Occidental Petroleum (OXY) - Get Report CEO Vicki Hollub’s salary will be cut by more than 80% and the oil-and-chemical company’s top executives’ pay will be cut by an average of more than two-thirds as the global coronavirus pandemic continues to slam oil prices.
Citing an internal email, The Wall Street Journal reported on Wednesday that the Houston-based company also was cutting salaries for its U.S. employees by up to 30% in a bid to slash expenses amid one of the most precarious downturns the industry has ever seen.
Occidental is not only facing one of the steepest oil-price drops in history, accentuated by an ill-timed price war between Russia and Saudi Arabia, but also high debt from its $38 billion acquisition of Anadarko Petroleum last year.
The main U.S. oil price is down 61% since the start of the year, closing at $24.01 a barrel on Tuesday.
“The coronavirus pandemic has led to an unprecedented decline in demand for oil on a global basis,” the email said. “On top of that, the price war between Saudi Arabia and Russia has further exacerbated the situation. We must take immediate and unprecedented actions for our company.”
Hollub earned compensation valued at $14.1 million in 2018, the Journal said, citing the company’s most recent annual proxy statement. The bulk of it was paid in stock. Her base salary was $1.25 million and her bonus amounted to $2.81 million.
Earlier this month, Occidental slashed its dividend 86% and reduced its fiscal 2020 capital budget by about a third, or roughly $1.7 billion.
Separately, the company announced on Wednesday that it has reached a truce with Carl Icahn that brings the billionaire activist into the oil company’s boardroom.
Andrew Langham and Nicholas Graziano will receive Occidental board seats under the agreement, while Herbalife (HLF) - Get Report board member Margarita Paláu-Hernández will join as an independent director.
Occidental’s board will also create a new board oversight committee, with at least two of the new board members, that must be informed of any offers to acquire the company or its assets, according to the Journal. The company also made former CEO Stephen Chazen chairman.
Shares of Occidental were down 3.81% at $10.35 on Wednesday. The stock, which began the year trading in the lows $40s, ended the day Tuesday at $10.72.