Thursday, October 15, 2009

InvesGuard- New Scorecard Added – Occidental Petroleum (OXY)

New Scorecard Added – Occidental Petroleum (OXY)

Company Name: Occidental Petroleum (OXY)

Industry: Oil & Gas Producers

InvesGuard has just released a Corporate Governance scorecard for Occidental Petroleum. (OXY). Devon Energy scores well in its Internal Control Environment. Its Compensation practices need to be strengthened. It also needs to increase the level of its Social and Environmental reporting.

( Click here to view Occidental’s scorecard)

Given that it is a Oil & Gas Producer, Occidental’s poor showing on the Environmental and Social Commitment front could be of concern in the long term. Another concern from a long term perspective, is compensation. For a CEO, who as the proxy quotes has “Implemented a cost-cutting initiative in advance of world-wide economic deterioration” to take home a record breaking $65 million is both contra indicative to his cost cutting efforts as well as detrimental to increasing shareholder value.

From a reporting perspective, Occidental publishes certain mandated information on Emissions and certain other environmental metrics. But other critical metrics such as percentage of oil spill recovered are not reported in its Social Responsibility Report. nor is does it make a public commitment by participation in such collaborative initiatives like the UN Global Compact. More information about Occidental Petroleum’s Social and Environmental impact can be found on Occidental’s Company Page , under the “Social and Environmental” Tab.

Also of concern is the presence of a Board Executive Committee. This committee has been granted broad powers and is chaired by Dr Irani- Occidental’s CEO. Although this committee held no meetings during 2008, such a situation can intensify the dilemma of excessive CEO power versus a fully empowered one.

The company does however perform well across our Internal Control Environment criteria and demonstrates a well developed Audit mechanism with committee members that are not overextended.

Occidental’s Overview and Scorecard

Other companies covered by InvesGuard in the Oil & Gas Producers industry include:

- Vaalco Energy

- Chesapeake Energy

- Conoco Phillips

- Devon Energy Corp

Related news:
Citigroup sells Phibro to Occidental


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