ExxonMobil and Rex Tillerson have agreed on a plan to cut financial ties if Tillerson is confirmed as Secretary of State.
Exxon’s board of directors reached an agreement with Tillerson to “sever all ties with the company to comply with conflict-of-interest requirements associated with his nomination as secretary of state.”
Exxon said that the deal was developed in consultation with federal ethics regulators.
According to the Wall Street Journal, Tillerson’s retirement package is valued at about $180 million.
Tillerson, 64, retired from his post as Exxon chairman and CEO on December 31 after more than 40 years of service with the company.
If Tillerson’s nomination is confirmed, the value of more than 2 million deferred Exxon shares he would have received over the next 10 years will be transferred to an independently managed trust.
The trust would be prohibited from investing in Exxon and the trustee would manage the assets in a manner that is “consistent with government ethics rules,” Exxon said.
Payments to Tillerson from the trust would be subject to the same 10-year schedule that the cancelled awards would have if they had stayed in place.
Under the deal, Tillerson would also surrender his entitlement to more than $4.1 million in cash bonuses, scheduled to pay out over the next three years along with other benefits such as retiree medical and dental benefits as well as administrative, financial and tax support.
Exxon said the one-time payment to the trust would be equal to the value of Tillerson’s cancelled shares based on a volume-weighted average price per share.
“Consistent with guidance from federal ethics regulators, the value would be reduced by about $3 million,” Exxon said.
The agreement will reduce Tillerson’s total compensation by about $7 million, Exxon said.
The trust would also include forfeiture rules that would prohibit Tillerson from working in the oil or gas industry during the 10-year payout period.
The trust rules dictate that in the event of forfeiture, the money would be distributed to one or more charities involved in fighting poverty or disease in the developing world.
Neither Tillerson nor ExxonMobil would have any control over the selection of the charities.
Separate to the agreement with ExxonMobil, Tillerson has also committed selling more than 600,000 Exxon shares he currently owns if he is confirmed.
Incoming president Donald Trump tapped Tillerson to lead the State Department last month.
Trump cited Tillerson’s business experience as a key factor behind his nomination, calling Tillerson “one of the truly great business leaders of the world.”
Some senior Republicans have expressed concerns about Tillerson’s ties to Russian president Vladimir Putin and his views on sanctions.
Tillerson was awarded the Order of Friendship by Russian President Vladimir Putin in 2013, about two years after Exxon signed a strategic cooperation deal with Russia’s Rosneft.
During Exxon’s 2014 shareholders meeting, Tillerson said Exxon “does not support sanctions” because the firm believes they are usually “not effective.”
U.S. sanctions against Russia forced Exxon was forced to wind down its $600 million Kara Sea project in late 2014 afte Russia annexed Crimea.
Senator John McCain told Reuters late last month that he and “several” of his colleagues “have concerns about Mr. Tillerson, and some of his past activities, specifically his relationship with Vladimir Putin.”
McCain added that he will give Tillerson an “opportunity to make his case about why he is qualified to be Secretary of State.”