ExxonMobil will pay some oil traders cash bonuses in expansion plan
EXXONMOBIL introduced a new compensation policy that would pay some traders cash bonuses, a significant change within the US energy giant as it looks to expand its trading operations.
Under the new structure shared internally last week, traders will be divided into two categories: so-called system traders who buy and sell physical commodities in support of the company’s operations, and traders who take on risk to boost company profits. Only the latter will be eligible for performance bonuses. The bonuses will be all cash and will be paid out starting in December 2024. Details of the changes were described by sources familiar with the matter, who asked not to be named discussing internal matters.
The new plan was keenly anticipated by traders at ExxonMobil, where compensation has been a point of contention as the Texas oil giant builds out its global trading business. Until now, ExxonMobil has paid traders regular salaries topped up with small stock awards for top performers, a convention that has frustrated new hires accustomed to being awarded large cash bonuses tied to performance, as is commonplace across the industry.
“We strive to deliver competitive pay that will attract, reward and retain talented employees in support of the company´s business objectives,” said ExxonMobil spokesperson Emily Mir. “Specific to select trader job roles, our compensation programme is directly informed by company results, global trading results and individual performance.”
The new plan comes six months after the company consolidated all of its trading desks into a single unit, which is now led by former human resources chief Tracey Gunnlaugsson. ExxonMobil also recently opened a new office in central London that will house traders and associated staff.
ExxonMobil has been trying to build out its trading business since 2018 but has faced several hurdles including cost-cutting during the pandemic, and cultural differences between some traders and the conservative management style.
Pure traders such as Trafigura Group, Vitol Group as well as European oil majors BP and Shell have made bumper profits due to increased market volatility in recent years, providing an incentive for ExxonMobil’s expansion.
However, the company will build its trading division at a “controlled and thoughtful” pace, chief executive officer Darren Woods said in April. “This is not about going out and taking speculative positions,” he said. “This is about going out and optimising” the company’s vast global footprint of plants, ships and storage terminals. BLOOMBERG
Share with us your feedback on BT's products and services
