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COMMENTARY
It is high time the socio-economic impact of the big integrated oil companies is revisited ... specifically:
- to get a better understanding of the value chain from the natural energy resources to the ultimate consumer of the refined products. Where is the valueadd and where is the value destruction in this end to end chain;
- to get some clarity about the redistribution of wealth from the energy consumer to the oil companies that are suppliers of energy ... what is going on when 'price at the pump' goes up but there is actually no physical disruption in the supply change; and
- some detail about how these companies provide for risk and manage risk ... one gets the impression that they talk about risk being contained by their technology, but in reality the technology is subservient to the interest of the investors and executives in maintaining profit flows and stock prices!
My impression is that big companies have a singular focus on profit and stock price ... period. In fact most senior executives will probably tell you that they have a 'fiduciary legal duty' to put the interest of the stockholders above all else. This may be true in law ... another example of 'rule of law' being out of touch with the needs of a civilized society ... but it is clear that energy companies have a responsibility to society that is huge, and not being addressed in a serious manner at all.
This piece talks a bit about the tax rate being paid by ExxonMobil ... this is a subject that is 'in the nbews' but it is nowhere near as important as the broader behavior of these companies as they exploit resources and 'steamroller' over any and all obstructions in the way of maximizing profit and share price performance vital to executives and investors.
Peter Burgess
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ExxonMobil Made $41.1 Billion In 2011, But Pays Estimated 17.6 Percent Tax Rate
ExxonMobil had the largest profits of the Big Five oil companies in 2011, raking in $41.1 billion for the year. This 35 percent jump from last year is driven in large part by record-high oil prices. Today, the oil giant announced its fourth quarter profits of $9.4 billion, a 2 percent increase since 2010. Here are a few other facts about ExxonMobil:
- – Exxon’s $41.1 billion in 2011 profit translates into nearly $5 million in profit every hour, or more than $1,300 every second. The annual profit comes near the record revenues of $46.23 billion in 2008.
- – Stock buybacks for Q4 were $5.4 billion, and $21.60 billion for the year, equivalent to 53 percent of total 2011 profit. This enriches executives, the board of directors, and largest shareholders.
- – Exxon pays a lower tax rate than the average American. Between 2008-2010, Exxon Mobil registered an average 17.6 percent federal effective corporate tax rate, while the average American paid a higher rate of 20.4 percent.
- – The company paid no taxes to the U.S. federal government in 2009, despite 45.2 billion record profits. It paid $15 billion in taxes, but none in federal income tax.
- – The oil giant uses offshore subsidiaries in the Caribbean to avoid paying taxes in the United States.
- – Exxon is sitting on $11 billion cash on hand as of September 30.
- – Exxon spent nearly $13 million on lobbying expenditures in 2011. The company gave nearly another $900,000 in federal campaign contributions. 92 percent of contributions went to Republicans.
- – Exxon CEO Rex Tillerson made $29 million in 2010 (according to the latest records): He made $2.2 million in salary, a $3.4 million bonus, and stock awards valued at $15.5 million.
- – Exxon is drawing out a legal battle for damages on a spill from 22 years ago. Exxon hasn’t paid $92 million in cleanup for the devastating Valdez Alaskan oil spill. In its Sept. 30 court filing, Exxon argued the damages it agreed to pay only covers “restoration” and not additional “clean-up.”
- – Far from a job creator, ExxonMobil — together with Chevron, Shell, and BP — reduced their U.S. workforce by 11,200 employees between 2005 and 2010.
Tags: Big OilExxon
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