The Case of the Colossal Compensation: ExxonMobil

Ali Noorda, Simon Liu, Joe Moxon

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Table of Contents
Background3
External Environment..3
Industry....5
Client7
The Product, Service, or Issue...10
Promotions.11
Market Share..12
Competition13
Resources...20
SWOT Analysis.21
Public Profiles22
Situation Analysis..26
Core Problem/Opportunity.26
Communications Plan....26
References..27

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Background
1. External Environment
Economic conditions: The demand for energy and petrochemicals correlates
closely with general economic growth rates. The occurrence of recessions or
other periods of low or negative economic growth will typically have a direct
adverse impact on our results. Other factors that affect general economic
conditions in the world or in a major region, such as changes in population
growth rates or periods of civil unrest, also impact the demand for energy and
petrochemicals. Economic conditions that impair the functioning of financial
markets and institutions also pose risks to ExxonMobil, including risks to the
safety of our financial assets and to the ability of our partners and customers to
fulfill their commitments to ExxonMobil.
Access limitations: A number of countries limit access to their oil and gas
resources, or may place resources off-limits from development altogether.
Restrictions on foreign investment in the oil and gas sector tend to increase in
times of high commodity prices, when national governments may have less need
of outside sources of private capital. Many countries also restrict the import or
export of certain products based on point of origin.
Restrictions on doing business: As a U.S. company, ExxonMobil is subject to
laws prohibiting U.S. companies from doing business in certain countries, or
restricting the kind of business that may be conducted. Such restrictions may
provide a competitive advantage to our non-U.S. competitors unless their own
home countries impose comparable restrictions.
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Lack of legal certainty: Some countries in which we do business lack well-
developed legal systems, or have not yet adopted clear regulatory frameworks for
oil and gas development. Lack of legal certainty exposes our operations to
increased risk of adverse or unpredictable actions by government officials, and
also makes it more difficult for us to enforce our contracts. In some cases these
risks can be partially offset by agreements to arbitrate disputes in an international
forum, but the adequacy of this remedy may still depend on the local legal
system to enforce an award.
Regulatory and litigation risks: Even in countries with well-developed legal
systems where ExxonMobil does business, we remain exposed to changes in law
(including changes that result from international treaties and accords) that could
adversely affect our results, such as increases in taxes or government royalty
rates (including retroactive claims); price controls; changes in environmental
regulations or other laws that increase our cost of compliance or reduce or delay
available business opportunities (including changes in laws related to offshore
drilling operations, water use or hydraulic fracturing); adoption of regulations
mandating the use of alternative fuels or uncompetitive fuel components;
government actions to cancel contracts or renegotiate terms unilaterally; and
expropriation. Legal remedies available to compensate us for expropriation or
other takings may be inadequate. We also may be adversely affected by the
outcome of litigation or other legal proceedings, especially in countries such as
the United States in which very large and unpredictable punitive damage awards
may occur.
Security concerns: Successful operation of particular facilities or projects may
be disrupted by civil unrest, acts of sabotage or terrorism and other local security
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concerns. Such concerns may require us to incur greater costs for security or to
shut down operations for a period of time.
Climate change and greenhouse gas restrictions: Due to concern over the risk
of climate change, a number of countries have adopted or are considering the
adoption of, regulatory frameworks to reduce greenhouse gas emissions. These
include adoption of cap and trade regimes, carbon taxes, restrictive permitting,
increased efficiency standards and incentives or mandates for renewable energy.
These requirements could make our products more expensive, lengthen project
implementation times and reduce demand for hydrocarbons, as well as shifting
hydrocarbon demand toward relatively lower-carbon sources such as natural gas.
Current and pending greenhouse gas regulations may also increase our
compliance costs, such as for monitoring or sequestering emissions.
2. Industry
Supply and Demand: The oil, gas and petrochemical businesses are
fundamentally commodity businesses. This means ExxonMobils operations and
earnings may be significantly affected by changes in oil, gas and petrochemical
prices and by changes in margins on refined products. Oil, gas, petrochemical
and product prices and margins in turn depend on local, regional and global
events or conditions that affect supply and demand for the relevant commodity.
