than anything else.

2. INDUSTRY

ORGANIZATIONS/ COMPANIES

Oil companies output per day/ biggest companies based on production: TheMiddle East, known for its vast fields of oil, still houses the two biggest oil

producers in the world. Saudi Aramo produces on average 12.5 millionbarrels of oil a day. Coming in a distant second, NIOC produces 6.4 million

barrels a day. Exxon comes in at 5.3 million barrels produced a day.Following Exxon, in order of number of barrels produced a day, is:PetroChina, BP, Royal Dutch Shell, Pemex, Chevron, Juwait PeroleumCorporation and ADNOC (wiki graph)

Biggest companies (revenue): Measuring a companies size in terms of yearlyrevenue can paint a different picture of the success and power of oilcompanies. A list of the top-ten oil producers (figures in billions):

o Royal Dutch Shell (Netherlands)= 484,489o Exxon Mobil (United States= 452,926o British Petroleum (United Kingdom)= 386,463o Sinopec (China)= 375,214o China National Petroleum (China)= 352,338o Chevron (United States)= 245,621o Conoco Phillips (United States)= 237,272o Total (France)= 231,580o Gazprom (Russia)= 157,830o ENI (Italy)= 153,676o (wiki graph re Fortune Global 500

http://en.wikipedia.org/wiki/List_of_largest_oil_and_gas_companies_by

_revenue) List of countries by oil production:

o Russia (13.28% share)= 10,900,00 barrels a dayo Saudi Arabia (12.65% share)= 9.900,000 barrels a dayo United States (9.97% share)= 8,453,000 barrels a dayo Iran (4.77% share)= 4,231,000 barrels a dayo China (4.56% share)= 4,073,000 barrels a dayo Canada (3.90% share)= 3,592,000 barrels a dayo Iraq (3.75% share)= 3,400,000 barrels a dayo United Arab Emirates (3.32% share)= 3,087,000 barrels a day


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o Venezuela (4.74% share)= 3,023,000 barrels a dayo Mexico (3.56% share)= 2,934,000 barrels a dayo According to IEA the top ten oil-producing countries were responsible

for producing 63% of the worlds oil production.o (according to report by International Energy Agency (IEA

http://en.wikipedia.org/wiki/List_of_countries_by_oil_production) ) OPEC: OPEC stands for the Organization of the Petroleum Exporting

Countries. The founding members, Iran, Iran, Kuwait, Saudi Arabia andVenezuela created the oil-cartel in 1960. OPECs mission is to OPEC'sobjective is to co-ordinate and unify petroleum policies among MemberCountries, in order to secure fair and stable prices for petroleum producers;an efficient, economic and regular supply of petroleum to consuming nations;and a fair return on capital to those investing in the industry. (OPEC

WEBSITE)

OCED:

o Source: Organization for Economic Cooperation and Development andBP statistical review of world energy, authors calculations

(http://www.fool.com/investing/general/2013/09/04/dont-place-your-bets-on-peak-oil-demand-just-yet.aspx)

Countries of the world, mapped according to the amount of oil they produce(according to World Factbook CIAhttp://en.wikipedia.org/wiki/File:Oil_producing_countries.2010.png)
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Who Owns Big Oil?(Holdings of Oil Stocks, 2011)o 20.6%Asset Management Companies (Including Mutual Funds)o 31.2%Pension Fundso 21.1%Individual Investorso 17.7%IRAso 6.6%Other Institutional Investorso 2.8%Corporate Management of Oil Companieso Source: Who Owns Americas Oil and Natural Gas Companies,

SONECON, October 2011.Sources: Based on company filings with the federal government as reported by U.S.Census Bureau and Standard & Poors Research Insight.And Putting Earnings into

Perspective: Facts for Addressing Energy Policy, 2012)Third Quarter 2011 Earnings by Industry(cents of net income per dollar of

sales)o 22.2 Pharmaceuticals and Medicineso 21.8 Computer and Peripheral Equipmento 20.1 Beverage and Tobacco Productso 15.1 Chemicalso 12.6 Electrical Equipment, Appliances, and Componentso 9.2 All Manufacturingo 8.9Aerospace Products and Partso 8.7 Apparel and Leather Productso 8.7 Machineryo 6.8Furniture and Related Productso 6.7 Oil and Natural Gaso 6.6 Motor Vehicleso 6.0 Papero 5.3 Plastics and Rubber Productso 3.9Textile Mills and Textile Product Millso 2.2 Iron, Steel, and Ferroalloys


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o 1.9 FoodSources: Based on company filings with the federal government as reported by U.S.Census Bureau and Standard & Poors Research Insight And Putting Earnings into

Perspective: Facts for Addressing Energy Policy, 2012)

Source: Bloombberg Businessweek (January 24-30, 2011).


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Source: Who Owns Americas Oil and Natural Gas Companies, SONECON,October 2011.

INDUSTRY GROWTH / GROWTH PATTERNS

o Monthly crude oil production in the United States is expected toexceed the amount of U.S. crude oil imports later this year for the firsttime since February 1995, the EIA said. The gap between monthly


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U.S. crude oil production and imports is projected to be almost twomillion barrels per day by the end of next year.

o http://www.ibtimes.com/us-produce-more-crude-oil-2013-it-imports-department-energys-energy-information-administration

PER CAPTIA CONSUMPTION All time peak of oil consumption was 2.28 liters per day in 1979. The most

recent peak was in 2005 at 1.81 liters per day. In 2013 we have seen anaverage of 1.7 liters per day. Experts expect consumption to dip even fartheras the worlds population increase and oil production will stay relatively flat.

Per capita crude oil consumption (in liters) per day:

GROWTH POTENTIAL

Has oil peaked? A slight decrease in oil demand from OCED countries havelead some to believe demand for oil has reached its peak. However, when


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placing demographics into the discussion, the demand could possibly onlyget higher

o Right now, oil demand for the two categories is roughly even at about45 million barrels of oil per day. But that is just about the only metricwhere these two groups of nations are equal. There are 4.72

times more people in the developing world, which means that percapita use of oil is considerably smaller than that of developednations.(http://www.fool.com/investing/general/2013/09/04/dont-place-your-bets-on-peak-oil-demand-just-yet.aspx

o As developing economies advance, it is assumed that they willconsume more oil. So for oil demand to remain flat, developingnations would need to reduce their consumption by an equal amount.It can be hard to conceptualize very large numbers like global GDPand world oil demand, so let's make a comparison that almosteveryone can understand: drinks. If every person in the developing

world were to increase their oil consumption by one shot glass a day,those in developed nations would in turn need to use 1 beer can of oilless in order for global demand to remain flat.

o We all have a tendency to use the US and China as the bellwethers forthe developed and developing world, respectively. The thing is, thereare many places in the developing world that are not going to behavelike China. In fact, based on projections from the OECD, China'spopulation is expected to peak in 2025 and then decline while the restof the developing world is expected to grow by 2 billion people. Moreimportantly, the places we expect to see the largest gains inpopulation growth have some of the lowest fuel consumption.

o Today, over 60% of the population in Africa use biomass such asfirewood as their primary energy source, and a study done atHavard's John F. Kennedy School of Government found that 90% ofthe rural Indian population still relied on biomass as the primarycooking fuel. As population in both of these regions grow and livingconditions improve, oil demand will most definitely follow.

o According to The Economist, over 1 billion people have been takenout of extreme poverty over the past 20 years, and the UN'sMillennium Development Goals will look to remove another billion.Freedom from the shackles of gripping poverty will ultimately requiremore energy resources, though. We have made major strides in the

developed world to replace some of our hydrocarbon use withalternatives, but global demand for oil will continue to rise aspopulations increase and living conditions improve.

o CONCLUSION: If we were to assume per capita oil consumption wereto remain flat between now and 2030, then the projected increase inpopulation would require an increase in production equal toboth ExxonMobil (NYSE:XOM ) and Chevron(NYSE:CVX )more
http://www.fool.com/investing/general/2013/09/04/dont-place-your-bets-on-peak-oil-demand-just-yet.aspxhttp://www.fool.com/investing/general/2013/09/04/dont-place-your-bets-on-peak-oil-demand-just-yet.aspxhttp://www.fool.com/investing/general/2013/09/04/dont-place-your-bets-on-peak-oil-demand-just-yet.aspxhttp://www.fool.com/investing/general/2013/09/04/dont-place-your-bets-on-peak-oil-demand-just-yet.aspxhttp://caps.fool.com/Ticker/XOM.aspx?source=isssitthv0000001http://caps.fool.com/Ticker/XOM.aspx?source=isssitthv0000001http://my.fool.com/watchlist/add?ticker=XOM&source=iwlsitbut0000010http://caps.fool.com/Ticker/CVX.aspx?source=isssitthv0000001http://caps.fool.com/Ticker/CVX.aspx?source=isssitthv0000001http://my.fool.com/watchlist/add?ticker=CVX&source=iwlsitbut0000010http://my.fool.com/watchlist/add?ticker=CVX&source=iwlsitbut0000010http://caps.fool.com/Ticker/CVX.aspx?source=isssitthv0000001http://my.fool.com/watchlist/add?ticker=XOM&source=iwlsitbut0000010http://caps.fool.com/Ticker/XOM.aspx?source=isssitthv0000001http://www.fool.com/investing/general/2013/09/04/dont-place-your-bets-on-peak-oil-demand-just-yet.aspxhttp://www.fool.com/investing/general/2013/09/04/dont-place-your-bets-on-peak-oil-demand-just-yet.aspx


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than tripling their current oil production over that time frame...just tomaintain the status quo.

