2016 Dec 16

There has been much ado about Rex Tillerson, the head honcho of Exon Mobil, the super gigantically huge oil and gas company. I mentioned in an earlier piece that Tillerson earns as much in a year as a first string NFL quarterback, about 30 million dollars. Tillerson has been chosen by President –elect Trump to be his Secretary of State largely because he has been touted as an outstanding business man/administrator, and of course Trump wants to select only the “best of Breed,”... people like himself.

There have been some unpleasant comments about Mr. Tillerson’s very close friendship with Vladimir Putin, the Russian strong man. Tillerson has received Russia’s “Order of Friendship” the highest award given to a non-Russian citizen. But Tillerson’s presumed superior business skills trumped (?) all. We are told that Tillerson will now, as Secretary of State, put these skills in the service of us American citizens.

But just how great are Tillerson’s business skills? He is certainly well paid and it is said that his first loyalty has been to his shareholders. How have these shareholders done? 

Ten years ago the company’s stock, XOM, was $71.68 a share, now it is $90.78 a share. That is a gain of a little over 26 percent. There were dividends as well, about 3 percent a year.

Suppose instead of putting your money in XOM you had settled for an index fund based on the Standard and Poor’s index of 500 stocks, the SPY. If you had put your money in the SPY in ten years it would have gone up over 59 percent, better than twice as much as XOM’s stock improved. The SPY also pays a dividend, a little less than XOM’s.

As we all know, the price of oil has sagged badly in the last few years so maybe Tillerson has done a heroic job to keep his company’s stock from going through the floor. It is also possible that Trump chose him for reasons quite apart from his business savvy. Recall Trump’s cozy relationship with Putin; maybe he wants a Secretary of State nicely primed to keep that relationship intact. Maybe that’s why Tillerson is his man.

John Bolton the white mustached, whiteeye browed warrior, is apparently a favorite for the job as deputy Secretary of State. This is the person who runs things while the premier person is off visiting foreigners.  Bolton was named ambassador to the UN as a recess appointment by G.W. Bush but he didn’t last long. His bellicosity was not in favor then and it isn’t now either. Senator Rand Paul has said that he will do whatever it take to.insure his appointment fails, The Senator will surely have some help.

The alternative to Bolton may be Rudy Giuliani. There’s a choice maybe Trump will let Tillerson make for himself.