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Tillerson Discloses Assets Of $400 Million

Rex Tillerson

One day after Exxon announced it would sever ties with its former CEO and Chairman, Rex Tillerson, who is slated to become Trump's secretary of state, in the process awarding him $182 million in deferred shares (presumably tax-free), disclosed assets worth as much as $400 million in an ethics filing that showed investments across more than a dozen nations.

Tillerson’s disclosures, first flagged by Bloomberg, reflects more than $300 million in Exxon interests and pension benefits and between $28.6 million and $98 million in other assets. He directly owns 611,087 shares of Exxon, worth about $55 million. He has an additional 2.026 million restricted shares, worth $182 million which he will receive shortly. The ex-CEO's 38-page financial disclosure reveals he has a varied portfolio of investments in companies based in more than a dozen countries, including China, Japan, Germany, Taiwan, India and Brazil. He also disclosed income of at least $20.5 million in 2016, including the $10.3 million he received in salary, bonus and other compensation from Exxon.

Tillerson will also have to sell more than 600,000 shares he already owns in North America’s largest oil explorer, abandon $4.1 million in cash bonuses he would have been paid over the next three years and take a $3 million haircut on the restricted stock payout, the company said in a statement on Tuesday. Related: Libya To Re-Open Last Major Oil Export Terminal

In cashing out his global holdings, Tillerson could apply for a “certificate of divestiture,” which would allow him to defer capital-gains taxes on certain assets he liquidated to comply with ethics requirements. To qualify for deferral, which is available to eligible appointees, his wealth would have to be reinvested in certain approved investments, such as mutual funds.

Tillerson stepped down as the head of Exxon on Jan. 1, succeeded by refining chief Darren Woods. The company typically retains the services of ex-CEOs post-retirement to benefit from their long-standing relationships with foreign oil ministers, political leaders and dignitaries according to Bloomberg. By cutting ties with Exxon, Tillerson is also eschewing post-employment perks such as a private office and administrative support enjoyed by his predecessor and mentor, Lee Raymond.

According to Bloomberg, if confirmed by the U.S. Senate, Tillerson will recuse himself for a year from government decisions involving Exxon Mobil Corp., where he served as chairman and chief executive officer until Jan. 1, according to a separate filing posted by the Office of Government Ethics on Wednesday. Because the company explores for oil and natural gas on six continents, he may have a lot of recusing to do.

To avoid a conflict of interest with the multinational corporation he joined in 1975 and led for 11 years starting in 2006, Tillerson had to work out a resolution for the deferred compensation package that he is now set to receive. Exxon’s board said it consulted with federal ethics officials to ensure the agreement severing Tillerson’s ties to the company was sound.

Additionally, Tillerson might have to recuse himself from Trump administration decisions over whether to ease sanctions placed on Russia for supporting separatists in eastern Ukraine and for the 2014 annexation of Crimea. Under Tillerson’s leadership, Russia became Exxon’s single biggest zone of exploration as the company amassed drilling rights across tens of millions of acres.

Related: Shrinking Contango Points To OPEC Deal Success

Pundits have suggested that Tillerson's extensive links to Russia and Putin would make his confirmation hearing problematic. Tillerson’s confirmation before U.S. senators may begin as soon as next week. The 64-year-old Texan is no stranger to Capitol Hill, having testified before congressional inquiries in the past decade on topics as diverse as gasoline prices and the Deepwater Horizon disaster. Tillerson could face a tough confirmation process, with Democrats eager to push back on Trump’s nominees and a handful of Republicans concerned about his longtime business ties to Russia at a time of heightened tension between the two countries. Senate Democratic leader Chuck Schumer called Tillerson and several other Trump nominees “troublesome.”

Tillerson's severance of his relationship with Exxon isn’t unique, nor the largest such separation. In 2006, before his confirmation as U.S. Treasury Secretary, former Goldman Sachs Group Inc. CEO Hank Paulson agreed to sell his $485 million stake in the investment firm for which he received tax-free proceeds.


By Zerohedge

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