Other demand-related factors: Other factors that may affect the demand for oil,
gas and petrochemicals, and therefore impact our results, include technological
improvements in energy efficiency; seasonal weather patterns, which affect the
demand for energy associated with heating and cooling; increased
competitiveness of alternative energy sources that have so far generally not been
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competitive with oil and gas without the benefit of government subsidies or
mandates; and changes in technology or consumer preferences that alter fuel
choices, such as toward alternative fueled vehicles.
Other supply-related factors: Commodity prices and margins also vary
depending on a number of factors affecting supply. For example, increased
supply from the development of new oil and gas supply sources and technologies
to enhance recovery from existing sources tend to reduce commodity prices to
the extent such supply increases are not offset by commensurate growth in
demand. Similarly, increases in industry refining or petrochemical manufacturing
capacity tend to reduce margins on the affected products. World oil, gas and
petrochemical supply levels can also be affected by factors that reduce available
supplies, such as adherence by member countries to OPEC production quotas and
the occurrence of wars, hostile actions, natural disasters, disruptions in
competitors operations or unexpected unavailability of distribution channels that
may disrupt supplies. Technological change can also alter the relative costs for
competitors to find, produce and refine oil and gas and to manufacture
petrochemicals.
Other market factors: ExxonMobils business results are also exposed to
potential negative impacts due to changes in currency exchange rates, interest
rates, inflation and other local or regional market conditions. We generally do not
use financial instruments to hedge market exposures. (Learn about
ExxonMobils)


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3. Client
History: Over the last 125 years, ExxonMobil has evolved from a regional
marketer of kerosene in the U.S. to the largest publicly traded petroleum and
petrochemical enterprise in the world.
Scope of ExxonMobil: Today they operate in most of the world's countries and
are best known by their familiar brand names: Exxon, Esso and Mobil. They
make the products that drive modern transportation, power cities, lubricate
industry and provide petrochemical building blocks that lead to thousands of
consumer goods. (Learn about the history)
Government sponsorship of alternative energy: Many governments are
providing tax advantages and other subsidies and mandates to make alternative
energy sources more competitive against oil and gas. Governments are also
promoting research into new technologies to reduce the cost and increase the
scalability of alternative energy sources. We are conducting our own research
efforts into alternative energy, such as through sponsorship of the Global Climate
and Energy Project at Stanford University and research into hydrogen fuel cells
and fuel-producing algae. Our future results may depend in part on the success of
our research efforts and on our ability to adapt and apply the strengths of our
current business model to providing the competitive energy products of the
future. See Management Effectiveness below.
Management Effectiveness: In addition to external economic and political
factors, our future business results also depend on our ability to manage
successfully those factors that are at least in part within our control. The extent to
which we manage these factors will impact our performance relative to
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competition. For projects in which we are not the operator, we depend on the
management effectiveness of one or more coventurers whom we do not control.
Exploration and development program: Our ability to maintain and grow our
oil and gas production depends on the success of our exploration and
development efforts. Among other factors, we must continuously improve our
ability to identify the most promising resource prospects and apply our project
management expertise to bring discovered resources on line on schedule.
Project management: The success of ExxonMobils Upstream, Downstream
and Chemical businesses depends on complex, long-term, capital intensive
projects. These projects in turn require a high degree of project management
expertise to maximize efficiency. Specific factors that can affect the performance
of major projects include our ability to: negotiate successfully with joint
venturers, partners, governments, suppliers, customers or others; model and
optimize reservoir performance; develop markets for project outputs, whether
through long-term contracts or the development of effective spot markets;
manage changes in operating conditions and costs, including costs of third party
equipment or services such as drilling rigs and shipping; prevent, to the extent
possible and respond effectively to unforeseen technical difficulties that could
delay project startup or cause unscheduled project downtime; and influence the
performance of project operators where ExxonMobil does not perform that role.
Operational efficiency: An important component of ExxonMobils competitive
performance, especially given the commodity-based nature of many of our
businesses, is our ability to operate efficiently, including our ability to manage
expenses and improve production yields on an ongoing basis. This requires
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continuous management focus, including technology improvements, cost control,
productivity enhancements and regular reappraisal of our asset portfolio.
