Oil and gas exploration and production company Occidental Petroleum Corp. (OXY) Thursday stated that its Board of Directors has decided to appoint President and Chief Operating Officer Stephen Chazen as Chief Executive Officer at the company's Annual Meeting of Stockholders to be held in May 2011. Chazen succeeds Ray Irani, who has informed the Board of his desire to step down from the position of Chief Executive Officer with effect from the Annual Meeting. Irani has also informed of his intention to retire at the end of 2014.
Irani will move to a new full-time role of Executive Chairman, to focus primarily on the company's corporate strategy, Middle East operations and international business development. Several Corporate functions will continue to report to him.
Chazen, who has 30 years of experience in the oil and gas industry, joined Occidental in 1994 as Executive Vice President - Corporate Development. In 1999, he appointed as the company's Chief Financial Officer. He was named President and Chief Financial Officer in 2007 and became President and Chief Operating Officer in August 2010. He was also elected to the Board of Directors in 2010. Prior to joining Occidental, Chazen was a managing director in the investment banking group of Merrill Lynch & Co. (MER).
Irani joined Occidental in 1983 as Chairman and Chief Executive Officer of Occidental Chemical Corporation. In 1990, he became Chairman and Chief Executive Officer of Occidental Petroleum Corp.
In a separate announcement made today, Occidental stated that the Board has elected Howard Atkins to the Board, effective immediately. The company also said that John Chalsty and Irvin Maloney, both of whom have passed the Board's retirement age of 75, have expressed their intention not to stand for re-election at the 2011 Annual Meeting.
Occidental's Board plans to nominate a new Director candidate for election to the Board before the Annual Meeting.
Atkins currently serves as Senior Executive Vice President and Chief Financial Officer of Wells Fargo & Co. (WFC). Previously, he served as Executive Vice President and Chief Financial Officer of New York Life Insurance Company, Chief Financial Officer of Midlantic Corporation and Corporate Treasurer of Chase Manhattan Bank.
Further, Occidental today stated that the Board has approved significant changes to its executive long-term incentive compensation program in order to make its overall compensation levels to be more in line with its peers. The new program applies to the company's current Chairman and Chief Executive Officer Irani, President and Chief Operating Officer Chazen and other senior executives.
The new program will utilize a combination of long-term incentives, a substantial portion of which are performance-based Total Shareholder Return Incentives or TSRIs. The TSRIs are based on a sliding scale, measured against the relative performance of a 12-company industry peer group. If Occidental ranks 1st among the 12-company peer group, the maximum TSRI-related payout for Irani and Chazen would be $20 million and $16 million, respectively, as of the grant date.
The remaining portion of the long-term incentives will be an allotment of tax-qualified restricted shares, which will have a minimum vesting period of three years. These shares are valued at $5 million for Irani and $4 million for Chazen as of the grant date.
Occidental also stated that, under the new program, at all performance levels, the compensation for the company's Chairman and Chief Executive Officer is expected to be lower than that of one or more peer companies based on the latest publicly available data provided by these companies.
OXY closed Wednesday's trading at $84.29, up $1.06, on a volume of 4.14 million shares.
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