HISTORY

Imperial Russia was the first area to successfully produce oil. In 1825 theRussians produced 3,500 tons of oil. In 1848 the Russians built a pipeline totransport oil throughout the nation.

Refined oil was first used in artificial asphalt, machine oil and lubricants andkerosene lamp. The kerosene lamp was the first major product to help thedemand for refined oil to grow.

The United States first oil corporation was organized to develop oil foundfloating on water neat Titusville, Pennsylvania. Edwin L. Drake located oil inthe surrounding area an don August 27, 1859 oil was struck at a depth ofsixty-nine feet. This was the first time oil was retrieved using a drill. Modernoil drilling began in America in West Virginia and Pennsylvania in the 1850s.

John D. Rockefeller took advantage of the oil boom and built a small oilrefinery. He created the Standard Oil Company. By 1870 Standard Oil hadbought out all competitors and became the dominant oil producer.

Rockefeller developed the use of oil pipelines, which were an efficient way totransport oil.

In 1937 Chevron Corporation (then Pure Oil Company) and partnerExonMobil (then Superior Oil Company) constructed a platform to startdrilling off-shore in Louisiana. Developments in off-shore drilling lead tomore access to oil and the ability to produce more.

After World War II, countries in the Middle East became the leading oilproducers in the world. Since WW II there have been many developments inoil production such as: deep-water drilling and drill ships.

Source: http://www.history.com/topics/oil-industryTECHNOLOGICAL ADVANCES

According to the Organization of Petroleum Exporting Countries, technologicaladvancements have helped to nearly double Ultimately Recoverable Resourceestimates since 1980. Meanwhile, improvements in drilling, and in particulardirectional and horizontal drilling, have reduced the surface impact of oil and gasoperations, while allowing for optimum recovery of reserves. In addition,developments in 3D modelling allow for more accurate exploration, targetingreserves with guaranteed high production volumes, meaning fewer wells have to

be drilled on the surface. Aside from the E&P imperatives for technologicaladvancements in the oil and gas industry, they can also help companies deal withthe issues they will face in the coming decades. Technology has its role to play inhelping the oil and gas industry in reducing its greenhouse gas emissions, at atime when carbon cuts are high on the global community's agenda. In the wakeof the BP oil spill in the Gulf of Mexico, technology may also be looked upon toenhance safety for those working within the industry.


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In its World Oil Outlook 2009, OPEC highlights that carbon capture and storage(CCS) technology is likely to be extremely important to the oil and gas industry inthe coming years. Speaking on the subject of developments within the oil and gasindustries, OPEC said: "In particular, the focus needs to be on the earlydevelopment and deployment of cleaner fossil fuel technologies, such as carbon

capture and storage." OPEC believes that CCS has the potential to aid the oil andgas industries mitigate its carbon emissions. The technology has been gainingmuch press of late and forms part of the UK's new coalition government's climatechange policy. Using CCS techniques for enhanced oil recovery (EOR) holdsparticular potential for the oil and gas industry. The practice involves carbondioxide being compressed and forced down into reservoirs, which pushes oil tonearby production wells, while sealing the gas underground. Exxon Mobil isamong the major E&P firms using the technology, which it claims has been put toparticular use in the Permian Basin in Texas. According to Exxon, 25 percent ofproduction in the region is a result of EOR, which has allowed for the recovery ofone billion extra barrels of oil.

Technology also has a significant role in play in the extraction of oil and gas fromdeepwater reserves, and in ensuring the safety of those charged with doing so.

This is particularly true in Brazil, which is blessed with large numbers ofhydrocarbon reserves, many of which are located in remote deepwater locations.OPEC observed that important discoveries, including Roncador, Peregrino, Papa-Terra, Whale Park fields, Tupi, Guara [and] Iara will need "major investment andcutting edge production technology" to be realised. However, it is perhaps in theUnites States where deepwater technology is receiving the highest levels ofscrutiny, following BP's blow-out at the Macondo well earlier this year. UnitedStatesgovernment officials claimed that better instruments and sensors are neededto diagnose issues with deepwater rigs and prevent further loss of life Interior

secretary Ken Salazar is quoted in a report from Reuters as saying: "We musteliminate the gap between the technology and knowledge that allowsoil and gascompaniesto tap reserves beneath 5,000 feet (1,524 metres) of water - and thetechnologies and strategies that allow us to deal with emergencies at thosedepths." BP has now announced it is joining the Marine Well ContainmentCompany, alongside Chevron, ConocoPhillips, ExxonMobil and Shell to build asystem for use by the entire United States upstream oil and gas industry which"exceeds current response capabilities".

http://www.oilandgasiq.com/oil-drilling-gas-drilling-development/articles/the-outlook-for-technological-advancements/

TRENDS

According to recent analyses of the 2008 economic crash, the price of oil hasbeen directed related to the performance of the U.S economy. The success ofthe U.S. economy largely relies on the price and production of oil.

o For most of the last century, cheap oil powered global economic growth.But in the last decade, the price of oil has quadrupled, and that shift willpermanently shackle the growth potential of the worlds economies. The
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countries guzzling the most oil are taking the biggest hits to potentialeconomic growth. Thats sobering news for the U.S., which consumesalmost a fifth of the oil used in the world every day. Not long ago, whenoil was $20 a barrel, the U.S. was the locomotive of global economicgrowth; the federal government was running budget surpluses; the jobless

rate at the beginning of the last decade was at a 40-year low. Now, growthis stalled, thedeficitis more than $1 trillion and almost 13 millionAmericans are unemployed. And the U.S. isnt the only country gettingsqueezed. From Europe toJapan,governments are struggling to restoregrowth. But the economic remedies being used are doing more harm thangood, based as they are on a fundamental belief that economic growth canreturn to its former strength. Central bankers and policy makers havefailed to fully recognize the suffocating impact of $100-a-barrel oil.Running huge budget deficits and keeping borrowing costs at record lowsare only compounding current problems. These policies cannot be long-term substitutes for cheap oil because an economy cant grow if it can no

longer afford to burn the fuel on which it runs. The end of growth meansgovernments will need to radically change how economies are managed.Fiscal and monetary policies need to be recalibrated to account for slowerpotential growth rates. (Source: http://www.bloomberg.com/news/2012-09-23/how-high-oil-prices-will-permanently-cap-economic-growth)
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Because of high oil prices and the fear the world will run out of fossil fuels,many professionals believe natural gas will take the place of gasoline as thelargest transportaion fuel. Sourc(e: 2013 Deloitee Report: Surveying energyattitudes: Industry insiders and the publics outlook on the future of U.S. oil

and gas)


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DISTRIBUTION PATTERNS Who exports the most? According to recent research, the central hub of oil

exporting is located in the Middle East. While the United States has increasedthe amount of oil they produce, they still consistently consumer more thanthey can keep up with.


