A spokesman for the California
State Teachers' Retirement System (Calstrs) said in an email that his fund
and Relational Investors LLC aim to take at least four of the 13 board seats
at the company's annual general meeting next year.
The move by the funds follows
the rejection in May of Oxy's pay policy by a majority of its shareholders.
Chief Executive Ray
Irani, whose compensation grew 40 percent in 2009 to $31.4 million,
responded to that vote by saying the board would study what changes may have
to be made.
The Los Angeles-based company
then said on Monday that those changes would be proposed in the coming
"The board's new compensation
committee chairman has been meeting with investors, and is expected in the
next two months to make recommended changes that we believe are responsive
to investors' sentiment as expressed in the vote," Occidental spokesman
Richard Kline said.
The Calstrs spokesman, Ricardo
Duran, declined to comment further. Relational, a $6 billion fund based in
San Diego, California that owns 0.8 percent of Oxy, did not comment.
Relational's Ralph Whitworth
is an activist investor with ample experience targeting directors' seats; he
now sits on the Genzyme Corp (GENZ.O)
board after threatening a battle with the biotechnology company, before
A VERY GOOD DECADE
Irani's pay has garnered media attention over the years, and last week
he made 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.
The Journal reported earlier
on Monday on the funds' plans to take the Occidental board seats. Unhappy
over compensation practices, they sent a letter on Friday that also raised
concerns about CEO succession plans now that
Irani has reached the company's director retirement age of 75, the
But earlier on Monday,
Occidental moved toward succession planning by announcing that Stephen
Chazen, its 63-year-old president and chief financial officer, would become
chief operating officer and hand over his CFO role to James Lienert.
Shares of Occidental rose 2.9
percent to $80.19 on Monday as an upward spike in oil prices boosted the
The funds' effort comes on the
heels of a so-called shareholder derivative lawsuit filed last week over the
pay issue. A shareholder is suing Oxy's executives and directors on behalf
of the company itself over how its managers are paid.
The legal complaint, seeking
"damages and other relief on behalf of the company," said Occidental was one
of only three companies to get less than majority stockholder support in the
management-sponsored "say on pay" vote on 2009 compensation.
Irani, whose name is first among the defendants in the complaint filed
in Los Angeles Superior Court, has run Oxy for 20 years, and helped
transform the company. The share price has quintupled under his management.
The lawsuit was brought by a
Vladimir Gusinsky on behalf of a trust in his name that has held an Oxy
stake since January 1, 2008. The Gusinsky lawsuit also names Chazen and the
general counsel, Donald de Brier, as well as the board members and the
executive compensation consultant, Pearl Meyer & Partners.
The name Vladimir Gusinsky was
attached to shareholder derivative lawsuits in New York and Texas, going
back to 2006, that he brought against companies over their awards of stock
options. A spokesman for his lawyers declined to comment.
The case is Gusinsky vs
Irani, et al, and Occidental Petroleum Corporation, no: BC442658.
(Reporting by Braden Reddall;