Research and development: To maintain our competitive position, especially in
light of the technological nature of our businesses and the need for continuous
efficiency improvement, ExxonMobils research and development organizations
must be successful and able to adapt to a changing market and policy
environment.
Safety, business controls and environmental risk management: Our results
depend on managements ability to minimize the inherent risks of oil, gas and
petrochemical operations and to control effectively our business activities. We
apply rigorous management systems and continuous focus to workplace safety
and to avoiding spills or other adverse environmental events. For example, we
work to minimize spills through a combined program of effective operations
integrity management, ongoing upgrades, key equipment replacements and
comprehensive inspection and surveillance. Similarly, we are implementing cost-
effective new technologies and adopting new operating practices to reduce air
emissions, not only in response to government requirements but also to address
community priorities. We also maintain a disciplined framework of internal
controls and apply a controls management system for monitoring compliance
with this framework. Substantial liabilities and other adverse impacts could result
if our management systems and controls do not function as intended. The ability
to insure against such risks is limited by the capacity of the applicable insurance
markets, which may not be sufficient.
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Preparedness: Our operations may be disrupted by severe weather events,
natural disasters, human error and similar events. For example, hurricanes may
damage our offshore production facilities or coastal refining and petrochemical
plants in vulnerable areas. Our ability to mitigate the adverse impacts of these
events depends in part upon the effectiveness of our rigorous disaster
preparedness and response planning, as well as business continuity planning.
(Learn about ExxonMobils)
4. The Product, Service or Issue
The issue at hand is the public perception towards compensation of
ExxonMobils executivesparticularly the CEOs compensation package. Detractors of
current executive compensation are focused on its high monetary value relative to the
salary of the average worker. By understanding the characteristics, history, advantages
and disadvantages of executive compensation, ExxonMobil can craft a strong
communications plan for its critics more effectively.
Characteristics: There are a number of factors to consider regarding executive
pay, such as what the compensation actually consists of and what its basis is.
CEO compensation packages typically consist of a combination of a base salary
and bonuses, stock options and other performance-based incentives. As a general
rule, only about 20 percent of a CEOs compensation is base pay, the rest is made
up of incentives. (Salary.com)
Executive compensation is based on a number of different factors; these factors
include competitive salaries for similar positions, as well as the sheer breadth of
responsibilities accorded to an executive:
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A chief executive officer plans and directs all aspects of an organization's
policies, objectives and initiatives. CEOs may require a bachelor's degree with at
least 15 years of experience in the field. They on experience and judgment to
plan and accomplish goals, and may preside over the board of directors.
(Salary.com)
Compensation is also based on the executives ability to meet performance
objectives and generate profit for the organization.
Histories: Historically, the compensation for corporate executives has been fairly
high relative to the average worker. However, the CEO-to-worker compensation
ratio has increased significantly in recent years. While the ratio was 20.1-to-1 in
1965, it grew to 272.9-to-1 in 2012, far higher than it was in the 1960s, 1970s,
1980s or 1990s. (Mishel, 2013)
Advantages: The high compensation for ExxonMobil executives is based on
industry standards and sound business practices. The competitive salaries serve
to keep executives with ExxonMobil while incentivizing them to perform well.
Disadvantages: Critics of high executive compensation argue that it does not
have an impact on the companys actual success. In addition, critics say that a
focus on extrinsic, monetary motivation undermines intrinsic motivation.
(HR.com)
5. Promotions
While there have not been many attempts to address public concerns on
executive compensation, there have been several communications campaigns by
competitors that try to repair brand image as a whole.
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Successes: Companies that have embraced Corporate Social Responsibility
(CSR) have increased public perception of their brand and contribute to a greater
level of sustainability, while increasing profits and competitiveness. (Garcia-
Rodriguez, 2013)
Failures: A lackluster response to public condemnation can lead to long-term
damage of the brand such as when BP failed to adequately respond to its oil spill
in the Gulf of Mexico. Because of this, it likely faces a similar black eye [as
Exxon], one that will last decades. (Mulkern, 2010)
6. Market Share
In order to fully understand Exxons executive compensation, it is important to
compare it to other companies in the same industry.