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http://librairie.immateriel.fr/fr/read_book/9789264055926/e9789264055926_c10.. Source: BP 2006 Sahel and West Africa Club/OECD 2007

CONTROL & REGULATION

History and backgroundo Oil markets have long-term price cycles. The peaks and troughs of those

cycles have often coincided with demands for federal intervention, butthose interventions have usually made cycles more, not less, severe. In the1920s, oil prices were peaking and many commentators believed that oilsupplies were running out. Congress was confronted by requests toaugment supplies, so it enacted a generous depletion allowance forproducers in 1926, which increased investment returns substantially. Thischange induced additional exploration activity, and subsequently thediscovery of large new oil reservoirs.

o During the next decade, the situation was reversed, with prices low anddropping. That led to demands for more "orderly" competition and oil

price supports. Rather than repealing the supply-enhancement policiesenacted during the 1920s, Congress left them intact and enacted a price-support system. Similar cycles occurred in the 1950s and 1970s. In eachcase, Congress enacted policies that overreacted to the current peak ortrough and failed to quickly repeal the policies when petroleum pricesretreated from their extreme highs or lows.

o Beginning in the late-1920s, different groups in the oil industry proposedpolicy measures to help prop up prices. Initially, the major oil companies
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supported industry planning similar to that used during World War l. Thewar experience left many corporate leaders favorably disposed towardmanaged capitalism under the protection of the state.

o Federal intervention increased enormously in the 1930s. The NationalIndustrial Recovery Act of 1933 (NIRA), which passed with support from

large oil companies, substituted producer agreements for normal marketcompetition. The oil industry was the first to adopt a "fair trade" codeunder the Act. When the Supreme Court ruled NIRA unconstitutional in1934, the majors once again turned their attention to Washington. Theyfavored federal regulation to limit supply, but when some in the Rooseveltadministration argued for public-utility style regulation of major oilcompanies (which would involve limits on rates of return), oil companysupport shifted to the Connally Hot Oil Act of 1935, which gave federalsanction to the state prorationing (supply restriction) programs thatrestricted competition and raised prices.

o After an intense lobbying effort, Congress adopted a clause in theReciprocal Trade Act Amendments of 1955 that authorized the presidentto limit imports of a commodity if he thought such imports weredetrimental to national security. In 1959, President Dwight Eisenhowerinvoked the clause and imposed oil import quotas.

o This effort to restrict imports drove down international oil prices andencouraged the creation of the Organization of Petroleum ExportingCountries. International oil companies, which were now effectively shutout of the U.S. market, flooded Europe with cheap oil and increased its oildependence. The world price of oil declined until the mid-1970s. Withlower prices, oil companies reduced their royalty payments to Middle Eastcountries, which prompted those nations to create OPEC.

o In the United States, the effects of a tighter world oil market wereaggravated by President Richard Nixon's price controls, which gavespecial attention to oil because oil prices were rising rapidly. The Nixonprice controls, which began in August 1971, were complex and they wentthrough a series of phases over time. The controls interacted withchanging market conditions to create shortages of different products atdifferent periods during the 1970s. For example, heating oil shortagesarose during late-1972, but most other oil products were less affected atthat particular time.

o Then in 1973, severe shortages of gasoline developed at independentretailers. Oil price controls collided with the rising cost of imports, forcingoil companies to cut back on imports. Those cuts in turn particularly hurtindependent refiners and retailers, who obtained a large share of theirsupplies from the major importers. Thus, gasoline shortages wereparticularly acute at independent gas stations.

o Congress responded to this situation not with a repeal of the price controlsthat were the source of the problems, but rather with a series of newcomplex regulations. Congress passed the Emergency PetroleumAllocation Act in 1973, which enmeshed federal regulators even closer


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into oil company operations, and it created a two-tier system of pricecontrols on domestic oil. The price of "old"domestic oil was frozen, but"new" domestic oil was decontrolled.

o The EPAA created many distortions, as one example will illustrate.Expensive imported oil was not subject to price controls and it determined

the marginal cost, and thus price, of gasoline sold in the United States. Butsince many refiners had access to domestic old oil that was subject to pricecontrols, they made larger profits than refiners dependent on new domesticoil. In response to this situation, the Federal Energy Administrationcreated complex new rules in 1974 to spread around the refiner benefits ofprice-controlled old oil. Those rules, in turn, created incentives for refinersto further increase oil imports.

o The EPAA helped to create the very shortages that it was supposed toameliorate. By attempting to insulate the U.S. market from world oilprices, EPAA actually created incentives to hoard just at those times wheninventories should have been released on the marketduring the

disruptions of 1973 and 1979. In sum, a range of new governmentinterventions in the 1970s exacerbated the conditions that they weresupposed to resolve.

o The EPAA regulations were scheduled to expire after two years, andCongress replaced them with new rules under the Energy Policy andConservation Act of 1975. This law placed previously uncontrolled newoil produced since EPAA had passed under price controls, so we wentfrom a two-tier price control system to a three-tier system. EPCA createdand exacerbated a range of economic distortions, including increasing theincentives to import and decreasing consumer incentives to shift from oilto other energy sources or to conserve.

o Price controls on oil and refined products were extended through 1979with various further iterations. Finally, in 1979 President Jimmy Carterbegan to repeal price controls through a series of administrative actions.President Ronald Reagan finished the job in 1981.

o Congress finally allowed oil price controls to expire, but decided to placea windfall profits tax on companies in 1980. The tax was not really a taxon profits, but an excise tax on domestic oil production and thus madedomestic production less attractive, while encouraging imports. Onecongressional study found that the tax reduced domestic oil production by3-6 percent and increased U.S. imports by 8-16 percent.3The windfallprofits tax was repealed in 1988. And the period since 1990 has beengenerally free of petroleum market regulation.4

o Source:http://www.downsizinggovernment.org/energy/regulations#sthash.s0m3RozY.dpuf

GEOGRAPHIC CHARACTERISTICS
http://www.downsizinggovernment.org/energy/regulations#_edn3http://www.downsizinggovernment.org/energy/regulations#_edn3http://www.downsizinggovernment.org/energy/regulations#_edn3http://www.downsizinggovernment.org/energy/regulations#_edn4http://www.downsizinggovernment.org/energy/regulations#_edn4http://www.downsizinggovernment.org/energy/regulations#_edn4http://www.downsizinggovernment.org/energy/regulations#_edn4http://www.downsizinggovernment.org/energy/regulations#_edn3


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3. The ClientHISTORY

The company is a direct descendant of John D. Rockefellers Standard Oil Previously known as Humble Oil or Standard Oil of New Jersey Replaced multiple oil brands on January 1, 1973 Beforehand, Humble Oil was a company established on the East Coast that

would later expand to the West

In 1963, Humble Oil wished to purchase the refining and marketingoperations of Tidewater Oil Company, which would help them expandfurther and take the market in California, where the market was growing thefastest. However, The Supreme Court denied this request on the grounds ofanti-trust laws.

Humble Oil received many lawsuits and complaints from other companies,such as the Stand Oil of Kentucky, for expanding too much and taking toogreat a part of the market.

In the 1960s, Humble Oil struggled to become a nationwide companydistributing under one name, such as Shell and Texaco.

Humble Oil was a main promoter and broadcast sponsor for college football.


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At first, Humble Oil wanted to change its nationwide name to Enco, butdismissed that idea when they found it was similar to a Japanese wordmeaning stalled car.

In 1972, Humble Oil became Exxon for a unified brand name. The name was initially going to be Exon, but the sitting governor of

Nebraska had the last name Exon, so an x was added. In 1989, Exxon moved from downtown New York (Rockefeller Center) to

Irving, Texas, because New York costs were too high. In 1989, a oil carrier traveling from Alaska to Long Beach hit a large reef and

caused the second largest oil spill in American history. There have been a total of 6 oil spills caused by Exxon infrastructure. In 2012, CEO Rex Tillerson received salary of 34.9 million dollars, a twenty

percent raise from the previous year (according to thinkprogress.org)

CEOs are normally paid in stock advances, meaning that they either rise orfall with their investors.

Made approximately 104 million dollars a day (according tothinkprogress.org)

SIZE In January of this year, Exxon took over Apple as the largest company. Around 80,000 employees Annual employee pay in 2011-66,605 (Bloomberg) 45,000 gas stations in 118 countries around the World Owns 36 oil refineries worldwide Has the ability with these refineries to produce 6.2 million barrels of oil a day Owns less than one percent of the worlds total oil and gas reserves 453 billion dollars in revenue, which is the third highest grossing company in

the worldREPUTATION

ExxonMobil has a reputation of an older generation, conservativeorganization. The organization has been strongly against LGBT rights, andreceived the worst score by the Human Rights Campaign (-25, the only negativescore) in terms of progressive LGBT ideals.

