LOS ANGELES--(BUSINESS WIRE)--Occidental Petroleum Corporation (NYSE:OXY) today announced that its
Board of Directors has approved a 'say on pay' policy. Under this new
policy stockholders will have a non-binding advisory vote on executive
compensation starting at the company's 2010 annual meeting.
The advisory vote gives stockholders the ability to advise the Board on
its philosophy on the annual compensation of the most highly compensated
executives at the company.
"We welcome ongoing input from our stockholders. Oxy's Board of
Directors strives to maintain an ongoing, constructive dialogue with the
goal of achieving continuous improvement in all aspects of our corporate
governance, including executive compensation," said Dr. Ray R. Irani,
Chairman and Chief Executive Officer of Occidental.
"In recent years, we have engaged in direct discussions with
stockholders on various important governance issues, including
'say-on-pay,' put a significant amount of executive compensation 'at
risk' based on the company's performance and expanded and improved the
executive compensation disclosures in our proxy statements. We are now
taking an additional significant step forward by adopting 'say on pay,'
providing for a regular advisory vote," said Dr. Irani.
Additionally, Oxy supports Congress establishing clear guidelines,
setting a common standard and adopting legislation to mandate an
advisory vote on executive compensation at all U.S. companies. This
would enable investors to have a consistent tool to give feedback at all
companies in which they invest.
As a result of the Oxy Board's action, The Needmor Fund, the lead
proponent, along with its co-filers, have withdrawn the 'say on pay'
stockholder proposal they had planned to present at Oxy's upcoming 2009
Annual Meeting of Stockholders. If this proposal had been approved by
stockholders, it could not have taken effect until the 2010 meeting. A
similar proposal received significant support, but did not pass, at the
company's 2007 and 2008 annual meetings.
"We believe one important way to ensure that shareholders maintain a
meaningful voice in executive compensation decisions is to submit
executive pay packages to a non-binding shareholder vote," stated Tim
Smith of Walden Asset Management, the investment manager for The Needmor
Fund and a leader in the movement for an Advisory Vote. "When tied to a
robust investor communication program on executive compensation which
provides an avenue for detailed shareowner feedback, the vote has
additional meaning," said Smith.
"We are extremely pleased that Occidental's Board recognizes the
importance of shareholder input on compensation decisions that have the
potential to affect their investments," stated Daniel Stranahan of the
Needmor Fund. The 2009 resolution seeking the Advisory Vote was led by
the Needmor Fund and co-filed by Academy of Our Lady of Lourdes;
Christus Health; Providence Trust; Mount St. Scholastica, Benedictine
Sisters; Congregation of Benedictine Sisters of Perpetual Adoration; and
Convent Academy of the Incarnate World.
In addition, AFSCME and the AFL-CIO, together with its co-filer, The
Firefighters' Pension Fund of the City of Kansas City, Missouri, have
agreed to withdraw their 'hold through retirement' and 'golden coffin'
stockholder proposals they submitted related to Occidental's executive
compensation practices. This was a result of the Board's agreement to
expand the proxy statement intent on equity retention and death benefits.
Richard Ferlauto, Director, Corporate Governance & Pension Investment of
AFSCME, stated, "We are encouraged by the adoption of 'say on pay' at
Occidental and commend the Board for taking this and the other important
steps to improve transparency and accountability to shareholders."
"Allowing shareholders to provide input on executive compensation
packages is more important than ever in the current economic
environment. As long-term shareholders, we are pleased that Occidental
has adopted these reforms and given investors a critical tool to hold
the board accountable," said Daniel F. Pedrotty, Director, AFL-CIO
Office of Investment.
During the past three years, Oxy's total shareholder return was 58
percent, compared to (-23) percent and 37 percent, respectively, for the
S&P 500 Index and the S&P 500 Integrated Oil and Gas Index. During the
past five years, Oxy's total shareholder return was 210 percent compared
to (-10.5) percent and 108 percent, respectively, for the S&P 500 Index
and the S&P 500 Integrated Oil and Gas Index.
About Oxy
Occidental Petroleum Corporation is an international oil and gas
exploration and production company with operations in the United States,
Middle East/North Africa and Latin America regions. Oxy is the fourth
largest U.S. oil and gas company, based on equity market capitalization.
Oxy's wholly owned subsidiary, OxyChem, manufactures and markets
chlor-alkali products and vinyls. Occidental is committed to
safeguarding the environment, protecting the safety and health of
employees and neighboring communities and upholding high standards of
social responsibility in all of the company's worldwide operations.