Occidental Petroleum Corp. said Monday that Chief Executive Steve
Chazen would remain at the helm through 2014 as the company restricted
compensation packages and tightened requirements for serving on its board.
The Los Angeles oil-and-gas producer said stock grants for directors who are not Occidental employees will be slashed and the "discretionary portion" of the chief executive's bonus would also be reduced, Occidental said in a Monday statement.
The company also set the mandatory retirement age for the CEO at 68. Former Occidental CEOs will be barred from serving on the board.
The moves appear to be in direct response to heavy criticism by large investors following the board's announcement in February it was seeking a replacement for Chazen. Some speculated that it was more a power play by board Chairman Ray Irani and less about Chazen's performance as chief executive.
Investors such as First Pacific Advisors and California State Teachers' Retirement System had publicly come out in support for Chazen. Some have called for Irani to resign.
The announcement pleased David Neuhauser, a managing director at Livermore Partners, which holds a stake in Occidental and had said that Irani should resign.
"Very constructive news this morning," he said.
Under the new mandates, Chazen, 66, must retire in two years while Irani, who previously served as chief executive until 2011, will no longer be eligible to serve on the board.
"We greatly value constructive input from our shareholders and have spoken with many of them over the past several weeks," director Peggy Foran said in a statement. "After carefully evaluating all of the suggestions and feedback we received from shareholders during the course of those conversations, we have decided to adopt these policies."
Occidental is holding its annual shareholder meeting Friday in Santa Monica.
Last week, the company said its first-quarter profit fell but beat expectations as the company tried to cut costs and manage lower prices for natural gas.
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