Retirement Outrage
Where Exxon Went Wrong
By Daniel Muniz

In the midst of outrageously high gas prices, the oil giant Exxon sparked an outrage over its enormous profits and by its gargantuan $400 million retirement to its chairman Lee Raymond.

Liberals about had a coronary and demanded Raymond’s head on a stick. The press had a field day describing all the quirky perks and the lavish retirement that the former head of Exxon will enjoy while everyone else suffers at the pump. Republicans found themselves in a corner because they do not want needless government intervention but they also want to avoid getting crucified by opportunist politicians and an angry public.

Meanwhile, fiscal conservatives rushed to Raymond’s defense claiming that the government should not interfere with free enterprise even if it represents gross mismanagement.

As for Raymond’s golden parachute, that is an issue that should be taken up with shareholders outside of the diatribes of U.S. Senators and Representatives on Capitol Hill. Myself as a conservative, I agree in principle with the defenders of Exxon, however I completely disagree with the business decisions that the oil giant has made. Although such a stance may infuriate fellow fiscal conservatives, my assertion is based purely on a business perspective instead of an ideological one. Here is why.

First and foremost, the oil giants play an intimate role in the everyday life of most Americans. Just about everybody either has an automobile or is associated in some way with petroleum products. As a result, an overwhelming number of people have been hit hard by soaring gasoline prices.

Because of this intimacy with so many millions of consumers, Exxon and the other oil producers have an image to protect.

Right now, too many people are feeling pain at the gas pump. And negative publicity such as arrogant unapologetic executives only adversely impacts the industry’s reputation. As for the outlandish retirement of an Exxon chairman, it is one thing to receive a substantial cash payment but it is something else for a corporation to finance a former executive’s eccentric demands. It just reeks of bad publicity that a vicious media can exploit.
 

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It would be entirely different if Exxon was a big corporation that nobody ever heard of and that most of the public never had to deal directly with. Nobody would have cared about big profits or the lavish retirement of a chairman of the board, except to those who invest in that company. But that is not the case here.

To reduce the negative publicity, Raymond should have found a different type of golden parachute that limited visibility and perhaps have his compensation partially deferred until the oil crisis had blown over. The parachute taken was a poor business decision because of the harsh publicity it generated.

And of course it is not the oil industries fault about the economic laws of supply and demand but perception is reality, especially when you have over a hundred million customers.

Overall, Exxon botched it, especially with its public image.

The oil producers could have taken the high moral ground with a gigantic public relations barrage to explain the reason why gasoline prices are so high. In fact, millions of consumers who are angry are listening intently to anyone who can come up with solutions. Right now would be the perfect time to take to the airwaves to articulate many of the problems that this country has inflicted upon itself over the past few decades such as:

● Refusal to use more coal (for power plants)
● Refusal to build new nuclear power plants
● Refusal to drill in Alaska, and off the East and West Coasts
● Reluctance for new hydroelectric power plants
● No new refineries in over 30 years
● Refineries only in certain parts of the country
● Blends of gasoline in certain parts of the country

Each item described is a self-inflicted wound that our own federal, state, and local governments imposed on the public.

Removing many, if not all, of these obstacles can have a substantial impact on our access to oil as well as reducing our dependency on foreign sources. But most importantly, the big oil companies can finally push for the need of this country to adopt a “long-term” energy plan. Such a strategy doesn’t exist and just a handful of band-aids is not going to solve future problems.

Instead, the oil giants have allowed the press and Liberal Democrats to define the problem and to define its solution. Through their lenses, the problem is simple. The greedy oil companies such as Exxon are exploiting us. The solution is even easier. They need to be severely taxed and the government has to get involved.

History has repeatedly shown that government intervention has never worked. The central planning and mandated goals that have been implemented in Western Europe, such as France and Germany, did absolutely nothing to increase efficiency and lower prices. Instead, such actions have only led to a worsening of unemployment, high prices and inflation, and an economy that is failing while ours is booming.

Is it unfair that the oil companies are being attacked for the wrong reasons?

Yes it is. But the business world in itself has to adapt to changing environments and public relations is an extremely important component when you have millions of direct and indirect customers.

I sympathize with the fiscal conservatives about the plight of the oil industry because I do not want to see the government get any more intrusive than it already is but the bottom line is that companies like Exxon lazily botched a grand opportunity to seize the heightened awareness of our current oil crisis. This is truly a missed an opportunity to convert a negative into a positive.

Instead, the media and Liberal Democrats will unceasingly pound on this issue with an acquiescent public backing them up.

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