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$50 Million for Getting Fired ?

occidental petroleum no unemployment shareholders c-level executives cliques

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#1 Hum

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Posted 06 May 2013 - 21:10

Occidental Petroleum chairman Ray Irani lost his job Friday after 76% of shareholders opposed his reelection, the latest high-profile executive to be shown the doors.

He won’t be able to collect unemployment but, in this case, getting fired might be the best thing to happen to the longtime oil executive: Irani stands to receive an exit package of over $50 million if his departure is considered a “termination” vs. a merely $20 million package had he retired at the end of 2012, The WSJ reports.

The heft of Irani’s golden parachute adds a bit of absurdity to the excess of his tenure at Occidental: Always among America’s most highest-paid executives, Irani’s total compensation from 2004-2012 totaled over $1.1 billion.

Two years ago, shareholders voted to remove Irani as CEO, in part because of a backlash against his outsized compensation given Occidental shares were lagging major competitors. Scheduled to retire at the end of 2014, Irani sought to install a former executive as CEO, which prompted the latest shareholder revolt. Arguably, it’s also a sign of how the executive had come to believe the company belonged to him vs. other stakeholders, i.e. shareholders, customers, employees and the community at large.

The dirty (yet open) secret is C-level executives often serve on the boards of other companies where they vote for outsized pay packages; in turn, compensation consultants then cite those packages as a rationale for paying other CEOs big bucks. To say that it’s very clubby and cliquey is an understatement.

Even worse, these compensation packages are often tied to specific company performance metrics, giving individual executives huge personal incentives to focus on short-term goals vs. what’s in the company’s best long-term interests. This focus on the short-term – exacerbated by Wall Street’s fixation with quarterly results -- has contributed to the erosion of American industry’s long-term ability to compete in a global economy.

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#2 threetonesun

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Posted 06 May 2013 - 21:22

But let's not tax them guys, they earned that money, it takes a lot of hard work to show up at meetings and vote to give your fellow C-level hard workers billions of dollars. :rofl:

#3 +SOOPRcow

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Posted 06 May 2013 - 21:28

But let's not tax them guys, they earned that money, it takes a lot of hard work to show up at meetings and vote to give your fellow C-level hard workers billions of dollars. :rofl:


I don't get it... he will pay taxes on it :\

#4 OP Hum

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Posted 06 May 2013 - 21:32

I'd be bending over, mooning the stockholders out the skyscraper window. :p

#5 Growled

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Posted 07 May 2013 - 01:42

Something is very wrong with a system that allows crap like this.