ExxonMobil has appointed Kathryn Mikells as its new CFO. She replaces Andrew Swiger, who has been the CFO since 2013. Mr Swiger is retiring in September after a 43-year career with the company. Exxon has a mandatory retirement age of 65.
The company has its corporate office in Irving, TX , though it has a large presence in Houston. It is unusual for Exxon to appoint an outsider for a senior executive position but it has been under pressure from activist shareholders recently (more on that below). Ms. Mikells is the first woman appointed to the Executive leadership team at Exxon.
Ms. Mikells has a diverse background. For the past four plus years, she has been based in London as the CFO of Diageo PLC, the drinks manufacturer. Ms. Mikells announced her resignation in January as she planned to return to the US.
Prior to that, she was CFO at Xerox (2013-2015), ADT (2012-2013) and Nalco, a chemicals company (2010-2011). She worked at United Airlines in Chicago for 16 years, where she ended up as CFO. When United merged with Houston-based Continental Airlines in 2010 she lost out on the CFO position of the combined group to Continental CFO Zane Rowe.
Ms. Mikells will receive a base salary of $1.1 million.
In June, an activist investor, Engine No 1, won three seats on the Board of Exxon, despite the objections of the company and its CEO, Darren Woods. The hedge fund, which only owns 0.02% of Exxon’s stock, argued that the company did not have a coherent plan for a transition to cleaner energy sources. It also argued that the company was too insular and needed outside perspectives. Other investors backed the hedge fund, mainly because Exxon’s recent financial performance has been shocking.
Poor financial performance
In the first decade of this century, Exxon had around $20 billion of net cash and was making a return on capital in excess of 25% a year. Now, net debt is nearly $50 billion and returns have fallen below 5%. As an example, the $41 billion acquisition of XTO Energy, a natural gas producer, in early 2010 was overpriced and ill-timed (the CEO at the time was Rex Tillerson).
Back in June, a report in Bloomberg stated that Exxon planned to reduce its headcount in the US offices by 5-10% annually for the next three to five years.