Oxy to Meet Regularly With State Pension Plan : Shareholder rights: Representatives of the fund, which is a major stockholder, agreed to drop a proposal to form an advisory panel to the oil giant’s board.

Occidental Petroleum Corp. has agreed to meet twice a year and review corporate strategy with representatives of a California pension fund that owns a large block of its stock, a decision viewed as a victory for shareholders unhappy with recent decisions by the board.

In return, the board of the California Public Employees’ Retirement System voted Wednesday to drop an unusual proposal to form a shareholders advisory committee to Occidental’s board, a proposal that CalPERS wanted to place in the proxy statement for shareholders to vote on at Occidental’s annual meeting in May.

After meeting with CalPERS lawyers last week, Occidental agreed that CalPERS officials could meet twice a year with Occidental President Ray R. Irani and Senior General Counsel Gerald M. Stern, who are both directors, and with two outside directors. No date was set for the first meeting.

“I would hope that (the agreement) will have a positive effect on the company and enable us to discuss with them where the company’s going and how to enhance the value for shareholders,” said Richard H. Koppes, general counsel for CalPERS, which owns 1.74 million Occidental shares--about 0.6% of the outstanding common shares.

The deal announced Wednesday was believed to represent the first time that Occidental has agreed to meet regularly with an institutional shareholder. Company spokesmen declined to comment on the agreement.

The agreement to meet with CalPERS is only the first step; Occidental also agreed to consider including other institutional shareholders after the first meeting. In return, CalPERS said it would ask its environmental committee to see if Oxy representatives could sit in on its meetings.

CalPERS’ actions were the latest in a series of efforts by investors to gain a voice in the governance of Occidental. Institutional investors have complained that the company has disregarded their interests through questionable decisions on the use of corporate funds, including investment in the Armand Hammer Museum of Art and Cultural Center. Hammer is chairman and chief executive of Occidental. CalPERS and others are challenging the settlement of a shareholder suit objecting to that investment.

“It will be useful for all shareholders for CalPERS to go in and discuss various options for accountability . . . how director candidates are nominated, compensation plans . . . any matter in which managers and shareholders have a conflict of interest,” said Nell Minow, general counsel for Institutional Shareholder Services, a consulting firm whose clients include Occidental shareholders. Minow has openly opposed settlement of the museum suit.

Critics have long accused Occidental’s aging directors of being in thrall to Hammer, 91, the irascible chairman who hand-picked most of them. Directors interviewed last week denied that the board is a rubber stamp for Hammer.

The company had strongly opposed including the shareholders’ advisory committee proposal in the proxy statement and had appealed to the Securities and Exchange Commission for permission to omit it.

The SEC has not issued a ruling but, in an earlier case, it ordered that a similar proposal by CalPERS be included in the proxy statement of another company.

“I’m glad to see it, because it’s a good precedent, and hopefully this will lead to more deals such as this,” added Ralph Whitworth, director of United Shareholders Assn., a Washington, D.C., advocacy group founded by financier T. Boone Pickens Jr.

But, he added, “They ought to be having a dialogue with their largest shareholders as a matter of course. They shouldn’t have to be forced into it.”