Do you think Exxon will donate some money to me?

[chuck22b]

Originally Posted by Mathguy

I see your point and it is valid. I would need to see more research or the timing etc. to come to a solid conclusion. For example, if the CEO makes good moves over a 5 year period and speculators move in on his stock. They might still warrant a nice raise even though the speculator bubble popped recently.

Exxon stock went from 35 to 95 and then corrected back down to around 80 now. If the guy got the stock from 35 to 80 in five years, thats not shabby and paying him 21million is a tiny amount of money for the impact he can have.

It's just like Michael Jordan getting tens of millions from Nike over and over and over. He made them a fortune and got his cut.

XOM Stock Charts - Exxon Mobil Corp Stock Market Charts - Free Stock Charts

Your right, that I would have to do more extensive research on the tenure of a CEOs term to figure out if their pay raises are justified. But, if they continue to have salary increases in the next year '08... then I would have to say that there's definitely something wrong.

In terms of capacity usage though... I would say that the Oil companies are doing very well in controlling prices by controlling the spigot (production). True competition would have some companies trying to produce more so that they can leverage the most out of current prices. But... somehow... from the capacity usage trends... it looks like they all are reducing capacity usage in line with consumer reductions. I guess they like current price levels... and competition is low (especially since the mergers). Go figure.

http://tonto.eia.doe.gov/dnav/pet/hist/mopueus2M.htm

-chuck22b

[StoneOne]

Originally Posted by chuck22b

Your right, that I would have to do more extensive research on the tenure of a CEOs term to figure out if their pay raises are justified. But, if they continue to have salary increases in the next year '08... then I would have to say that there's definitely something wrong.

In terms of capacity usage though... I would say that the Oil companies are doing very well in controlling prices by controlling the spigot (production). True competition would have some companies trying to produce more so that they can leverage the most out of current prices. But... somehow... from the capacity usage trends... it looks like they all are reducing capacity usage in line with consumer reductions. I guess they like current price levels... and competition is low (especially since the mergers). Go figure.

U.S. Percent Utilization of Refinery Operable Capacity (Percent)

-chuck22b

Sorry to burst your bubble, but competition on the oil market is extremely tight. Companies fight with each other and with governments all the time for the rights to new development areas. There are plenty of large corporations producing oil, as well as plenty of large and small state owned companies around the world. There are also plenty of small privately owned E&P companies producing oil.

There is no single company or group of companies that could even hope to control oil prices in today's market, especially given that oil is also traded as an investment and not simply a product for end users. Even OPEC can't control prices anymore. If they could, prices would be a lot less than they are now. OPEC does not want $120 oil, as alternative energy will become much more competitive at those prices and eventually (sooner than we think) push oil onto the sidelines.

Companies are pretty much producing at capacity. There are a lot of limiting factors that keep them from producing more. You have governments that control licenses, you have environmental laws, and you also have a labor market that is extremely tight. Finding qualified oil workers is not easy anywhere.

Refined products bring almost zero profit now for the big oil companies, because they actually have to buy a lot of the crude at the sky high prices. That's why refining capacity was so high in the 1990s. $1 gas off of $20 oil is much more profitable than $4 gas of $120 oil.