XTO founder to get cash, stock worth $43M

AP News
Posted: Dec 15, 2009 5:30 PM

The founder of XTO Energy stands to get near $43 million in cash and stock after the natural gas producer agreed to be bought by Exxon Mobil in a deal worth about $30 billion, according to a regulatory filing Tuesday.

Bob Simpson will retire from the company under the deal and become a consultant for Exxon Mobil, according to the filing with the Securities and Exchange Commission.

Should the deal be completed, Simpson will also receive an award of 833,333 shares of XTO that are worth nearly $40 million based on Tuesday's closing stock price of $47.66. He also will get retention payments of nearly $25 million for his consulting work and a lump sum cash payment of $10.8 million.

The package includes a consulting fee of $1.8 million, an annual cash bonus of $1.8 million and a stock award equal to his base salary of $3.6 million.

In addition to the package, Simpson also stands to get 833,333 shares of XTO stock before the deal closes as part of a pre-existing agreement with XTO. Those shares are worth nearly $40 million based on XTO's closing stock price of $47.66 Tuesday.

Exxon Mobil's purchase of XTO with its emphasis on unconventional natural gas resources is seen as a big push into a fuel that figures to become more important as the U.S. looks for ways to cut emissions of carbon dioxide from power plants.

Also, Rep. Ed Markey, chairman of the Energy and Environment Subcommittee, said he will schedule hearings early next year on the deal to look at its effect on competition in the U.S. gas and oil industry.

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"This transaction shows that natural gas _ with its comparatively lower carbon content _ is a bridge fuel to America's low-carbon future, since it will play an increasing role in the coming years," said Markey, D-Mass. "However, this proposed merger also raises a number of issues with respect to the future direction of the U.S. domestic oil and gas industry, competition within the industry, and the potential environmental impact of increased unconventional natural gas development."