The company does not give to charity. Ultimately, this is our shareholdersmoney were spending, CEO Rex Tillerson said, according tothe essay SteveColl wrote for the Points section last month. Its not my money to tithe. Its notthe corporations. Its ourshareholders.(http://dallasmorningviewsblog.dallasnews.com/2012/07/exxonm

obil-profits-above-all-else.html/) In 2007 ExxonMobil was rated the company with the worst reputation in

almost every study due to the Valdez oil spill. Since then, philanthropic givingand public relations has bettered this reputation

The company was charged with a lawsuit alleging they knowingly assistedhuman rights violations when it supplied material support to Indonesianmilitary forces, who committed crimes of torture murder, and rape. Thecompany dismissed these charges, which dismissal is still under appeal.


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STRUCTURE ExxonMobil is structured by business activity on a global basis and not by

country.

The company is divided into 11 separate businesses: 5 Upstream(Exploration, Development, Research, Production, Gas Marketing), 4

Downstream (Refining and Supply, Fuels Marketing, Lubricants andPetroleum Specialties, Technology), Chemicals, and Coals and Minerals

Major shareholders (as described in corporatewatch.org) Top Institutional Holders of Exxon Mobil:

FMR Corporation (Fidelty Management & Research Corp)Barcleys Bank PlcMorgan (J.P.) Chase & CompanyState Street CorporationMellon Bank, N.A.Vanguard Group, Inc.Putman Investment Management, Inc.

Taunus CorporationTIAA Cref Investment Management, LLCCitigroup Inc.

Top Mutual Fund Holders (as described in corporatewatch.org) College Retirement Equities Fund-Stock Account

Fidelity Magellan Fund IncVanguard Index 500 FundFidelity Growth And Income PortfolioPutnam Fund For Growth And IncomeAXP New Dimensions FundFidelity Contrafund IncVanguard Institutional Index FundFidelity Puritan Fund IncWashington Mutual Investors Fund

Board of Directors Exxon Mobil: The board is made up of 15 directors- (corporatewatch.org) Lee R. Raymond

Chairman of the Board of Directors and Chief Executive Officer

Eugene A. RennaSenior Vice President

Ren DahanSenior Vice President

Harry J. LongwellSenior Vice President

Michael J. BoskinT.M. Friedman Professor of Economics and Senior Fellow, Hoover Institution,Stanford University

William T. EsreyChairman and Chief Executive Officer, Sprint Corporation (a global


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communications company integrating long distance, local and wirelesscommunications services and one of the worlds largest carriers of Internet

traffic)

Donald V. FitesRetired Chairman and Chief Executive Officer, Caterpillar Inc. (manufacturer

of construction, mining, and agricultural machinery and engines) Charles A. Heimbold, Jr

Chairman and Chief Executive Officer, Bristol-Myers Squibb Company(manufacturer of consumer products and pharmaceuticals)

James R. HoughtonChairman of the Board Emeritus, Corning Incorporated (communications,advanced materials and display products)

William R. HowellChairman Emeritus, J.C. Penney Company, Inc. (department store andcatalogue chain)

Helene L. KaplanOf Counsel, Skadden, Arps, Slate, Meagher & Flom LLP (law firm)

Reatha Clark KingPresident and Executive Director, General Mills Foundation; Vice President,General Mills, Inc. (manufacturer and marketer of consumer food products)

Philip E. LippincottChairman of the Board, Campbell Soup Company (global manufacturer andmarketer of high quality, branded convenience food products); RetiredChairman and Chief Executive Officer, Scott Paper Company (sanitary paper,printing and publishing papers and forestry operations)

Marilyn Carlson NelsonChairman and Chief Executive Officer, Carlson Companies, Inc.; Co-Chair,Carlson Holdings, Inc. (travel, hotels, restaurants and marketing services)

Walter V. ShipleyRetired Chairman of the Board, The Chase Manhattan Corporation and TheChase Manhattan Bank (banking and finance)

Executives Lee R. RaymondChairman of the Board and Chief Executive Officer

E. G. GalanteSenior Vice PresidentR. W. TillersonSenior Vice PresidentH. J. LongwellExecutive Vice President, DirectorE. A. RennaExecutive Vice President, Director

R. DahanExecutive Vice President, DirectorM. E. FosterPresident, ExxonMobil Development CompanyF. A. Risch VicePresident, TreasurerD. D. HumphreysVice President, ControllerC. W. MatthewsVice President, General CounselT. P. TownsendVice President of Investor Relations, SecretaryP. E. SullivanVice President and General Tax CounselH. R. CramerVice President


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K. T. KoonceVice PresidentS. R. McGillVice PresidentS. D. PryorVice PresidentD. S. SandersVice PresidentJ. S. SimonVice President

The two Senior Vice Presidents, the three Executive Vice Presidents and theChairman and CEO, L. R. Raymond, constitute the Corporation's ManagementCommittee.

4. The IssueSALES AND PROFIT HISTORY

After a steep decline in 2009, sales have been steadily rising up to 2012, wherethey had a very small decline. Cost of Goods Sold has followed the same trend,

and so has the gross income.

http://www.marketwatch.com/investing/stock/xom/financials

According to Forbes, Exxon is currently #5 on the list of Worlds biggestcompanies. They are also #3 in Sales, #1 in profit, #91 in assets, and #2 in Market

value

Market Cap is at $400.42 B http://www.forbes.com/companies/exxon-mobil/

4. The Product, Service or Issue

the gasoline: 3 octane grades, developed on molecular level for better fueleconomy

meets TOP TIER Standards (Top tier is the premier standard for gasolineperformance according to http://www.toptiergas.com/index.html


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The Octane rating is the measure of a gasolines ability to resist knock or pingduring combustions. The higher rating menas greater reisistance.

Exxon offters octane 87,89, and 91-93 Exxon also provides marine fuels and aviation fuels Breakdown of products offered:

o 42%gaso 25%dieselo 9%aviation/jet fuelo 4%liquified petroleum gaso 4%fuel oilo 2%waxes/asphalto 3%chemicalso 11%lubes/coke/other

http://www.exxonmobil.com/Corporate/about_what_downstream.aspxPRODUCT DEVELOPMENT

continuous improvement is a key element of the process management so they canensure great performance and have a competitive advantage.

Researchers will make products that always meet or exceed industry standardsand needs of customers.

Extensive product testing done, bench, rig, engine, and field testing This is critical for making sure the product meets the claims and representations Once the product is out of the lab, it will undergo industry standard tests,

propriety tests, and field test in order to verify performance.

Field engineers will help to identify where any data and any conditions need to bemonitored, and technologists are at hand to review the product

http://www.exxonmobil.com/Lubes/technology_commitment_research.aspxREPUTATION

even though Exxon was number 1 on 2011s fortune 500 list of most profitablecompanies(http://money.cnn.com/magazines/fortune/fortune500/2012/performers/

companies/profits/) , it was ranked 51 out of 60 on the 2012 Harris Poll

Reputation Quotient http://www.prdaily.com/Main/Articles/10954.aspx

In April 2013, a jury in New Hampshire found Exxon Mobil liable in the lawsuitover groundwater contamination by the gas additive, MTBE. The company was

ordered to pay $236 million to clean it up. http://www.cbsnews.com/8301-

505123_162-57578675/exxon-mobil-must-pay-$236-million-in-u.s-pollution-

case/

An Exxon Mobil pipeline ruptured in Arkansas in April of 2013, and investigationproved that it was not the fault of the state http://www.cbsnews.com/8301-

201_162-57577491/arkansas-will-investigate-exxonmobil-oil-spill/

Based on these article and comments made, Exxon does not have a goodreputation among environmental groups


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In an interview with CBS about drilling, CEO Rex Tillerson said My philosophyis to make money. http://www.cbsnews.com/8301-505123_162-

57578675/exxon-mobil-must-pay-$236-million-in-u.s-pollution-case/

In 2013, Exxon beat out Apple as the worlds most valuable publicly tradedcompany, meaning Exxon has a market capitalization a few billion dollars higher

than Apples http://www.foxnews.com/tech/2013/04/17/apple-loses-title-world-most-valuable-company-to-exxon/

Before the BP oil spill, the Valdez oil spill in 1989 was the largest oil spill in U.scoastal waters. And 23 years after it happened, they are still looking into the long-

term effect on killer whales in Alaska.

