ExxonMobil’s Rex Tillerson, 59, and General Electric’s Jeffrey Immelt, 55, are about the same age. They both head iconic U.S. companies. Last year, the two CEOs made about the same amount of money, with Tillerson at $21 million and Immelt at $19.6 million.
Both men are leading figures in the energy business. That’s obvious in Tillerson’s case, but Immelt’s GE is a major player in the oil-field services sector. In addition, GE controls about 40 percent of the global market for gas turbines. Overall, more than a quarter of GE’s revenue now comes from what the company calls “energy infrastructure.” And during the first quarter, that division delivered about 28 percent of the company’s profit.
But for all their similarities, Rex and Jeff are separated by a political double standard: President Barack Obama likes Immelt and has even given him a prominent position within his administration. But Obama and his Democratic allies take every opportunity to vilify Big Oil and Tillerson’s entire industry.
Last month during his weekly radio address, Obama took aim at the oil industry, saying the U.S. should stop “subsidizing yesterday’s energy sources.” He said Congress should eliminate all tax preferences for the oil industry, which amount to about $4.4 billion per year, because the energy companies are “making record profits and you’re paying near-record prices at the pump. It has to stop.”
Earlier this month, Democrats on the Senate Finance Committee held a much-publicized hearing during which they dressed down Tillerson, and the heads of four other major integrated oil companies, over the tax preferences their companies receive.
There’s no question big, integrated oil companies such as ExxonMobil are making lots of money. In the first quarter, ExxonMobil reported profit of $10.65 billion. But Obama and many of his fellow Democrats apparently believe only politically favored companies such as GE are entitled to make big money.
GE’s first-quarter profit totaled $3.6 billion. But Immelt wasn’t called on the Senate carpet.
ConocoPhillips CEO Jim Mulva was, even though Mulva’s company reported a smaller first-quarter profit, $3 billion, than GE. Obama and Democrats are demonizing Big Oil even though GE paid zero U.S. income taxes in 2010 on its $5.1 billion in profit.
How does that compare to Tillerson’s company? ExxonMobil paid $1.6 billion in U.S. income taxes in 2010. And the company figures its total taxes and fees to the U.S. government came to some $9.8 billion last year.
Obama likes GE so much he appointed Immelt to head the President’s Council on Jobs and Competitiveness.
Immelt has a plum spot in Obama’s kitchen cabinet even though his company is setting new standards for corporate welfare.
GE is a major backer of the $2 billion Shepherds Flat wind project in Oregon. GE and its partners are receiving a $1.1 billion loan guarantee from the federal government. In addition, the companies will share in a $500 million cash grant, courtesy of U.S. taxpayers.
Tillerson’s company is vilified for making “record profits.” But Immelt’s company can pay zero income tax, collect huge subsidies, net fabulous returns on its equity and, better still, land a top assignment in the Obama administration.
Robert Bryce is a senior fellow at the Manhattan Institute.