EM is going to sink but who is really responsible and in what ways?
[Low Level]: Employees such as technicians to baseless VPs who are abusing the system everyday for worthless personal benefits.
[Higher Level]: Presidents of the companies and Senior Level Executives who have no leadership, good decision making qualities or vision.
I think the Jury is still out! Happy to hear your vigorous thoughts and expose'.
@5qoh yes we were raised with financial discipline and blunt talk on the Exxon side of the family, however the blood has been diluted by mergers, acquisitions, and experienced hires, so much that there was no point keeping the faith when everyone else was splurging and hiring and promoting their friends. Tragedy of the commons I guess ... When I was a bright-eyed, bushy-tailed newhire soon after the 80s layoffs, the word was that we only hire on campus to imprint our own culture and not import bad habits from other companies ... now I know what that meant. Not that I admire or approve the old culture; but they knew what they wanted and they knew how to get it and keep it. We are now completely rudderless by comparison.
@5qoh+16MrejTB - it's not just at the Spring Campus, I have it on good authority that this also happened in New Jersey. After a reorganization in 2017 (I think), 1 Department Head, 2 Division Managers, 3 Section Heads and the Planning Manager held "Welcome to the New Organization" forums with staff in the US (for the Americas), Germany (for Europe and Middle East) and China (for Asia Pacific). Obviously they would have flown Business Class to Europe, but I actually saw a copy of their itinerary for the trip to China.
Of course, they had a limo to take each of them from home to the nearest international airport and for the return trip at the end of the excursion. They all flew First Class to China (I think it was Beijing). They all stayed in the same, 5-star hotel (of course). The forum was held in a 3rd party conference center. And here's the kicker .... each of these managers had their own black (it was specified that it must be black) BMW 5-series car with driver. That's 7 managers, flying First Class to China, each with their own chauffeur driven BMW, all for a forum to basically to say "you're now part of our organization" and give an overview of the span of activities (and honestly, there was nothing more to it).
Agree that at least the Exxon part was built on financial diligence (many moons ago). Agree that this had definitely slipped the past 5 years - numerous examples. But, like thrift, the splurge message trickled down from the very top. Working in a $4B glass palace with hyper modern furniture and amenities doesn't exactly spell thrift. Seeing how "the other half" (upstream) lives and realizing they have 20% uplift on you 'just because', does not exactly spell thrift. Seeing people from out of state flying for a meeting practically every week doesn't exactly spell thrift (and no, the working person does not have access to such budgets). Flying whole teams from US to AP just for a meeting does not exactly spell thrift. The campus made all this 'transparency' possible - an unintended consequence of its hubris. Follow the leader!
@5bwy+16MrejTB is correct; there have been many excesses and wastage across the entire rank and file. Every instance he/she indicates is real. Generalizations are always incorrect, but there are enough examples showing scores of expats living king size lifestyle in Asia without commensurate contribution back, marketing meetings in exotic locations with expensive wining and dining when what all we sell is commodity fuel and commodity polyethylene, justification for travel for two hour meetings, attending conferences without any accountability to bring anything back to the company - the list goes on.
Financial diligence is not the "flavor of the month", its a mindset that we need today, and everyday (even when the company is doing good) which we lost.
The 10k proxy is always fun reading.
2020
https://corporate.exxonmobil.com/-/media/Global/Files/investor-relations/annual-meeting-materials/proxy-materials/2020-Proxy-Statement.pdf
2019 - Look for Chapman’s 338k relocation expense on page 50
https://corporate.exxonmobil.com/-/media/Global/Files/investor-relations/annual-meeting-materials/proxy-materials/2019-proxy-statement.pdf
Not all employees drained XOM... speak for yourself...
It’s not just executives, everyone milked the cow to varying degrees. I recall folks hosting candidates to $1000 dinners. I remember folks going for conferences in exotic locations. I remember folks going for “meetings” across continents. I recall folks rewarding employees with iPads. Not executives, regular employees. I remember everyone getting 12% raises.
Guess what, cows milk dried up .. so stop complaining about who s—ed most .. you all did .. I saw expense report of $60 for lunch when you went for training across town .. everyone one here dried this company .. stop complaining about bosses,, we are all the guilty party .. we all need to be ashamed
John D Rockefeller sold franchises.
That's how he made the money.
7 percent interest comes back in 10 years.
Bribery, kickbacks and modified production numbers.
Old JDR couldn't tell low-sulfur oil from the mink oil shining his shoes.
And no later Executive ever wiped his own behind.
