Exxon Bans Former North Texas Oil CEO From Board, But Pays Him Well

(CTN News) – It’s possible that Exxon Mobil Corp.’s board member Scott Sheffield, the former CEO of Pioneer Natural Resources Co., will no longer serve on it.

Sheffield and other executives did, however, continue to get millions of dollars following the recent completion of a $59.5 billion acquisition of the massive oil and gas company based in Dallas. In the spring of May, Exxon closed its largest all-stock acquisition since acquiring Mobil in 1999 with the acquisition of Pioneer.

In connection with the deal, Sheffield and others were expected to get $141.4 million in so-called “golden parachute” payouts, according to a document filed with the Securities and Exchange Commission on April 29.

One day later, the Federal Trade Commission approved the deal, but Sheffield, who founded Pioneer in 1997, was barred from ever working as an advisor or joining Exxon’s board of directors. Sheffield was slated to join the board of Exxon after leaving Pioneer as CEO at the end of 2023. Sheffield had advised the corporation.

The FTC claims that Steelworth plotted to raise crude prices with OPEC and a “related cartel of other oil-producing countries known as OPEC+”. Pioneer responded by defending Sheffield, saying that the FTC’s complaint “reflects a fundamental misunderstanding of the U.S. and global oil markets and misinterprets the nature and intent of Mr. Sheffield’s actions.”

To complete the purchase, Exxon agreed to the FTC’s requirements.

In addition, except for Sheffield, another clause in the FTC decision prohibits Exxon from proposing, selecting, or appointing to its board any Pioneer director or employee for a term of five years, with the exception of certain designated persons.

Maria Dreyfus, a current Pioneer board member, was named to the Exxon board on May 3. Rich Dealy, who became Pioneer’s CEO at the start of 2024, will take on a leading role in the combined company’s Permian Basin division.

Despite the limitations, Sheffield and other former Pioneer executives were still eligible for a sizable payout. The FTC’s order contained no mention of compensation or golden parachutes. Exxon Mobil did not respond to calls for comment.

According to the federal filing from April, Sheffield was given a severance package of approximately $68.1 million in cash, as well as outstanding stock awards, benefits, and a separation payment.

If Dealy is let go, Exxon guarantees his compensation will top $26.4 million.

Pioneer’s executive vice president and former chief financial officer, Neal Shah, is expected to receive about $15 million upon his departure, while Mark Berg, the company’s executive vice president and general counsel, was estimated to receive about $16.5 million. J.D. Hall, the executive vice president of operations, is qualified to get $15.3 million.

The golden parachutes were projected to be worth $241.5 million in a January proxy filing. Figures from the filing were based on the assumption that the purchase will close on November 17, 2023.

Apart from the equity awards that settled and vested in December, the estimates did not include any restricted stock units that executives would have purchased in 2024.

At a special meeting on February 7, over 68% of Pioneer shareholders voted against the golden parachute payments, while the majority supported the deal. The agreement stated that approval was not required in order for the transaction to close and that the vote on pay was only advisory.

With a $19.4 billion yearly revenue, Pioneer, a Dallas-based company, was the biggest publicly traded energy company at the time. The biggest was once Exxon, which moved its corporate headquarters to the Houston region in 2023.

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