Occidental Petroleum shareholders have voted executive chairman Ray Irani off of the board of directors. Following weeks of shareholder criticism regarding Mr. Irani’s control over the board and the (now postponed) decision to replace current CEO Stephen Chazen, it appears as though shareholders will have their cake and eat it too. Not only did the board agree to implement a swath of corporate governance and compensation policy changes and extend Mr. Chazen’s tenure, but long-time lead director Aziz Syriani (who resigned the day before the meeting) and Mr. Irani, are definitively out. According to a statement released after the meeting, current director Edward Djerejian will replace Syriani as lead director, and director E. Spencer Abraham will take the new role of vice chairman. Shareholders approved the Company’s advisory vote on executive compensation. A shareholder proposal seeking shareholder action by written consent was not approved.
It’s rare that an executive board member is effectively voted off of the board, and even rarer for a company to maintain a “true majority” vote standard. Usually, the board is able to consider director resignation letters and make the final decision. However, in the case of Occidental (which previously implemented a separate slew of governance reforms after a 2010 shareholder spat) no such resignation policy is provided. The bylaws however do allow for a defeated director to continue serving on the board until October 31st of the year of election, unless removed earlier by the board. Whether Mr. Irani’s resignation will be effected immediately or a few months down the line, it appears as though his 30 year tenure on the board has come to an end.