On the greed part, if you want to understand a part of that, go look at the SEC ownership reports and you will clearly see the management committees addictions to the honey pot. Quarterly stock awards, stock grants and other compensation, how they buy, sell and manage these funds. These transactions are done automatically and the numbers are staggering. Many direct stock funds to their children’s accounts, spouses and other configurations. Stock bonuses are rarely talked about but you can follow the money and see just how well the higher ups are compensated while the company declines in value. Each year of decline the awards and bonuses kept flowing in and nobody policing them. This is built in as part of their overall compensation package. This should not be. There is no accountability at the upper levels of management, I mean would you put accountability in place if you were getting these kind of bucks? This is a shareholder issue that needs to be addressed at the shareholder level at an annual meeting. There are many corporate perks at the management committee level that need to cease and desist, this is not yesterday.
@1qbt+16MrejTB And to collect their Marriotts points! Indirect perks of being an executive!
The problem is with the upwards only forced ranking system. Senior managers have been promoted so fast the didn’t learn anything. They then think they are demigods, wise on all matters and are untouchable. If you criticize them or their decisions, your ranking will plummet...never to rise again. Little value is placed on experience or results. It is all about making your boss look good and upwards only focus. The ranking system has been an abject failure producing the arrogant Darren Woods look alikes that have plundered this once great and proud company. RIP.
Several managers were moved AND promoted because “they could not get along with anyone” and were bullies. This is what gets promoted and if your not willing to lick boots for bubba your gone. Good old xom culture.
@1itw+16MrejTB is biased but at least admits as much.
Couple of comments:
It is definitely the Bottom 10% that is the problem. The Bottom 10% is responsible for buying XTO, starting Kearl, and getting into Russia. Dump the Bottom 10% and all of our problems will be solved!!! /s
Lack of accountability at every level - key reason why we are in this challenging situation. Too much focus on “superficial cultural behaviors” vs “actual hard work”
I'll do a little confessional here to start. Before I start my pome.
26 years/ CL27 / 62 yo. Combo of Scientist / Engineer (that is possible!)
Prior to joining, I invented an automated Simplex algorithm patented elsewhere.
Still being used.
Not bragging. Just saying.
I've switched stations 4X for the company - Machelen to Toronto to New Jersey and Houston.
Long stretch-outs in BKK and Rotterdam, of all places.
Houston now for the last 8 years. Seems like 40, but still not a texan by the rules.
So seen ExxonMobil culture extensively/diversely sufficient for summary.
Amurikah is Standard Oil. Standard Oil is Amurikah.
Ancient ferns grew in the briny waters before the volcanos.
They died. And settled in. Cracked themselves under pressure.
They did this for Standard Oil.
Lemurs climbed down from the baobobs/eucalyptus/live oaks/conifers.
Grew frontal lobes and bendable thumbs. Slow and steady.
They did this for Standard Oil.
Things pop out of the ground. Mushrooms, sharp stones, hematite struck by lightning.
Other things burn. The forest, squashed olives, thatched huts, whale blubber.
Then burning things pop out of the ground.
They did this for Standard Oil.
Thinking men (homo sapiens) flattered themselves.
My brain best. Dollars shine best in my eyes.
Mind over matter. Soul over body.
My soul over everybody.
They did this for Standard Oil.
Look no further than the Wolfgang Puck restaurant in the top of the Cube. Anyone who passed through there and swiped their Amex is guilty of greed.
Recently many P and VPs were asked to leave (a.k.a) retire.. but it is too late. We can continue singing praises.. and watch the setting on the once great company..
The greed is there and so is the idiocracy.
Take a look at share buy backs. 210 Billion on 10 years to prop the stock price up and look where that got us! Instead we could have held that cash in reserve for a rainy day, out it towards projects and not be on the situation we currently are in. Look at Apple over 190 billion available (maybe they want to buy a technology company).
The greed is there and so is the idiocracy.
Take a look at share buy backs. 210 Billion on 10 years to prop the stock price up and look where that got us! Instead we could have held that cash in reserve for a rainy day, out it towards projects and not be on the situation we currently are in. Look at Apple over 190 billion available (maybe they want to buy a technology company).
I don’t believe that anyone has been at Xom 20 years and not seen these behaviors. Not for a second.
It is ego and/or "we are the best attitude". All of these comments are true but he management fails to truly admit mistakes and bring new people (outside of Exxon) who will bring new ideas, new methods, new processes, and fix things. But no, we know it all...For example, for how long our Exploration Company was struggling? I would say for 25 years plus. Except Guyana, which we "discovered" by luck by the way....nothing else for our size. But instead of bringing someone to change it no...we stick to it...
It's not either/or, it's both/and, both management and employees, but management models behavior for others to follow. There's no business like oil business, there are no margins like oil margins, thanks to KSA and the cartel. That's how oil pays better than other industries. That's why we are fat, dumb and happy, with our pensions and 7% 401k matches, bringing in our children and husband's and wives to share in the bounty. No matter how we try to cover it up with 'meritocracy and 'ethics', oil is a corrupt sector, that is bad for the planet and for democracies. And life balancing out hubris will catch up with it sooner rather than later.
