The oil and gas company is to have undergone a recent change of personnel, the chairman herein being forcibly made to step aside by activist shareholders
After having been opposed by 76 percent of shareholders on their considering his re-election, Occidental Petroleum’s (OXY) chairman, Ray Irani has been shown the door. Though not without taking a customarily large share of the pie, the longstanding oil executive presently stands to receive a $50m exit package on his dismissal.
The colossal sum, as reported by WSJ, is a sizeable increase on the $20m retirement package offered at the close of 2012, herein further fueling an unceasing backlash from OXY shareholders.
After being forced to step aside as CEO two years ago over concerns of outsized pay, shareholders were more recently triggered by his apparent willingness to oust the company’s current chief executive – a matter the board has since fervently denied.
Forbes statistics editor, Scott DeCarlo tallied Irani’s pay since his becoming CEO, as well as his resulting compensation at $1.2bn – amounting to an average annual pay of $54m a year for over two decades. The sum consisting of $32m in salary, $50m in short-term bonuses, $93m in long-term bonuses, $132m in ‘other’ compensation, $554m in value realised from exercised stock option, and $362m in value realised from vested shares.
Through 2012, Irani’s total take amounted to $46m, after $50m in 2011 and $76m in 2010 respectively. The 78-year-old’s largest sum being in 2006, wherein he earned $321m, mostly exercised stock options.
The departure is the latest demonstration of growing investor clout, previous cases including the April departure of Ray Lane as chairman of HP; founder and chief executive of Chesapeake Energy, Aubrey McClendon being supplanted by shareholders; and Angela Braly of Wellpoint Inc., who last summer fell under fire from shareholders over the insurance company’s dimming financial health.
Speaking on shareholder power in these circumstances, Charles Elson of the Weinberg Centre for Corporate Governance at the University of Delaware’s business school said: “It’s a pretty amazing thing… It happens very rarely, particularly for a company of this size and reputation.”
Activist shareholders – once seen as a negligible force – are being more so backed by mainstream shareholders: those who previously deferred to companies’ management on matters of governance. WSJ in May of this year labeling the circumstances as being incited by “a rise of shareholder activism.”