Exxon plans below-inflation U.S. pay raises despite rebound in earnings

HOUSTON (Bloomberg) --Exxon Mobil Corp. will award U.S. employees below-inflation pay increases in early 2022 despite a strong rebound in earnings over the past 12 months.

The oil giant will increase salaries by an average of 3.6% for those employees who performed with “merit,” according to a company document seen by Bloomberg. The highest average increases will be awarded to employees working in the so-called upstream division that drills for oil and natural gas, the document said, but all pay decisions will depend on individual performance.

“Total compensation is highly competitive relative to other companies with whom we compete, both in the marketplace and for talent,” spokesman Casey Norton said in an emailed response to questions. “Inflation is one of many variables we assess.”

U.S. consumer prices jumped 6.2% in the 12 months through October, the most since 1990. Exxon employed 72,000 worldwide as of the end of 2020, with just less than half working in the U.S., according to a regulatory filing.

In October, Chief Executive Officer Darren Woods said employees should be “encouraged” by Exxon’s policy of returning to annual salary increases. His remarks happened during a town-hall style event in which he was questioned about the company’s “major attrition issues.”

But the salary boosts are unlikely to mollify employees who endured a temporary reduction in pension-saving benefits during the global pandemic.

Exxon’s financial performance has improved markedly this year after a disastrous 2020 during which the company posted its first annual loss in at least four decades. Third-quarter earnings and cash flow were the highest since 2014, when oil traded for more than $100 a barrel, and the company introduced a $10 billion share buyback program on top of raising a dividend that already was the third-largest in the S&P 500 Index.

More details on Exxon’s salary increases from the document seen by Bloomberg:

• Average “merit” increase will be 5.4% for upstream workers; 3.4% for downstream and global services; 3.2% for other staff
• Maximum increases will be in the 10-15% range
• Promoted employees to receive a 1.5% increase on top of their regular raise
• No increase for those judged to need significant improvement