http://response.restoration.noaa.gov/exxonvaldez

Exxon known for responding to Oil spill with increased safety, and now theirreputation is that they are very safe.

o Exxon, the world's largest publicly traded international oil and gascompany, sticks to its standards, Tillerson says, even if it means tough

decisions need to be made. "We do not proceed with operations if wecannot do so safely," he said. In 2006, Exxon halted drilling in an oil field

in the Gulf of Mexico, dubbedBlackbeard,because it got too dangerous

even though Exxon had spent $185 million and 575 days drilling.

o From http://usatoday30.usatoday.com/money/industries/energy/2010-08-03-oilspillrig_N.htm

2007- Exxon accused of spending money to mislead the public on the seriousnessof global warming

http://www.nytimes.com/2007/01/04/business/04exxon.html?_r=0

Exxon funded campaigns to raise doubts about global warminghttp://www.pbs.org/wgbh/pages/frontline/environment/climate-of-doubt/steve-coll-how-exxon-shaped-the-climate-debate/

2009- Exxon named Green company of the year(http://www.forbes.com/forbes/2009/0824/energy-oil-exxonmobil-green-

company-of-year.html), however there were some skeptics as to whether or not

this was an accurate label, like this article called Is ExxonMobil Really the

Green Company of the Year? (http://www.huffingtonpost.com/james-hoggan/is-

exxonmobil-really-the_b_277070.html)

April 2013- after the pipeline leaks in Alaska, Exxon is still pushing for theKeystone pipeline, but public opinion is not very keen on more drilling and oil

pipelines(http://qz.com/69763/exxonmobil-pipelines-public-opinion-could-upend-keystone/)

2012- the Ad campaign that called for better science is called hypocritical becauseof its funding of those past campaigns claiming denial of scientific claims. This is

also when the company started its math and science initiative under charitable

giving. (http://thinkprogress.org/climate/2012/04/16/464922/what-you-should-

know-about-exxon-mobils-hypocritical-science-education-ad-campaign/)
http://content.usatoday.com/topics/topic/Blackbeardhttp://content.usatoday.com/topics/topic/Blackbeardhttp://content.usatoday.com/topics/topic/Blackbeardhttp://content.usatoday.com/topics/topic/Blackbeard


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2010- Articles claim that Exxon is becoming very dangerous because it funds somany right-wing policy groups and foundations and think tanks

(http://www.peoplesworld.org/why-exxon-mobil-is-more-dangerous-than-bp/)

5. PromotionsLEADERSHIP

Rex Tillerson- CEO since 2006 Salary in 2011: $25.2 million Predecessor: Lee R. Raymond 1993-2005 Acquired XTO in 2010 XTO is a Fortune 500 company Board of Directors:o Michael J. Boskin, since 1996. T.M. friedman Professor of Economics and

Senior Fellow, Hoover Institution, Stanford University

o Peter Brabeck-Letmathe, since 2010. Chairman of the Board of Nestleo Ursula M. Burns, since 2012. Chairman of the Board and Chief Executive

Officer of Xerox Corporation

o Larry R. Faulkner, since 2008. President Emeritus of University of Texasat Austin

o Jay S. Fishman, since 2013. Chairman of the Board and Chief Executiveofficer, The Travelers Companies

o Henrietta H. Fore, since 2012. Chairman and Chief Executive Officer,Holsman International

o Kenneth C. Frazier, since 2009. Chairman of the Board, President, andChief Executive Officer of Merck & Co.

o William W. George, since 2005. Professor of management practice,Harvard University

o Samual J. Palmisano, since 2006. Former chairman of the Board, IBMo Steven S. Reinemund, since 2007, Dean of Business, Wake Forest

University

o Rex Tillerson, since 2004. Chairman of the Board and Chief ExecutiveOfficer of Exxon Mobil Corporation

o William C. Weldon, since 2013. Former Chairman of the board of Johnsonand Johnson

o Edward E. Whitacre, Jr., since 2008. Former Chairman of the Board,General Motors, Charmain Emeritus, AT&T

Board Committees:o Audit, compensation, board affairs, finance, public issues and

contributions, executive

Compensation committee: purpose is to determine compensation for theCEO and other executives, and makes recommendation about succession

planning and development for other senior executive positions. Members


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are appointed by the board, and are not able to participate in any of the

compensation plans that they administer.

o They review corporate goals and objectives that are relevant todetermining compensation of the CEO

o Meet annually to evaluate CEO performance compared with the goals andobjectives.

o Annually review succession planningo Make recommendations to the board about compensation planning and

equity-based planning.

o Mr. Fishman, Mr. Palmisano, Mr. Weldon, Mr. Whitacre, Jr.o http://www.exxonmobil.com/Corporate/investor_governance_comm_com

pensation.aspx

EMPLOYEE COMPENSATION AND BENEFITS

Programs in the US include: health, dental, vision plan options for employee andeligible dependents; savings plan; pension plan; disability coverage; life

insurance; flexible work arrangements including personal time off, adjustable

work schedules; telecommuting, and short-term part-time arrangements

Education assistance- reimburses 100% of college related expenses for approvedcourses

Matching gift program-matches your gifts to eligible colleges, with financialgrants

Volunteers involvement program- provides financial grants to eligible non-profitorganizations you are involved with

Financial fitness program-offers help so employees will understand exxonsfinancial programs and have a better financial future

Resource referral- helps employees with childcare, elder care, adoption, teenissues, stress, etc

Employee product discounts Adoption assistance Emergency back-up dependent care programs Leaves of absences for personal, family, military, and educational Spousal relocation assistance Professional membership support Survivorship counseling Employment policies: Diversity policy: they strive to get and retain a diverse

workforce, foster a productive environment, and keep an environment where

individual and cultural differences are respected, valued. Identify and develop

leadership capability that will allow them to excel in a global environment

http://www.exxonmobil.com/USA-English/HR/careers_us_andyou_benefits.aspxCHARITABLE GIVING
http://www.exxonmobil.com/Corporate/investor_governance_comm_compensation.aspxhttp://www.exxonmobil.com/Corporate/investor_governance_comm_compensation.aspxhttp://www.exxonmobil.com/Corporate/investor_governance_comm_compensation.aspxhttp://www.exxonmobil.com/Corporate/investor_governance_comm_compensation.aspxhttp://www.exxonmobil.com/Corporate/investor_governance_comm_compensation.aspxhttp://www.exxonmobil.com/Corporate/investor_governance_comm_compensation.aspxhttp://www.exxonmobil.com/Corporate/investor_governance_comm_compensation.aspx


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ExxonMobil Foundation- philanthropic section, founded in 1955. President isSuzanne McCarron since 2010. Includes womens economic opportunity

initiative, math and science initiative, and malaria initiative.

Womens economic opportunity- focused on developing women entreprenuersand leaders through skill and development training, mentor programs, business

women networks. create advocacy and research programs. Support of high-impactsustainable innovations and research to help accelerate womens academic

advancement.

o So far have invested $47 million and reached over ten thousand women inalmost 100 countries

o Partners: Africare, CEDPA, Cherie Blair Foundation for Women, Coadyinternational Institute, Council on Foreign Relations Women and Foreign

Policy Advisory Council, Harvard Kennedy School Women and Public

Policy Program, Harvard Womens Leadership Board, international

Center for Research on Women, Kopernik, Solar Electric Light Fund,

Solar Sister, Thunderbird School of Global management, Vital Voices Math and Science Initiative

o Exxon has given $125 million to support the National Math and ScienceInitiative, a non profit organization

o This organization replicated math, science, technology, and engineeringprograms that have proven to be effective, and helped prepare students in

29 states

o A critical component of this is providing good development for teachers,and for recruiting and preparing future teachers of math and science.

