Summary
Occidental Petroleum Corporation (OXY) announced the adoption of an Executive Severance Plan on March 29, 2020, which will apply to its executive officers. This marks the company's first formal severance arrangement for this group. The plan aims to ensure executives can focus on their responsibilities without personal financial concerns, especially given the challenging industry conditions. The Severance Plan provides for cash severance (1.5x to 2x base salary plus bonus), a pro-rata bonus, continued welfare benefits for two years, accelerated vesting of long-term incentive awards (service-based portion), and outplacement services. Notably, the benefits are more generous for terminations occurring on or before December 31, 2021, reflecting recent executive salary reductions and a commitment to performance-based bonuses. The plan is designed to be competitive within the oil and gas sector and align with broader U.S. industry practices, while also adhering to the company's existing Golden Parachute Policy.
Key Highlights
- 1Occidental Petroleum has implemented its first Executive Severance Plan for executive officers, effective March 29, 2020.
- 2The plan provides for cash severance of 1.5x (or 2x for CEO) of base salary plus bonus upon termination without cause.
- 3Severance benefits are more favorable for terminations occurring on or before December 31, 2021, accounting for recent salary cuts and performance-based bonus structures.
- 4Eligible executives will receive continued welfare benefits for two years post-termination and accelerated vesting of service-based long-term incentive awards.
- 5The plan is designed to be market-competitive and align with industry practices, ensuring executives can focus on their duties.
- 6Severance benefits are contingent upon the executive executing a release of claims and adhering to restrictive covenants.
- 7Payments are subject to the Company's Golden Parachute Policy and potential reductions to avoid excise taxes.