The chief executive of Exxon Mobil Corp. will step down at the end of the year from the world's largest publicly traded oil company after a tenure marked by record profits and environmental controversy.
Lee R. Raymond, 66, a career Exxon employee who has held the top job for 12 years, is likely to be succeeded by the company's president, Rex W. Tillerson, 53, according to an Exxon statement.
Raymond presided over a company that analysts view as the most efficient in the business, earning better returns on the money it spends than its rivals. But under Raymond's leadership, Exxon has become the top target of environmental groups that complain that the company has helped block mandatory limits on emissions linked to global warming and has lobbied to open Alaska's Arctic National Wildlife Refuge to drilling.
The company also became known for taking a hard line. It does not cave in to interest groups, scientists or activist shareholders -- even if its position appears politically incorrect or out of sync with rivals. For example, Exxon questions whether fossil-fuel emissions are the primary cause of climate change, defying a growing scientific consensus, and it has stayed out of the wind and solar power business, citing inadequate profit.
"They're one of the best-managed companies in the industry," said Mike R. Bowlin, the former chief executive of oil company Atlantic Richfield Co., which merged with BP PLC in 2000. "The company travels to the beat of its own drummer. They don't bend much from outside influences -- Wall Street, analysts, the political environment."
Tillerson joined the company 30 years ago as a production engineer and gradually moved into top leadership jobs. While he has toed the company line, environmentalists said they hoped he would be more friendly than Raymond to their concerns. Analysts said they expect no significant change in the company's direction. An Exxon spokesman, Tom Cirigliano, said neither Raymond nor Tillerson would comment yesterday.
Raymond stayed past his planned retirement at the request of the company's board of directors, which increased his total compensation last year to $38.1 million. Analysts said one of Raymond's top achievements was overseeing Exxon's acquisition of Fairfax County-based Mobil Corp. in 1999, a deal valued at more than $80 billion.
As leader of Exxon, one of the successor companies to John D. Rockefeller's Standard Oil, Raymond never became a household name. But he is celebrated in industry circles. The Economist magazine said that based on financial performance alone, "Raymond could claim to be the most successful oil boss since Rockefeller."
As oil prices have surged in the past year, Exxon has been among the biggest beneficiaries. Its profit last year was $25.3 billion, a record. For the first half of 2005, its profit was about $15 billion. Analysts described Exxon as an efficient, profit-obsessed cash gusher.
While Exxon may be best known to consumers for its gasoline, it makes most of its money from producing and selling oil and natural gas. Exxon's other major operations -- refining and chemical businesses -- have been booming as well.
The company, with 86,000 employees, operates in more than 200 countries or territories -- as diverse as Equatorial Guinea, Venezuela and the Russian Far East. The company has 2,600 employees in Fairfax County, where executives oversee refining and marketing operations.
While rival companies such as BP and Royal Dutch Shell PLC have waged big public relations campaigns to depict themselves as environmentally conscious, Exxon has shied away from creating a similar public persona, analysts said.
Exxon's presence on the corporate landscape diminished after 1990 when the company moved its headquarters from New York City to Irving, Tex., a community of office parks, gated developments and manicured lawns outside Dallas. The headquarters is less visible than a company gas station -- hidden behind trees, shrubs and security fences.
Raymond, a native of Watertown, S.D., who has a doctorate in chemical engineering, spent 42 years at Exxon, where he was schooled in the company's rigid focus on squeezing more profit out of its operations than competitors do. He rose to the top job at Exxon in 1993. He remained in charge when Exxon acquired Mobil.
Environmental and public interest groups recently began a campaign against the company.
"If this was a movie, Lee Raymond would be Darth Vader on global warming," said Kert Davies, research director for the environmental group Greenpeace, part of the anti-Exxon campaign. "Anything that comes up positive, you can guarantee that Exxon is on the other side of it."
Exxon has long questioned the increasingly accepted science behind global warming but says it recognizes that the risk of climate change may be significant and that it has taken steps to reduce emissions. The company has donated millions of dollars to organizations that share Exxon's views, causing environmentalists to complain that the company is using independent groups to promote its position.
Exxon has opposed mandatory limits on greenhouse-gas emissions and its lobbying is seen by environmentalists as having influenced the U.S. government's decision not to sign the Kyoto Protocol, which sets targets for reducing pollution linked to global warming.
"Exxon tells it like it is," Cirigliano, the company spokesman, said recently. "We're willing to take the slings and arrows if we think something has to be said. What really puzzles us is that we're condemned for having a different opinion."
Exxon was criticized by several Senate Democrats in June after it announced the hiring of Philip Cooney, a White House official and former lobbyist with the American Petroleum Institute, an industry trade group. Cooney had just resigned from the White House after reportedly revising government scientific reports to cast doubt on the link between global warming and the emission of greenhouse gases. The Democrats, including Senate Minority Leader Harry M. Reid of Nevada, wrote to Raymond, questioning the company's ethical standards. Exxon officials dismissed the criticism and said they hired the best man for the job.
While competitors get into the alternative energy business, Exxon officials dismiss such projects as small-scale public relations efforts that make little or no money. Exxon literature explains: "Current renewable technologies do not offer near-term promise for profitable investment relative to attractive opportunities that we see in our core business."
As his career winds down, Raymond faces a difficult but enviable task: how to spend $30 billion in cash on hand.
Exxon has been giving some cash to investors in the form of higher dividends and has been buying back stock. It also has been spending conservatively on exploration and development, analysts said.
International energy officials have said oil companies worldwide are not doing enough to keep up with predicted growth in demand. The International Energy Agency, a Paris-based adviser to 26 industrialized countries, has said oil companies and governments are not investing enough in new oil production, raising the possibility of inadequate supplies in the future. More oil production would put downward pressure on prices.
Exxon has been making decisions about spending money based on assumptions about oil prices returning to the $20-a-barrel range, analysts said. Raymond chafes at questions about why the company isn't spending more on exploration and drilling, noting that spending has increased.
"First, we will not do anything stupid or silly," Raymond told analysts in March. "Secondly, don't expect us to take mechanistic or knee-jerk reactions."
Company officials say they expect prices to eventually decline, and given that it takes years to develop an oil field, Exxon has to make sure it will achieve sufficient profit when a project comes online.
Analysts said the company's cautious approach to spending money stems from its almost singular focus on the bottom line.
"They have great market discipline where companies like BP and Chevron are perhaps a little more aggressive in projects they might go after -- either lower-return projects or projects that have higher risk-return potential," said Paul Larson, a Morningstar Inc. stock analyst.
Raymond is gruff and prickly. Appearing before analysts or reporters, he has snapped at them and denounced their questions.
At Exxon's annual meeting in Dallas in May, activists and shareholders pushed resolutions dealing with subjects including global warming, the environment, human rights and gay rights. The resolutions were opposed by the company and defeated. Speakers launched wide assaults on the company. Residents of Aceh, Indonesia, were there to claim that military units working with Exxon to guard its operations were responsible for human rights abuses.
Some shareholder groups and state pension officials complained that the company is poorly positioned compared with its competitors for the next generation of energy production and tightening pollution regulations.
When speakers ran beyond their allotted time, Raymond ordered their microphones cut off. He occasionally rolled his eyes and shook his head as shareholders spoke.
Despite complaints aired at the shareholders meeting, plenty of attendees who did not speak were thrilled with Raymond and the company's performance.
"I'm real pleased," said J. Howard Morgan, a retired banker from Wichita Falls, Tex. "Profits are good. Dividends couldn't be better."
Environmental and other groups are conducting an anti-Exxon campaign.
Rex W. Tillerson
is next in line.