Company Executive
Compensation
(2013)
Total
Profit
(2013)
Pay-to-
Profit
Ratio
ExxonMobil $76,001,442 $32.6
billion
.0023
Royal Dutch
Shell
$7,211,362 $16.7
billion
.0004
BP $40,314,300 $23.8
billion
.0017
(Source: Google Finance)



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7. Competition:
Who and where the market is: Exxons market is found around the world. With
drilling projects in Iraq, Africa, South America and Alaska, it literally spans the
globe. Exxon has drilling projects on six of the seven continents. Exxons market
is not only oil consumers, but also investors and contracting partners. Exxon is a
top provider of not only fuel, but also motor oil, lubricants, aviation and marine
products, chemicals such as polyethylene (common plastics) and asphalt. In fact,
BusinessWire recently named Exxon as one of the top two polyethylene
producers in America.
Exxons major market is made up of consumers of the companys gas, power and
natural gas liquidsmore broadly: global energy and petrochemical markets.
(Exxon and Mobil)
How ExxonMobil is segmented:
Oil: American customers purchase Exxon-brand fuels, services and
lubricants for business and personal needs.
Esso is the brand name used for international customers. It provides
basically the same products Americans enjoy under the Exxon name.
Mobil is used in both America and abroad and sells high-technology fuel,
lubricants and services.
Chemical: Exxon is the largest produces in the world of aromatics,
including paraxylene and benzene. These chemicals are the building
blocks for vital products worldwide such as packaging materials, plastic
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bottles, automobile bumpers, synthetic rubber, solvents and countless
consumer goods.
Upstream (Unrefined Gas Extraction): Exxon offers industry
leading project execution for a variety of petroleum extraction
opportunities including conventional, heavy oil, tight gas, shale gas,
deepwater, liquefied natural gas (LNG), Arctic and sour gas projects.
Downstream (Refined Gas): Exxon is the largest refiner in the world.
The products of these refineries reach consumers via Exxons large
distributor network; gas stations that carry their goods. This distribution
network is found across the world. Exxon also operates its own retail
service stations (gas stations) that distributes directly to consumers.
Natural Gas and Power Marketing: ExxonMobil is active in almost
every market of natural gas. Thanks to its major presence in its
upstream and downstream fields, Exxon feels they are able to create
innovative solutions. This appears to be Exxons smallest market
segment.
Exxon also operates three global business-to-business segments:
1. Industrial and wholesale: targets producers of energy, pulp
and paper, primary metals, quarry and cement, processing
plants and big machines to market their oil for their large
machinery.
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2. ExxonMobil Aviation: targets aviators in need of jet oils,
aviation fuel, hydraulic fuel, greases, lubricants and technical
support.
3. Marine Fuels and Lubricants: have similar targets as
Aviation, except that these targets are found operating on, or in
the water.
Consumer needs, attitudes, characteristics: Although consumers are found
around the globe and range from individuals filling up their automobile to owners
of mid sized business, all consumers share a common threada need for a
byproduct of petroleum.
When it comes to attitude, consumers tend to seek out Exxon products as a
necessity and less of an auxiliary desire. Exxon products are needed to keep
machines and engines running.
According to a recent Forbes article, Exxons reputation is nearly untouchable.
Although 2013 saw an epic oil spill in Arkansas, stocks were untouched. Why?
The general public believes in the transparency of Exxon and its idea of
working good as opposed to continuous good works.
According to US Energy Information Administration research, most petroleum,
natural gas, coal and electricity (energy in general) is consumed in the United
States. China is in second, consuming only half of what the US imports
annually. Consumers both in America and around the world would have no need
for Exxon products unless they have a car or machine that need fuel, lubricant or
petrol byproducts. This means that consumers have disposable income for
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personal transportation or have a viable business that requires machinery or basic
building blocks like polyethylene.
How, Why, When consumers buy: Consumers can purchase Exxon products
directly off the shelf or through the pump at gas stations. Businesses can contact
Exxon online, via phone or in person at sales offices around the world.
