Maybe it was a stab by Charles Gibson to provide a national group therapy session for his 8 million viewers, but the ABC "World News" anchor aggressively questioned ExxonMobil CEO Rex Tillerson on the August 14 broadcast for "obscene" profits and asked him to "justify" the company's success.
"As we said earlier, Rex Tillerson - who is the board chair and CEO of ExxonMobil, doesn't talk often to the press," Gibson said. "His company has reported remarkable profits in the first half of this year. The high price of gas brought ExxonMobil close to $22 billion in profit - in profit - for the first half of this year. I asked him how he justifies that amount, that some see as obscene."
But Tillerson explained to Gibson it was the nature of a large business that performs an incredible amount of transactions.
"Everything we do, the numbers are very large," Tillerson replied. "I saw someone characterize our profits the other day, in terms of $1,400 in profit per second. Well, they also need to understand we paid $4,000 a second in taxes. And we spent $15,000 a second in costs. We spend $1 billion a day just running our business. So, this is a business where large numbers are just characteristic of it."
As a report posted on American Petroleum Institute's Web site on July 25 explained, Exxon (NYSE:XOM) and other oil companies' profits reflect the size of the companies and the industry and aren't necessarily a good reflection of financial performance in terms of what they are charging at the pump. In other words, the profits are high because of volume, not profit margins.
Gibson also questioned Tillerson about the public's attitude toward Exxon and others. He asked the CEO if he could empathize with consumers - as if he had any ability to alter market forces which have drove the price of oil to record highs, which have since receded.
"Do you understand and can you appreciate from your position, with the escalation of the price of a gallon of gas, why people are fed up, angry, indeed disgusted, with the oil companies?" Gibson asked.
Tillerson wouldn't comment specifically on the public "anger," but he did question if it was or wasn't misguided. "Well, I can understand why people are very upset and why they're very worried and concerned about their ability to deal with these high prices," Tillerson said. "In terms of where they should direct their anger, I don't think it's useful for me to comment on that. Although, it does bother that much of that is directed at us."