Malaria Initiative- works with partners including local institutions andinternational NGOs in Africa to help stop the spread of malaria on the continent.

o Since 2000, invested more than $110 milliono Reached more than 83 million people in 17 countrieso Helped distribute more than 13.1 million bed nets throughout Africao More than 942,000 rapid diagnostic kits, and 1.8 million doses of anti-

malarial drugs.

o Trained more than 250,000 health care workers and counselorso Helped fund three pediatric anti-malarial drugso http://www.exxonmobil.com/Corporate/community_malaria_invest.aspx

Worldwide givingo 2012- $40 million employee and retiree giving, $5 million arts and culture,

$49 million civic and community, $4million environment, $25 million

health, $49 million higher education, $8 million united appeals and

workplace giving, $49 million pre-college education, $9 million public

policy research, $18 million other education
http://www.exxonmobil.com/Corporate/community_malaria_invest.aspxhttp://www.exxonmobil.com/Corporate/community_malaria_invest.aspxhttp://www.exxonmobil.com/Corporate/community_malaria_invest.aspx


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o Total: $256 million

http://www.exxonmobil.com/Corporate/Imports/ccrcharts/img/charts/community_investments_focus.jpg
http://www.exxonmobil.com/Corporate/Imports/ccrcharts/img/charts/community_investments_focus.jpghttp://www.exxonmobil.com/Corporate/Imports/ccrcharts/img/charts/community_investments_focus.jpghttp://www.exxonmobil.com/Corporate/Imports/ccrcharts/img/charts/community_investments_focus.jpghttp://www.exxonmobil.com/Corporate/Imports/ccrcharts/img/charts/community_investments_focus.jpghttp://www.exxonmobil.com/Corporate/Imports/ccrcharts/img/charts/community_investments_focus.jpg


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STAKEHOLDERS

Governments- participate in 47 countries Shareholders-2.5 million individuals, more than 2,000 institutions Suppliers- 160,000 suppliers of goods and services Communities, NGOs and academic institutions- 542, interactive sessions, 58,000

individuals

Customers- millions of consumers and industrial customers Employees- about 77,000 employees in 67 countries around the world

FINANCIAL STATEMENTS

Exxon https://www.google.com/finance?fstype=ii&q=NYSE:XOM


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http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=XOM


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Summary of financial statements: Revenue and gross profit increased from 2009-2011,but decreased very slightly from 2001-2012. Operating expenses and operating incomehave followed the same trend. Net income, has continually increased rom 2009-2012.Rex Tillerson financial information:

compensation for 2011o salary: $2,387,000o bonus: $4,368,000 **where is this money coming from??**o restricted stock awards: $17,890,875o all other: $519,230o change in pension value and nonqualified deferred compensation earnings:

$9,755, 401

o total compensation: 34,920,506o http://www.forbes.com/profile/rex-tillerson-1/o April 2013- His compensation rises to $40.2 Million,

http://online.wsj.com/article/SB1000142412788732374100457841861304

2749062.html

oo Exxon is number 14 on the list of 100 highest paid CEOs

http://www.aflcio.org/Corporate-Watch/CEO-Pay-and-You/100-Highest-

Paid-CEOs

FINANCIAL INFO OF COMPETING ORGANIZATIONS

Exxonmobil leads the 6 major petroleum companies. (BP, Chevron Texaco, Total,ConocoPhilips, and Royal Dutch Shell)

Chevron- CEO, John Watson, pay just increased 30% to $32.2 millionhttp://www.mercurynews.com/ci_23005440/chevron-ceos-pay-jumps-30-percent-

32-2


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Conoco- James Mulva, CEO total compensation is around #31.34 millionhttp://www.forbes.com/lists/2006/12/CR0R.html

BP chief executive, Bob Dudley, was paid 2.67Million in 2012http://online.wsj.com/article/BT-CO-20130306-711651.html

PAST EXXON CAMPAIGNS In 2009, Exxon invested $600M in algae-based biofuel research. They joined the

biotech company, Synthetic Genomics Inc to research and develop these biofuels

that could be produced by sunlight, water, and waste carbon dioxide through

photosynthetic bond scum. This also included a new test facility in San Diego to

study algae growing and oil extraction.

http://www.nytimes.com/gwire/2009/07/14/14greenwire-exxon-sinks-600m-into-algae-based-biofuels-in-33562.html

By May 2013, the had spent $100M and had not produced and real results. Aspokesperson for the company said that they gained significant understanding ot

eh challenges that must be overcome to deliver algae based biofuels. They

withdrew from this project and said the next step would be to place more

emphasis on basic sicence to understand and deve;o algae strains.

http://www.bloomberg.com/news/2013-05-21/exxon-refocusing-algae-biofuels-program-after-100-million-spend.html

Valdez Oil Spill:o 1989-Alaskas Prince William soundo 2250,000 barrels of oilo cleaned up with more than 11,000 Alaskan residents, and thousands of

Exxon personnel

o clean up was declared complete in 1992o changes that were made after the oil spill: modified tanker routes;

instituted drug and alcohol testing programs for safety sensitive positions;

restricted safety-sensitive positions to employees with no history of

substance abuse; implemented more extensive periodic assessment of

ExxonMobil vessels and facilities; strengthens programs for vessel

captains and pilots; and applied new technology to improve vessel

navigation, and ensure the integrity of oil containment systems; improve

response capability

o http://www.exxonmobil.com/Corporate/about_issues_valdez.aspxo

6. Market Share


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According to statistics released by Y charts, Exxon is considered a mega cap(over $200 B), which is a business value based on share price and number ofshares outstanding. Exxons mega cap is 389.10 B.

Fox News reports that Exxon just surpassed Apple as the worlds mostvaluable company, as of January 2013.

Exxon' s shares gained 0.42 percent to 91.73 dollars per share for a marketvalue of some 418.2 billion dollars, reports China.org.cn. According to Think Progress, Exxon is dominating the Big 5 Oil companies in

quarterly profits. See graph below.

Despite falling gas prices, big oil still makes large profits and in 2012, the fivecompanies combined made $62 billion last year. That means $341 millionper day, according to numbers from Think Progress.

CNN reports that Exxon reclaimed the number one spot on the Fortune 500list in 2012. Exxon made $452,926 in revenues in 2012, coming in front ofChevron and Conoco Phillips by almost twice the revenue.

7.Competition(taxpayer.net)

Table 1: 2012 Oil and Gas Industry Profits (billions)

Company 1stQuarter 2ndQuarter 3rdQuarter 4thQuarter 2012 Total


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Table 1: 2012 Oil and Gas Industry Profits (billions)

ExxonMobil 9.5 15.9 9.6 10.0 44.9

Shell 8.7 4.1 7.1 6.7 26.6

Chevron 6.5 7.2 5.3 7.2 26.2

BP 4.9 0.2 4.7 2.1 12.0

ConocoPhillips 2.9 2.3 1.8 1.4 8.4

Total Profits $118.1

Segmentation consists of Upstream (Exploration and Production),Downstream (Refining and Marketing, R&M), and Midstream(Transportation, Storage, and Trading).

There is not a season or time when customers normally buy, businessremains steady throughout the year.

ExxonMobil is not the only company with oil spills and lawsuits in its past.Consumer attitudes are largely similar in terms of negativity across the oilcompany spectrum.

Not many companies have launched any type of PR campaign ortransparency/awareness campaign, expect for BP to change perceivedattitudes regarding its oil spill in the Gulf of Mexico.

Over the past few years, tightening environmental laws have been restrictingproduction and limiting the amount of oil and gas production, raising pricesand limiting revenues in all companies.

In 2005, the average pay of a CEO in the oil industry (using the top 15industries) was 32.7 million dollars(http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aJqpyEwim0Fw)

Reports of large percent annual pay raises for CEOs from other competitorsare also frequent, making the issue industry-wide.

Potential Publics:

ShareholdersEnvironmental groupsEmployeesCompetitorsGovernmental leaders
http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aJqpyEwim0Fwhttp://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aJqpyEwim0Fwhttp://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aJqpyEwim0Fwhttp://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aJqpyEwim0Fwhttp://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aJqpyEwim0Fwhttp://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aJqpyEwim0Fw


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CongressOpinion leadersDriversBloggersCorporate donors

Gas station ownersAirlinesInvestorsNews organizationsEconomistsManagementRegulatorsExecutive BranchFederal AdministrationLobbyistsUnited Steel Workers Union

Other oil companiesNatural gas companiesThe board of directors

Best Potential Publics:

InvestorsShareholdersCongressManagementBoard of DirectorsLobbyists

EmployeesMedium Publics:

SECCustomersEnvironmental LeadersExecutive BranchFederal AdministrationCompetitorsNatural Gas CompaniesGovernmental Leaders

Inefficient Publics:

United Steel Workers UnionNews OrganizationsEconomistsCorporate DonorsBloggersOpinion Leaders


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Public Profiles:

SHAREHOLDERS:

Background:ExxonMobils stockholders include more than 2.5 million

individuals and more than 2,000 institutions. The Vanderguard Group, Inc., is thelargest institutional holder with 222,138,704 shares. The CEO, Rex Tillersonholds the most shares at 1,934,322 shares. Shareholders participate in annualvotes on policies and salaries.