According to Exxon reports, Exxon has seen a bumpy, yet overall upward climb
in earning since the economic downturn of 2009. Exxon peaked in the late fourth
quarter of 2010, sloped downward until 2012 and is now on the rise again. It
would appear that consumers often fall victim to the overall state of the
American economy, which also crashed in 2009, and took a slight downturn in
2012 after the presidential elections. (ExxonMobil Executive Compensation
Review, 2013)
Past and Future Customers: Exxon started as a local kerosene supplier in
Pennsylvania following an oil rush comparable to that of the gold rush in San
Francisco. American businessman John Rockefeller built on the small business,
and eventually developed Standard Oil, known for its products high quality.
Throughout the late 19th century, consumers such as Thomas Edison and the
Wright brothers used Mobil products to fuel and lubricate some of the most
significant engines in the history of mankind.
As early as 1906, Mobil products found a home in foreign countries such as
China, where kerosene lamps were used. The winner of the 1915 Indianapolis
500 was the first of many winners to use Mobil products. 1919 saw the acquiring
of a drilling company in Texas and the beginnings of new technology using
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microscopic fossils to find oil reservoirs. In 1920, Jersey Standard, a precursor to
Exxon, developed the first petrochemical: isopropyl alcohol.
Throughout the twenties and thirties, the companies that now make
groundbreaking discoveries in petrochemicals, oil extraction and methods of oil
discovery, especially in Texas. Customers throughout the United States, from
Amelia Earhart to the average Joe owner of a Model T Vacuum Oil and Jersey
Standard products. With the development of petrochemicals, especially the
artificial rubber butyl, Exxons customers started to expand. Butyl is essential in
the production of tires, surgical tapes, protective coatings and more. This means
that Jersey Standard was no longer just in the kerosene and petroleum business,
but was starting to engage in business-to-business interactions.
Extraction methods were born in Texas and continued to flourish in the Southern
United States. Jersey Standard continued to focus on their motor vehicle
customers by developing the first multigrade motor oil desirable for both summer
and winter use.
After fueling the first commercial Trans-Atlantic flight, Vacuum Oil officially
changes its name to Mobil oil and patents its first synthetic oil lubricant. To this
day, Mobil 1 is the top choice among automobile users around the globe.
The seventies and eighties saw further expansion when Mobil completed the first
concrete production platform in the North Sea, located between Great Britain and
Scandinavia. Jersey Standard, now officially known as Exxon, opens a facility
for biomedical sciences and environmental research in 1980. Two years later,
Exxon celebrates its 100 year anniversary, realizing in its first 100 years it has
evolved from serving simple kerosene consumers to a global market involved in
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every level of oil and gas extraction, production, refining, marketing and
petrochemicals manufacturing.
In the 1990s, Mobil introduces Speedpass, providing more services to their
extensive Distributor Network, or gas stations that carry their product.
In the past twenty years, ExxonMobil has furthered its reach to customers
seeking environmentally friendly fuel alternatives. ExxonMobil has partnered
with its American competitors Chevron, ConocoPhillips and Shell to pledge to be
more environmentally friendly. ExxonMobil is always growing and seeking new
consumer markets, and it appears that it will maintain this pattern.
Petrolium: Regardless of time period or the engine that ExxonMobil was
fueling, petroleum is the common denominator. These days, ExxonMobil
products are not limited to oils and lubricants like they once were. New
petroleum byproducts such as ExxonMobils wide selection of plastics, however,
still come from the same base product: petroleum. Therefore, all customers have
one thing in common, the need for a consistent and viable petroleum source.
What consumers like about the product: ExxonMobil users are pleased with
the product. The Internet is littered with far more testimonials as opposed to
complaints. Users claim that Mobil oils and lubricants minimize wear, extend
engine life and reduce environmental impact. (exxonmobil.com)
What consumers dislike about the product: Customers are displeased with gas
prices; while the quality may be high, automobile drivers around the world are
unhappy with the high prices of gasoline.
