U.S. oil and gas giant ExxonMobil Corporation (XOM) announced that its chief executive officer (CEO) Rex W. Tillerson received compensation worth $28.1 million in 2013, which marks a 3% hike from $27.2 million in 2012. Most of Rex W. Tillerson's compensation was in the form of stock awards.
Tillerson received a salary of $2.7 million, reflecting a 6% increase from the year ago, plus a cash bonus of nearly $3.7 million, which was down 20% because Exxon's earnings fell from 2012. The value of Tillerson's stock awards increased $1.6 million, or 8% from 2012, because of a rise in the company's share price. He received other compensation valued at $496,704. The biggest items in that miscellaneous category were $190,190 in matching contributions to a retirement plan and $177,140 for personal security.
Exxon earned $32.6 billion in 2013, a decrease of 27% from 2012, which was the company's second-best year ever, courtesy of rising oil prices.
ExxonMobil is the world’s best run integrated oil company given its track record of superior return on capital employed. The company is in excellent financial health. Free cash flow generation remains strong and investors seeking a defensive name with continued dividend growth have long considered the company has a core holding.
ExxonMobil is fairly active in its investment program. The company plans to spend about $185 billion over the next five years. The capex covers as many as 21 important oil and gas projects currently under the anvil that are estimated to accumulate over 1 million net oil-equivalent barrels per day by 2016.
ExxonMobil is also engaged in a large liquefied natural gas project in Papua New Guinea. It will further unearth more oil from the development of Hebron oil field, offshore the Canadian province of Newfoundland and Labrador. The development will help in recovering over 700 million barrels of oil and the platform is expected to yield its first oil toward the end of 2017.
However, we remain skeptical due to the company’s continued disappointing production trend. We see ExxonMobil struggling to consistently grow production volumes, which have been steadily decreasing in the past year.
ExxonMobil carries a Zacks Rank#3 (Hold). Some better-ranked stocks in the oil and gas industry worth considering include EnLink Midstream Holdings, LP (ENLC), Exterran Holdings, Inc. (EXH) and Range Resources Corporation (RRC). All these stocks sport a Zacks Rank #1 (Strong Buy).
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