Executive Compensation: Occidental and Ray Irani
J. Robert Brown | Wednesday, April 11, 2007 at 06:22AM We have been studying the compensation paid to directors of public company who receive payments approaching $1 million yet are treated by the board as independent under the definitions used by the relevant stock exchange. The posts are here, here and here.
In the weekend edition of the WSJ (April 7-8, 2007), a story appeared about the compensation paid to Ray R. Irani, the Chairman and CEO of Occidental Petroleum. He received an eye popping $416 million, an amount in league with payments made to Larry Ellison at Oracle and Michael Eisner at Disney. The story is here.
As a result, we opted to take a look at the compensation committee of Occidental. Here are the directors on the committee and a descriptions of the duties of the committee.
Executive Compensation and Human Resources Committee Spencer Abraham (Vice Chair) | • | reviews and approves the corporate goals and objectives relevant to the compensation of the Chief Executive Officer (“CEO”), evaluates the CEO’s performance and determines and approves the CEO’s compensation | 5 meetings | ||
• | reviews and approves the annual salaries, bonuses and other executive benefits of all other executive officers | ||||
• | administers Occidental's stock-based incentive compensation plans and periodically reviews the performance of the plans and their rules | ||||
• | reviews new executive compensation programs | ||||
• | periodically reviews the operation of existing executive compensation programs as well as policies for the administration of executive compensation | ||||
• | reviews annually director compensation | ||||
The committee, as required by the NYSE, consists entirely of "independent" directors. How much did these "independent" directors get paid for service to the board? A considerable amount.
Name | Fees Earned | Stock Awards | All Other Compensation | Total | ||||||||||
Spencer Abraham | $ | 91,500 | $ | 259,275 | $ | 36,024 | (3) | $ | 386,799 | |||||
Ronald W. Burkle | $ | 75,500 | $ | 259,275 | $ | 0 | $ | 334,775 | ||||||
John S. Chalsty | $ | 99,500 | $ | 300,759 | $ | 32,136 | (4) | $ | 432,395 | |||||
Edward P. Djerejian | $ | 95,500 | $ | 259,275 | $ | 2,898 | $ | 357,673 | ||||||
R. Chad Dreier | $ | 95,500 | $ | 259,275 | $ | 50,000 | (5) | $ | 404,775 | |||||
John E. Feick | $ | 99,500 | $ | 259,275 | $ | 2,554 | $ | 361,329 | ||||||
Irvin W. Maloney | $ | 107,500 | $ | 259,275 | $ | 915 | $ | 367,690 | ||||||
Rodolfo Segovia | $ | 103,500 | $ | 300,759 | $ | 59,682 | (6) | $ | 463,941 | |||||
Aziz D. Syriani | $ | 97,500 | $ | 342,243 | $ | 25,516 | (7) | $ | 465,259 | |||||
Rosemary Tomich | $ | 127,500 | $ | 342,243 | $ | 0 | $ | 469,743 | ||||||
Walter L. Weisman | $ | 91,500 | $ | 259,275 | $ | 50,000 | (5) | $ | 400,775 | |||||
In other words, the directors on the compensation committee, responsible for at least some portion of the amount paid to Irani, all made somewhere in the vicinity of $400,000 and were treated as "independent" by the board under the definition used by the NYSE.
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