A Tale of Two Back-Scratchers:
Exxon’s Raymond & Chase’s Shipley

Was Lee Raymond’s $400 million retirement package just a big return favor from ExxonMobil compensation committee member Walter V. Shipley?

After all, Raymond awarded Shipley a multimillion-dollar retirement package when Shipley left Chase in 1999 and Raymond sat on that company’s compensation committee.

All the blame heaped on Raymond for the size of his package is a little misplaced. It’s ExxonMobil’s compensation committee which determined his salary and benefits.

Who’s on the committee? James R. Houghton (Corning), William R. Howell (JC Penney), Reatha Clark King (General Mills Foundation), Samuel J. Palmisano (IBM), Walter V. Shipley (Chase).

Of course, it helps that Raymond has long ties with some members of the committee - Raymond, Shipley and Houghton are all members of both the Business Council and the Council on Foreign Relations.

Raymond also chairs the compensation committee at JPMorgan Chase, where he came under fire last month for awarding $22.3 million in compensation to both chairman William Harrison and chief executive James “Jamie” Dimon.

And Raymond was on that committee in 1999 when it determined the multimillion dollar retirement package for Shipley, the outgoing chairman and CEO. In essence, Raymond scratched Shipley’s back by awarding him a fat going-away present and Shipley returned the favor. (Take a look at the Times’ examination of the chummy world of compensation committees and CEOs. About 1,730 board members of the nation’s 100 leading companies sit on the boards of 4 or more other corporations, according to Mother Jones.)

It seems shocking (hey, even O’Reilly was apoplectic about the guy’s pay package) but there is nothing wrong with someone making $400 million. If that’s what others judge to be an employee’s worth, then so be it… if the decision is made by unbiased independent consultants.

And it’s a little greedy for the recipient to hoard all that money.

Many such corporate chieftains who retire with big payouts start their own charitable foundations or give millions to worthy causes. But it doesn’t seem like Raymond has done much, as far as we can tell. ExxonMobil gave away billions to different causes but a Google search came up with no hits for Raymond giving a single ‘donation’ or ‘gift’ to any charity. (His biography lists the University of Wisconsin Foundation and the United Negro College Fund among his affiliations but their Websites don’t list him as a donor - in fairness, he may have contributed to them but the donations don’t seem large enough to merit acknowledgment.)

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One Response to “A Tale of Two Back-Scratchers:
Exxon’s Raymond & Chase’s Shipley”

1. Think Progress » Exxon CEO Defends Predecessor’s $400 Million Retirement Package Says:
   May 3rd, 2006 at 1:51 pm

   [...] Exxon’s compensation board isn’t as “independent” as Tillerson suggested. In 1999, Raymond was on the board of Chase Manhattan. When CEO Walter Shipley retired, Raymond and other board members awarded him a multimillion-dollar compensation package. Shipley now sits on Exxon’s board and helped award Raymond his generous reitrement package. [...]