The pay of Occidental Petroleum Corp.'s outgoing Chief Executive Ray Irani, who was the highest-paid energy CEO in 2009, more than doubled last year to $76.1 million.
Irani’s pay included $40.3 million in stock awards and $31.6 million in cash incentives, according to a filing with the Securities and Exchange Commission. His total compensation from Occidental, the largest onshore crude producer in the continental U.S., was $31.4 million for 2009.
Occidental, based in Los Angeles, announced in October that Irani, 76, would take a pay cut and retire this year in the wake of shareholder complaints about his earnings. The company issued a new compensation formula and said President Stephen I. Chazen would become CEO.
“It’s easy to make an argument that compensation’s too high,” said Philip Weiss, an analyst with Argus Research in New York. “I can’t dismiss that.”
Weiss said the pay for Irani was “less offensive” than for some other leaders in the industry because of Irani’s Middle East contacts and Occidental’s stock performance. “If I’m a shareholder and I’m getting good returns, I shouldn’t get too upset,” Weiss said.
Occidental shares fell 31 cents to $99.79 on Thursday. The shares gained 21% in 2010, outpacing the 15% increase in U.S. oil future prices.
Irani’s pay in 2010 included more than $58 million in both cash and stocks related to an incentive plan based on the company’s returns, established in 2007. He had a salary of $1.19 million, a bonus of $1.40 million and other compensation, including security services, of $1.69 million last year. Irani is to remain chairman through 2014.
The board believes that Occidental’s “outstanding short-, medium- and long-term performance has more than justified Dr. Irani’s compensation,” said Richard Kline, an Occidental spokesman.
Compensation reported during the next three years will show a phase-out of the former plan and implementation of a new one, Kline said. He said changes “are expected to substantially reduce the chairman and CEO compensation levels and to make them consistent” with those at peer-group companies.
Chazen’s compensation for 2010 was $38.1 million, compared with $13.5 million in 2009. Last year’s total included $21.8 million in stock awards and $14.4 million in non-equity incentive plan pay.
Exxon Mobil Corp., the world’s largest oil company, paid its CEO, Rex Tillerson, a total of $27.2 million in 2009, the last year for which figures were available.