By Saabira Chaudhuri
Occidental Petroleum Corp. (OXY) said Steve Chazen will continue to serve as its chief executive through the end of 2014 as it unveiled a slew of changes to its corporate governance and compensation policies.
The move follows the company's February announcement that it would search for a new CEO, which fueled increasing shareholder discontent.
Mr. Chazen had said he wasn't looking to go, and some investors wanted him to stay. Earlier this month, The Wall Street Journal reported Matrix Asset Advisors Inc.'s concerns that the decision to replace the longtime company executive was driven by personal differences between Mr. Chazen and Executive Chairman Ray Irani--who was previously Occidental's CEO--not disagreements over corporate strategy or poor company performance.
In Monday's statement, Occidental said Mr. Chazen would stay on "with the board's full support," reflecting the "extensive feedback the company has received from shareholders, who also indicated a strong desire to move forward with other corporate governance and executive compensation changes."
Occidental said Mr. Chazen will assist the board with its ongoing succession process and will work with it on corporate strategy, succession planning, executive compensation and talent development.
Meanwhile, Mr. Chazen said the announcement is "consistent" with his personal plans, adding he supports the board's efforts to find a successor and will work with them to ensure an orderly transition.
Mr. Chazen also said he has had a "productive partnership" with Mr. Irani for the past 20 years, and that he and the board "look forward to calling on Ray for advice, counsel and help in advancing the company's business interests."
Also on Monday, Occidental unveiled changes to its corporate governance and its director and executive compensation policies. The changes include having an independent director serve as chairman, rotating the chairs of each board committee and the independent chairman at least every five years, and adding at least two new independent directors to its board.
The company also said it will adopt a policy going forward that former CEOs of the company won't be eligible to serve on the board.
Mr. Irani's fate wasn't mentioned in Monday's release.
Occidental also said it will cut its annual share grant to non-employee directors by at least 20%, starting "immediately" and that director compensation levels will be revised to be in line with peers.
Shares edged up 44 cents to $87.10 in recent premarket trading. The stock has risen 13% so far this year.
Write to Saabira Chaudhuri at [email protected]