Exxon Mobil Corporation or ExxonMobil (NYSE: XOM) is the largest publicly traded, integrated oil and gas company in the world, formed on November 30, 1999 by the merger of Exxon and Mobil. It is the sixth-largest company in the world as ranked by the Forbes Global 2000 and the largest company in the U.S. as ranked by the Fortune 500.

It is the largest of the six oil "supermajors," which also include BP (formerly British Petroleum), Shell, Chevron, ConocoPhillips and Total. It has the highest market value of any publicly traded company in the world, and in 2005 was the most profitable. Its operating profit in 2005 was $.08 per gallon of sales for a total of $36.13 billion (an all-time record for any publicly traded company), slightly less than the gross domestic product of Azerbaijan, while its revenues were slightly less than the GDP of Belgium. ExxonMobil is a component of the Dow Jones Industrial Average.

The company is bifurcated into a "Downstream" division (marketing, refining, and retail operations) headquartered in Fairfax, Virginia (a Washington DC suburb), and an "Upstream" division (oil exploration, extraction, shipping, and wholesale operations) headquartered in Houston, Texas. Although most internal operations are divided along these lines, the company also has several smaller divisions such as Chemicals, Coal & Minerals, and Lubricants.

The upstream division dominates the company's cashflow, accounting for approximately 70% of revenue. The company employs over 100,000 people worldwide with approximately 4,000 employees in its Fairfax downstream headquarters and 27,000 people in its Houston upstream headquarters.

Overall corporate headquarters are located in Irving, a suburb of Dallas, Texas, a comparatively small office of a few hundred (primarily very senior) employees. The company markets products around the world under the brands of Exxon, Mobil, and Esso; it also owns hundreds of smaller subsidiaries such as Imperial Oil Limited (an oil retailer in Canada) and SeaRiver Maritime.

The merger of Exxon and Mobil was unique in American history because it brought together once again the two largest companies of John D. Rockefeller's Standard Oil trust, Standard Oil Company of New Jersey/Exxon and Standard Oil Company of New York/Mobil.

In 2005, ExxonMobil replaced Wal-Mart as the world's largest publicly held corporation when measured by revenue, although Wal-Mart remains the largest by number of employees. (Both Wal-Mart and ExxonMobil are smaller than certain government-controlled corporations such as Saudi Aramco.)

History

Both Exxon and Mobil were descendants of the John D. Rockefeller monopoly, Standard Oil. In 1911, after a United States Supreme Court ruling which upheld a federal court order to dissolve it, the Standard Oil Trust was split into 34 companies. Two of these companies were Jersey Standard, which eventually became Exxon, and Socony ("Standard Oil Company of New York"), which eventually became Mobil.

In the same year, the nation's kerosene output was eclipsed for the first time by gasoline. The growing automotive market inspired the product trademark Mobiloil, registered by Socony in 1920.

Over the next decade, both companies grew significantly. Jersey Standard acquired a 50 percent share in Humble Oil & Refining Co., a Texas oil producer. Socony purchased a 45 percent interest in Magnolia Petroleum Co., a major refiner, marketer and pipeline transporter. In 1931, Socony merged with Vacuum Oil Co., an industry pioneer dating back to 1866 and a growing Standard Oil spin-off in its own right.

In the Asia-Pacific region, Jersey Standard had oil production and refineries in Indonesia but no marketing network. Socony-Vacuum had Asian marketing outlets supplied remotely from California. In 1933, Jersey Standard and Socony-Vacuum merged their interests in the region into a 50-50 joint venture. Standard-Vacuum Oil Co., or "Stanvac," operated in 50 countries, from East Africa to New Zealand, before it was dissolved in 1962.

Mobil Chemical Company was established in 1960. As of 1999 its principal products included basic olefins and aromatics, ethylene glycol and polyethylene. The company produced synthetic lubricant base stocks as well as lubricant additives, propylene packaging films and catalysts. Exxon Chemical Company became a worldwide organization in 1965 and in 1999 was a major producer and marketer of olefins, aromatics, polyethylene and polypropylene along with specialty lines such as elastomers, plasticizers, solvents, process fluids, oxo alcohols and adhesive resins. The company was an industry leader in metallocene catalyst technology to make unique polymers with improved performance.

In 1955 Socony-Vacuum became Socony Mobil Oil Co. and in 1966 simply Mobil Oil Corp. A decade later, the newly incorporated Mobil Corporation absorbed Mobil Oil as a wholly owned subsidiary. Jersey Standard changed its name to Exxon Corporation in 1972 and established Exxon as a trademark throughout the United States. In other parts of the world, Exxon and its affiliated companies continued to use its Esso trademark.

On March 24, 1989, shortly after midnight, the oil tanker Exxon Valdez struck Bligh Reef in Prince William Sound, Alaska, spilling more than 11 million gallons (42,000 m³) of crude oil. The spill was the largest in U.S. history, and in the aftermath of the Exxon Valdez incident U.S. Congress passed the Oil Pollution Act of 1990. At the time of the spill, Exxon paid $300 million immediately and voluntarily to more than 11,000 Alaskans and businesses affected by the Valdez spill.In addition, the company paid $2.2 billion to cleanup Prince William Sound, a process that lasted until 1992, when the State of Alaska and the U.S. Coast Guard declared the cleanup complete. Exxon paid $1 billion in settlements with the state and federal governments. Virtually all Valdez compensatory damages were paid in full within one year of the accident, and the trial court commended Exxon for coming forward "with its people and its pocketbook and doing what had to be done under difficult circumstances." However, a $4.5 billion punitive ruling against Exxon is still under appeal. The punitive damages were set by a Federal court judge in Anchorage,and have twice been vacated by the Ninth Circuit Court of Appeals as excessive.