Demographics/Psychographics:Shareholders include 2.5 million individuals frommany different areas and backgrounds. In addition to these adults, there aremany groups and mutual fund shareholders. These include large corporationsthat have stake in Exxons success. These shareholders help make decisions for

the companys future. They vote on corporate policies such as LGBT legislation,environmental regulations, and even CEO pay.

Current Relationship: Because of Exxons large profits last year, shareholders are

making a fairly good return on investment. For most shareholders, their sharesare increasing in value annually. However, more and more shareholders arevoting to decrease CEO pay. 70% this year approved of CEO pay, which is downfrom 78% last year and 90% the year before.

Self-interests:Shareholders care about Exxons financial success because thatdetermines the value of their company shares. They care about how thecompany does business because they want a good return rate.

Channels: Good channels include email, website information, webcasts, surveys,information packets, brochures, conference calls, and annual shareholdersmeetings.

Opinion Leaders: Shareholders will listen to the Board of Directors because theytrust that source to give them information that will benefit their investment.Government leaders also influence shareholders with new policies andregulation.

CONGRESS

Background: Congress is made up of two chambers, the Senate and the Houseof Representatives. The Senate has 100 members, two from each state, whilethe House has 435 members, decided by proportional population. This year,the majority party in the House is Republican, with 233 Republicans, 200Democrats and 2 vacancies, according to the government clerk. The Senate ismainly Democrat with 52 Democrats, 46 Republicans and 2 Independents.The Republican party tends to favor legislation that helps oil companies,


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including tax breaks and subsidies. The Democratic Party tends to favorlegislation that promotes higher taxes on big oil and seeks to subsidizealternative energy sources.

Demographics/Pyschographics: Congress is made up of men and women from

all of the 50 states. The average age in the Senate is 62.2, while the averageage of members of the House is 56.7. There is a wide range of occupationswithin each chamber. Many members are high-income citizens, but thedefining characteristic of members of both chambers is their politicalaffiliation.

Current Relationship: The House of Representatives supports legislation thatbenefits oil companies, while the Senate has proposed multiple tax break cutsfor big oil. The Senate and the Executive Branch have both supported a cut of$4 billion in tax breaks to oil, gas, and coal companies in the 2014 budget.

Self-interests: Each member of Congress has a slightly different self-interest,but party motivations are easier to capture. Plus, each member representsthe interests of their state. Republicans tend to favor free market capitalism,and so support big oil with tax breaks and subsidies. Democrats tend tocrack down on government subsides of big oil to promote alternative energysources.

Channels: The best channels for this public are lobbyists. Exxon Mobil hasspent $17 million in lobbying over the last 18 months. Congress listens tolobbyists to decide what causes to take on and what proposed legislation tosupport.

EXXON MANAGEMENThttp://dailycaller.com/2013/05/29/nyt-oil-companies-paid-the-most-in-taxes/http://www.forbes.com/sites/jacquelynsmith/2012/04/04/americas-most-reputable-companies/

Background: Chairman and CEO Rex W. Tillerson, Senior Vice President MarkW. Albers, Senior Vice President Michael J. Dolan and Principal FinancialOfficer Andrew P. Swiger. These leaders are the highest paid employees ofExxonMobil. They all have considerable experience in the oil industry andexpansive knowledge of the intricacies of the unstable oil market.Educational background.

Current Relationship:CEO Tillerson recently received attention when it wasannounced his salary would be raised to over 40 million dollars. In the wakeof recent heated political races, President Obama has made an effort topromote equality in the business sectors of America. Obama has proposedhigher corporate taxes.
http://dailycaller.com/2013/05/29/nyt-oil-companies-paid-the-most-in-taxes/http://dailycaller.com/2013/05/29/nyt-oil-companies-paid-the-most-in-taxes/http://dailycaller.com/2013/05/29/nyt-oil-companies-paid-the-most-in-taxes/http://www.forbes.com/sites/jacquelynsmith/2012/04/04/americas-most-reputable-companies/http://www.forbes.com/sites/jacquelynsmith/2012/04/04/americas-most-reputable-companies/http://www.forbes.com/sites/jacquelynsmith/2012/04/04/americas-most-reputable-companies/http://www.forbes.com/sites/jacquelynsmith/2012/04/04/americas-most-reputable-companies/http://www.forbes.com/sites/jacquelynsmith/2012/04/04/americas-most-reputable-companies/http://dailycaller.com/2013/05/29/nyt-oil-companies-paid-the-most-in-taxes/http://dailycaller.com/2013/05/29/nyt-oil-companies-paid-the-most-in-taxes/


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Opinion Leaders: Board of directors: The board of directors have power tomake sweeping changes to the executive leadership of Exxon, when theiractions are deemed harmful to the companies main goals.Shareholders:Shareholders also have some sway and influence in the decisions made byExxons leaders. Distraught shareholders mean potentially less money

streaming into the company. Employees: Exxons employees want to beguaranteed that decisions at the top arent trickling downand hurting theircompensation or working environment.

Self-Interests: Exxons executives assuredly enjoy receiving high

compensation for their work. Exxons leadership also understandtheimportance of having satisfied employees. Employee turnover means lessrevenue and a potential reduction in quality and quantity.

Channels: Leadership council meetings, conventions, through major I nvestors/ shareholders

LOBBYISTS

Background: According to opensecrets.org, Exxon spent almost 8 milliondollars in lobbying fees in the year 2012.24 out of the 37 lobbyists hired byExxon have held previous jobs in the government. Have an uniqueunderstanding of the workings of congress.Have a high educationalbackground. Majority of lobbyists either have experience in the governmentor practicing law.

Current Relationship: Exxon has repeatedly been one of the top spenders onlobbying within American industries. Lobbyists are receiving continual workand receiving substantial pay for their services.

Opinion Leaders: Colleagues,Congressional members, Exxon executives

Self-Interests: Belief in the cause they are representing is ethical andworthwhile. Money is another self-interest for lobbyistsit is the mainmotivation for lobbying certain causes.

BOARD OF DIRECTORS

Background:

Michael J. Boskin, since 1996. T.M. friedman Professor of Economicsand Senior Fellow, Hoover Institution, Stanford University

Peter Brabeck-Letmathe, since 2010. Chairman of the Board of Nestle


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Ursula M. Burns, since 2012. Chairman of the Board and ChiefExecutive Officer of Xerox Corporation

Larry R. Faulkner, since 2008. President Emeritus of University ofTexas at Austin

Jay S. Fishman, since 2013. Chairman of the Board and ChiefExecutive officer, The Travelers Companies

Henrietta H. Fore, since 2012. Chairman and Chief Executive Officer,Holsman International

Kenneth C. Frazier, since 2009. Chairman of the Board, President, andChief Executive Officer of Merck & Co.

William W. George, since 2005. Professor of management practice,Harvard University

Samual J. Palmisano, since 2006. Former chairman of the Board, IBM Steven S. Reinemund, since 2007, Dean of Business, Wake Forest

University

Rex Tillerson, since 2004. Chairman of the Board and Chief ExecutiveOfficer of Exxon Mobil Corporation

William C. Weldon, since 2013. Former Chairman of the board ofJohnson and Johnson

Edward E. Whitacre, Jr., since 2008. Former Chairman of the Board,General Motors, Charmain Emeritus, AT&T

Background: All information fromhttp://www.exxonmobil.com/Corporate/investor_governance_boardpowers.aspx

Amend by-laws Establish committees and committee members Elect officers, designate the CEO, appoint any assistant officers Establish corporation divisions, and appoint presidents to those divisions Remuneration of directors Must submit to shareholders any action that need approval from the

shareholders

Appoint independent auditors, audit committee. Which shareholders canratify and receive reports for

Declare dividends Issue and acquire long-term debt or shares of stock Review financial and operating results each quarter Adopt any new employee benefit plans and programs, approve of any major

amendment of existing plans and programs

Review of policies and any objectives for corporate contributions Approve of corporations budget each year The CEO must refer to the board for:

o long term strategy and corporate plans


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o significant investment planso significant sales or transferso significant changes in policieso significant organization changeso review of political contributions made by the corporation interested

in US and Canadao any matters related to the business which would be significant

enough to need the Boards consideration

Demographics: Ages: 54-71 years old, 11 of the 13 are male, 11 of the 13 areCaucasian, Upper class, High levels of education, They all have had extensiveexperience in high leadership positions of large companies. Most have been adirector, CEO, or president of some company. In 2011, they directors werecompensated between $285,000 and close to $300,000 for being on theboard. According to this articlehttp://www.theracetothebottom.org/executive-comp/2012/6/12/the-

director-compensation-project-exxon-mobil-corporation.html

Psychographics:

Self-interests: Because Rex Tillerson is on the Board of Directors; they are the

faces of the company and want to have a good reputation. They want to keep

their shareholders happy.They want their employees to be loyal.They want

their customers to be loyal.They want to have positive relationships with the

media. But they still want to be rich.

