$3.15 a gallon for 87 octane!

One of my friends from church forwarded an e-mail advocating a boycott of ExxonMobil as a way to express consumer displeasure at oil companies. I wasn’t going to do it since the most conveniently located gas stations for me happen to be ExxonMobil, and I get a kick out of using the SpeedPass doohickey on my key chain. Then I heard about the $400 mm pay out to the retiring CEO and decided that ExxonMobil must be rolling in it. I began to notice that the ExxonMobil prices were about five to ten cents higher than other stations, and I went to a Hess Station instead. I’m not boycotting the company, but I am paying closer attention to prices and rewarding the company with the lowest price.

It turns out that I am a shareholder of ExxonMobil through my pension plan, so I would probably be screwing myself by boycotting that company, but the $400 mm retirement package pisses me off even more as a shareholder. It’s not as if the guy did anything special; he just happened to be CEO when oil prices were exceptionally high. ExxonMobil doesn’t exist for the benefit of management, does it?

What am I saying? Of course it does. That’s the price I pay as an investor for not being mindful of where I put my money. A big part of earnings in the companies I invest in as a passive shareholder supports an infestation of parasitic MBAs.

I am not sure that analysts and fund managers look at the costs of management or that this is reflected in share prices. Things are different in companies that are not publicly traded. My company is wholly owned by another company, which is wholly owned by another company and so on up the line until you get to a government shareholder who has all the shares of the ultimate parent. We have to convince our rather more attentive shareholders that each of us in the managerial class is necessary and adds value in excess of our compensation. We don’t have share prices since there is no market in our shares. We are either profitable or not, and this determines whether executives get bonuses and raises and how much.

But managers of publicly traded companies seem to have a lot less accountability to their shareholders who seem, for the most part, not to be paying close attention to what managers are paying themselves and one another. Of course, these companies still have to be profitable, but they also deal with share prices that fluctuate based in part on perceptions and other factors unrelated to actual performance or prospects. I have got to get me a job in one of those companies.