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Lee Raymond

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Lee Roy Raymond (born August 13, 1938) is an American businessman and petroleum engineer who served as chairman and chief executive officer (CEO) of ExxonMobil - and its predecessor Exxon - from 1993 to 2005. During his tenure, Raymond oversaw the merger of Exxon and Mobil in 1999, creating the world's largest publicly traded oil company and one of the most valuable corporations on the planet. He is widely recognized as one of the most influential figures in the global energy industry and one of the most powerful CEOs of his generation.

Raymond's legacy remains highly controversial due to his role as one of the most outspoken executives in the United States against regulation to curtail global warming. While publicly casting doubt on climate change science, internal Exxon research - as later documented in investigative journalism and the PBS documentary "The Power of Big Oil" - pointed to the role of human activity in climate change. Critics, including former Exxon climate consultants, have characterized Raymond's public statements dismissing climate science as "evil" and fundamentally dishonest given what company scientists knew at the time.

Upon his retirement in 2005, Raymond received a compensation package worth approximately $400 million, one of the largest in corporate history at that time. He subsequently served on the board of JPMorgan Chase until 2020, when he was removed as lead independent director amid pressure related to his climate change record. Raymond's tenure exemplifies both the extraordinary power concentrated in the hands of major oil company executives and the ongoing debate about corporate responsibility regarding climate change.

Early life and education

Childhood in South Dakota

Lee Roy Raymond was born on August 13, 1938, in Watertown, South Dakota, a city of approximately 20,000 people in the northeastern part of the state. Growing up in the Great Plains during and after World War II, Raymond experienced the traditional values and work ethic characteristic of small-town America in that era.

Raymond graduated from Watertown High School in 1956. His academic abilities were evident early, setting him on a path toward engineering education and eventually one of the most powerful positions in American business.

Engineering education

After high school, Raymond enrolled at the University of Wisconsin-Madison, where he pursued a degree in chemical engineering. He received his bachelor's degree in chemical engineering in 1960, establishing the technical foundation that would support his career in the petroleum industry.

While at Wisconsin, Raymond met Charlene Hocevar, who was studying journalism at the university. The two began a relationship that would lead to marriage and a partnership spanning more than six decades.

Raymond continued his education at the University of Minnesota, pursuing graduate work in chemical engineering. He completed his Ph.D. in chemical engineering from Minnesota, joining the relatively small group of corporate CEOs who hold doctoral degrees. In 2001, the University of Minnesota recognized Raymond's achievements by awarding him an honorary doctorate.

Career at Exxon

Early years

Raymond began his career at Exxon (then known as Standard Oil of New Jersey or "Jersey Standard") in 1963, the same year he completed his Ph.D. His technical training in chemical engineering was well-suited to the petroleum industry, where understanding complex chemical processes is essential.

Over the following decades, Raymond rose steadily through Exxon's ranks, demonstrating both technical competence and managerial ability. He held positions of increasing responsibility across the company's operations.

Rise to leadership

Raymond's ascent to the top of Exxon followed a traditional path through the company's hierarchy:

  • 1984: Named a director of Exxon
  • 1987: Named president of Exxon
  • 1993: Named CEO, succeeding Lawrence G. Rawl

By the time Raymond became CEO, he had spent three decades at the company and understood its operations, culture, and strategic position intimately. He was prepared to lead one of the world's most important and complex corporations.

The Exxon-Mobil merger

The defining transaction of Raymond's tenure was the 1999 merger of Exxon and Mobil Corporation, creating ExxonMobil. The merger was valued at approximately $80 billion and created the world's largest publicly traded oil company.

The merger combined two of the original Standard Oil companies that had been created when the Supreme Court ordered the breakup of John D. Rockefeller's oil trust in 1911. Exxon (originally Standard Oil of New Jersey) and Mobil (originally Standard Oil of New York) reunited nearly nine decades after they had been forced apart.

Raymond personally negotiated the merger and led the integration of the two companies. The combined ExxonMobil had:

  • Proven reserves exceeding 20 billion barrels of oil equivalent
  • Operations in virtually every country that produced or consumed significant amounts of oil and gas
  • Dominant positions in refining, chemicals, and retail fuel sales
  • A market capitalization approaching $300 billion

The merger was approved by regulators after the companies agreed to divest certain assets to address competition concerns. It created an energy colossus that would dominate the industry for decades.

