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Wall Street Journal, May 7, 2010 article


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BUSINESS   |   MAY 7, 2010, 5:39 P.M. ET

Investors Balk at Occidental Petroleum Pay Practices


Investors rapped Occidental Petroleum Corp. over its pay practices Friday, marking the second time in a week—and ever —that a big U.S. company has lost a "say on pay" vote.

At its annual meeting Friday, Occidental asked its shareholders to weigh in on the way it pays its top executives. A majority of shareholders didn't approve of the oil company's practices, the firm said.

The vote is nonbinding, but it is one way for investors to express disapproval of pay and force a conversation with the board.

This is the second year that shareholders have had the chance to vote on executive-pay practices at many companies in the U.S., after Congress required the vote at firms that received federal bailout money and other firms offered it voluntarily. This is the first time shareholders have had the chance to vote at Occidental, which adopted the measure voluntarily.

Occidental spokesman Richard Kline said the results were "preliminary" and that he didn't yet have the final tally. He said the vote was close but that "a majority of stockholders did vote against approval."

It follows a Monday vote at Motorola Inc. that also failed to garner a majority of support, a first for a major U.S. company, according to proxy advisory firm RiskMetrics Group Inc.

"The board compensation committee will continue to expand its dialogue with institutional investors to assess the views and we'll use that input to re-evaluate the company's compensation philosophy, objectives and policies in a manner which will address stockholder concerns," Mr. Kline said.

CEO Ray Irani is one of the highest paid chiefs in the U.S. Mr. Irani was awarded total direct compensation of $52.2 million in 2009, tops among 200 big-company CEOs in The Wall Street Journal's annual-pay survey. Over the past three years, Mr. Irani earned almost $375 million, including the value of exercised stock options and newly vested restricted stock, the survey found.

"Shareholders are blowing the whistle, and they're saying enough is enough," said Ralph Whitworth, a principal at Relational Investors LLC, which owns about 1% of Occidental shares.

Write to Erin White at


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