Former Exxon CEO Rex Tillerson will be allowed to keep millions in tax breaks he received for leaving the private sector to become, now, the former Secretary of State.
According to Vox, a provision in the federal ethics law that permits executive branch appointees and employees to defer taxes when they are forced to sell off assets that may constitute a conflict of interest as part of accepting the job.
In the case of Tillerson, he was forced to sell off more than 600,000 Exxon shares valued at about $54 million he owned when he accepted the job, with the proceeds placed in a trust.
As Vox notes, “Per the agreement with Exxon, the value of more than 2 million deferred Exxon shares that Tillerson would have received over the next 10 years as part of his compensation were put into an independently managed trust. That money will become available to him gradually over the course of a decade. It is also subject to the capital gains tax deferrals for executive branch officials and employees.”
In the case of Tillerson, who only lasted a little over a year working for Trump, he still receives those benefits because he was fired.
“The deferral won’t terminate or won’t be affected in any way, shape, or form in his leaving,” Bob Willens, a New York-based tax analyst told Vox. “This is probably a non-event for him from the point of view of his financial arrangements.”
According to Willens, had those sales been made under normal circumstances the money would have been subject to capital gains taxes, “meaning he’d only have about 75 to 80 percent of his Exxon shares’ value to re-invest.”
Added Steve Rosenthal, of the Tax Policy Center, “He sidestepped a pretty big slump in Exxon’s stock. It probably worked out pretty well for him just out of chance. His biggest savings were just market timing — as they say, it’s better to be lucky than good.”
You can read the whole report here.