Exxon's chief to retire at end of year

Raymond's 12-year reign included Mobil acquisition

August 05, 2005|By BLOOMBERG NEWS

DALLAS - Exxon Mobil Corp. Chief Executive Officer Lee Raymond will retire at the end of this year, ending a 12-year reign in which he built a Standard Oil Trust successor into the world's largest publicly traded company.

President Rex Tillerson, 53, probably will succeed the 66-year-old Raymond as chairman and chief executive, Irving, Texas-based Exxon Mobil said yesterday.

At the board's request, Raymond became the first chief since 1933 to work past the company's mandatory retirement age of 65. Exxon Mobil's cash balance more than tripled in the past two years to $30 billion.

"Lee Raymond is one of the great men of the industry, and I have unabashed admiration for him," said Donald Coxe, who manages $21 billion, including Exxon Mobil shares, at Chicago-based Harris Investment Bank. "The challenge facing his successor will be to find enough big projects in which to invest their billions."

Raymond led the former Exxon Corp.'s 1999 purchase of Mobil Corp. for $85.2 billion, the biggest oil acquisition in history. Last week, Exxon Mobil posted the highest second-quarter profit in its 123-year existence and had the most revenue on record for any public company.

Raymond "orchestrated the development of the modern global energy company," said Gene Pisasale, a former Exxon Mobil geologist who helps manage $36 billion at Wilmington Trust Co. in Wilmington, Del. "He engineered the most successful merger in energy-sector history and one of the most successful in the history of corporate America."

Since Raymond was named chief executive in April 1993, Exxon Mobil's shares have risen an average 14 percent annually, including reinvestment of dividends. That compares with an 11 percent average for Standard & Poor's 500 members.

Raymond, a University of Minnesota-trained chemical engineer, joined the company in 1963 as a researcher.

Before being promoted to president last year and emerging as the leading candidate to replace Raymond, Tillerson managed some of Exxon Mobil's biggest projects and handled some of its most delicate negotiations. He joined the company in 1975.

Tillerson has helped run such projects as Chayvo, an offshore field near Russia's Sakhalin Island that has the world's most powerful drilling rig. Exxon Mobil is counting on multibillion-dollar developments in such places as Russia and West Africa to make up for slowing output at old U.S. fields. The choice of Tillerson to succeed Raymond was expected, said Neil McMahon, an analyst at Sanford C. Bernstein in London who rates Exxon Mobil shares at outperform and doesn't own any. "This has been telegraphed for the past year," he said.

Shares of Exxon Mobil fell 48 cents to $58.52 yesterday on the New York Stock Exchange. The stock has climbed 14 percent this year.

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