Spring-based Exxon completed its all-stock acquisition of Pioneer on May 3. This is the company's largest transaction since it acquired Mobil in 1999.
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Former Pioneer Natural Resources CEO Scott Sheffield may not serve on Exxon Mobil's board, but he recently became involved in the Dallas-based oil and gas giant's $59.5 billion acquisition. After it was completed, he and other executives still made millions of dollars.
Spring-based Exxon completed its all-stock acquisition of Pioneer on May 3. This is the company's largest transaction since acquiring Mobil in 1999. As part of the deal, Sheffield and other executives were to receive a total of $141.4 million in so-called buyout payments. A “golden parachute” payment related to the deal, according to an April 29 filing with the Securities and Exchange Commission.
The deal was completed a day after the Federal Trade Commission agreed to approve it, but Mr. Sheffield, who founded Pioneer in 1997, is barred from serving on Exxon's board or holding any advisory position. Sheffield, who will retire as CEO at the end of 2023, had been serving in an advisory role at Pioneer and was scheduled to join Exxon's board of directors.
The FTC accused Sheffield of colluding with OPEC and “an affiliated cartel of other oil producing countries known as OPEC+” to raise oil prices. Pioneer issued a response defending Mr. Sheffield, saying the FTC's allegations “reflect a fundamental misunderstanding of the U.S. and global oil markets and misunderstand the nature and intent of Mr. Sheffield's actions.” Ta.
Exxon agreed to the FTC's terms to get the deal across the finish line.
In addition to removing Mr. Sheffield, another provision of the FTC's decision requires Exxon to nominate, nominate and appoint Pioneer employees and directors to its board of directors for a period of five years, with the exception of certain named individuals. It is forbidden to do so. Maria Dreyfuss, Pioneer's current director, was elected to join Exxon's board of directors on May 3. Pioneer's current CEO, Rich Deeley, who assumed the role in early 2024, will assume a leadership role in the combined company's Permian Basin. work.
Despite the restrictions, Mr. Sheffield and other former Pioneer executives continued to line up for big paychecks. The FTC's order made no mention of compensation or golden parachutes. ExxonMobil did not respond to a request for comment.
Sheffield's severance package represents more than $68.1 million in cash, unpaid stock awards, severance and benefits, according to an April federal filing.
If Deeley is fired by Exxon, Deeley's package would total more than $26.4 million. Neil Shah, Pioneer's executive vice president and chief financial officer, will receive approximately $15 million upon his retirement, and Mark Berg, Pioneer's executive vice president and general counsel, will receive approximately $16.5 million. I was planning to receive it. J.D. Hall, executive vice president of operations, could receive $15.3 million.
A previous proxy filing in January estimated the total value of Golden Parachute to be approximately $241.5 million. The amounts set forth in that filing assume the acquisition closes on November 17, 2023. This estimate also includes stock awards that have already vested and settled in December, but does not include additional restricted stock units that executives received in 2024.
Pioneer shareholders overwhelmingly approved the deal at a special meeting on February 7, with approximately 68% voting against the golden parachute payment. According to the terms of the agreement, the vote on compensation was advisory only and approval was not a requirement for closing the acquisition.
Pioneer, headquartered in Dallas, is the largest publicly traded energy company with annual sales of $19.4 billion. The biggest player so far has been Exxon, which moved its headquarters to the Houston area in 2023.
