Updated 10.14.2009

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Summary: Compensation practices need to be strengthened at Occidental. An overextended CEO is also a concern.


What stands out the most in the case of Occidental is the CEO compensation which including perquisites topped $65 million for 2008. Other compensation practices are also a cause for concern. In addition, it appears that the CEO has directorships at 2 other public companies.


Certain critical social and environmental metrics are also not being reported.


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Are the compensation practices at Occidental strong?

  1. Occidental Petroleum does not have a Board level reserves committee to provide oversight and review of any statements or of any internal procedures used for gathering and disclosure of reserves. This is especially critical when you consider that executive compensation is based on operating and financial performance measurements of which reserves form an integral part.

  2. Another compensation related issue is CEO compensation. According to Occidental’s latest proxy, Dr. Irani, the CEO of Occidental received a whopping $65 million in compensation from the company. As part of this compensation, Occidental paid Dr. Irani a little over $400K for tax preparation and financial planning services and over half a million dollars for security services.

  3. Travel expenses of spouses of directors (when directors travel to attend Board meetings) are also reimbursed by the company.


Does the CEO of Occidental Petroleum appear to be over extended?

  1. The CEO of Occidental Petroleum Dr. Irani is also on the board of 2 other public company boards. Managing the affairs of one company while providing strategic direction and oversight to a few others can be a herculean task and such executive officers may be easily overextended.


Does Occidental Petroleum follow comprehensive social and environmental metrics reporting?

  1. For an oil and gas company such as Occidental, reporting the percentage recovered in oil spills is a critical metric. Although Occidental reports the number of spills in a year, it’s social responsibility report fails to report the percentage of such spills recovered. This can go a long way in enhancing its credibility in its environmental reporting.


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Detailed Scorecard


Board Size: 13 (out of which one added on July 20 8k)

Board of Directors Compensation ($): Cash- $60,000 plus $2000 for every board meeting attended; Stock: annual grant of 5,000 restricted shares

Total emissions: 2008 levels stood at 16.8 million metric tons CO2 equivalents and 2007 stood at 15.6 million metric tons.

Emissions of SOx and CO from facilities operated by Oxy decreased by 4.5 percent to 4,200 metric tons and 21 percent to 10,300 metric tons, respectively, from 2006 to 2007.

Emissions of Nitrogen Oxide (NOx) increased by 21.5 percent to 17,500 metric tons in 2007 as compared to 2006.

Total CEO compensation for 2008($): $65 million

Chief Risk Officer: Gregory Curl