Extension beyond retirement age

In 2003, as Raymond approached 65 - the mandatory retirement age for executives at ExxonMobil - the board of directors requested that he stay in his position for two additional years. The board wanted Raymond to continue leading the company through the post-merger integration period and to prepare his succession.

Raymond agreed to the extension, ultimately serving until the end of 2005, two years beyond the normal retirement age.

Succession and retirement

On August 14, 2005, Raymond announced that he would retire as ExxonMobil's chairman and CEO at the end of the year. Rex Tillerson, who had been serving as president, succeeded Raymond as CEO effective January 1, 2006.

On April 14, 2006, it was reported that Raymond's retirement package was worth approximately $400 million - the largest retirement package in history for a U.S. Public company at that time. The package included:

  • Retirement-specific pension benefits of approximately $100 million, calculated based on more than 40 years of service and his final salary
  • Stock options, restricted stock, and other equity awards accumulated over his career
  • Salary and bonuses from his final years

The size of the package drew criticism at a time of high gasoline prices, with some lawmakers and consumer advocates questioning whether such compensation was appropriate regardless of Raymond's performance.

Climate change controversy

Public skepticism about climate science

Raymond was one of the most outspoken corporate executives in the United States against regulation to address global warming. Throughout his tenure as CEO, he publicly expressed skepticism about climate science and opposed efforts to limit greenhouse gas emissions.

In the 1990s, Raymond stated that the scientific evidence for climate change was "inconclusive" and that "the case for global warming is far from air tight." He argued against the Kyoto Protocol and other international agreements aimed at reducing carbon emissions, characterizing them as economically damaging and scientifically unjustified.

What Exxon knew

Investigative journalism and subsequent litigation revealed that while Raymond was publicly casting doubt on climate science, Exxon's own internal research had for decades confirmed the role of fossil fuels in climate change.

Exxon scientists had conducted extensive research on climate change beginning in the 1970s, and internal documents showed that the company understood the potential consequences of continued fossil fuel consumption. The disconnect between internal knowledge and public statements became a major focus of criticism and legal action against the company.

The PBS documentary "The Power of Big Oil" detailed this history and included damning assessments from former Exxon consultants. Professor Martin Hoffert, a former Exxon climate consultant, called Raymond's public report "Climate Change: Don't Ignore the Facts" a "load of baloney" and stated: "I would have to say that on an ethical basis, it is actually evil."

Funding of climate skepticism

Under Raymond's leadership, ExxonMobil funded organizations that promoted skepticism about climate science. According to investigative reports, the company provided millions of dollars to think tanks, advocacy groups, and researchers who questioned the scientific consensus on global warming.

Critics argued that this funding was part of a deliberate strategy to confuse the public about climate science and delay regulatory action that would affect ExxonMobil's business. Supporters of the company argued that it was exercising legitimate free speech rights and supporting scientific debate.

Legacy on climate

Raymond's climate change record has become increasingly controversial as the effects of global warming have become more apparent and as more information has emerged about what oil companies knew and when they knew it.

In 2020, amid growing pressure related to climate concerns, JPMorgan Chase removed Raymond as lead independent director of the bank's board. Raymond had served on the JPMorgan board since 2005, but his history on climate issues had become untenable as the bank faced its own pressure to address climate risk.

The removal from the JPMorgan board represented a belated acknowledgment that Raymond's climate record was no longer acceptable in mainstream corporate governance circles.

LGBTQ+ employment policies

Raymond was at the helm of Exxon while it remained one of the last large American companies to exclude LGBTQ+ employees from its anti-discrimination policies. Throughout his tenure, the company did not include sexual orientation in its employment non-discrimination policy.

The situation became more controversial following the Exxon-Mobil merger in 1999. Mobil had previously had a non-discrimination policy that included sexual orientation, but the merged ExxonMobil rescinded this protection, reverting to Exxon's more restrictive policy.

From 1999 to 2014, the ExxonMobil board annually rejected shareholder resolutions calling for the company to add sexual orientation to its non-discrimination policy. The company finally updated its policy in 2015 - a decade after Raymond's retirement - to prohibit discrimination based on sexual orientation and gender identity.