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What consumers like about the issue: Consumers are comfortable with the idea
of engineers and rig workers being paid high salaries.
What consumers dislike about the issue: Consumers have a problem with the
idea of paying high prices at the pump while a high-paid CEO receives tens of
millions of dollars each year in bonuses.
How consumers are reached: Customers can be reached in a variety of ways.
Business-to-business consumers must contact ExxonMobil to purchase products;
therefore ExxonMobil has their contact information.
Most direct consumers have disposable income to own an automobile or a
business. Because of this, one could also assume that consumers have access to,
and are therefore reachable via telephone, television, Internet, public advertising
space such as billboards, etc.
Competitors and their potential, competing ideas and attitudes: According to
Hoovers, ExxonMobils top competitors globally are Royal Dutch Shell,
Chevron and BP.
Royal Dutch Shell: Royal Dutch Shell differs from ExxonMobil in that it is
headquartered in The Hague, Netherlands, as opposed to the United States. Shell
offers a similar range of products when compared to ExxonMobil. Shells
website lists fuels, oils, lubricants, Shell stations and chemicals as their major
products. Shell is also competing with ExxonMobil in more than 70 countries in
both upstream and downstream businesses. Like ExxonMobil, Shell is
working to expand their environmentally friendly fuel options and expand their
customer market share.
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Chevron: Chevron also caters to a very similar market. Chevrons website
indicates that gasoline, refinery, extraction, lubricants, pipelines and unrefined oil
is what the company thrives off of. One thing that does make Chevron unique,
however, is their patented additives inserted in their fuel. Chevron also has its
own shipping company to transport its fuel, as opposed to other competitors that
hire a third party. Chevron is equally invested in fossil fuel replacements and
clean energy. Chevron has investments around the globe and is currently facing
heat in a lawsuit in Ecuador. Chevron has the largest natural gas holding in
Australia. ExxonMobil does not have a majority natural gas holding on any
continent.
BP: Still recovering from the spill in the Gulf of Mexico, BP is comparable to
ExxonMobil in its upstream and downstream content, and claims its focus is on
fuels, lubricants and petrochemicals. BP operates its own gas stations and has
recently started its own caf chain, Wild Bean Caf. BP, like ExxonMobil,
operates on six continents and has a strong campaign for green, renewable and
sustainable energy.
8. Resources
ExxonMobil has many outreach resources at its disposal, including: social media
outlets (Facebook and Twitter), the companys Perspectives Blog and ExxonMobil apps
for Android and iPhone users. There are also intervening publics, which could have
potential influence on key publics:

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Intervening Public Attitude/Current Relationship with
ExxonMobil
Influential
(Yes/No)
Media Negative Yes
Esso Education Foundation Positive No
Save The Tiger Fund Positive Limited
Mickelson ExxonMobil Teachers
Academy
Positive Limited
Partnership with Phil Mickelson Positive Positive
Partnership with Idol Gives Back
(American Idol)
Positive Limited


9. SWOT Analysis
Strengths (Internal)
1. Extensive retail presence
2. Integrated business operations
3. Interests across various asset types
Weaknesses (Internal)
1. Declining liquidity
2. Increasing production costs per barrel
3. Negative media attention since the Valdez oil
spill in 1989
Opportunities (External)
1. Global potential for undeveloped
discoveries
2. Increasing demand for petroleum
products
3. New products and capacity expansion
Threats (External)
1. Vehicle technology limiting demand
2. Water contamination concerns
3. Volatility in oil & natural gas prices
(ExxonMobil Corporation)




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10. Public Profiles:
a) Shareholders:
Demographic/Psychographic Data: Major shareholders are the
members of the board, who are mostly American businessmen (and two
women) who have impressive experience in top companies including
Nestle, LOreal, Goldman Sachs and others. These individuals are highly
educated and have often served as deans of respectable American
Universities. A handful of these individuals have also served in public
government positions at both federal and state positions.
Current Relationship: Positive. ExxonMobil has not seen a drop in
stock value, though their reputation may be tarnished by critics.
