Occidental Petroleum Cuts Pay for Staff, Executives
March 24 2020 - 10:19PM
Dow Jones News
By Ryan Dezember and Rebecca Elliott
Occidental Petroleum Corp. is cutting salaries for its U.S.
employees by up to 30% in a bid to slash expenses, according to an
internal email reviewed by The Wall Street Journal.
The Houston company is facing plunging oil prices, high debt
from an ill-timed acquisition and falling demand due to a halt in
economic activity because of the new coronavirus.
Chief Executive Vicki Hollub's pay will be cut by 81% and the
oil-and-chemical company's top executives' pay will be cut by an
average of 68%, according to the email. Employee bonuses and perks,
such as gym memberships and commuter subsidies, are set to end in
April.
The company said it was taking the drastic steps in the face of
an extraordinarily swift change in oil prices.
"The coronavirus pandemic has led to an unprecedented decline in
demand for oil on a global basis. On top of that, the price war
between Saudi Arabia and Russia has further exacerbated the
situation," the email stated. "We must take immediate and
unprecedented actions for our company."
Occidental released a statement confirming it was taking steps
to "ensure the health of the company while protecting jobs." The
company said it was reducing compensation for all of its employees,
but didn't comment on the specific salary cuts.
The entire U.S. oil industry has been badly battered in recent
weeks. Occidental, whose $38 billion acquisition of Anadarko
Petroleum Corp. last year left it deeply indebted, has been among
the hardest hit. Its share price, which began the year trading in
the lows $40s, closed on Tuesday at $10.72.
Earlier this month, the company slashed its prized dividend 86%
and reduced this year's capital budget by about a third, or roughly
$1.7 billion. Dozens of U.S. shale companies also have slashed
spending. Chevron Corp. and Royal Dutch Shell PLC cut their capital
budgets and suspended share buybacks, but neither took the step of
across-the-board salary cuts.
Meanwhile, Occidental is nearing a truce with Carl Icahn that
would bring the billionaire activist into the oil company's
boardroom, The Wall Street Journal reported Sunday.
A settlement would mark the end of a protracted fight with Mr.
Icahn, who took aim at Occidental after the company outbid Chevron
for Anadarko. The company's market capitalization has since plunged
below $10 billion, from more than $46 billion at the time of the
offer.
Occidental had staved off Mr. Icahn for months, but had to give
up significant ground as oil prices plunged below $25 a barrel due
to a price war between Saudi Arabia and Russia and depressed demand
because of the coronavirus pandemic.
The company also has brought back its former Chief Executive
Stephen Chazen back as chairman.
Ms. Hollub, who presided over the Anadarko deal last year, is
expected to keep her job -- albeit at a much lower salary.
Write to Ryan Dezember at ryan.dezember@wsj.com and Rebecca
Elliott at rebecca.elliott@wsj.com
(END) Dow Jones Newswires
March 24, 2020 22:04 ET (02:04 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Occidental Petroleum (NYSE:OXY)
Historical Stock Chart
From Aug 2024 to Sep 2024
Occidental Petroleum (NYSE:OXY)
Historical Stock Chart
From Sep 2023 to Sep 2024