NEW REPORT: Oil Companies' Record Profits Going to Execs and Stock Buybacks, Leaving Energy Alternatives Behind

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Contact: Select Committee, 202-225-4081

New Report: Oil Companies’ Record Profits Going to Execs and Stock Buybacks, Leaving Energy Alternatives Behind

As Top 5 Oil Companies Come to Capitol Hill, Select Committee Report Details Big Oil’s Profit Priorities

WASHINGTON (May 21, 2008) –  As oil prices reached a new all-time high today of $130 a barrel for light sweet crude, and executives from the top 5 oil companies come to Congress for a second time this year, a new report details decisions by the big five oil companies to use record-breaking corporate profits to boost executive compensation and prop up their stock price with rich stock buy-backs instead of investing in renewable technologies to end America’s addition to oil.

To Download a PDF of this Report (with footnotes), please CLICK HERE.
For a Web Version of this Report, Please CLICK HERE.

The report, produced by the House Select Committee on Energy Independence and Global Warming, found that even as American consumers suffer declines in real income and purchasing power, executive pay and shareholder dividends in the oil industry have far outpaced investment in new oil discoveries or alternative energy. The committee looked at executive pay and stock purchases at ExxonMobil, British Petroleum, Shell, ConocoPhillips, and Chevron, which combined made $123 billion last year. The same executives appearing before Congress today were first grilled by Chairman Edward J. Markey (D-Mass.) and the Select Committee on April 1 of this year.

The report discusses the nearly $60 billion that the top 5 oil companies spent last year on schemes to prop up the value of their stock. Tomorrow Rep. Markey will introduce legislation to impose a 10 percent tax on those transactions for the top 5 oil companies and reinvest that money in renewable energy and low-income energy assistance programs.

The report shows how one company, ExxonMobil—the largest of the major oil companies—has utilized its $40 billion profit from 2007 to:

• Increase compensation for the top five executives to $76 million, a 170% increase in the last 7 years.

• Help finance full page ads in USA Today, the New York Times, the Los Angeles Times, the Washington Post and several other major daily newspapers that attempt to deflect negative attention to their earnings. The American Petroleum Institute has not disclosed the total amount spent on this public relations campaign, only saying it “is less than $100 million a year.”

• Repurchase $31.8 billion worth of stock.

• Invest only $10 million in renewable energy alternatives.

Meanwhile, the oil industry has vigorously fought to defend $18.5 billion in tax breaks they are set to receive over the next ten years from being redirected to companies producing energy from renewable sources. Legislation to repeal and redirect the tax breaks has passed the House of Representatives several times during the past year but has been opposed by President Bush and Senate Republicans.

“While American families are struggling to pay for Big Oil’s product, executives from these oil giants are making more money than ever while investing money in their own stocks instead of alternatives to oil,” said Rep. Markey.  “If the leaders of Big Oil focused as much on the next generation of fuels as they do on their own excessive salaries, we’d all be better off.”

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