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With Rex Tillerson likely to take a position in the U.S. cabinet as Secretary of State, Exxon Mobil is going to have to move on from their long running CEO and look for a replacement. Rex has been CEO of Exxon Mobil since 2006.
Donald Trump, in somewhat of a surprise move, has tapped Tillerson to be the country’s Chief Ambassador in the Secretary of State role. While Tillerson has no prior experience in politics, he has extensive dealings with world leaders in a negotiation standpoint. Rex, in particular, has met with Russian leader Vladimir Putin numerous times in connection with deals that Exxon Mobil has entered into with Russia. This connection to Putin, a rival and potential threat of the United States, is being criticized by Democrats and Republicans alike and may lead to Tillerson not being confirmed as Secretary of State.
Exxon Mobil is well prepared for this change in their head as they have a company policy that requires a CEO and other key executives to retire at 65 years old. Rex reaches this retirement age in March 2017. Tapped to replace Rex is Darren Woods who has been running the Company’s refining business and has occupied a CEO in waiting role for some time now. Darren has run the company’s refining business since 2012.
Tillerson’s time at Exxon Mobil has been a mixed bag. The entire industry has been experiencing a challenge due to the glut of oil on world markets. Exxon Mobil has been best in breed with the lowest cost structure and has maintained this advantage. However, the company continually bought back shares of stock when prices were hi. Further, Exxon has a poor environmental record. Exxon has also invested heavily in U.S. shale gases when prices were high which have yet to pay off for the company, though it might rebound with the bounce in oil prices.
Darren is likely to experience a more benign environment for the company as oil prices are finally starting to rise as well as due to a reduction of regulations that seem likely to be reduced under a Trump administration. Many market observers are predicting that Exxon is posed to do well in the next four years with lower regulatory costs and as the market for oil prices rebound.