Joe Carroll and Kevin Crowley
Lee Raymond, the former head of Exxon Mobil who oversaw the biggest corporate merger in the history of the oil industry and was derided as “the Darth Vader of global warming” for his scepticism toward climate change, has died. He was 87.
“Lee was a remarkable leader who transformed not just ExxonMobil but the global energy landscape,” an Exxon spokesperson said on Wednesday in a statement. “His legacy will forever remain a pillar of this company.”
The son of a South Dakota railroad engineer, Raymond became one of corporate America’s most prominent leaders as chief executive officer of Exxon Corp from 1993 to 2005. He was known for a severe leadership style and would sometimes ridicule Wall Street analysts for questions he perceived as frivolous.
He led Exxon into its 1999 all-stock acquisition of Mobil Corp that combined Exxon’s financial discipline and deep pockets with one of the world’s most extensive exploration portfolios, including vast gas fields in Indonesia and Qatar. With an equity value of $US82 billion, it was the world’s largest energy takeover, according to data compiled by Bloomberg.
As the combined company’s first CEO, Raymond instituted sweeping safety protocols that became industry standard and lifted annual profits to record highs as Exxon Mobil became the largest company in Wall Street’s S&P 500 Index.
‘Let’s agree there’s a lot we really don’t know about how climate will change in the 21st century and beyond.’
Lee Raymond in 2006
By Raymond’s departure at the end of 2005, the company had amassed a $US29 billion cash balance and oil and natural gas reserves sufficient to sustain production for another 15 years. Investors who held Exxon shares for the entirety of Raymond’s reign reaped average annual returns of 14 per cent at a time when the S&P 500 yielded 10 per cent a year, according to data compiled by Bloomberg. Still, his $US357 million retirement package infuriated investors and politicians.
“He had a remarkable tenure leading this corporation through a lot of different business environments, different conditions,” Rex Tillerson, who succeeded Raymond as chairman and CEO, said during Exxon’s annual shareholders’ meeting in 2006. Raymond “positioned this corporation to achieve the kind of industry leadership that we have enjoyed”.
Raymond’s hostility to climate-change activism was also part of his legacy, earning him the Darth Vader comparison from Greenpeace, the international environmental protest group. He argued strongly against the 1997 Kyoto Protocol, which set the path for countries to adopt targets to lower greenhouse gas emissions.
For years, he maintained that the science behind global warming was uncertain. “Let’s agree there’s a lot we really don’t know about how climate will change in the 21st century and beyond,” Raymond said in a 1997 speech in Beijing.
Target of protesters
He became a frequent target for environmental protesters, who alleged Exxon knew about the catastrophic effect fossil fuels were having on the planet as far back as the 1970s. In February 2005, Greenpeace protesters splashed red wine across the tables of a London dining hall hours before Raymond gave a speech that called the Kyoto agreement unrealistic and unattainable. The protocol, which took effect that day, bound 35 nations and the European Union to reduce emissions.
Years after his departure from Exxon Mobil, a pair of media investigations concluded that, as early as the 1970s, Exxon had understood more about climate change than it had let on and had deliberately misled the public about it. The company denied the allegations.
Raymond’s 2020 resignation from the board of JPMorgan Chase, after 33 years of service, came after environmental activists led a shareholder campaign to oust him. A spokesperson for the bank denied that his departure was the result of outside pressure.
Toward the end of his tenure, Exxon directors exempted Raymond from the mandatory retirement age of 65 to allow more time to cultivate the next generation of executives. After a long succession process, it was decided that Tillerson, a Texan who headed up Exxon’s exploration and production division, would replace Raymond in January 2006.
Tillerson stepped down in 2017 to become US secretary of state under President Donald Trump.
Lee Roy Raymond was born on August 13, 1938, in Watertown, South Dakota, where his father was a railroad engineer.
He earned a bachelor’s degree in chemical engineering from the University of Wisconsin in 1960, the same year he married the former Charlene Hocevar. They would have three sons, John, Colin and Robert.
Faith and power
Around that time, Raymond converted to Roman Catholicism, according to Private Empire: ExxonMobil and American Power (2012). Thereafter, he rarely missed Mass, going so far as to attend Sunday services at the US embassy when in Saudi Arabia, where Christian churches are prohibited.
Raymond obtained a doctorate in chemical engineering at the University of Minnesota in 1963 and joined Exxon as a researcher in Tulsa, Oklahoma.
As company president under then chairman and CEO Lawrence Rawl during the late 1980s, Raymond was tasked with relocating the company from Manhattan to suburban Dallas.
He had a chance to show his leadership in 1989 when the Exxon Valdez supertanker ran aground and spilled 11 million gallons (41.6 million litres) of oil into the ocean off the Gulf of Alaska, fouling Prince William Sound and killing hundreds of thousands of sea animals.
“We’re chagrined, we’re disappointed, we’re even devastated to a degree,” Raymond told the New York Times in a hastily scheduled interview.
Raymond’s response included implementing a zero-tolerance safety culture and a demanding system of rating employee performance in the style of Jack Welch of General Electric — the company that Exxon replaced as the S&P 500 Index’s largest in 2005.
Exxon settled with Alaska and the US government in 1991, agreeing to pay $US900 million to settle civil claims, $US100 million in criminal restitution and $US25 million in a criminal plea agreement.
JPMorgan board
As a director of JPMorgan, Raymond helped guide the lender through mega-mergers and the 2007-2008 global financial crisis as one of longtime CEO Jamie Dimon’s biggest supporters and advisers.
“He helped us navigate through some of our most challenging times,” Dimon wrote in a memo to employees when Raymond’s departure was announced in December 2020. He embodies “exactly what we want in a steward of the firm — complete intellectual independence, a deep understanding of strategy and people, extraordinary tough-mindedness and, importantly, fairness.”
Raymond was disdainful of government interference in economics and industry. In 2006, four months after relinquishing control of the world’s largest energy company by market value, he told a Columbia University energy conference that government meddling in the energy industry was anathema.
“I’m not interested in hearing from them when prices are $US10” a barrel and “I’m not interested in hearing from them when prices are $US40 to $US50,” Raymond said. When crude fell close to $US10 a barrel in the late 1990s, “I don’t recall anyone in Washington calling me up and saying, ‘Boy, are you guys doing all right? Need any help?’.”
Bloomberg
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