* To cut CEO bonus, director compensation
* Former CEOs to be ineligible for board
* Company sets maximum age of 68 for CEOs
* Analysts say moves are positive for the stock
April 29 Occidental Petroleum Corp said
Chief Executive Steve Chazen would continue in his role through
2014 with the full support of the board, reducing uncertainty
surrounding its CEO succession plans.
Last year was a challenging year for the fourth-largest U.S.
oil company, including a disappointing stock performance, and
Occidental said in mid-February it was seeking a replacement for
The Wall Street Journal said in March there was pressure
from Chairman and former CEO Ray Irani for Chazen to leave the
post immediately but added that Chazen had the support of
several big investors. The company had denied any fight at the
Morningstar analyst Allen Good called the latest move a
positive for the stock as it cleared a lot of uncertainty around
"Giving him more time to execute on his plans certainly
should reassure investors at this point," Good said.
Occidental's shares rose 1 percent to $87.68 in morning
trade on the New York Stock Exchange.
Occidental also said former CEOs would not be eligible to
serve on the board "going forward". It did not specify whether
this rule would apply to 78-year-old Irani, who has said that he
plans to retire as chairman at the end of 2014.
In addition, it announced cuts in director and CEO
compensation among a range of governance measures that also
included an upper age limit of 68 for CEOs to retire. Chazen,
66, said the measures were consistent with his personal plans.
Investor advisory firm ISS, in a statement issued late on
Monday, reaffirmed its recommendation to vote against the
election of Irani to the board, saying his role as executive
chairman could complicate the board's succession planning.
It also recommended that shareholders vote for the company's
executive compensation plan, and called the new policies a move
in a "positive direction".
However, the advisory firm advised shareholders to wait and
see how the policies are implemented, highlighting the
Occidental's previous conflicts with the board and on the issue
In the past, both Chazen and Irani found themselves targeted
over their high compensation, until a shareholder effort to take
board seats sparked reform in 2010.
Occidental also said the discretionary portion of the CEO's
bonus would be reduced to "no more than 20 percent" from 40
percent, and that the company's financial performance would be
used to evaluate his performance.
The annual common stock grant to non-employee directors
would be reduced by at least 20 percent immediately and the
director-compensation program would be reviewed this year, the