Next Exxon CEO Likely to be Internal Candidate
Exxon Mobil Corp's appointment of the head of its refining business as its new president makes him the probable successor to Chief Executive Rex Tillerson and was designed to avoid raising eyebrows on Wall Street, analysts said on Monday.
The new president, Darren Woods, 50, a 23-year company veteran, and exploration and production executive Jack Williams, were named to Exxon's expanded five-member management committee in 2014. The two are further from the company's mandatory retirement age of 65 than the others on the panel.
At the time, some insiders said Williams, who spent time at Exxon's fracking unit XTO, was a likely successor to Tillerson.
Since then, tumbling prices have prompted many shale oil producers to shrink, while refiners have posted solid profits.
The Irving, Texas, company's conservative approach to succession planning, which involves promoting from within and grooming engineers fresh out of college, contrasts starkly with the tumultuous change seen in some U.S. boardrooms.
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"Nobody gets to be the CEO of Exxon by rocking the boat," said Raymond James analyst Pavel Molchanov. "Over the last several successions, from Lee Raymond to Rex Tillerson, it's essentially been status quo."
Molchanov said investors believed any member of Exxon's management bench could generate cash for shareholders. It had $32.5 billion in profit last year and distributed $23.6 billion to shareholders.
Woods, an electrical engineer with a degree from Texas A&M, became president of Exxon Mobil Refining & Supply in 2012.
A transition is expected at the end of 2016, before Tillerson faces retirement in 2017, analysts said.
Technically all five members of the committee are eligible to replace him.
Analysts said Exxon may need a steady hand as it faces a collapse in crude oil prices, an investigation by the New York state attorney general into the company's climate risk disclosures, and a global deal by governments to curb emissions.
"Obviously Exxon feels he's the best candidate to lead the company into the future, which has a lot of uncertainty around it related to carbon," Edward Jones analyst Brian Youngberg said of Woods.
Exxon shares rose 2.3 percent to $74.34 on Monday.
Reporting by Anna Driver