Summary
Occidental Petroleum Corporation (OXY) filed an 8-K on July 21, 2009, disclosing the authorization of incentive awards under its 2005 Long-Term Incentive Plan for its executive officers. These awards, granted on July 15, 2009, are performance-based and designed to align executive compensation with the company's future performance. The grants include a Return on Equity Incentive (ROEI) and a Total Shareholder Return Incentive (TSRI), with specific performance metrics and vesting conditions tied to defined periods.
Key Highlights
- 1Executive officers received performance-based, at-risk incentive awards under the 2009 Long-Term Incentive Plan.
- 2Awards include a Return on Equity Incentive (ROEI) payable in cash, contingent on cumulative Return on Equity over a three-year period (July 1, 2009 - June 30, 2012).
- 3A minimum cumulative Return on Equity of 33% is required for any ROEI payout, with a maximum payout of 200% of the target for cumulative ROE of 54% or higher.
- 4Awards also include a Total Shareholder Return Incentive (TSRI) denominated in performance shares, with payout determined by a four-year comparison against a peer group of major oil and gas companies (July 15, 2009 - July 14, 2013).
- 5TSRI payouts range from 0% to 200% of target performance shares, payable 60% in stock and 40% in cash, with a forfeiture condition if OXY's TSR underperforms the S&P 500.
- 6Dividend equivalents are paid on target performance shares during the TSRI performance period.
- 7Awards are subject to forfeiture upon termination for cause or voluntary termination by the employee; pro-rata payouts may be forfeited in cases of death, disability, retirement, or termination for convenience.
- 8In the event of a Change in Control, both ROEI and TSRI awards will vest at their target amounts.