Ousted Secretary of State Rex Tillerson may have gotten more than he bargained for in his 14 months trying to keep up with a president full of surprises in Donald Trump. But the former Exxon Mobil CEO leaves the top diplomatic post with his beneficial tax deals on stock holdings that amounted to more than $200 million.
Tillerson, like other Trump officials with large financial holdings, was required to avoid conflicts of interest in stocks when assuming office because of federal law. There's nothing untoward about it — the law is designed to allow private citizens to assume important public roles without conflicts of interest related to their personal wealth. It gives Cabinet members the option of selling stocks on a tax-deferred basis as the cleanest way to remove conflicts, and then they can invest those proceeds in diversified holdings such as mutual funds or Treasury bonds.
In the case of Tillerson, a large piece of his stock holdings were a little different than the norm. Typically, private citizens who sell stocks to serve in federal office defer any capital gains until such time as whatever replacement investments they bought are sold and subject to taxes.
The former oil CEO had a huge stake in Exxon Mobil stock available to him as an executive compensation reward that accrued over four decades with Exxon Mobil but had not yet been granted and would normally be paid out in retirement over a decade. The New York Times estimated in January 2017 that Tillerson's Exxon stake of roughly 2 million shares was worth $174 million.