* COO to take over from Irani, who will be exec chairman
* Under investor pressure, to bring pay in line with peers
* Names Wells Fargo CFO to board; two members to retire
* CalSTRS and Relational Investors endorse actions (Rewrites with comments from board member; adds byline, dateline; updates shares)
By Braden Reddall
SAN FRANCISCO, Oct 14 (Reuters) - Occidental Petroleum Corp (OXY.N), facing shareholder pressure over management pay and succession plans, is bringing on a new CEO next May and cutting executive salaries to bring them more in line with peers.
The pay of Ray Irani, the chief executive for two decades, and other top executives will be “substantially” cut and, in a much-anticipated move, Chief Operating Officer Stephen Chazen, 64, will take over from Irani, Occidental said on Thursday.
Irani, who is 75 and was born in Lebanon, will stay on as executive chairman until the end of 2014. His ties to the Middle East will be valuable as Occidental expands production in Iraq in the next half decade. [ID:nN19243152]
“We have had a succession plan that we have worked on for some time and this is just one more step along that pathway, with more steps to follow,” Spencer Abraham, the Oxy board member who chairs the compensation committee, told Reuters.
Media attention has long focused on the compensation for Irani, which grew 40 percent in 2009 to $31.4 million, and Abraham said an advisory shareholder vote in May that went against the pay structure was the main catalyst for change.
“We sort of anticipated that that would be either very close one way or the other, or that very likely that would be a negative vote,” Abraham said. “There were other issues raised by some of the investors, but maybe that say-on-pay vote was the point that it took on a little bit more activity.”
The company said that, under the new pay program, compensation for the chairman and CEO was expected to be lower than at one or more peer companies, at all performance levels.
The moves on pay and succession won the endorsement of two funds that own more than 1 percent of Occidental’s shares and had pushed for changes.
The California State Teachers’ Retirement System and Relational Investors LLC had said in August they aimed to take at least four of the 13 board seats at the annual general meeting next year because of their concerns.
Occidental also said two board members, John Chalsty and Irvin Maloney, would not stand for reelection. The company named Wells Fargo & Co’s (WFC.N) CFO, Howard Atkins, to its board and said it would name a second nominee later.
The company’s shares rose 0.3 percent to $84.59. (Reporting by Braden Reddall in San Francisco and Adveith Nair and Anand Basu in Bangalore; editing by Savio D‘Souza and Andre Grenon)