The sky high compensation reappears, and this time, the oil giant may be bleeding heavily.
According to the latest news from multiple foreign media, oil giant ExxonMobil has been sentenced to pay a former employee $725 million in compensation, equivalent to approximately RMB 5.2 billion.
So, what exactly happened?
Huge compensation
Several media outlets, including Agence France Presse and Reuters, reported that according to a court document released on Friday, a jury in Pennsylvania ruled 10-2, ordering US oil and gas giant ExxonMobil to pay $725 million in compensation to a former mechanic suffering from rare leukemia. The mechanic claimed that the toxic chemical benzene in ExxonMobil's gasoline and solvents caused his cancer.
According to reports, 67 year old Paul Gill was diagnosed with acute myeloid leukemia (AML) in 2019, a rare blood and bone marrow cancer. According to a statement issued by the law firm representing the Giles couple, Giles insists that this condition was caused by his daily hand cleaning of car parts with oil and solvents while working as a mechanic at a Mobil service station in Philadelphia from 1975 to 1980.
The US Environmental Protection Agency has previously listed benzene as a known carcinogen. After more than a week of trial, the jury found that ExxonMobil had not issued a warning about the health risks of benzene due to negligence, and the ruling was announced this Friday.
The above-mentioned law firm stated that they filed a lawsuit against ExxonMobil in 2020 (ExxonMobil and ExxonMobil merged in November 1999), accusing the company of not warning the mechanic of the "known risk" of carcinogenesis from inhaling and handling benzene in petroleum products. "This ruling is important because it is a discovery that their gasoline can cause cancer. ExxonMobil has been aware for decades that benzene can cause cancer, but they have not issued warnings to the public or taken the most basic preventive measures to protect everyone," said Patrick Wigel, a lawyer for the law firm
According to court documents, the jury ruled in favor of the plaintiff and against the defendant ExxonMobil, with a compensation amount of 725.5 million US dollars. It was clearly stated that $725 million of the compensation was awarded to Paul Gill and $500000 was awarded to his wife Diana.
ExxonMobil responded to this matter by stating that this is an unreasonable judgment and that the company will appeal to the court to overturn it before finalizing the case, and expressed confidence in winning the appeal.
It is understood that benzene is widely used in the United States as a solvent for automotive fuels, resins, plastics, and other industrial applications. The US Environmental Protection Agency has restricted the acceptable benzene content in fuel and stated that benzene is also present in emissions from burning coal, petroleum, automobile exhaust, and gas station oil evaporation.
Sky high acquisition
ExxonMobil is the largest oil company in the United States and one of the world's largest publicly traded oil companies. The company is headquartered in Irving, Texas, with a latest market value of $465.1 billion and a stock price increase of nearly 18% so far this year.
In the fiscal year 2023, ExxonMobil's revenue was $344.7 billion, a year-on-year decrease of 16.42%; The net profit was $36 billion, a year-on-year decrease of 35.40%. In the first quarter of 2024, ExxonMobil's revenue was $83.08 billion, a year-on-year decrease of 4.02%; The net profit was 8.2 billion US dollars, a year-on-year decrease of 28%.
Recently, the Federal Trade Commission (FTC) of the United States issued a statement approving ExxonMobil's $64.5 billion acquisition of Pioneer Natural Resources, but prohibiting Pioneer founder and former CEO Scott Sheffield from joining ExxonMobil's board of directors or serving as an advisor to resolve antitrust issues surrounding the acquisition.
The FTC accuses Sheffield of conspiring to raise oil prices, including sending hundreds of pieces of market dynamics, including pricing and production levels, to representatives of the Organization of the Petroleum Exporting Countries (OPEC). The FTC also stated that Sheffield did not conceal his behavior of linking US oil production to OPEC, and he urged US oil producers to maintain "self-discipline" in terms of production.
The FTC believes that cooperation between OPEC and US oil producers has led to lower production growth rates than expected in competitive markets, thereby pushing up US energy prices and sacrificing the interests of US households and businesses.
Sheffield officially retired in December last year and founded Pioneer Company, which is the largest oil producer in the Permian Basin of the United States and the largest pure shale oil producer in the country. The FTC pointed out that Sheffield is widely regarded as a leader in the US shale oil industry, but he used his position to collaborate with oil producers and OPEC, limiting production and raising energy prices, so he should not be on ExxonMobil's board of directors.
ExxonMobil claims that it will not allow Sheffield to join the board, and the FTC's long-term investigation "has not raised any concerns about our business behavior.".
However, ExxonMobil has other troubles. The largest public pension fund in the United States, Calpers, is considering voting against CEO Darren Woods being re elected as a board member at ExxonMobil's shareholder meeting. This decision stems from dissatisfaction with ExxonMobil's lawsuit against two investors focused on climate change issues.
Earlier this year, investor groups such as Arjuna Capital and Follow This urged ExxonMobil and other oil giants to adopt stricter climate targets and develop plans to reduce greenhouse gas emissions from product users. However, ExxonMobil filed a lawsuit in a Texas court in January this year, aiming to prevent these investors from voting on their climate proposals at the company's May shareholder meeting. Despite Arjuna Capital and Follow This subsequently withdrawing their climate proposals, ExxonMobil has stated that it will continue to file lawsuits against these two investors.
Michael Cohen, Chief Investment Officer of Calpers, expressed "deep concern" and hinted that ExxonMobil's actions may be aimed at suppressing the opinions of key shareholders. Cohen pointed out, "ExxonMobil's approach to filing lawsuits against shareholders who have made proposals far exceeds that of other companies."