After intense shareholder pressure, Occidental Petroleum Corp. announced Monday that Steve Chazen will continue to serve as chief executive through next year.
The Westwood oil giant also announced new governance policies that effectively bar former Chief Executive Ray Irani from returning to that post.
According to reports in the Wall Street Journal and elsewhere, Irani, upset with the company’s declining stock price, had launched a campaign to force Chazen out as chief executive. Occidental announced in February that it was launching a national search for a new chief executive, but did not say when Chazen would relinquish the post.
Several major shareholders, including the California State Teachers Retirement System, have been trying to drum up support for a shareholder initiative to retain Chazen as chief executive. Occidental’s annual meeting is Friday.
In response, Occidental’s board on Monday announced several governance changes, including setting a mandatory chief executive retirement age of 68 (Chazen is 66; Irani is 78) and having the board chair post rotate among independent directors for terms of up to five years. The board also cut common stock grants to non-employee directors by 20 percent.
The board also barred “going forward” former chief executives from serving on the board; it was not clear if this policy would apply immediately to Irani, who has said he would step down from the board next year.
“We greatly value constructive input from our shareholders,” board member Peggy Foran said in a release. “We have decided to adopt these policies, which are aimed at building long-term value for shareholders.”
Occidental’s stock closed at $87.86, up 1.4 percent.