Exxon CEO weighs higher pay to combat employee exodus
HOUSTON (Bloomberg) --Exxon Mobil Corp. is weighing salary increases as it tries to halt employee attrition across its business divisions after sweeping job and benefit cuts.
Chief Executive Officer Darren Woods told employees at a town hall-style meeting that they should be “encouraged” by the ongoing salary-review process, according to a recording of the event. “The policies we’re putting in place will get back to where people can begin to see a different path going forward than the path we came out of in 2020,” he said at the Oct. 20 gathering in suburban Houston.
Woods didn’t give any indication as to the size of any pay increase or which employees would be eligible. The program will impact salaries, promotions and retirement benefits, spokesman Casey Norton said in an email on Monday. Exxon disclosed plans last year to cut 14,000 workers, or 15% of staff, by the end of 2022. As of Dec. 31, the company employed 72,000 worldwide.
"We anticipate 2022 will follow our typical annual salary and promotion process, with industry benchmarking informing decisions about our 2022 salary program in advance of a January 1 effective date," Norton wrote. “We are recruiting, hiring and backfilling roles.”
Until last year, Exxon was one of America’s most secure and highest-paying employers, offering high base pay, generous benefits, opportunities for global travel and strong job security. But amid 2020’s pandemic-driven demand slump and the worst oil-market crash in history, the company imposed its first major job cuts in decades, curbed travel, suspended matching contributions to employee retirement plans, and altered its long-standing performance-ranking system.
Amazon.com Inc., Microsoft Corp. and other Big Tech companies are hiring former Exxon staffers, with financial services, consulting and pharmaceutical firms picking up others.
At the town hall, one employee expressed concerns to Woods during the question-and-answer session.
“Everyone in the room today and calling in knows that we’re having some major attrition issues,” the employee said. “While this can be kind of glazed over with the decision to have layoffs last year and the economy as a whole, really every business line is having attrition issues.”
She then asked Woods what the company could have done to mitigate the situation. A moderator said it was a “very popular” question.
In response, Woods acknowledged the company has “more attrition today” and that it’s “not something that we obviously want,” according to the recording. However, Exxon is not unique in losing workers after the pandemic and is actually doing better than its industry peers, he said.
“I’m not suggesting that your concerns around what are people thinking and what’s driving them to leave the company isn’t important,” Woods said. “I would just make sure we put it in the proper context that it’s something that we’re seeing coming out of the pandemic, and something that we’re seeing across all the companies.”
In prepared remarks posted on Exxon’s website, Woods was upbeat about the oil explorer’s prospects because of rising prices for crude, natural gas and petrochemicals, rebounding economic growth and the opportunity presented by the energy transition. Investors appear to agree, with the stock up more than 50% this year. Exxon is scheduled to report third-quarter earnings on Oct. 29 and analysts expect net income to be the highest in seven years, according to estimates compiled by Bloomberg.
Whether or not employees will see much of the windfall remains to be seen, but the signs are positive, according to Woods. Exxon restored matching contributions to employee 401k plans earlier this month.
“We’re going through the salary process today,” Woods told employees. “As we get into Jan. 1, when raises come out, that’s going to be, I think, people will be encouraged by that, given what we had to do in 2020.”