Occidental Petroleum Corp. paid Chief Executive Ray Irani more than $22.5 million in salary, bonuses and stock awards in 2002 -- more than double his compensation from the previous year -- despite the company's lower earnings and sales.
Most of the increase for Irani came in the form of performance awards of Occidental shares, including two awards of restricted stock worth a combined $10.4 million. A year earlier, Irani received restricted shares worth $2.2 million, according to an Occidental financial statement filed with federal regulators Wednesday.
The shares are considered restricted because Irani gains complete ownership in three to five years.
The executive also received $1.3 million in salary -- the same as in 2001 -- plus a 15% larger cash bonus of $2.99 million. Rounding out the package, Irani collected a long-term performance payout of $5.7 million, plus other compensation totaling $2.1 million that included $130,491 for club dues (up from $32,885 in 2001).
The filing did not elaborate on those dues, and company spokeswoman Jan Sieving declined to supply details.
Nell Minow, editor of business watchdog Web site the Corporate Library, called Occidental "a serial offender in the key area of executive compensation."
Irani already holds vast Occidental shares and options, and should not need more for motivation, Minow said. "Restricted stock is always a red flag for me, because you make money on it unless the stock goes down to zero," she added.
Sieving said Irani's compensation was performance-based, with some of the payout stemming from four-year corporate benchmarks that compared Occidental's shareholder returns with others in the industry.
In a note to the Westwood company's shareholders, compensation committee board members said Irani earned a larger cash bonus and big stock awards because of his "significant accomplishments" in 2002, including strengthening the oil company's balance sheet, raising the value of its assets and improving the "consistency and quality" of its earnings.
Occidental, which also is in the chemical business, reported 2002 net income of $989 million, or $2.61 a share, down 14% from $1.15 billion, or $3.09 a share, a year earlier. Revenue fell 9% to $7.34 billion.
On the plus side, Occidental reduced its debt by $131 million during the year, and in December raised its quarterly shareholder dividend by a penny to 26 cents a share, or $1.04 a year. In addition, Occidental's share price rose 7.2% in 2002, another very difficult year for most stocks.
The company's stock price fell 85 cents on Wednesday to close at $29.31 in New York Stock Exchange trading.