In 1998, Exxon and Mobil signed a US$73.7 billion definitive agreement to merge and form a new company called Exxon Mobil Corporation, the largest company on the planet. After shareholder and regulatory approvals, the merger was completed on November 30, 1999.

In 2000, ExxonMobil sold a refinery in Benicia, California and 340 Exxon-branded stations to Valero Energy Corporation, as part of an FTC-mandated divestiture of California assets. ExxonMobil continues to supply petroleum products to over 700 Mobil-branded retail outlets in the state.

In 2005, its stock price surged in parallel with rising oil prices, surpassing General Electric as the largest corporation in the world in terms of market capitalization. At the end of 2005, ExxonMobil reported record profits, reporting U.S $36 billion in annual income, up 42% from the previous year (the overall annual income was an all-time record for annual income by any business, and included $10 billion in the third quarter alone, also an all-time record income for a single quarter by any business). The company and the American Petroleum Institute, the Oil and Chemical industry's lobbying apparatus, however tried to downplay its success in order to avoid criticism from consumers by putting up page-long ads in major American newspapers, such as The New York Times, The Washington Post, comparing Oil Industry profits to that of other large industries such as pharmaceuticals and banking. [1] [2] As an illustration, ExxonMobil's $36 billion in profits came on top of $370.6 billion in revenue, for a profit margin of 9.7%. In other words, Exxon netted 9.7 cents on each dollar of revenue it brought in. By contrast, Microsoft earned 30.8 cents for each dollar of revenue, and Google earned 23.9 cents for each dollar of revenue. Starbucks' profit margin was slightly lower than ExxonMobil's, at 7.8 cents for each dollar of revenue. Exxon's long-time mascot is a Tiger; Mobil's mascot is a Pegasus which dates back to the late 19th century and is one of the oldest marketing symbols still in use.

Allegations against ExxonMobil

ExxonMobil has been accused of several unethical business practices. [3] Exxonmobil has further alienated many people through PR missteps and a corporate philosophy perceived as confrontational and "take no prisoners" in nature.

Allegations levied against the company include:

• Intentional negligence and indifference to the environmental consequences of the Valdez disaster; [4]
• Underfunding its pension plan, although Exxon Mobil currently has enough cash on hand to fund the difference several times over. [5]
• Price gouging in the United States at a retail level; [6]
• Indifference to the needs of homosexual employees -- domestic partner benefits were ended following Mobil's merger with Exxon. Mobil employees who already had domestic partner benefits were allowed to keep them, but other employees could not add their domestic partners to the benefit plans after the merger. ExxonMobil does offer domestic partner benefits in countries where same-sex marriage is legal. [7]
• Shortchanging retail fuel marketing and lubricants marketing partners (known in the industry as "distributors" or "jobbers") (The marketers won a $1.4 billion judgment against ExxonMobil for anticompetitive practices in federal court in 2003) [8]
• Abuse of U.S. corporation law and perpetration of clever marketing schemes to avoid proper responsibility for its actions (For example, after the Valdez disaster, the company took the name "Exxon" out of its tanker shipping subsidiary, renaming it "SeaRiver Maritime," and giving it a separate (but wholly Exxon-controlled) corporate charter and board of directors. The former Exxon Valdez is now the "SeaRiver Mediterranean" and is legally owned by a small, allegedly undercaptialized, stand-alone company, which would have minimal ability to pay out on claims in the event of a further accident. [9]
• Human rights violations in the Indonesian territory of Aceh. In June 2001, ExxonMobil became the target of a lawsuit in the Federal District Court of the District of Columbia, under the Alien Tort Claims Act. The suit alleged that the company knowingly assisted human rights violations, including torture, murder and rape, by employing and providing material support to Indonesian military forces, who committed the alleged offenses in Aceh. Human rights complaints involving ExxonMobil's relationship with the Indonesian military first arose in 1992; the company denies these accusations and has filed a motion to dismiss the suit, which is still pending as of 2005; [10]
• Callous treatment and prejudicial termination of former Mobil employees in favor of their Exxon counterparts during and after the Exxon & Mobil merger;
• Violation of the Bribes & Foreign Corrupt Practices Act (ExxonMobil controls concessions covering 11 million acres (44,500 km²) off the coast of Angola that hold an estimated 7.5 billion barrels (1.2 km³) of crude. [11] Questions have been raised about ExxonMobil's actions in securing these concessions—Forbes Magazine alleging that "ExxonMobil handed hundreds of millions of dollars to the corrupt regime of President José Eduardo dos Santos in the late 1990s". [12]; and
• Trade in violation of economic sanctions against regimes hostile to the United States (In 2003, the Office of Foreign Assets Control reported that ExxonMobil engaged in illegal trade with Sudan and along with dozens of other companies had to settle with the United States government for US$50,000 [13].)

Corporate governance

The current Chairman of the Board and CEO of Exxon Mobil Corporation is Rex Tillerson. Tillerson assumed the top position on January 1, 2006 on the retirement of long-time chairman and CEO, Lee Raymond, who received a highly controversial retirement and severance package of approximately $400 Million.