What is the significance of changing the ROEI award settlement from 100% cash to 50% cash and 50% shares?

This change is significant because it aligns the interests of the executives receiving the awards more closely with those of shareholders. By requiring executives to hold 50% of their award in company shares for at least three years, it incentivizes them to focus on long-term stock performance and value creation, as their personal wealth becomes more directly tied to the company's stock price.

Why was Stephen Chazen's incentive award increased?

Stephen Chazen's incentive award was increased to reflect his new role as Chief Executive Officer. This is a common practice to compensate executives appropriately for expanded responsibilities and the increased scope of their leadership duties.

What are the 'Total Shareholder Return Incentive' (TSRI) and 'Restricted Stock Incentive' awards?

The Total Shareholder Return Incentive (TSRI) awards are designed to reward executives based on how Occidental Petroleum's stock performance compares to a defined peer group over a specific period. Restricted Stock Incentive awards grant executives shares of company stock, often with vesting requirements tied to continued service or performance, providing a direct ownership stake in the company.

Have the performance metrics or targets for these new awards changed significantly?

The filing indicates that while the performance periods have been revised and the peer group for TSRI awards was modified, it does not specify if the underlying performance metrics or the targets themselves have undergone substantial changes. The forms of award agreements are noted to be substantially the same as last year's, with the key differences being the revised performance periods and peer group.

OXY/OXY-WT 8-K: Leadership Changes

Summary

Occidental Petroleum Corporation (OXY) filed an 8-K on July 18, 2011, detailing changes to executive compensation arrangements. The Compensation Committee approved modifications to existing Return on Equity Incentive (ROEI) awards granted in 2008 to Dr. Ray R. Irani and Stephen I. Chazen. Previously a 100% cash payout, these awards will now be settled 50% in cash and 50% in shares, with recipients required to hold the shares for at least three years post-tax. This change aligns executive interests more closely with long-term shareholder value by increasing equity participation. Furthermore, the filing announces new incentive awards granted under the 2005 Long-Term Incentive Plan. These include Total Shareholder Return Incentive (TSRI) awards and Restricted Stock Incentive awards for several key officers, including Dr. Irani and Mr. Chazen, whose CEO role adjustment was reflected in his increased grant. The performance periods have been updated, and the peer group for TSRI awards was modified. These adjustments signal a continued focus on aligning executive compensation with performance and shareholder returns.

Key Highlights

1Modification of 2008 ROEI awards for Dr. Irani and Stephen Chazen: 50% cash and 50% shares settlement, with a 3-year holding period for shares.
2New incentive awards granted under the 2005 Long-Term Incentive Plan.
3Key executives, including Dr. Irani and Mr. Chazen, received Total Shareholder Return Incentive (TSRI) and Restricted Stock Incentive awards.
4Stephen Chazen's incentive grant was increased to reflect his new role as Chief Executive Officer.
5Performance periods for TSRI and Restricted Stock awards have been revised.
6The peer group for TSRI awards has been modified.
7The company is increasing the equity component of executive compensation to align with shareholder interests.

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Executive Changes (Jul 18, 2011)

Summary

Key Highlights

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