Ray Irani to Step Down at OXY

Interesting news today. Ray Irani will step down as CEO of Occidental Petroleum (OXY) in May 2011. He’s been CEO ever since Armand Hammer died in December 1990.

When Irani took over, shares of OXY were at $10.38 adjusted for a stock split. Today, the stock is at $84.32. That works out to a return of 11% per year and it doesn’t include dividends.

Occidental Petroleum said Chief Executive Ray Irani will step down next May, and that it would cut the salaries of its top executives to bring them more in line with peers.

The salary cuts would “substantially” reduce the pay of its CEO, COO and other senior executives, Occidental said in a statement adding that Chief Operating Officer Stephen Chazen will take over as CEO.

“Under the new program, at all performance levels, the compensation for Occidental’s chairman and chief executive officer is expected to be lower than that of one or more peer companies,” the company said.

Irani’s pay has garnered media attention over the years, and in July he was featured in the Wall Street Journal’s front page for earning $857 million in the past decade, making him third on the list of best-paid public company executives in that time.

I don’t want to defend Irani’s pay, but let’s add some perspective. His 10-year total of $857 million works about to about $1.06 per share. That’s obviously a lot of money but it’s hardly something that has been a drag on the stock over the last decade.

Posted by on October 14th, 2010 at 12:57 pm


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