National Petroleum Council =

In addition to his role at ExxonMobil, Raymond served as chair of the National Petroleum Council (NPC), an advisory committee that provides advice on oil and natural gas policy to the United States Secretary of Energy.

In this capacity, Raymond led the preparation of a report on the future of oil supply and demand. The NPC's work influenced government thinking about energy policy during a period of significant change in global energy markets.

Post-retirement activities

JPMorgan Chase board

After retiring from ExxonMobil, Raymond was hired in 2005 as lead independent director for JPMorgan Chase, the largest bank in the United States. In this role, he chaired the board's independent directors and played a significant role in the bank's governance.

Raymond served on the JPMorgan board for 15 years, but his position became increasingly controversial as attention focused on climate change and the role of financial institutions in funding fossil fuel production. In 2020, amid pressure from climate activists and shareholders concerned about the bank's climate policies, JPMorgan Chase removed Raymond as lead independent director.

Raymond's removal reflected the changing landscape around climate issues in corporate governance. A figure who had once been celebrated as one of America's most successful executives had become a liability due to his history of climate skepticism.

Awards and honors

During his career, Raymond received numerous awards and honors:

The Woodrow Wilson Award for Corporate Citizenship, received in 2003, appears particularly ironic given subsequent revelations about ExxonMobil's climate change activities under Raymond's leadership.

Personal life

Family

Raymond married Charlene (née Hocevar), whom he met while both were students at the University of Wisconsin-Madison. Charlene earned a degree in journalism from Wisconsin. The marriage has lasted more than six decades.

The couple has children, including son John T. Raymond, who has followed his father into the oil and gas industry. John partnered with Jim Flores and Paul Allen-backed Vulcan Capital in the buyout of Plains Resources, demonstrating that the Raymond family's involvement in the energy industry spans multiple generations.

Management style

Journalist Steve Coll, in his book "Private Empire: ExxonMobil and American Power," described Raymond as "notoriously skeptical about climate change and disliked government interference at any level." This characterization captures Raymond's libertarian-leaning philosophy and resistance to regulation.

Raymond was known as a demanding executive who expected high performance from his subordinates and maintained tight control over ExxonMobil's operations. His engineering background influenced his analytical approach to management, and he was reputed to be deeply involved in operational details despite leading one of the world's largest companies.

Legacy

Corporate achievement

By conventional measures of corporate success, Lee Raymond's tenure at ExxonMobil was extraordinarily successful:

  • He engineered one of the largest mergers in corporate history
  • ExxonMobil became the world's most valuable company by market capitalization at various points during and after his tenure
  • The company delivered consistent returns to shareholders throughout his leadership
  • He built one of the most profitable and efficiently managed companies in the world

These achievements made Raymond one of the most celebrated and powerful CEOs of his generation, compensated accordingly with one of the largest retirement packages ever paid to a corporate executive.

Climate controversy

However, Raymond's legacy is increasingly defined by the climate change controversy. As the world has become more aware of the urgency of addressing climate change, Raymond's role in promoting climate skepticism has been subjected to harsher scrutiny.

The revelations about what Exxon knew about climate change internally while publicly promoting doubt have led to:

  • Legal action by state attorneys general and cities against ExxonMobil
  • Congressional investigations into the company's climate communications
  • Reputational damage that has affected the company's relationships with investors and regulators
  • Growing calls for accountability from those who led fossil fuel companies during the critical period when action on climate change was delayed

Whether Raymond will ultimately be judged primarily on his business achievements or on his role in the climate debate remains to be seen. What is clear is that his legacy is more contested than that of most corporate executives of his stature.

Impact on the oil industry

Raymond's influence extended beyond ExxonMobil to shape the broader oil industry's approach to climate change. His prominence and outspokenness made him a de facto spokesperson for climate skepticism in the corporate world.

The strategies developed under Raymond's leadership - funding skeptic organizations, promoting doubt about scientific consensus, opposing regulatory action - became a template adopted by other companies and industries facing regulatory threats. The effectiveness of these strategies in delaying climate action has been both praised by industry supporters and condemned by environmentalists.

See also

References


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