Opinion Leaders:Congress and government policy makers,oil industry

leaders, CEOs and other boards of directors,shareholders.

Channels: The Chairman of the board who sets the agenda for each board

meeting (Held eight times per year).Employee supervisors who hear the

reports from their employees, and then report to management could be used

as a good channel.

http://www.exxonmobil.com/Corporate/files/corporate/sbc.pdf Normally,

an employee should discuss such matters with the employees immediate

supervisor. Each supervisor is expected to be available to subordinates for

that purpose. If an employee is dissatisfied following review with the

employees immediate supervisor, that employee is encouraged to requestfurther reviews, in the presence of the supervisor or otherwise. Reviews

should continue to the level of management appropriate to resolve the issue.

News Media is another great channel for this public.

Current Relationship: Influential in determining policies and protocols of

Exxon.The compensation committee also determines the compensation of

the CEO, which is the main issue that this campaign is dealing with.They are
http://www.theracetothebottom.org/executive-comp/2012/6/12/the-director-compensation-project-exxon-mobil-corporation.htmlhttp://www.theracetothebottom.org/executive-comp/2012/6/12/the-director-compensation-project-exxon-mobil-corporation.htmlhttp://www.theracetothebottom.org/executive-comp/2012/6/12/the-director-compensation-project-exxon-mobil-corporation.htmlhttp://www.theracetothebottom.org/executive-comp/2012/6/12/the-director-compensation-project-exxon-mobil-corporation.htmlhttp://www.theracetothebottom.org/executive-comp/2012/6/12/the-director-compensation-project-exxon-mobil-corporation.html


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involved in any major policy changes, which if ultimately they want to change

compensation, or decide to put money into different areas of the company

(i.e. charitable giving) any of these changes would have to be approved by the

board. The Board also has the CEO of the client on it, so he is both the face of

the client, and currently the main problem for the negative attitudes towards

the client.The rest of the board also have a stigma that they are earning toomuch money, which the campaign needs to address

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Background: The SEC is a government agency that investigates and regulatesfinancial securities for individuals and organizations. This commission couldbe a key public to communicate with because a good, transparentrelationship would help establish good financial reports and give substantialreasoning behind the pay of the Chief Executive Officer.

Self-Interests: To make transparent the financial dealings of notableindividuals and organizations, regulate stock trade and prosecute any personor company engaging in incriminating financial practices. The Commission iscomprised of five members appointed by the President with consent fromCongress, with no more than three allowed to pertain to the same politicalparty in order to maintain balance. A term in the Commission lasts for fiveyears, and the President appoints one as Chairman. Therefore, politicalopinions are widespread and bipartisan as a group. The Commission standsfor firm legal financial decisions, and will investigate and publicize anymisdemeanor or unethical action to the public (investors).

Opinion Leaders: The SEC is one of many security commissions in theInternational Organization of Securities Commissions (IOSCO). Other thanthat, the public has no real infuentials because its organization is so that it iscompletely independent and unbiased. The President does not even hold thepower to fire members of the commission.

Channels: The main channel with which to communicate with the SEC is notonly the periodic financial reports, but the narrative account management

must provide them describing the year of operations and explaining financialdecisions and future ventures. This is called the "Management Discussion andAnalysis". By using this and similar documents to communicate primary andsecondary messages, the SEC could potentially bring awareness tostakeholders and other publics as to why certain financial decisions weremade, and validate the salary of the CEO.


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Current Relationship:Exxon's relationship with the SEC is one of constantrequests and disapproval. Recently, Exxon asked the SEC to disregardresolutions made by Chippewa tribes that would force the company to curbthe negative environmental effects it was having in their areas. The SECdenied this request. Also, with new technology being developed by Exxon

known as "fracking", shareholders wanted a financial report created thatwould expose the cost benefits of the procedure and if it would beworthwhile. Exxon asked the SEC to disregard these requests, but the SECtook the shareholders' side. Exxon should be seen by the SEC as a companywishing to promote the better good and make sound, financial decisions inorder for the agency to become more willing to help overcome the coreproblem.

ENVIRONMENTAL GROUPS

Background: There are a few environmental groups that have successfullytargeted Exxon and the issue at hand. One of these groups, Exxon Hates Your

Children, uses the specific message that the company is having an effect on

global warming, but will not do anything about it because of executive greed.Other groups like Greenpeace, the Defenders of Wildlife, and MoveOn.orghave worked both separately and as an alliance in order to urge publics toboycott Exxon. Although their main self-interests are purely environmental,they broadcast specific messages portraying Exxon management as greedyand irresponsible.

Self-Interests:Non-profits that almost always have the same interest as

Greenpeace: To expose global environmental problems and to promotesolutions that are essential to a green and peaceful future (greenpeace.org).Their goal is to solve environmental issues and to stir public debate anddiscussion about what is hurting the environment and how to stop it. Manyenvironmental organizations send messages to their publics that Exxon isdestroying the climate at the taxpayers expense. Many call for Congress andPresident Obama to stop all subsidies and tax breaks to fossil fuels. Theyoften single out CEO Rex Tillerson and take quotes wildly out of context topaint him as a greedy businessman with no care for his environmentalfootprint. Most environmental organizations at odds with Exxon believe thatthe company is not burning oil in the most efficient manner, and is thereforecausing harm to the planet.

Opinion Leaders

Channels: Key channels that would be effective in communicating withenvironmental organizations would be press releases, press conferences, andevents that would serve their self-interests (tree-planting, environmental


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awareness campaigns, etc.). Many of these organizations do not discuss whatExxon IS doing to help the environment, such as being the frontrunner forfracking. Even though the program still has not proven to be cost-effective, itpaves the way for a cleaner way to extract oil.

Current Relationship: The many oil spills caused by Exxon have shatteredrelationships with environmental organizations. Exxon has been widelycriticized for its slow response in these situations, as well as a lack incommunity outreach. Instead of using funds to fight global warmingproblems where oil extraction takes place, Exxon has funded front groupsthat release information discrediting global warming and its effects. This hascaused many problems, such as Greenpeace publishing the websiteExxonsecrets.org: How ExxonMobil funds the climate change skeptics

(exxonsecrets.org). Many organizations describe greed as a core principle ofExxon to drive their points to the hearts of their publics and createcontroversy.

Situation Analysis:

In recent years a downturn in the economy has affected unemployment and averagesalaries, resulting in negative perceptions of executive management paychecks. Inthe face of economic downturn, the oil industry has been resilient and continued tomake large quarterly profits and make a high return on investment forshareholders. After events such as the Occupy Wall Street Movement in 2011, publicperception has decreased to an all-time low concerning the pay gap betweenmanagement and average employee salary ratio. In 2013, top US executives made an

average of 394 times more than the average employee, which is up 1,000 percentfrom 1950. After Exxons CEO Rex Tillerson received a 15 percent pay increase in2013, only 70 percent of shareholders voted in favor of CEO compensation asopposed to 78 percent last year and 91 percent the year before. The average Exxonworker made about $66,605 in 2011, whereas Tillerson made a total of $39.4million, 524 times more than the average employee. This causes a concern for thereputation of Exxon and its perception of greed at the top executive level.

Throughout the campaign, we expect potential barriers to arise. Because ofthe economic situation in the US, any exuberant salary will look greedy to theaverage American, even if Exxons CEO mightbe paid a fair percentage of overallprofits. With unemployment at 7.3 percent, attitudes towards highly paid executives

will be hard to overcome. Another barrier is high gas prices. Anytime gas isexpensive, the public could potentially overlook any philanthropy from the companyand associate management of big oil with greed.

Core Problem/Opportunity:


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Documents

Comms 336 Exxon Campaign