Influentials: Board members, peers, Wall Street thought leaders
Self-Interests: Making profit, stock value, maintaining lifestyle, integrity
of ExxonMobil
b) Employees:
Demographic/Psychographic Data: Employees of ExxonMobil are
found around the world. In fact, according to the website, they are found
in most countries. Employees can range anywhere from customer
service/call center workers, to project engineers on site that make six
figures.
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Current Relationship: Positive. According to employee reviews found
on indeed.com, employees from every position enjoy working for
ExxonMobil.
Influentials: Family, employers, co-workers, labor unions, peers
employed in similar field.
Self-Interests: Income, workplace environment, lifestyle, status
c) Critics of Executive Compensation:
Demographic/Psychographic Data: The demographic for this public is
difficult to attain. Most information comes from media reports with an
unclear pool of sources. Because executive compensation is an American
capitalist ideal, and the critics are emotionally charged due to a belief in
some sort of injustice, it can be assumed that the critics are low-income
individuals, both in America and abroad. These individuals probably
value social or liberal economic welfare policy. It is also likely that
these individuals are consumers of ExxonMobil products, specficially
gasoline, that are unhappy with prices at the pump.
Current Relationship: Negative. This is the main source of conflict.
Influentials: Peers, labor unions, families, employers, media
Self-Interests: Income, economic justice, American economic policy,
gas prices
d) U.S. Senate and House of Representatives:
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Demographic/Psychographic Data: Most US representatives are 57
years old, have a college education in business, law or public services,
most average 4.7 terms of service in the House, 87 percent identify
themselves as Christians, 82.8 percent are male and 84 percent are white.
Current Relationship: Positive, though this may change as a federal
investigation is being launched regarding executive compensation. So
far, this has no implications on ExxonMobil because it has not received
government funded bailouts.
Influentials: voters, lobbyists, other branches of government,
policymakers
Self-Interests: reelection, campaign platforms, policy, political party
alignment
e) Consumers:
Demographic/Psychographic Data: Consumers of ExxonMobil goods
are found all around in the world in every situation and economic
background. As previously explained, most have disposable income of
some sort or are owners of a business.
Current Relationship: Good. It appears that even though there are
complaints, ExxonMobils sales have not dropped.
Influentials: employers, customers, global economy, family, government
regulation
Self-Interests: wellbeing, product quality, staying in business, price
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f) Media:
Demographic/Psychographic Data: Backlash is coming mostly from
mainstream and liberal leaning American media. Channels from CNN all
the way down to scholarly research journals have published complaints
Current Relationship: Negative. Media is main source of complaint and
fueling the fire.
Influentials: advertisers, readers/consumers, employers, government,
other media, sources
Self-Interests: employment, maintaining market share, selling
advertising space, sharing relevant news
g) CEOs of other large companies:
Demographic/Psychographic Data: According to Forbes, eight of the
ten top earning CEOs in the country are white, and all ten of them are
male. All ten are over age 50.
Current Relationship: Positive.
Influentials: stockholders, policymakers, lobbyists, media, consumers,
employees
Self-Interests: lifestyle, approval of peers, wellbeing of their respective
company, stock value


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Situation Analysis
Critics of the high compensation of corporate executives do not understand the rationale
behind why many American executives are paid such high salaries. Because of ExxonMobils
unique position as the most profitable in the world, it is particularly targeted by critics.
ExxonMobil has the opportunity to justify its executives compensation to its publics.
Several obstacles could hinder the effectiveness of the communications plan. The major obstacles
include the shear size of the corporation and its executives compensation, biased media and the
lack of public trust of many large corporations since the 2008 recession.
Core Problem/Opportunity
If ExxonMobil does not address the continuous criticism of its profits and executives
salaries, then its reputation will continue to suffer.
Communications Plan
In order to repair its reputation, ExxonMobil must justify the rationale behind executive
salaries to its publics. Shareholders must understand the necessity to continue the high
compensation of its executives in order to sustain company profitability. Employees must
understand that their wages are not affected by the salaries of ExxonMobils executives. Finally,
critics of ExxonMobils executive compensation must understand that executives pay is justified
by both the profitability of the company and the standard of executive compensation in the
industry.



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