@titw (seriously!) Nepotism is one of the reasons the company is going down. Sons and daughters of employees sneak in prepped with the backstory, the playbook and the contact list and they invariably do much better than the earnest Midwest kids trying to figure it all out. Look at the four Mad__ns, the two Sle___rs, and so many others. Spare us the sermon, you are insider trading, go prove yourself outside mommy's skirt/ daddy's backpocket and the show your face here.
@1itw - yours is a sober and balanced post. Your analysis of well considered actions that should have been taken is spot on. However, in my 15++ years at EM I have seen behaviors that reflect subtle deficits in judgement, arrogance and dismissivness toward direct report staff, and outright entitled use of company resources. One of the more notable (but not unique) examples of this was several years ago prior to a meeting late in the year watching a mid level executive examine his calendar to figure out when to fit in one last business trip to Asia. The trip was not necessary - the exec openly stated he wanted to keep 100k status on United the following year. While many (most?) comments on here are over the top and lack perspective, do not kid yourself. The reactions maybe inappropriate but the observations are likely grounded in some truth.
Behaviors that can be seen as greed and arrogance are definitely symptoms of the problem, but overall I’d say it’s due to an incentive/performance system that was (and in many ways still is) long overdue for major changes. I personally had a boss who was a great example of this. Good person, well intentioned, but so twisted by the system that he referred to highly toxic and abusive behaviors as “leadership behaviors”. That’s the reality that EM needs to deal with and keeping the same stale leadership isn’t going to fix it.
Very interesting post. I would add that 210 billion in stock buy back over 10 years did nothing for the investors. It propped up a falling stock price for a company going out of fashion with investors.
That money could have been saved for a rainy day just like Apples 200 billion they now have in cash.
I am second generation Exxon, having worked for company for over 20 years, and never seen the behaviors described in some of these comments. My colleagues have always demonstrated good ethics and competence. I can only imagine some of this narrative is driven by the anxiety of a down market, but oil & gas is riddled with market swings. As an experienced hire, and as part of some joint ventures, I have worked with/for other companies, and am proud to be affiliated with ExxonMobil.
Our current finances are based on an informed decision to pursue a natural gas portfolio, assuming the market would reward greener companies and that a carbon tax would equal the playing field with oil. Well we failed to distinguish ourselves as a greener alternative and a carbon tax never materialized. Tight gas development over-supplied the market. But we would have been fine in pursuit of the 2025 objectives if OPEC+ and Covid had not formed the perfect storm. So rough finances following our pursuit of Natural Gas (XTO) and capital mismanagement (Kearl) left us vulnerable to market conditions. And now we are strapped.
None of this was caused by greed or arrogance.
My complaint with leadership is that it is taking too long for a course correction. And now management is suffering from “paralysis of analysis” when they should be facing up to these facts. Right off the bat, Executive increases and bonuses should have been frozen. This would have been the proper signal to market and employees. Instead, leadership is waiting for some workforce study still months away from being reporting, and waiting for the Executive Compensation Committee to meet in November. The Leadership team is allowing press leaks to drive our response, because they have this false sense of control, where they believe they can direct this narrative.
So it is not greed or arrogance that is framing this debacle, it is a tired leadership team clinging to data and past processes. Sure the studies have to happen, but there are definitive actions that could be enacted today. A 10-15% reduction in dividends would preserve all of these at-risk jobs. Freezing Executive raises and bonuses would free up cash. Smart deferral of capital projects pre-FID could lower cash requirements. We don’t need workforce redundancy studies to do these actions which would stop the bleeding, provide relief to stressed workers, and signal the market.
Isn’t it the same thing? The greed of executives is their motivation - they stand to profit immediately from their power.
The preservation of authority and their privileges, chiefly achieving “generational wealth”, is what motivates them; not the enterprise, not the shareholders, not the employees, and most definitely not the “Energy poor” people somewhere around the world.
Despite their claims, their compensation, perks, stock options, is the only thing that matters - and for that they play the game: they don’t rock the boat, they gamble to outshine each other, and since they never face consequences, they convince themselves of their infallibility.
They don’t give a hoot about us - we’re only steps on their way to the top.
How can techs abuse the system? They have no control. The reality is the company needs to be investigated top to bottom.
Hey dude! I work in the Upstream. Yo'll should see my homie s. All they cared about and sniffed for are meaningless expat positions and ways to pocket extra money, frequent flyer miles, 5 star hotels and new destinations on company dime in spite of getting paid a very good salary. These peeps cared zero, zilch, nill about providing real and productive value to the company.
So I say hell yeah to low level employees being up there with the estimeed Dallas crowd to help poke the may many holes that are collectively visible now.
Really?